Page 10 - DMGT509_RURAL MARKETING

Unit 1: Rural Marketing – An Introduction

of the rural consumers should be analyzed at the product planning stage so that they match the Notes
needs of the rural people.

Figure 1.1: Rural India – Challenges and Opportunities

Therefore, marketers need to understand the social dynamics and attitude variations within
each village though nationally it follows a consistent pattern. The main problems in rural
marketing are:

 Understanding the Rural Consumer
 Poor Infrastructure
 Physical Distribution
 Channel Management
 Promotion and Marketing Communication

There has been a considerable amount of discussion on rural India of late and the opportunity it
presents and one almost gets tired of the rate at which CK Prahlad is being quoted these days.
Rural India definitely does present immense opportunity but for everyone trying to make
millions out of it, there are a few words of caution on the challenges that the landscape presents.
1. Distribution and logistics: Infrastructure continues to be a challenge in rural India.
Moreover, the lack of an efficient distribution network prevents penetration of products/
services into rural India. One of the most innovative models in recent times has been the
usage of the postal service by mobile operators to penetrate scratch cards to the villages.
The Indian Postal Service with 155000 post offices is the largest distribution network in the
world, and has all of 120000 outlets in India’s villages.
2. Payment collection: The majority of the rural population is still unbanked. Clearly, non-
cash collection becomes rather unlikely. Cash collections, on the other hand, are messy
and difficult to monitor, especially since cash cards or technology-enabled centralized
POS (like Suvidha or ItzWorld) have still not reached rural areas. The time-tested
manufacturer-distributor-retailer network has been the only real success so far but setting
up such a structure is rarely feasible. Partnering with MFIs comes to mind but often, the
MFIs don’t cater to the relatively more privileged/affluent segments of the rural economy
who are likely to be early adopters.

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