RURAL DEVELOPMENT

Rural development is a strategy designed to improve the economic and social life of rural poor.It is a process, which aims at improving the well being and self realization of people living outside the urbanized areas through collective process.

Rural Development is all about bringing change among rural community from the traditional way of living to progressive way of living. It is also expressed as a movement for progress.

The United Nations defines Rural Development as:

“Rural Development is a process of change, by which the efforts of the people themselves are united, those of government authorities to improve their economic, social and cultural conditions of communities in to the life of the nation and to enable them to contribute fully to national programme.”

Meaning of Rural

• Collin’s cobuild dictionary describes the word rural as “places for away from towns or cities”

• Sociology point of view rural is defined as a group of people who are traditionalists in out look, rooted in the land and who resist change.

• The census of India defines rural as that what is not urban and urban is – locations with in a municipality/ corporation– other location that satisfy the following criteria• 1.minimum population of 5,000• 2. at least 75% of male workforce engaged

in non- agricultural activities• 3. a population density of over 400 person

per sq.km.

Factors differentiating rural marketing from urban marketing

• Infrastructure availability :electricity supply, finance facility, education level, roads connectivity

• Income streams : in rural areas in is seasonal and highly unreliable, consumption pattern is quite different

• Life style: daily routine of consumers is different

• Context : because of variation in infrastructure and income , an individual exists in rural areas is different

• Socio – cultural back ground :value system, goods/services and consumption in general is quite different

• Accessibility : the cost and logistics is high• Media reach and habits: different types of

promotional strategy in these two markets.

• Nature of competition : the nature and intensity of competition amongst the brands is very different in the two markets

• Consumer behaviour : the consumer’s response to marketing stimulate differs widely in two markets

Rural India : A Brief profile

• Adi Godrej, chairman, Godrej group . “ the rural consumer is discerning and the rural market is vibrant. At the current rate of growth, it will soon outstrip the urban market. The rural market is no longer sleeping but we are”

• Villages are the heart of India• 75% of population lives in 6,38,365 villages• 90% is concentrated in the village having

population less than 2000• Rural segment comprises 13.5 crore

households which constitute 72% of total households in India

• But the rural market is not homogeneous across the country

• The consumer willingness to accept innovation also varies among the rural market

Nature and characteristics of the rural market

1) large and scattered market• 75 crore rural consumers who live in

approximately – 6,38,365 villages• 23% have population less than 200• 21% have population between 200 and 500• So widely scattered- raise transportation

costs, affects the viability of the distribution system

• 2) Heterogeneous market• Not a homogeneous• 24 languages and 1642 dialects- varies every

100 km• Difficult to develop uniform message – caste,

community, tradition values (from state to state, region to region differ)

• Variations in economic development and socio-cultural background influence

• Literacy rate in rural south India is higher than rural north

• Rural consumers in the south are more brand conscious

• So, variations in behaviour due to the consumer environment – geographical, occupational

3) Income from agriculture• 55% of rural income comes from the

agriculture sector• Hence rural prosperity is tied with agricultural

prosperityRecently- gradual reduction in the sole

dependence on agriculture( other sectors plays significant role in the rural economy)

4) Standard of living• Lower standard of living• 70% rural population is employed in small –

scale agricultural and related occupation• Seasonality’• As it is unreliability in income- rural consumers

are extremely conscious in their purchase behaviour

• Low literacy, social backwardness, low savings

5) infrastructural facilities• Road, warehouse, communication system and

financial facilities are inadequate in rural area• Roads do not connect nearly 50% villages in

the country• Inadequate infrastructure is single most

important factor distinguishes urban and rural• Promotion and physical distribution thus

becomes very difficult

Life style of rural consumer

• Haryana that had televis ion(53%) sets was more than the number of households that had toi lets(44.5)

1) rural consumer is very re l ig ious• The promotional mater ia l bui lt

around rel ig ious themes is not only going to last longer, but wi l l be kept with care by the v i l lager

2) rural consumers prefer to work hard themselves

• Would not l ike to be replaced by a machine

• They are less l ikely to spend on products making l i fe a bit easier

• 3) strong family ties and respect for family values

• More conservative in their approach toward the different socio, economic issues

• The loose, free flowing hair of a g ir l in a shampoo or hair oi l advertisement may actual ly act as barr ier in the rural market.

• 4) likes to play cards and hangs out at choupal • Whatever promotional message is delivered to

the opinion leaders in a village, gets transmitted

• Love chatting with friends• Word of mouth stories develop around easily

and fast• ITC which has created an e-choupal- using the

internet to bring down any barrier with regard to technology

Profile of rural consumer

• 1) traditional outlook • Values old customs and tradition• 2) perception and its influence• In rural markets, colour, size and shapes are

interpreted differently

• The lower literacy levels in the rural markets increase the importance of visual influence

• 3) less exposure to marketing stimuli• Low exposure to branded product• Advertisement• Source of information and learning• Low convenient buying• 4)conscious of value for money

• 5) realistic aspiration : he can reach out and stretch the budget but that is done with in limits only

• Dual usage 15% of surf and 12% of ariel using families also use nirma detergent

• 18% of pantene using households also used clinic plus shampoo

• 6)concept of quality-values for long lasting “solid), low – cost maintenance

• 7)attitude towards prestige products• Yet they are interested in products adding to

his prestige but the price of a product justifies the value equation

• Rural markets remain untapped because of three D’s

• 1.distance• 2.diversity• 3.dispersion

Challenges in Rural Business

The challenges are..

• 1.Distribution: the problems of physical distribution of channel mgt adversely affect the service as well as the cost aspect- it is not commensurate with the returns that the marketers expect.(poor infrastructure)

• Greatest challenges is reaching out to the remotest destinations and having a number of vendors at the retailing end.

• 2.understanding the psyche of the rural consumerVery distinct from one anotherCampaigns have to be tailor-made for each product category, each region, custom in region, language and dialects etc..

• 3.limited knowledgeDifferent research organisations are very different from one another

• 4. communication: comm..barrier due to language or icons used for advertisingDifferent interpretation in rural marketDubbing – not a right solution for rural audienceThe context, story line, narration, idiom, symbols, appeal need to be examined while developing an advertisementExplain directly and clearly

• 5. cost per contact• Comparing the rural promotional cost with the

urban - is the biggest challenge • Renting a van per day cost more than Rs 3500

and there are 6 lakhs villages spending 500 dialects to cover

• One exposure may not be sufficient • By simple calculation – we can know that the

total cost will be much more to reach the entire rural market.

• 6. sale of fakes and spurious product• The retailer pushes imitation products – as they

get better margins (retailer)• A research undertake by A.C. Neilsen reported

that the sales value of the fake of P&G’s vicks brand were almost equal to the sale of the brand

• Secondly , selling face goods in not a criminal offense in India and it is under civil law

• The only practical way to deal with fake is to improve the distribution and make the products available in as many places

• Original products imitation• 1.pond polons• 2.rin run• 3.501 bar 509 bar• 4. brooke bond benson brand• 5. lifebuoy lifejoy, liteboy

• 7.budgetary allocation• “Corporate sector loves the rural markets, but

when it comes to allocations, the amount of investment in rural marketing is very limited”,

• 8.urban orientation and bias• Rural people are just like urban ones• They too have the same needs, desires and

aspirations • Most of the marketer apply minor

modifications (of the Indian urban market)• But, these paradigms (patterns) fail

• 9.lack of right competence and commitment at frontline level

• Most of the frontline staff is from the urban areas

• They are not very comfortable to travel and interact with the villager

• Solution is recruiting frontline staff from the rural parts of India