Marketing Practices in Rural India

8/7/2019 Marketing Practices in Rural India

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MarketingPractices inConsumerDurables inRural India


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Contents

................................................................................................................................... 1

Contents ..................................................................................................................... 2

Introduction ................................................................................................................ 3

................................................................................................................................ 3

Indian Rural Market: ................................................................................................ 3

Recent shift in attention from urban to rural market: ............................................. 3

Special Features of rural markets: .......................................................................... 4

Methodology ............................................................................................................... 6

................................................................................................................................... 6

Questionnaire ............................................................................................................ 7

Responses .................................................................................................................. 8

Respondent 1 .......................................................................................................... 8

Respondent 2 .......................................................................................................... 9

Respondent 3 ........................................................................................................ 12

Learnings from the Project ....................................................................................... 14

Awareness ............................................................................................................. 14

Acceptability ......................................................................................................... 14

Availability ............................................................................................................ 15

Affordability ........................................................................................................... 15

Conclusion ................................................................................................................ 16

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Introduction

Indian Rural Market:

The census of India defines rural market as any inhabitation where the

population density is less than 400 per sq. km., where at least 75% of the

male working population is engaged in agriculture and where there exists no

municipality or board. This definition encompasses 70% of Indian population,

who resides in 6.4 Lakh villages.

Recent shift in attention from urban to rural market:

The Indian rural market has a huge demand base ad offers great

opportunities to marketers. Two-thirds of Indian consumers live in rural areas

and almost half of the national income is generated here. The reasons for

heading into the rural areas are fairly clear. The urban consumer durable

market for products like colour TVs, washing machines, refrigerators and air

conditioners is growing annually at between 7 per cent and 10 per cent.

The rural market is zooming ahead at around 25 per cent annually. "The

rural market is growing faster than urban India now," says Venugopal Dhoot,

chairman of the Rs 989 crore (Rs billion) Videocon Appliances. "The urban

market is a replacement and up gradation market today," adds Samsung's

director, marketing, Ravinder Zutshi.

'Go rural' is the slogan of marketing gurus after analyzing the socio-

economic changes in villages. The Rural population is nearly three times the

urban, so that Rural consumers have become the prime target market for

consumer durable and non-durable products, food, construction, electrical,

electronics, automobiles, banks, insurance companies and other sectors

besides hundred per cent of agri-input products such as seeds, fertilizers,

pesticides and farm machinery. The Indian rural market today accounts for

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only about Rs 8 billion of the total ad pie of Rs 120 billion, thus claiming 6.6

per cent of the total share. So clearly there seems to be a long way ahead.

Although a lot is spoken about the immense potential of the unexplored rural

market, advertisers and companies find it easier to vie for a share of the

already divided urban pie.

The success of a brand in the Indian rural market is as unpredictable as rain.

It has always been difficult to gauge the rural market. Many brands, which

should have been successful, have failed miserably. More often than not,

people attribute rural market success to luck. Therefore, marketers need to

understand the social dynamics and attitude variations within each village

though nationally it follows a consistent pattern looking at the challengesand the opportunities which rural markets offer to the marketers it can be

said that the future is very promising for those who can understand the

dynamics of rural markets and exploit them to their best advantage. A

radical change in attitudes of marketers towards the vibrant and burgeoning

rural markets is called for, so they can successfully impress on the 230

million rural consumers spread over approximately six hundred thousand

villages in rural India.

Special Features of rural markets:

Unlike urban markets, rural markets are difficult to predict and possess

special characteristics. The featured population is predominantly illiterate,

have low income, characterized by irregular income, lack of monthly income

and flow of income fluctuating with the monsoon winds.

Rural markets face the critical issues of Distribution, Understanding the rural

consumer, Communication and Poor infrastructure. The marketer has to

strengthen the distribution and pricing strategies. The rural consumer

expects value for money and owing to has unsteady and meager status of

weekly income; increasing the household income and improving distribution

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Methodology

The basic aim of this project is to identify the current marketing practices in Rural

India adopted by various consumer durable companies. We can do that by a mere

secondary analysis of the available reports from the research sites.

But we adopt an unconventional methodology for this project. We do not end up

reproducing the current practices but for the betterment, we refine and fine tune

our report to identify how successful the current market practices have been and do

the consumers actually buy because of those marketing practices. Which of the 4As

is dominant in helping the rural consumer make the final purchase and what are the

compulsive factors that have to be present for the final purchase is what we also

analyse along with the current marketing practices.

We formed a questionnaire and questioned 3 different villagers for their take on the

current marketing practices. All the questions in the questionnaire were

strategically chosen considering into account the 4 As and questions were based on

each of the 4As along with some focus on the key influencer and the decision

maker.

After we got the subjective questionnaire filled from the respondents, we analysed

it and thus did a comprehensive 4A study and the drawbacks and the advantages

were quite clearly emerging from the results.

Thus the current marketing practices for consumer durables along with the prime

important characteristic of effectiveness are the two factors that comprehensively

emerge from the report.

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Questionnaire

1. Age:2. Gender:

3. Income:

4. What consumer durables do you own?

5. Who in the family is the influencer for each of the above mentioned products?

6. Who is the main decision maker in your family?

7. Who goes to make the purchase?

8. How important is the price of the product in your purchase decision?

9. From where do you buy them?

10. Do you buy any brand or are you loyal to a specific brand?

11. Does the proximity of the place from where you buy matter?

12. Do you listen to the retailer or go by your preset mindset?

13. How did you come to know of a particular brand? (Media Vehicles)

14. Whom do you go to for the brand recommendation?

15. Do you buy it anytime of the year or only during certain seasons?

16. How do you bring the product back to your home? (Mode of transport)

17. How do you finance your purchases?

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Responses

Respondent 1

1. Age: 42 years

2. Gender: Male

3. Income: Rs 3-4 lakhs P.A.


Television

Refrigerator

Washing Machine

Mixer Grinder

Inverter

5. Who in the family is the influencer for each of the above mentioned

products?

Television: Son

Refrigerator: Wife

Washing Machine: Wife

Mixer Grinder: Wife

Inverter: I Myself


I Myself


I Myself


As we dont buy these products often so we dont give much importance to

price, quality is more important to us.


Most of the Consumer durables are available in Revari (a feeder town) which

is 23 Kms from here.


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We prefer small brands (local) above big brands as these small brands

provide after sales service in the village whereas for the big brands we will

have to go to Jhajhhar (Distt HQ)


Yes


No, we always decide before going to the retailer

13. How did you come to know of a particular brand? (Media

Vehicles)

TV

Radio

Newspaper

Friends and family


Friends (who own the brand)

15. Do you buy it anytime of the year or only during certain

seasons?

We buy mainly in festive season of Deepawali or during Marriages

16. How do you bring the product back to your home? (Mode of

transport)

Public transport (Bus Service)

Private Jeeps

Motorcycle


Mainly through our savings

Respondent 2

1. Age: 38 Years

2. Gender: Male

3. Income: 2 lakh pa

4. What consumer durables do you buy?

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TV

Refrigerator

Washing Machine

DVD/CD player

Inverter

Sewing Machine

Ceiling and Table Fan


products?

TV: Leading Male

Refrigerator: Leading Male

Washing Machine: Leading Male+ Opinion from leading lady

DVD/CD player: Leading Male + Opinion from Children

Inverter: Leading Male

Sewing Machine: Leading Lady

Ceiling and Table Fan: Leading Male


Leading Male


Leading Male


For most of the items, price is not so important but quality and after sales

service are the essential attributes looked upon while making the final buying

decision.


Most of the times nearby towns are preferred but an extra mile can be

travelled if better quality and service can be assured at that place.

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10.Do you buy any brand or are you loyal to a specific brand?

The most important factor on which the final decision depends is the after

sales service, because the item has to be taken back to the service center, in

case no at the door service option is available. But at the door service or a

nearby service centre is the feature we look in for.


It does matter but only if quality is same at all places, but if quality is

different than extra distance can be travelled to get a better product.


Yes, retailer opinion does effect the buying decision, because he is always

consulted while making the final decision as he is more experienced and

know more about technical specifications.


Vehicles)

Word of mouth publicity is the most common and reliable source of

information. Apart from it OOH media and on the shop merchandising also

provides lot of information.


The most important recommendation comes from the previous user or

customer who provides insights about the product.


seasons?

Most of the durables are generally given as the gift items to the bride at the

time of marriage but there is also occasional and seasonal buying of Fans,

Mobile phone etc.


transport)

Big items are brought by either Bus or sometimes by Tractor


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Generally lump sum amount is paid for most of the products and only in case

the item is expensive and easy financing is possible, then financing is

thought about

Respondent 3

1. Age: 44

2. Gender: Male

3. Income: 5 lakhs


Refrigerator

Television

Washing Machine

Computer

Sewing machine


products?

Refrigerator: Wife

Television: Children

Washing Machine: Gotin Dowry (This was the general trend as he

said)

Computer: Son

Sewing Machine: Wife


The working husband (the respondent himself)


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Except the computer, all purchases were made by him. His son went to

purchase the computer.


He said that price is somewhat important in the decision making process but

for him the Samsung brand mattered a lot in the television buying decision

and he did not mind to pay a higher price for his desired brand.


From a nearby bigger village from where he buys all his consumer durables.


He was highly brand loyal.


Somewhat but he did not mind traveling.


Preset mindset. The retailer push did maintain somewhat, but he went into

the store with an almost preset mindset.


Vehicles)

Regional newspaper and television are still the major source for media

vehicles in the village that we visited.


Friends, newspaper ads, television ads, all form an equal source of

inspiration, no particular influencer from outside.


seasons?

This person was well to do, so the harvest season did not matter to him but

he did buy during auspicious occasions like Dassera.


transport)

Jeep, Bike

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Personal income,

Sometimes loans from the neighborhood banks.

Learnings from the Project

Awareness

The rural consumer as we derived from our project comes to know about the

consumer durables from a number of sources like

Regional & National TV

Newspapers

Radio

Word of Mouth/ Family and friends

Merchandising at the retailer

Billboards

So we can clearly see that, Consumers in rural India are becoming more and more

aware as their exposure to various media vehicles is increasing.

Acceptability1. The quality parameter of the products purchased in case of consumer

durables is rated very high by the consumers. This finding is exact opposite

of the perceived thought that the rural consumer buys cheap and low quality

product.

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2. Another important attribute of acceptability that we found out from the

respondents was that they buy smaller and lesser known brands only

because of the reason that these brands provide a better after sales service.

Mechanics of these lesser known brands visit the village in case any problem

occurs and they require any assistance. Whereas in case of bigger brands

like LG, Samsung, Sony etc. these people have to take the product to the

district HQ (Jhajhar) in case of any problem.

Availability

As far as the availability of the consumer durables is concerned we came to

following conclusions:

1. Most of the brands are available in the nearby towns that were Rewari, Jhajjarand Pataudi. Which employees that the distribution is quite effective as most

of the customers can reach the locations easily.

2. Customers are not apprehensive about extra travelling and they are willing to

travel extra distance in order to get a better product

3. Availability of service centre is very important and this is one of the most

important factor to decide the product to buy

4. Home service is always perceived as an added advantage and sometimes a

criterion to buy a product

5. Consumers sometimes do look for specific brand and in case of absence of a

particular brand they may go to a different store

Affordability

The issues and points that were realized during the visit are:

1. Price is not the buying criterion, quality is more important

2. Financing is not looked upon and financing option would not give an extra

advantage

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3. Most of the products are given as a gift at the time of wedding and hence

uttermost care is given to the brand and quality

4. While deciding the price the company should look at the value it is going to

create for the consumers, because rural consumers always look for value for

money

Conclusion

Thus in the above report we have comprehensively analysed the current marketing

practices that companies undertake in order to effectively lure the rural consumer

into buying the consumer durables. Along with the marketing practices, we also

analyse the effectiveness of the current practices by means of a subjective survey

of three families (dominant males: the decision maker). We then conducted a 4A

analysis and thus have a complete picture of the current marketing practices in

consumer durables and its effectiveness.

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Marketing Practices in Rural India

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