- To comprehend the significance of rural marketing and its concept
- To comprehend how rural marketing and rural development are related
- To gain understanding of the difficulties in boosting rural marketing
Content
- Introduction
- Rural Marketing
- Rural Marketing and Rural Development
- Challenges of Promoting Rural Marketing
- Way Forward
- Conclusion
Introduction
Although the rural economy is largely based on agriculture, there has been a decline in agricultural productivity, which is indirectly reflected in the growing difficulties facing rural development. As a result of this situation, rural people are becoming disillusioned with agriculture and turning to migration. A large number of farmers still rely on traditional farming methods and are unable to access proper marketing of their agricultural products, despite an increase in farmers adopting modern farming techniques, including the use of irrigation, high-yielding varieties of seeds, and increased fertilizer use. Farmers suffer from poverty, marginalization, and alienation from the agrarian lifestyle in the absence of appropriate marketing channels. To advance people-centered rural development, the government must provide a minimum support framework to bolster farmers' agrarian livelihoods. Rural marketing combined with additional minimum support systems to encourage agricultural productivity will help rural farmers escape poverty.
Rural Marketing
Rural marketing is defined as a process of pricing, promoting, distributing, developing, rural specific goods and services which can lead to an exchange between rural and urban markets that can satisfy consumer demand and organizational objectives. Further more, rural marketing deals with various projects, inputs and services that are meant for the development of a rural market and its linkages. Hence, it differs from agricultural marketing which stands for marketing of rural products or outputs to the urban consumer or to an institutional market (Dogra, 2008)
Each of us is a consumer, and since we require a wide range of products and services from the moment we are born, marketing helps us in some way to get what we need. The goal of marketing is to maximize customer pleasure and profit by having the vendor and the buyer exchange certain items (such as money, goods, services, and others) with one another. Rural marketing is now garnering a lot of attention and is in high demand as many businesses are attempting to expand into rural areas for a variety of reasons, one of which being the push effect of metropolitan area saturation.
The way marketing is planned and carried out in metropolitan regions contrasts starkly with the dominance of rural communities. Due to significant socioeconomic changes among rural consumers, the majority of FMCG (Fast Moving Consumer Goods) businesses, including HUL, Pepsi, Britannia, Coca-Cola, Colgate, Samsung, Palmolive, and others, are integrating their marketing efforts in rural areas as well. Rural consumers are now numerous enough and fully aware of the need to raise their standard of living. The evolution of rural marketing in India has been largely influenced by information and communication technology, a variety of government policies and initiatives, business strategies, and other reasons . The process of producing, pricing, promoting, and distributing products and services specifically for the rural market results in trade between the rural and urban markets, satisfying customer demand while also achieving organizational goals. Infrastructure accessibility, Income Streams, Lifestyle, Context, Socio-Cultural Background, Accessibility, Media Reach and Habits, Nature of Competition, and Consumer Behavior are the main factors that separate rural marketing from urban marketing. Rural marketing, then, is a particular branch of the marketing discipline that entails the application of marketing tools in a tailored manner, the customization of products to address such needs, and the efficient delivery of those products to enable a profitable exchange of goods and services with the rural market.
Rural Marketing and Rural Development
The term "marketing" generally refers to all those numerous marketing-related activities and services that are in charge of transferring manufactured goods (final products) or commodities from the producer to the consumer. Assembling, processing, packing, storage, and transportation are some of these tasks and offerings. These tasks are completed throughout the production to consumption phase.
The promotion of rural marketing is closely related to rural development in general and agricultural products in particular. The term "rural marketing" refers to a range of programs that support the marketing of rural businesses' goods and services as well as agricultural products. Through a variety of cooperatives and with the assistance of government organizations, the rural marketing process aims to take into account the role of people's collectives. The primary goal of rural marketing is to boost and support the local economy. Rural marketing involves two-way communication. In addition to the marketing of goods going to rural areas, the content now includes goods going from rural to metropolitan areas. Its four-pronged initiative gives underprivileged rural residents the ability to generate revenue and empowers the community by providing access to useful knowledge.
Due to inadequate communication and transportation infrastructure and the lower purchasing power of rural residents, India's rural market was previously unknown. The potential for expanding rural markets and rural marketing has expanded with the arrival of changes that have occurred in terms of basic infrastructural development. Due to a number of variables, including increasing connectivity between rural and urban regions, changes in the growth of agriculture, and changes in villagers' lifestyles and consumption patterns, it is now possible to reach out to rural areas. The improvements in transportation, social mobility, and communication technologies, as well as additional penetration through mass media like television and satellite services, have boosted rural people's access to education. These movements have opened rural India's eyes to the outside world, changing their perspective on the countryside.
Urban consumers' increasing desire for new products, stifled competition, and highly saturated urban marketplaces have forced businesses and sectors to look for new prospective markets. With more people living in rural areas than any other country, India has the largest rural markets, which has attracted the interest of several global corporations and advertising. According to a National Council for Applied Economic Research (NCAER) survey, increases in agricultural productivity and higher agricultural product prices have increased the spending power of rural residents. Concurrently, this increase in purchasing power is underutilized, but with television's expanding audience, it is now relatively simple for marketers to seize these markets (Murthy, 2014).
The majority of large firms have made rural marketing their current entry point. Hindustan Colgate Palmolive, Lever, Britannia, as well as multinational corporations (MNCs) like Coca-Cola, Pepsi, L.G., Philips, and others, are all scouting rural communities in an effort to capture the sizable Indian market. Understanding their needs and desires, reaching out to a large rural client base, supplying them with goods and services to meet their needs, and providing after-sales support that results in customer satisfaction and repeat business are all important components of the rural marketing framework (Krishna Moorthy B., 2011).
Challenges of Promoting Rural Marketing
Though there is a tremendous scope of increasing rural marketing, rural areas are still not sufficiently addressed due to various constraints:
Lack of Transportation and Storage facilities:
Even though there is more communication between rural and urban areas, this will still help to solve the transportation and storage issues. Through the Pradhan Mantri Gram Sadak Yojana, road transit has reached the villages. However, the majority of the rural region lacks even basic road connectivity, making it difficult to access the villages, particularly those that are situated in steep locations. Another obstacle to promoting rural marketing routes is the lack of a facility for storing goods. As of right now, only urban and suburban areas are served by state warehousing corporations, and central warehousing corporations provide storage facilities in the form of warehousing. Despite all of the challenges, India's rural market is both fascinating and demanding. There is tremendous potential. Although these markets have flaws, they also present marketers with enormous potential that they should take use of. The marketers need to think of creative ways to include the villagers in generating business in their own villages.
Low Standard of Living and Low Purchasing Power:
According to a few studies made available by the Indian Market Research Bureau and the National Council for Applied Economic Research, rural consumers are dispersed, have low literacy rates (23%), lower incomes than their urban counterparts, a lower standard of living, lower per capita incomes, and lower economic and social positions. The diversity of the population directly affects consumer behavior, media habits, and rural marketing. The aforementioned traits of rural residents must be taken into consideration as one creates novel models that are appropriate for contextual variances.
Less Bargaining Power:
The purchasing power of those living in rural areas is directly impacted by low per capita disposable incomes and lower bargaining power. Rural residents are primarily dependent on agriculture and are highly vulnerable to the whims of the monsoon. People's purchasing and negotiating power is influenced by their income. Thus, the marketer must devise strategies for making the product accessible to consumers in rural areas.
Lack of Proper Financial Support System:
In order to promote sustainable rural livelihood, financial support is a requirement. Without it, rural residents risk becoming increasingly vulnerable and caught in a cycle of poverty. The poor and other vulnerable groups in society, as well as rural residents in particular, suffer from a lack of access to financial institutions. A timely financial aid will help people develop their business skills and solve the credit crunch issue that affects the less fortunate groups of society.
India has the potential for a financially based rural economy, but the majority of the population is still unbanked. Because the majority of rural areas do not meet the requirements for bank loans, banks do not offer credit in those areas. Rural women suffer the most as a result of the strict requirements to access financial services, which mostly exclude the rural masses. It is not thought that rural women are capable of handling household finances. They are unable to request credit since they have little to no assets to use as collateral for a loan. In certain cases, even when they have the assets to serve as a loan guarantee, women lack the ability to vote because the family's male members often make those decisions. It has been discovered that women in India experience higher loan refusal rates than men.
In urban and metropolitan areas, there are 139 million total saving bank accounts, compared to 189 million in rural and semi-urban areas. If we look at the overall population of rural India, we can see that there are far fewer saving bank accounts in rural and semi-urban areas than in urban and metropolitan areas. Additionally, if we look at the percentage of deposits in bank accounts, rural areas in India account for about 10% of all savings. (Committee on the Medium-Term Path for Financial Inclusion Report, 2015)
Way Forward
Marketers in India face a significant challenge as well as an opportunity due to the rural market's untapped potential now that it has received due recognition. By utilizing a vast amount of marketing potential, marketers may face the problem with integrated marketing plans and programs. If they are successful in tapping into the potential of the rural market, the villages of India will soon enter a new period of economic prosperity. To provide people with the appropriate knowledge at the appropriate time and to support their efforts by setting up long-term support systems, constant effort is needed.
Rural Infrastructure Development
The encouragement of rural infrastructure development is really essential. Improved infrastructure, better roads, free trade in agricultural commodities, the elimination of excise taxes on tractors and agricultural tools, and the insurance program for farmers will all strengthen the rural economy and increase demand for corporate goods. The growth of rural areas will be significantly impacted by warehousing and storage facilities. It's because maintaining a constant flow of commodities will be challenging if storage facilities do not have feeder units and transportation of goods is challenging on the one hand.
Urban marketers will need to develop a greater grasp of rural lifestyles, wants, and aspirations in order to create products that are acceptable for them in order to take advantage of this new potential.
NGOs
The mission of non-governmental organizations (NGOs) that collaborate with rural residents is to focus on sustainable development through offering sources of income. They hold a significant amount of sway in the villages they serve. Companies could collaborate with them for both of their benefits. Companies reap benefits from infrastructure and networking at the grassroots level while NGOs handle distribution. Security within the firm would likewise act as a safeguard against sluggish retail collections. According to NGOs, such partnerships with businesses can result in job openings for locals.
The organizations can foster an environment that encourages the organization of the rural poor into Self Help Groups (SHGs), the promotion of self-employment among the rural poor, and the development of the group's capacity through financial support, training, the choice of important activities, infrastructure development, technology support, and marketing assistance. The program has been successful in giving rural youth access to institutional funding for starting small-scale income-generating ventures, which increases household income and can also empower women.
The process of promoting financial support to cooperatives and grameen banks can be facilitated by organizations like NABARD, which can also boost the rural agricultural and non-farm sector. Promoting the channels of marketing requires sufficient and prompt financial assistance from the banking system to the farmers for their farming requirements, including the purchase of inputs in a flexible and cost-effective manner. encouraging SHG participation by providing them with guaranteed microfinance through bank connections, enabling them to start microbusinesses and so increase their incomes (read: purchasing power), and increasing budgetary support for expedited irrigation projects.
Technology Transfer
Another necessity for promoting rural marketing is technology transfer. Technology transfer's major goal is to advance rural-based livelihood systems that advance the rural economy in general and the development of sustainable livelihoods in particular. Disseminating "information" is one of the promotional strategies used in technology transfer. The material is intended to encourage advancements in integrated rural development and scientific agriculture. Connecting farmers in particular and the rural masses in general to technology advancement will encourage employment and enlighten the rural populace about how to access the channels for entrepreneurship growth, rural marketing, and empowerment. Youth play a crucial role in gaining access to technology and making the best use of their resources.
People’s Control Over the Resource
The ability of the populace to manage the available resources is essential for the development of a rural economy through rural marketing. The development of productive assets such as land, financing, and decision-making with relation to crop diversification from staples like wheat and rice to more lucrative cash crops must be prioritized.
Conclusion
To include rural residents in mainstream marketing, rural marketing is a crucial technique. Due to the recent rise in rural incomes and standards of living, which will assist to improve income levels and agricultural commodity output in rural regions, the rural markets present a tremendous opportunity for a focused marketing effort. Rural marketing must, however, take into account the needs of the rural population. The goods must be of a need-fulfilling type. Similar to this, the goods produced in rural areas need to find a means to draw in urban populations.
Reference
- Baddi R.V., N.V. Badi (2004), “Rural Marketing,” New Delhi, Himalaya Publishing House, 1st Ed.
- Dogra, B. and K. Ghuman (2008), Rural marketing: Concept and Practices, New Delhi, Tata Mc-Graw-Hill.
- Iyengar, H. (2007), “Indian Rural Markets-A snapshot”, The ICFAI University Press, pp 11- 12
- Krishnamoorthy B. (2011): “Introduction to Rural Marketing”, 3rd Ed., pg 35-40
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