“Come with us to the fields, or go with our brothers to the sea and cast a net. For the land and the sea would be bountiful to you even as to us” – Kahlil Gibran
The word “advertising” is derived from a Latin word “advertere” which means to turn people’s attention to a specific thing. If you want to be successful in the Indian market, it is impossible to overlook the rural markets. Rural markets absorb a big chunk of the market in India, and there has been an impressive increase in the rural market potential owing to tremendous economic growth in India.
Advertising in rural markets is a quite a challenge because of lack of standard opportunities; there exists a sense of solidarity and complexity in the rural markets. Hence, creating an advertising campaign for rural India is often considered a tough responsibility. Rural marketing is a different ballgame that drives marketing gurus to unlearn the traditional concepts. Every facet and feature of marketing demands a refashion when the focus is shifted to rural marketing.
India is a country of about one billion people where more than 70% of the humankind inhabits in rural areas. The untempered number of the rural population demands market research for marketing various goods and services. Although almost about 30% of the Indian population is considered to be improvised, there exists a great opportunity for essential marketing articles in rural India.
FUNDAMENTAL NATURE OF RURAL MARKET
“Rural marketing is a two-way marketing process, where there is an inflow of products into the rural markets for production and consumption, and also an outflow of products to urban areas.”
The rural market has been growing constantly over the years, and more than about 800 million people live in villages in India. Today, Indian companies, as well as multinationals like Colgate, Godrej, and Hindustan Lever, are focusing on rural markets. Opportunities in rural markets are very promising for those who can fathom the kinetics of rural markets and squeeze them to their best advantage.
Unlike urban markets, rural markets are extremely unpredictable and possess special features. The highlighted population is predominantly illiterate, have lower and irregular income levels. They don’t possess a stable or a predictable reaction pattern due to inconsistent income. Demand for a product depends on the availability of necessities like power, transportation, schools, and hospitals. Rural markets largely depend on the government’s contribution in the rural sector.
LARGE SCATTERED MARKET
- The rural market in India is large and scattered which means that it consists of approximately around 63 crore customers across 5, 70, 000 villages throughout the country.
- The rural population has increased by 125 in the last decade and accounts for over 40% of the Indian economy.
- The market offers great opportunities in comparison with the urban sector. It blankets the maximum population and regions, hence consists of the maximum number of consumers. Rural market accounts for almost 70% of the total Indian population.
DIVERSE AND HETEROGENEOUS
- Rural Market is unbelievably diverse and heterogeneous, which furnishes a market for all categories of products and services.
- It consists of as many as 20,000 ethnic groups, which pronounces a hard challenge to the marketer.
- There exist over 24 languages and 1,642 dialects or so, which makes it tremendously difficult to come up with a single promotional message.
- We find various types of buyers in rural areas; few are simple while few are sophisticated, some are rich and the other poor, some might be educated while the others could be illiterates, few of them could be extremely dynamic and modern while some are rigid and conservative, some rely on quality while a few might compromise on quality responding to availability and pricing. So, it exhibits an extremely diverse and a heterogeneous market.
LOW STANDARD OF LIVING
- Consumers in rural areas have a relatively low standard of living, and rural customers have diverse socio-economic backwardness.
- Low standard of living is a result of lower literacy rates, low per capita income hence, low purchasing power, social backwardness and because of low or no savings.
- Price is the most crucial factor that influences the buying decision of a customer in a rural market.
- They can compromise on quality for a lower price and magnet towards discounts and sales.
- The payment mostly functions on a credit basis. They are accustomed to postponing payments.
- Personal selling works well for rural masses. Rural customer’s magnet to local and regional promotional efforts.
- Their reference group is a combination of educated and illiterate family members residing in urban areas. They strongly believe their religious or spiritual readers who are a dominant part of their reference groups.
- Articles like knives, rings, bangles, key-chains, caps, gas lighters, portraits, lamps calendars, and cards with religious impression are favourable promotional articles in a rural market.
- Visual advertisements published in local magazines and newspapers in their regional language might work wonders.
- Customers in your rural markets bank on the utility of a product compared to status and prestige. They believe in simple and effective products that serve them in the long run.
- They reciprocate to products that equate with their religious beliefs and social norms.
- They favour products that can be used and that benefit all family members rather than the personal-use ones.
- Branding, packaging, and labelling have minimal influence on this market segment.
- They are less concerned or unaware of the after sales services associated with products like the guarantee, warranty, services, and so on.
- Purchases are mostly made from known retailers and salesmen. Rural markets don’t believe in mall culture or the bigger departmental stores.
- Purchase mostly happens from retail outlets situated in rural or suburban areas.
- They are not keen on home delivery. They seek instant possession. Since they lack patience, they are found eager to possess and use products immediately.
- Caste, religion, political parties, religious and spiritual leaders play a significant role in choosing retailers.
- Online marketing has not yet secured its place in rural areas. They normally place frequent small orders with their retailers and lack storage facilities.
UNDERSTANDING THE RURAL MIND AND BUYING PROCESS
Buying decision process defines the rudimentary stages that a consumer goes through while he decides to buy a product. Purchase decision of a rural customer is determined by his lifestyle, his values, and personality.
On account of the green revolution, rural areas are absorbing large quantities of industrial and urban manufactured products. In the process, a pristine marketing strategy called the rural marketing has transpired. A big number of MNCs have shifted their locations from urban to rural markets, which have portrayed a stunning growth in the last few years. A consumer surpasses five stages while making a purchase decision and that is:
- Need recognition
- Information Search
- Evaluation of Alternatives
- Purchase Decision
- Post-purchase Behavior
1. NEED RECOGNITION
Perceiving the need is the first step of the buying decision process. In this stage, the consumer recognizes the need for a product which fundamentally depends on the prices of the products. Needs can be triggered by internal or external stimuli. In this stage, the advertisers should extend support to the consumers in recognizing the problems currently and expected problems later. A small research on consumer needs and problems would do a good deal. The research will further help the marketers design products that tend to meet the needs of the customers and to develop strategies for marketing that can stimulate a buying interest.
2. INFORMATION SEARCH
In the second stage, the consumer begins the search for the various alternatives available for the required product. He searches for internal and external information. The process can either be an active or a passive one. Passive information gathering is a process in which the customer becomes more attentive of a recognized solution to a given need. Active information search is a process in which the customer proactively engages in the accumulation of information regarding the products through the internet, print media, television, discussions with friends, family, and neighbours. In the process the consumer researches on details of the type of product, nature of the product, availability of the product, and so on.
3. EVALUATION OF ALTERNATIVES
This is the most crucial stage of the buying decision process since it is at this stage that the consumer analyses the various alternatives. In this stage, the consumer encounters various products and tries to evaluate the product based on his understanding, experience and exposure. Consumer evaluates product attributes and features that seem most relevant to his needs. The consumer will form a consideration set, which is a bunch of products that are likely to satiate his needs. He then uses cut-offs, which are the minimum and the maximum acceptable values for the product in which price is mostly the quality indicator.
4. PURCHASE DECISION
Post-assessment the customer proceeds to accomplish the final purchase decision of a product of a particular brand, his retailer and also the mode of payment. It is a collective decision guided by perceived risks associated with the products plus key influences. Evaluation process further leads to the purchase intention. There are three factors that possibly intrude a purchase decision like the attitudes of others, unanticipated events, and the possibilities of fulfilling the purchase decision that is from whom, where to buy and so on.
5. POST PURCHASE DECISION
Customer satisfaction is the key to establish a profitable long-term relationship with the customers. This is the final stage of the buying process that usually strikes to form a balance between customer expectation and satisfaction attained after employing the product. Based on this analysis the consumer interprets if his decision was a success story. Depending on his experience even if the product comes anywhere close to his expectations, he labels it as a good product and spreads the good news through word of mouth and vice versa.
ADVERTISING AND MARKETING IN RURAL AREAS
A classic feature of Indian rural markets is the well-bonded community structure, which recommends advertising and marketing to have a community feel. Promoting brands in rural markets necessitate a special dealing. Word of mouth is an important message carrier in rural India. Opinions of spiritual and religious leaders have a very strong impact on the promotion of any product in the rural market.
Rural marketing is a specialized niche. Marketing in the rural markets demands a tremendous amount of money to promote a brand in a small village. There are few effective ways of attracting the rural markets with less expense.
Street shows are quite popular in villages. There are many examples of effective street shows being employed to promote a product.
Wall paintings are used in villages to promote products. It is a popular technique which has two benefits. The wall is painted without any expense for the owner, and on the other hand, the advertiser doesn’t have to spend anything more than what he does for the paint. Hence it is a win-win situation.
An audio announcement in bus stands has a great impact on the promotion of brands and products in small towns. A lot of companies have created history by using bus stands for product promotions and brand building. With intelligent product selection and extraordinary ideas, companies have been successful and have made the best of the situation.
An experienced rural service provider can do wonders in marketing and in advertising your brand. Working with local agencies to accomplish a rural advertising initiative is similar to learning a new language. Employing an experienced service provider to work with can help escape these drawbacks. The familiarity of the experienced personnel with respect to rural markets can avoid common mistakes and enlarge your chances of a triumphant rural advertising opportunity.
Personal communication holds substantial value in rural communities. Personal presence in a community aids a brand build its reputation of ‘being in the community’. Inclusion in a loyal client base secures those within the community than those without.
A few years ago, consumer electronics company LG launched a special marriage package for rural markets. The package included a basic television, washing machine, and a refrigerator. Understanding that these are the articles the people in rural areas gift for weddings, which proved to be a blockbuster scheme!
Employing the above strategies will furnish a base for a successful rural advertising campaign. Success in multiple communities can establish a brand loyalty that generates real returns.
CHALLENGES IN THE INDIAN RURAL MARKETS
Presently, three out of four country’s consumers belong to the rural market, and over one-half of the national income is initiated there. A lot of corporate units are trying to get the hang of the rural markets. Rural markets exhibit opportunities to marketers. This market submits certain challenges that the marketer has to handle tactfully.
UNDERDEVELOPED PEOPLE – Rural markets are formed by old customs and traditions, blind beliefs and practices. Evolving technology has made very less, or no impact on the rural population and is still perpetuating the same.
UNDERDEVELOPED MARKETS – Rural markets are still underdeveloped due to inadequate banking and credit facilities.
UNPROFESSIONAL COMMUNICATION– People in villages still bank on telegrams and phones to fulfil their communication needs. Rural markets don’t support print media, social media or visual media.
MULTILINGUAL- India is a home of multiple languages. There exist over 24 languages and 1,642 dialects or so, which makes it tremendously difficult to come up with a single promotional message.
LOW PER CAPITA INCOME– Agriculture is the main occupation in villages, and most farmers are small farmers, which results in low per capita income. Low per capita income, in turn, results in low purchasing power when compared to the urban population.
POOR INFRASTRUCTURE FACILITIES– Due to high infrastructure cost facilities like roads, warehouses and so on are inadequate which have a high impact on rural marketing activities.
TRANSPORTATION BOTTLENECK– Transportation is one of the major challenges in rural markets. About50% of Indian villages are connected by roads. However, the rest of the rural markets don’t even have properly linked roads which makes physical distribution an exasperating task. Many villages are located in hilly areas that make it tough to bridge them through roads. Most marketers still employ tractors or bullock carts to distribute their products in rural areas.
WAREHOUSING- Warehousing is another major problem in rural areas. Storage becomes one of the major concerns. The services offered by central warehousing corporation and state warehousing corporation are limited to urban and suburban areas.
INNOVATIVE USE OF MEDIA IN RURAL AREAS
In addition to conventional media, various innovative mediums are used in rural advertising and marketing. Some of the most striking innovative rural media are Puppetry, Folk Theater, Wall painting, and Demonstrations.
Puppetry, since ages, holds an important place in traditional entertainment. Puppetry is an ancient art which originated over 3000 years ago. It is the most famous form of entertainment in villages.
Puppetry is the first theatre of India. It is the least expensive form of marketing. The manipulator employs the puppets as a means to express and communicate ideas, values and social messages.
In villages, people like getting together and sharing others daily routines. When a brand breaks through a puppet show, it is sure to work as word of mouth advertising. A positive word of mouth and exposure goes a long way with the brand. It goes without saying that in comparison to its influence, the cost is utilized in an effective manner.
Folk theatres are short and rhythmic. Folk media consists of folk songs, folk dances and other theatrical forms, which is an intrinsic part of culture and heritage of the land. Simple tunes aid in informing and educating people in an informal and interesting manner. The government of India has employed this media for popularizing an improved variety of seeds, agricultural implements, and fertilizer and so on.
Folk theatre intermixed with folk songs and dance is a simple form of communication. Folk theatre can be informative and educational. Each state has its own traditions of songs and dance.
Wall Paintings are an effective and economical means of advertising in rural markets. This is the most widely used form of advertising and is counted among the favourite of Indian masses. They are silent advertisements unlike other forms of advertisements. Retailers welcome paintings of their shops since the painting comes free of cost and the wall looks cleaner and better. Wall paintings endlessly remind rural masses about the product and the brand. Wall painting is economical when compared to other social media. Recall rates of the audiences are high. The biggest benefit of this means of advertising is the power of the picture which is completed with a local touch.
A direct or a face to face demonstration of the product with individual people and with groups such as Panchayats and other groups in the village have proven to work well. Such contact helps in stimulating villager’s interest and motivating them towards development. Demonstrations could be method demonstration, result demonstration, simple demonstration and composite demonstration.
In any form of rural communication, we have to think and act locally, and at the same time, the need for focused communication aimed at the rural market must not be underestimated.
THE SIZE OF RURAL MARKET
The number of villages, its population and the number of households constitute a rural market size. There are more than 64 villages in India. The number of sites or locations that have to be served is 124 times more than that of the urban markets. Rural India accounts for a total of 55% of the manufacturing GDP. Rural areas are a host to about 75% of the fresh factories initiated in the last decade. Rural consumption per person is seeing a striking increase over the years. Indian rural market is not a separate entity. Sociological and behavioural factors have a high influence on the rural markets. The size of rural India is anticipated to be about twice as that of urban India.
Rural marketing is a process of developing, promoting, distributing products specific to rural areas. Rural India is considered a goldmine. The estimated rural market size is about $425 billion, dispensing a magnanimous opportunity for marketers to strike the segment. Increase in literacy levels and disposable income growth is another reason for increasing consumption.
Indian rural market has a humongous potential in terms of the demand base and size. As a part of the development program, where economic development is a concern, the government is making conscious efforts towards rural development.
‘India moving towards development’ is the dynamic perspective on how Indian customer lifestyle and environment are evolving. It is bound to have a positive impact on business communications in the years that follow. Lifestyle transformations will dominate the way companies engage and initiate experiences for customers.
Indian customers have boosted demand across all categories. Demand for luxury goods and services have risen, mostly amongst the educated and high-income citizens.
India’s per capita GDP in rural markets has sprouted a Compound Annual Growth Rate (CAGR) of 6.2% since 2000. The Fast Moving Consumer Goods (FMCG) sector in rural and semi-urban India is anticipated to cross US$20 billion mark and touch US$100 billion by 2025.
- Fast Moving Customer Goods sector in rural and semi-urban areas is expected to cross US$100 billion by 2025.
- The rural Fast Moving Consumer Goods market is predicted to expand at a BACG of 17.41 per cent to US$ 100 billion by 2025.
- In terms of revenue, rural FMCG market accounts for 40% of overall FMCG market in India.
- Among the dominant retailers, Dabur fosters 40-45% of its domestic revenue from rural sales. The revenue of Hindustan Unilever Limited accounts for 45% of its overall sales and the other firms earn 30-35% of their revenues from rural markets.
Like the Urban Indian trends, consumers in the rural areas are also anticipated to welcome online purchases over time. The rural areas are experiencing a surged perforation of computers and smartphones. Considering these developments, openings online are sighted as prime channels for firms desiring to enter and establish their brands in the rural markets. The Internet is one of the most cost-effective mediums for an organisation seeking to conquer geographical barriers and broaden its clientele.
The challenges of rural marketing are perpetuating. The vast market demands good marketing strategies to design a win-win situation for all the groups in the rural marketing chain. Rural markets are a time-consuming affair and demand substantial investment. Where the markets offer a vast untapped potential, it is important to understand that rural marketing is not as simple as urban marketing due to several unattended issues.
Development of the nation largely depends upon the development of the rural population. “India’s way is not Europe’s. India is not Calcutta and Bombay. India lives in her several hundred villages” – Mahatma Gandhi.