TRENDS IN RURAL MARKETING
Product –Developing relevant products to meet the specific needs of rural consumers will exercise the minds of marketers. For eg. We know that voltage fluctuation is a major problem in our villages, because of which bulbs last but a few days. Companies will put their R & D teams to develop filaments that can withstand violent fluctuations, thereby extending the life of the bulb.
Price –As rural incomes continue to rise in the coming years, we may see the share of low unit packs coming down somewhat and economy packs gaining share. Also as the reach of media and awareness level improve, we are likely to see companies shift their focus from trade to consumers.
Distribution –Challenge of reach will be addressed through innovation. Project
Shakti of HUL is one such successful exampl model through haats being piloted by MART for Colgate, is another such new model. Amway is already selling bio-fertilizers in rural India, through its famous multi-layer distribution model.
Communication –Indian advertising industry has to be firmly grounded in rural perception, values and traditions. It has to drown itself in local colors, customs and modes of communication, to make itself relevant to rural society. It has to gain the trust of masses, by undercutting excessive dependency on western advertising.
Rural consumers are fundamentally different from their urban counterparts. The lower levels of literacy and limited exposure to product and services are well-known, but there are also differences in occupation options, with a direct impact on income levels and income flows, and a high level of inter-dependency affecting the dynamics of rural community behavior. All contribute to make rural consumer behavior starkly distinct from the urban. As any consumer research study must understand the consumer in the context of his environment and society, Rural Market Research must overcome the challenge of respondents with lower literacy and exposure levels, where conventional market research tools may not be easily comprehended by villagers. MART, a specialist organization in rural, has innovated tools to overcome these limitations in conducting rural consumer research.
• The term consumer finance refers to the activities involved in granting credit to consumers to enable them to possess goods meant for everyday use.
Types of Consumer Credit
Revolving credit: it is an ongoing credit arrangement whereby the financier on a revolving basis grants credit. The consumer is entitled to avail credit to the extent sanctioned as credit limit ex: Credit Card
• Fixed credit: it is like a term loan where by the financier provides loans for a fixed period of time. The credit has to be repaid within a stipulated period ex: monthly installment loan, hire purchase.
• Cash Loan: Under this type of credit banks and financial institutions provide money with which the consumers buy goods for personal consumption here the lender and seller are different and lender does not have the responsibility of seller.
• Secured Finance: when the credit granted by financial institutions is secured by collateral it takes the form of secured finance. The collateral is taken by the creditor in order to satisfy the debt in the event of default by the borrower. The collateral may be in the form of personal property, real property or liquid assets.
• Unsecured Finance: When there is no security offered by the consumer against which money is granted by financial institutions, it is called unsecured finance.
Sources of Consumer Finance
• Traders: The predominant agencies that are involved in consumer finance are traders. They include sales finance companies, hire purchase and other such financial institutions.
• Commercial Banks: Commercial Banks provide finance for consumer durables. Banks lend large sum of money at wholesale rate to commercial or sales finance companies, hire purchase concerns and other such finance companies. Banks also provide consumers personal loans meant for purchasing consumer durable goods.
• Credit Card Institutions: These institutions arrange for credit purchase of consumer goods through respective banks which issue the credit cards. The credit card system enables a person to buy credit card services on credit. On presentation of credit card by the buyer, the seller prepares 3 copies of the sales voucher, one for seller, bank/credit card company and 3rd for the buyer. The seller forwards a copy to the bank for collection. The seller‘s bank forwards company. The bank debits theThe amountbuyer to receives monthly statement from the card issuing bank or company and the amount is to be paid within a period of 20 to 45 days without any additional charges.
(NBFC‘s):Non-bankingFinancial companies constitute an important source of consumer finance. Consumer finance companies also known as small loan companies or personal finance companies are non-saving institutions whose prime assets constitute sale finance receivables, personal cash loans, short and medium term receivables. These companies charge substantially higher rate of interest than the market rates.
• Credit Unions: A credit union is an association of people who agree to save their money together and in turn provide loans to each other at a relatively lower rate of interest. These are caller co-operative credit societies. They are nonprofit deposit taking and low cost credit institutions.
• Consumers financing covers a wide range of products such as cars, Televisions, washing machines, refrigerators, Air conditioners, computers etc. The products covered possess some distinct feature such as durability, sustainability, salability and serviceability etc.
The CEO would need to articulate a strong commitment to rural marketing, only then will the marketing team give its focused attention and sustained support to this growing market segment.
HUL has already created a separate rural vertical with a team of RSMs, ASMs, SOs and RSPs committed exclusively to servicing the rural market. Rural has been given separate
sales targets and the company is in the process of allocating separate sales promotion and advertising budgets for this market.
Retail and IT models
IT and connectivity impact the way business is done. Today with STD facility, the retailer can dial the town distributor instantly and fresh stocks would reach him in just a couple of days, because of better road connectivity.
Benefits of IT Driven business strategy
Ease of access
Layout, design, consistent themes Easy navigation
Access through multiple media
Higher use of non-textual information Multiple languages
Lower transaction cost.
• As the rural market is already bigger than its urban counterpart, there is need to develop a good understanding about it among corporate managers. For this to happen rural marketing should be taught as a subject in every business school.
5 Glamorize rural marketing
• Rural is considered as unglamorous. Industry seminars on these subjects also evoke a similar response. This must change as the rural market in size is bigger than any of the other markets mentioned here.
• Industries associations (CII, FICCI, ASSOCHAM) government agencies and academic institutions should take upon themselves to give due importance to rural marketing.
Companies would join hands with the government in self-interest to increase the size of the pie, by creating economic activity in villages through micro-enterprises and mainstream these efforts, by linking them with large industry.
ICT Initiatives in Rural Markets
N-Logue communications –Business of providing Internet, voice, e-governance and other rural services through a network of Local service providers.