An analytical study on the opportunities of rural marketing in india

INTERNATIONAL JOURNAL OF (2013) – 6502(Print), ISSN (IJM)
International Journal of Management (IJM), ISSN MANAGEMENT 0976 –
6510(Online), Volume 4, Issue 1, January- February
0976

ISSN 0976-6502 (Print)
ISSN 0976-6510 (Online)
Volume 4, Issue 1, January- February (2013), pp. 183-189
IJM
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“AN ANALYTICAL STUDY ON THE OPPORTUNITIES OF
RURAL MARKETING IN INDIA”

Dr .Anukrati Shrama,
Associate Professor ,
Faculty of Commerce and Management
University of Kota ,Kota ,Rajasthan

ABSTRACT

The Indian rural market has a large demand and has lots of opportunities for
marketers. India has almost 5,76,000 villages, 80% of which has population less than 1000
and about 77% of that population is dependent on agriculture or land based activities. There
are several reasons why companies and marketers are getting attracted towards the rural
markets. Almost every marketer is in the rat race to get a hold and grip on the rural market as
a market leader. India’s 70 percent of the population resides in rural areas and 56 percent of
the overall consumption comes from there. They study made by Boston Consulting Group
(BCG) has found that small town consumers (those residing in their towns) are spending
higher on premium products as against their peers in urban lands. Such consumers moved up
the value chain during 37 percent purchase occasions as against 31 percent in metros in 2011-
12. The purpose of this paper is to find out the right marketing strategies for rural areas in
India and along with this, an attempt has been made to examine the rural market
environment, its problems and solutions.

Keywords: Rural Marketing, Market, Buying Decision, New Product

INTRODUCTION

Rural India is getting a noticeable growth. The rural Indians are no more a negligible
part for the big companies and MNCs. There could be several reasons for it, like increase in
income, rising of agriculture opportunities, technology development and government support
etc. The consumption patterns of rural population is certainly changing and it is witnessing a
shift of MNC companies to rural India. Rural spending was significantly higher at Rs.
3,75,000 crore (US $67.57 billion) than urban consumption at Rs. 2,99,400 crore (US $53.95
billion) between 2009-10 and 2011-12 wherein rural consumption per person outpaced its
urban counterpart by 2 percent.

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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 –
6510(Online), Volume 4, Issue 1, January- February (2013)

According to a study by CRISIL and preliminary date released for 2011-12 by
National Sample Survey Organization (NSSO), the consumption of FMCG product, usage of
technology is also enhanced in rural areas. According to a recent survey in December 2012 of
IMRB and Internet and Mobile Association of India (IMAI), “the number of claimed internet
users has witnessed a Compounded Annual Growth Rate (CAGR) of 73 percent since
December 2010. As of June 2012 there are 3.6 million mobile internet users in rural India.
This has grown 7.2 times in the past two years. The penetration of the computer literates
among the rural population is 8.4 percent while the penetration of claimed internet users has
grown from 2.68 percent in 2010 to 4.6 percent in 2012. The penetration of active internet
users has enhanced from 2.13 percent in 2010 to 3.7 percent in 2012.

The data clearly shows that increased levels of media, technology and mobile
penetration have caused a shift in the rural buying decisions and purchasing patterns. The
Indian Companies and MNCs are trying to trigger the growth in rural areas. The marketers
have noticed that rural people are now very much interested to dispose their income and are
in the better position. Other than this the urban markets are matured, competition level is very
high, frequent changes in the taste and preferences of the urban consumers, short product life
cycle are also a few reasons which are encouraging marketers to go for the rural markets. All
what the marketers need is to make a proper research of the rural market environment and
adopt a strategy accordingly.

OBJECTIVES

The research paper consists of following objectives:

1. To study the rural market.
2. To analyze the growth potential of rural markets.
3. To recognize the factors to decide the success of rural promotionalstrategies.
4. To throw light on the improvements to make the right strategy for enhancing the rural
market opportunities.

RESEARCH METHODOLOGY

For making this research successful and worthy, a questionnaire was structured.
Through the help of the questionnaire, primary data has been collected. Informal interviews
have been taken of 200 respondents. The research also includes secondary data which has
been collected from various websites, books etc.

REASONS TO GO FOR INDIAN RURAL MARKETS

1. Large Market: 70% of Indian population lived in 6,27,000 villages in rural areas.
2. High Income: Rural Indians have high income levels. By the advanced technology
and agricultural opportunities, the income level is also enhanced of villagers.
3. Similar Preferences/Choices: Most of the rural people have similarities in their
choice of the products. So it is easy for the marketers to access them. Lack of
frequently changing demand is also a supportive factor why MNCs are shifting
towards rural markets.

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4. Development of Infrastructure Facilities: Most of the rural areas are connected with
roads and railways transportation. By the infrastructural development it is easy to
supply the goods and the products to the rural areas.
5. Awareness of Media: Rural people are much more aware nowadays regarding the
products available in the markets. They are quite aware about new products, product
features, availability, price etc. through the help of media like television, radio,
newspaper etc.
6. Rising Educational and Literacy Level: Due to the efforts of Government in India,
schools have been established for the education of the rural children. Not only this,
the private sector is also establishing and attracting village/rural students to go for
higher studies. Most of the Colleges / Institutions are established on National
Highways, nearly the village areas. With the development of educational standards
there is automatically a great demand to buy and use the new products especially by
the young rural people.

FEW CHALLENGES FOR MARKETERS

While going to the rural markets the marketers are facing challenges, few of them are as
follows:

1. Lack of Infrastructure Facilities: The Government is trying their best to provide the
infrastructure facilities but still there is lot more needed to make the improvement on
that highest level. Still the rural people are not getting proper electricity, banking
services etc.
2. Depended on Seasonable Income: Rural people are dependent on the seasons for
their income. If the season for agriculture is in their favor they have good income
otherwise they are not able to spend amounts for purchasing of many products.
3. Traditional way of Living: Rural people are still living in their own traditional
environment. They don’t want to change and are not ready to accept the modern
products easily.
4. High but Scattered Market Area: Rural Markets are huge but scattered market area,
it creates a difficulty for the marketers to access the rural areas. Due to this, marketers
are unable to adopt many of the promotional tools for promoting their products.
5. Lack of Promotional Tools: Marketers can adopt the advertising as a promotional
tool for the rural areas, but other than this tool, other tools are very difficult to adopt
for marketing like sales promotion, personal selling, which are some of the tools
which are successful in the urban markets but the marketers can not adopt it in the
rural markets.
6. Uses of many Regional Languages: Rural people are using regional languages which
are difficult for the marketers to understand. Most of the rural people fail to
understand the languages which are used in the promotional tools like advertising so it
is impossible to make them aware about the products.
7. Low Level of Education: The education level of rural people is very low in
comparison to urban people.

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SAMPLE SIZE
The respondents in the sample consisted of rural and sub-urban consumers. 200 (two
hundred) respondents around the area of Kota, Bundi (Rajasthan) were interviewed. These
respondents have certain exposure to the urban lifestyle. The samples are further presented in
the tabulation form with their responses.

INFERENCES
Through the help of structured questionnaire, the study has been done. Each of the
question covers the valid reasons to find out the rural environment and its necessities. The
analysis of the table is as follows:

Table 1: Age of Respondents
Response Number of Respondents Percentage (%) of
Respondents
Less than 20 years 24 12
21 – 30 years 32 16
31 – 40 years 65 32.5
41-50 years 49 24.5
50 years above 30 15
Total 200
The first question was designed to find out the age of the respondents from rural areas. The
above table reveals that 32.5% of age group 31-40 years is mainly involved in the research
work for concluding the right market strategy and to find out the rural market environment.
Table 2: Gender of Respondents
Response Number of Percentage (%)
Respondents of Respondents
Male 130 65
Female 70 35
Total 200

The above table defines the gender which the researcher has involved into the research work.
Male respondents were higher than the female respondents.
Table 3 : Monthly Income of Respondents
Less than Rs. 2,000 25 12.5
Rs. 2,001 – 5,000 82 41
Rs. 5,001 – 8,000 35 17.5
Rs. 8,001- 10,000 28 14
Rs. 10,001 – 15000 25 12.5
More than 15000 05 2.5
Total 200

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It is analyzed that the monthly income of rural people is in between 2,001-5,000 maximum
and the range is in between 2,001-15,000 which indicates that the respondents are willing to
make expenditure on the purchasing of products.

Table 4 : Education of Respondents
Less than Vth 05 2.5
Upto VIIIth 47 23.5
Upto Xth 78 39
Upto XIIth 39 19.5
Graduate 20 10
Post Graduate 11 5.5
Total 200

The said table analyzed the education level of the rural respondents who have been involved
in the research. It clearly shows that most of the respondents are having education upto Xth
standard. So it can be concluded that they are able to understand the language of the product
and the promotional tools used by media.

Table 5 : Preferred Media of Communication Regarding Product
Television 62 31
Radio 30 15
Mobile 44 22
Newspaper 12 6
Posters 10 5
Word of Mouth 33 16.5
Drama/Skills 09 4.5
Total 200

The table 5 reveals that the most preferred media to get information and details, regarding the
products, is television.

Table 6 : Adoption of Right Marketing Practice
Urban 95 47.5
Rural 43 21.5
Both 62 31
Total 200

In spite of rural developments, the marketers are adopting marketing strategies for the urban
consumers. According to the above table the marketers have to focus on both the markets,
urban as well as rural but they have to make more efforts for the rural markets.

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Table 7 : Buying Decisions Influencers
Response Number of Percentage (%) of
Respondents Respondents
Content 16 8
Price 68 34
Brand Name 84 42
Celebrity Endorsement 32 16
Total 200

Table 7 analyzed that rural people are influenced by the brand name. A brand name can effect
their buying decisions. If they are familiar with a brand name they prefer that again and again.

Table 8 : Purchasing / Buying Decision
Self 92 46
Parents 59 29.5
Spouse 32 16
Children 17 8.5
Total 200

The above table number 8 highlights that most of the rural people take the buying decisions on
their own. They prefer to purchase a product with their willingness and own decision.
Interference of parents is also there, but the first choice is their own.

Table 9 : Thinking and Perception of New Product / Brand
No effect of new product 62 31
Try new product 50 25
Try to use after feedback of others 88 44
Total 200

The table reveals that most of the respondents prefer to use a new product after getting a feedback
from others who have already used the product. It shows there is a hitch of acceptance of a new
product by the rural consumers.

Table 10: Impact of Language in Purchasing Decision
Regional/Local 85 42.5
National 50 25
Both of them 65 32.5
Total 200

The last table number 10 shows that most of the respondents prefer regional or local language
while purchasing a product. The information regarding the product they want is preferred in their
local language.

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CONCLUSION

The research reveals that most of the people who are engaged in making the decision
of purchasing, are in the age group of 31-40 years. While making strategies for rural
marketing, the marketers must be aware about the media selection, proper use of the language
which is understandable by the rural people. Regional language play an important role in
purchasing decision, other than this rural people started recognizing the brand name while
shopping. They rely on the decisions of other people who have already used that product, so
the marketers need to make a proper marketing strategy. There are several opportunities in
rural markets if marketers concentrate properly on the requirements of the rural consumers.
Branding, media, usage of language are the few important factors which must be kept in
mind, while going for rural marketing.

REFERENCES

1. Babu, S. Dhineshet al (2008), “Emerging Trends in Rural Marketing”,
www.bmsgroup.blog.co.in/files/2008/07/final-pro.doc
2. Del Castello, Ricardo, Maul Braun (2006), “Framework for effective rural
communication for development”
3. Goswami, Rahul (2009) “Making sense of the rural rush”,
http://www.indiatogether.org/2009/apr/eco-ruraleco.htm
4. Iyer, Vidya (2009-2010), “Rural Marketing”, SIES Journal of Management, Vol. 6,
Iss. 2; pg. 110, 4 pgs
5. Jha, M., (April 1999) “Rural Marketing: Some Conceptual issue- Rural Scan”, vol. I
no.2
6. Kashyap, Predeep and Raut, Siddhartha (2010 ed.), The Rural Marketing Book
7. Lane, Bernard, Kenji Yoshinaga (1994), “Niche markets for the rural world”. The
OECD Observer, Paris: Oct/Nov 1994, Issue no. 190; pp. 14Vishwanathan, Gomathi,
“Challenges in Rural Marketing”, http://EzineArticles.com/?expert=
Dr._Gomathi_Viswanath
8. Jha, Neeraj (2000), "Gung-ho on rural marketing", The Financial Express, June 19
10. Krishnamurthy, Jagadeesh (2009), “Yeh Rural Kya Hai”? The Challenges and
Opportunities of Marketing in Rural India”, EF, December
11. Paninchukunnath, Ajith (2010), “3P Framework: Rural Marketing in India”, January
– March, pp 54 – 67
12. Business World, The Marketing Whitebook -2010-2011
13. Mirchandani, Rahul (2006), “Evolving a New Marketing Mix for Selling to Rural
Indians”
14. http://knowledge.wharton.upenn.edu
15. http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4386
16. www.trai.gov.in
17. http://www.rbi.org.in

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An analytical study on the opportunities of rural marketing in india

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