Page 233 - DMGT509_RURAL MARKETING

Rural Marketing

Notes  Promotion and communication
 Poor infrastructure
 Uneconomical market size
 Diverse socio-economic Consumer profile

Against the backdrop of such a market environment, marketers need to design creative solutions
to achieve success in rural markets. The problems of physical distribution and channel
management adversely affect the quality of service (delivery) and cost. With poor or even no
means of communication to exchange information with rural consumers directly, the success of
a brand depends largely on the village retailers. Therefore, rural marketers have felt a great
need to overcome the existing limitations across business stages in general and distribution in
particular of which retailing is the final stage.

12.1 Need of Innovation for Rural Market

As the competition increases in the rural market there might be the need for competitively
priced products that are developed as per the needs of the rural consumers. Non-consumers of
yesteryears are entering into the rural market as first time buyers for a large number of products
in a large numbers. This calls for shift in management thinking from gross margin to higher
profit from high value unit sales to game of high volumes, capital efficiency and from one
solution fits all thinking to market innovation.

Did u know? NGOs have also taken a role in market intermediation. Oxfam and Traidcraft
set up a trading and coffee roasting company Café Direct, now the UK’s leading Fair Trade
drinks company. More recently, Oxfam with a group of coffee-growing cooperatives set
up Progreso Cafes Limited, with 25% of the shares bought on behalf of the cooperatives,
25% held by a Coffee Producers Trust which will pay for development projects in poor
coffee growing communities and 50% held by Oxfam.

12.2 Principle of Innovation for Rural Market

The principles and practices of innovation to be adopted in rural market have to take into
consideration: needs, lifestyles and consumer behaviour of the rural population. It is extremely
important that the product, pricing, promotion and distribution strategy are not just innovative
alone but they must make product value proposition attractive and relevant for rural consumers.

12.2.1 Process Innovation

Process innovations are critical in rural markets. Innovation must focus on building a logistics
infrastructure, including manufacturing that is in accordance with the prevailing conditions and
can deliver solutions in a cost effective manner.

12.2.2 Product Innovation

Product development must start from a deep understanding of functionality, not just form.
Marginal changes to products developed for customers in the towns might not be that effective
in rural market. The infrastructure and environment, in which the rural consumers live and
work in, demand a rethinking of the functionality a new. Poor consumer’s problems can not be
solved with old technologies. New technologies need to be developed to make the product

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