Rural Markets: Retail Management

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Rural Markets – Retail Management

In recent years, rural markets of India have acquired significance, as the overall growth of the Indian economy has resulted into substantial increase in the purchasing power of the rural communities. On account of green revolution, the rural areas are consuming a large quantity of industrial and urban manufactured products. In this context, a special marketing strategy, namely, rural marketing has emerged. Rural India with its traditional perception has grown over the years, not only in terms of income, but also in terms of thinking. The rural markets are growing at above two times faster pace than urban markets; not surprisingly, rural India accounts for 60% of the total national demand. Today, rural market occupies a larger part of our economy and it is expected to grow at least four times the existing size. Another contributing factor for rural push was growing saturation in urban markets. To be precise, rural marketing in Indian economy covers two broad sections: 1. Selling of agricultural products in the urban areas

2. Selling of manufactured products in the rural regions
In present situation, our huge population is helping marketers to think new marketing strategies. 630 Billion rural populations are greater than total consuming markets of many countries like Canada, South Korea, etc. Tapping the rural market is one of the most important marketing strategies followed by various MNCs and Indian companies now-a-days. A number of companies in FMCG, consumer durables as well as telecom sector have adapted strategies to expand their base in rural market. Among those who have already taken remarkable initiative in rural market are HLL, Colgate, LG Electronics, Philips, BSNL, LIC, CavinKare, Britannia and Hero Honda. Rural Marketing in simple word is planning and implementation of marketing function for rural areas. Rural marketing has been defined as the process of developing, pricing, promoting, distributing rural specific products and services leading to exchange between urban and rural markets which satisfies consumer demands and also achieves organizational objective Rural Consumer insights

Rural India buys :-

* Products more often (mostly weekly) ;
* Buys small packs, low unit price more important than economy ; * In rural India, brands rarely fight with each other; they just have to be present at the right place ; * Many brands are building strong rural base without much advertising support, like Shampoos, detergent etc. * Fewer brand choices in rural areas; number of FMCG brands in rural areas is half that of urban. * Buys value for money, not cheap products

Exposure of Rural Markets in India.

* 630 million people ;

* According to a study by the Chennai-based Francis Kanoi Marketing Planning Services, estimated annual size of market is -    FMCG| Rs. 65,000 Crore   |
   Consumer Durables| Rs. 5000 Crore   |
   Agri Inputs (e.g., Tractors)| Rs. 45,000 Crore   |    2/4 Wheelers| Rs. 8,000 crore   |
   Total| Rs. 1,23,000 Crore   |

* In 2001-02, LIC sold 55% of its policies in rural India.

* Of the two million BSNL mobile connections, 50% are in small towns / villages.

* Of the six lakh villages, 5.22 lakh have a Village Public Telephone (VPT).

* 42 million rural households are availing banking services in comparison to 27 million urban households.

* Investment in formal savings instruments: 6.6 millions households in rural and 6.7 million in urban India. Importance of Rural Market

* Large Population: Approximately 75% of India's population resides in around 6,38,365 villages of India spread over 32 lakh square kilometer. 41% of India's middle class resides in rural areas. ;

* Higher Purchasing Capacity: Purchasing power of rural people is on rise;

* Market Growth: Market is growing at a rate of 3-4% per annum. Major Initiatives of Some Market Players

* Hariyali Kisaan Bazaar , was set up by DCM Shriram Consolidated...
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