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					 International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online),
   INTERNATIONAL JOURNAL OF MANAGEMENT (IJM)
 Volume 4, Issue 6, November - December (2013)

ISSN 0976-6502 (Print)
ISSN 0976-6510 (Online)                                                              IJM
Volume 4, Issue 6, November - December (2013), pp. 176-182
© IAEME: www.iaeme.com/ijm.asp                                                 ©IAEME
Journal Impact Factor (2013): 6.9071 (Calculated by GISI)
www.jifactor.com




     INFLUENCE THE RURAL MARKET IN INDIA OVER CHALLENGES

                              Mr. VIKRAM MOHANLAL AGRAWAL

     Assistant Professor, IT Department, BVM Engineering College, Vallabh Vidyanagar-388120



 ABSTRACT

         In recent years rural market have attained importance because there is 68.84% population live
 in 7, 78, 134 villages. Rural markets have been the buzz word in the Indian consumer market for
 quite some time. However, only a few companies have managed to make a profit from this market.
 This market is normally known as micro-market where you want to sell and modifying your model
 metropolitan and medium size cities as per regional distinctiveness. It would ensure profitable rural
 growth than metropolitan. In metropolitan, it is difficult to find out the scope of penetration, increase
 latency level and increase the income but in rural area, these all work as advantages for companies.
 This paper tries to understand the rural market, its strategies and way to get opportunities. The main
 aim of to study to observe the potential of Indian rural markets with considering some problems and
 challenges.

 Keywords: FMCG, Rural Consumers, Rural Market.

 1. INTRODUCTION

         From last two to three decade the rural market was used to attract the bigger player of Indian
 Consumer Market because now days most of the companies want to move to lavish life of consumers
 in cities. They think that it is easy to establish foot in big cities than rural area. So there is 70%
 population of our country was not in consideration to develop business. But now from last decade, an
 attraction has increased with additional money those are in rural area because of green revolution.
 From the last decade, there is rise in agribusiness and agri-produce prices and MNREGA is spending
 much amount over the different schemes to improve the life style of rural and poverty area. In a
 context of poverty & unemployment, wage employment programs provide unskilled manual workers
 with short-term employment on public works such as irrigation infrastructure, reforestation soil
 conservation, road construction etc. These programs provide income transfers to poor households
 during critical times and so also enable consumption smoothing specially during slack agricultural
 seasons or years. Durable assets created under these programs have the potential to generate
 sustainable livelihood. Further more the government agencies like IRDA (insurance Regulatory and
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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online),
Volume 4, Issue 6, November - December (2013)

Development Authority) and NCEAR (National Council for Applied Economics Research) define
rural as a village with population less than 5000 with 75% male engaged in agriculture, while HUL,
ITC and most FMCG companies consider village if the population is less than 20,000 . Rural
marketing is promotion of a company’s product in the rural market by using strategies which differ
from the urban market.

                            Image 1: - Changing face of Rural India




Source: http://www.livemint.com/Politics/NrJ7f1WnwO8VHSzxYNG7mI/The-changing-face-
                                   of-rural-india.html

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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online),
Volume 4, Issue 6, November - December (2013)

2. THE CHANGING FACE OF RURAL INDIA

        From the following chart we can say that the average rural household spent more on stuff
other than food in 2011-12. The share of spending on durable goods e.g. furniture and electronic
devices, and entertainment has nearly doubled over the past seven years. Rural spending on clothes,
on footwear, on consumer services such as telephone and repairing charges, and on conveyance has
also seen a quick jump over the same period. The actual share of these items in rural household
budgets is still small, but the absolute size of the Indian rural population means that even small
increases in the shares of some discretionary items can translate into large opportunities for
consumer companies that have a presence in the villages. After all, 70% Indians still live in villages.
And while the average person in urban India remains far wealthier than the average person in rural
India. In the past few years the consumption in rural India than urban India is sharply increased.
Consumer goods companies have been investing to strengthen their rural distribution networks, as a
recent report by Credit Suisse points out. Banks have finalized plans for an expansion of their rural
branches over the next few years. It may not be a surprise to see firms in other sectors aiming to
expand their rural reach over the next few years.

3. ARENAS IN RURAL MARKETING

Before 1960’s
       It was unorganized market and depended on Baniyas and Mahajans only
       There was rural marketing means agriculture marketing because it had only primary attention

1960 to 1990
       The green revolution happened in this duration where farming is done with scientific and
       technological methods.
        Rural marketing meant “marketing of agriculture inputs” and “agriculture marketing”.
       Government started to pay attention and promote agriculture products.

After 1990
       India’s industrial sector had gain strength and maturity because of GNP increased
       substantially.
       Rural marketing meant “marketing of agriculture inputs” and “agriculture marketing”.
       First time rural marketing consider different from agriculture marketing.
       Rural marketing in Indian economy can be classified under two broad categories these are:
       the market for consumer goods that comprise of both durable and non-durable goods and
       market for agriculture inputs that include fertilizers, pesticides, and seeds and so on.

4. OBJECTIVE BEHIND RURAL MARKETING

        After 1990, the rural market is consider as different from agriculture market so the objective
of rural market is changed,

       To study the present scenario of rural market in India because according to Government less
       than 5000 population with 75% male in agriculture only add as villages, while According the
       companies which are in business in Rural area they show village with population with 20,000
       To identify the major opportunities available in the rural market because it totally impossible
       to get work from only villagers we need people with high skill who can create and also find
       opportunities in villages.

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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online),
Volume 4, Issue 6, November - December (2013)

       To study major challenges faced by marketer in rural market. The marketing should be
       effective and efficient. It should be understand by normal villagers as well important for other
       people. Always make comparative study during marketing in rural area and urban area.

                           Table: 1 Share of rural in total population
                               2001(in crore)     2011(in crore)      Difference(crore)
               India               102.9                121.0                18.1
               Rural                74.3                83 .3                9.0
              Urban                 28.6                 37.7                9.1
        Source: census of India 2011

        From the above table we can say that rural population is also increased with urban population
of India. Still there are more people live in Villages than metropolitan.

4.1 Rural Market Status
        The market scenario in the rural areas today is changing very rapidly. Rural consumers
demand branded products mainly because of increase in disposable income and literacy level. Rural
families do not like to cut their expenditure on weddings, pilgrimages, constructions and
consumptions. Rural consumers have more aspirations, today this segment of buyers consumes large
variety of products, both durable and non-durables and willing to pay right price for right products.
Pardeep Kashyap, CEO, MART, says “The rural India has cash in hand and is not bound by EMIs or
loans, with the majority of our population based in tier III, tier IV cities and villages. It is right time
to penetrate into rural market.”

                          Table: 2 Rural share in stock of consumer goods
     Stock          1995-96      Share in     2001-02        Share in   2009-10               Share in
                    (in’000)      percent     (in’000)       percent    (in’000)              percent
  Cars/Jeeps       197         7.4          389          6.9        1876                        9.3
  Motorcycle      2210        45.8         6710         50.4        34724                       55.4
   Scooters       2496        25.2         4416         29.8        6125                        32.0
   Mopeds         2096        37.3         3930         42.2        7333                        46.6
  Automotive      6999        30.5         15445        35.9        50058                       42.5
  Television      21411       40.7         40605        47.6        63295                       44.9
   All Fans       37990       42.4         74673        49.3       157237                       49.0
 Other White      3337        13.5         7766         16.7        16730                       16.7
    goods
   Low cost      226952       57.9        313892        58.7       521999                       58.5
    items
Source: The Great Indian Market, National Council of Applied Economic Research

        The above table shows that the rural share in stock of consumer goods like car/jeeps,
motorcycle, scooters, moped, automotive, television, fans, other white goods and low cost items. The
rural share in automotive has increased from 30.5% in 1995-96 to 35.9% in 2001-02 and 42.5% in
2009-10, cars/ jeeps from 7.4% in 1995-96 to 9.3 in 2009-10,motorcycle from 45.8% (1995-96) to
50.4 (2001-02) and 55.4 (2009-10), scooters from 25.2% (1995-96) to 29.8% (2001-02) and 32.0
(2009-10), moped from 37.3% (1995-96) to 46.6 (2009-10). Similarly, in television it has registered
an increase from 40.7% (1995-96) to 44.9% (2009-10). Thus it is clear from the table that the
percentage of rural share in the stock of consumer goods has been raising since 1995-96 to 2009-10.

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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online),
Volume 4, Issue 6, November - December (2013)

                    Table: 3 Rural share in stock of consumer demands
 Demand                  1995-96    Share in 2001-02 Share in       2009-10             Share in
                         (in ‘000) percent      (in ‘000) percent   (in ‘000)           percent
 Cars/Jeeps              6          2.1         63        8.0       376                 10.9
 Motorcycle              359        47.3        1036      39.8      4045                48.3
 Scooters                368        33.1        355       39.4      311                 39.9
 Mopeds                  286        52.7        235       58.2      141                 57.7
 Automotive              1016       37.9        1689      36.0      4873                37.9
 Television              4852       54.0        6400      54.5      7712                44.2
 All Fans                7050       50.0        14627     56.9      32561               56.7
 Other White goods       819        23.8        1439      23.9      3120                23.7
 Low cost items          29228      58.1        45139     60.1      88607               61.3
Source: The Great India Market, National Council of Applied Economics Research

        The above table shows that the rural demand for two wheelers have increased from 1626
thousand in 2001-02 to 4497 thousand in 2009-10 which account 176% change in rural demand for
two wheelers while the urban demand has increased by 114.8%. In case of television 6400 thousand
TV sets were demanded in rural area in 2001-02, while in urban area only 5334 thousand TV sets
were demanded. In 2009-10, 7712 thousand TV sets are demanded in rural areas while in urban areas
9746 thousand TV sets are demanded. Rural demand for TV has increased by 20.5% where as urban
demand has increased by 82.7% from 2001-02 to 2009-10. Similarly, in respect of low cost goods
rural demand increased by 96.2% while urban demand registered a growth of 86.5%.

                 Table: 5 Difference in the rural urban demand (consumable)
        Items                             2001-02            2009-10        Percentage
                                      (figures in 000)
                                                  ‟      (figures in 000)
                                                                       ‟  Increase (%)
     Shampoos            Urban               13.6              31.4           130.8
                         Rural                6.7              16.3           143.2
     Edible Oil          Urban             2328.0             3986.5          71.24
                         Rural             4681.6              666.2           42.3
       Health            Urban               96.5              223.4          131.5
     Beverages           Rural               37.0              88.9           140.2
      Packaged           Urban              550.4             1091.0           98.2
       Biscuits          Rural              294.4              521.6           77.1
      Washing            Urban              510.7              616.5           20.7
        Cakes            Rural             1351.7             2104.5           55.6
     Toilet Soap         Urban              335.9              464.2           38.1
                         Rural              469.4              657.7           40.1
      Washing            Urban              847.1             1485.4           75.3
       Powder            Rural             1005.2             1847.8           83.8
   Source: The Great Indian Market, National Council of Applied Economic Research

        From the table we can see that percentage increase in demand shampoos, health beverages,
toilet shop, washing cakes and washing powder is more in rural areas as compare to urban area.
While in edible oil and packed biscuits increase in demand is more in urban area as compare to rural
area. Thus we can say that the consumption of many items areas is increasing at a high speed and
higher than the growing demand in urban area.


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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online),
Volume 4, Issue 6, November - December (2013)

5. IDENTIFYING SIGNIFICANT FACTOR FOR RURAL MARKETING

Factor Indicating Awareness
       Education of female in household
       Access of media: TV without cable, TV with Cable, Radio, News papers and Periodicals
       Awareness about standard of lifestyle
       Accepting world of Micro Market

Factor Indicate Standard Of Living
       Household occupation (Agri /Non Agri)
       Occupation of Chief wage earner (CWE)
       Ownership of select durables
       Types of structure house ( hut to house)
       Fuel used in cooking
       Use Different transportation rather than bullock cart

Product Buying Factor
      Products more often and really necessity of villagers
      Buys small packs, low unit price more important than economy
      Common regular usage things like shampoos, detergent, talcum powder and beauty cream etc
      Fewer brand choices in rural areas like HUL and Amul
      Started to buy value of money rather than cheap products.

Other Factor
      Religion
      Presence of city in district
      Share of rural population in district (Metropolitan Impact)

6. CHALLENGES

       There are many opportunities to penetrate in rural market even though there are many
challenges to reach to many villages. The main challenges of rural marketing are discussed below:

Transportation Problems: - transportation is essential for movement of products from urban
production centers to remote villages where we can not produce many things.
Warehousing Problems: - A storage function is necessary because there are always time gap
between production and consumption. Due to less population in villages all the products are not
consume as fast as produce.
Inadequate Media Coverage: - Media have lots of problem in rural area. Only TV is best source to
communicate with villagers but we can not advertise some of Micro-Market products otherwise the
value of these products are increased.
Many Languages: - there are many villages still people in there are illiterate. If we want to talk with
them then we must know local languages which are used in villages. This problem is sometime, we
can not short out. India is country of many languages with different people, so it is necessary for
companies to understand the mentality of rural area.
Seasonal Demand: - Agriculture situation plays a significant role in demand of commodities in rural
market because agriculture depends on weather.

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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online),
Volume 4, Issue 6, November - December (2013)

CONCLUSION

       From the review of paper, the rural India offers huge opportunities with less competition as
compare to urban area. However, Companies face many challenges to do work in rural India. There
are vast untapped opportunities available in rural area but there are many FMCG companies unable
to reach. Today there are fast development in infrastructure is going on in rural area and also many
education sector and university established there which attract companies to target rural market. The
rural market is greater future prospects for marketers and there are many opportunities in rural
markets.

REFERENCES

 [1]    Census of India 2011
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 [3]    Kotni, VV D.P. (2012). Prospect and problems of Indian rural markets. ZENITH
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 [4]    Kumar A., Hagagi, S. (2011). Rural market in India: some opportunities and challenges.
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 [5]    Rafiuddin, M.D., Ahmed B. (2011). Understanding the potential of rural marketing in India-
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 [6]    Shukla, S., Tandon, N. (2011). Rural marketing exploring new possibilities in the rural India.
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 [7]    Singh, P., Sharma, A. (2012). The Changing Face of Rural Marketing in Indian economy.
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 [10]   Dr. Anukrati Shrama, “An Analytical Study on the Opportunities of Rural Marketing in
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        rural-india.htm.


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