Rural markets need different strategy for upcoming business.

Dr. PC Sabharwal & Pushyamitra Joshi Go Rural India campaign is now a common slogan used by most of the financial, banking and retail sector companies. Every company wants its presence in rural and semi-urban markets to penetrate in these markets. Hidden market potential of Rural India is now visible and viable due to: Increase in the disposable income level of rural consumers Better road connectivity Advent of various rural development schemes by Government Saturation in urban market Basic infrastructure development Increase in literacy level of rural people

Over the years Rural India has seen an impressive growth. Substantial improvement in purchasing power, increasing brand consciousness, changing consumption pattern and rapid spread of communication network in rural areas has presented a growing potential for the corporate sector. Its better to target the rural market as it is growing by the day. Rural India is emerging as a large market for a number of goods and services financial services, health care, education and telecommunicationthe list seems to be endless. Today rural markets are as critical as urban markets for marketers A strategy to explore the hidden potential of rural markets needs to be worked out by the companies to meet the demands of the rural consumers. Most of the companies are still using the same urban marketing and operational approach while penetrating in the rural markets which does not help to satisfy the rural consumer and thus loss in capturing the rural markets. Companies do not see any difference in both the markets. Generally marketing mix strategies is based on the product, price, place and promotion but in rural marketing it is replaced by Acceptability, Affordability, Awareness and Availability. The major strategies for entering the rural markets may be: 1. Basic product & pricing 2. Less quantity packing 3. Educating rural people

4. Understanding their needs & requirements

5. Easy accessibility

Its difficult to enter and become successful instantly in the rural market as compared to urban market because the people in urban areas have their own perceptions and they are used to do the same thing over and over again. Although the Rural Market does offer vast untapped potential, it should be recognized that it is not that easy to operate in the rural market because of several such problems. Rural Marketing is a time consuming affair and requires considerable investments in terms of evolving appropriate strategies to tackle the problems. So if you want to make them aware of your product you first need to break their perceptions and build trust for your product. Then only you can make use of the huge potential for growth that it offers. Two cases each from retail and banking sector are discussed; which help to understand the problem and mistake generally done by marketers while penetrating rural market.

Case of Kushal Mega Mart (Retail sector)

After successful stints in the urban markets like Indore, Bhopal, Jabalpur and Gwalior of Madhya Pradesh, Indias leading retail company Kushal mega mart decided to open its retail stores in potential semi-urban and rural markets in the state. After doing the basic market research company finally decided to open its retail store in one of the most potential rural market Dhar. Company operated its retail store in the same way it operates in the urban market. Fully air conditioned big retail outlet with few varieties in clothes, belts, food grains, and other items. Company also did not change its customer service strategy of not giving personal attention to customers till customer does not demand for it. After opening the store surprisingly 2-3 customer per day visits the outlet during first week. After a week surprise turned into nightmare when customers came to visit the store with bare foot because they felt that in the air conditioned outlet their shoes and chapels may spread the dust and dirt. Company staff was in a big dilemma that how to deal with this situation? How to aware customers about not to leave their shoes outside the store? It took almost 4 months to make customers aware to not leave their shoes outside the store. Overcoming this problem company faced new problem of positioning and how to be different from its competitors (Local retailers)? After 1 & years company had closed its store in Dhar.

Case of Praxis Bank (Banking Sector)

Private Banks are aggressively opening their branches in rural areas to penetrate the rural market. Here is the case of Indias leading private bank Praxis and its struggle in penetrating rural market. Like its branches in other cities it has opened its branch in Khargone town of Madhya Pradesh, with the same distribution and product-price portfolio strategy. Basic financial products like savings a/c and current a/c with the same price and branch having all the standard facilities like air condition, furniture, and fancy outlook same as urban branches. Saving a/c opened with the amount of Rs. 5000/- minimum. A place where nationalised and co-operative banks opening saving a/c with minimum Rs. 500/- and Rs. 1000/- only. In comparison to this; amount charged by Praxis was too high. Customers were not showing interest in opening a/c with the banks except a few doctors and businessmen due to personal relation with sales executives and also to show their status in the society. Apart from it conditions were not in favour of branch staff because they were not getting expected outcome; their bosses had actually planned. Private Banks like Praxis bank still finding it difficult to penetrate the rural market and small town like Khargone is one the best example of it.

Learning from these cases

Rural market is having potential but at the same time it requires different marketing strategies. Rural consumers need value for money and basic products not standard product with luxury services. Problems discussed in the above cases show that whether it is a product company or service provider company, it has to understand the real need by customization and co-creation. Also try to avoid the standardized offerings in the rural market in every aspect. In first case customer need attention, value for money products with variety instead of air condition retail store. Air condition only increases the cost to the company as far as rural market is concerned. In second case rural consumer need basic saving and current account with minimum balance facility. Luxury facilities like air condition, beautiful ambience and higher amount opening balance accounts with additional facilities hardly matters to the rural consumers.

Go rural is the need of the hour but it is better to go for the real potential of the rural market. To explore the real potential of rural market it is necessary to understand the need and requirements of the rural consumers. Before actually getting into rural market it is very important to explore the need and requirements of rural consumers along with acceptability of the product, affordability in terms of pricing of the product, proper awareness about the offerings and make sure the availability of the right product and services through right channel in the rural market for companies.