Page 278 - DMGT509_RURAL MARKETING

Unit 14: Corporate Sector in Agri-Business

consumer. On the other hand, the government needs to focus on the rural economy Notes
with greater fiscal incentives and generate more rural employment schemes, adds the industry
body.
No doubt, in promoting the industry in rural areas, the role of the government cannot be
ignored. As Mehta suggests, “Rural electrification at subsidised rates, education opportunities
and EMI-linked finance facilities through rural development banks are the areas that the
government must address on priority.” Agreeing with Mehta, Bysani says, “A major emphasis
must be on electricity in all villages, followed by motorable roads.”
Bysani also feels product customisation can further help to attract rural consumers. “We offer
products such as semi-auto washing machines, direct cool refrigerators, low-end small appliances
that typically fit in the pockets of the rural market. Even in mobile phones and cameras, basic
models are focused,” he says, adding, “to tap the rural market, manufacturers should concentrate
on offering customised products.”
The penetration level of consumer durables would be higher in rural India with the growth in
disposable incomes, improving lifestyles, power availability, low running cost, rise in
temperatures and liberal incentives offered by banks and financial institutions for the white
goods industry segment.
While the consumer durables market is facing a slowdown due to saturation in the urban
market, rural consumers should be provided with easy consumer finance schemes, after sales
services to suit the infrastructure, and amenities such as electricity and voltage, among others.
Currently, rural consumers purchase consumer durables from the nearest towns, leading to
increased expenses due to transportation. Purchase is necessarily done only during the harvest,
festival and weeding seasons – April to June and October to November in North India and
October to February in the South – believed to be months ‘good for buying’. The purchase
activity needs to be converted from the seasonal feature into a regular habit.

14.17 The Wave of Change

Despite the low penetration levels at present, the consumer durables industry in rural and semi-
urban areas has witnessed a considerable change in the last few years. The sector is characterised
by the emergence of MNCs, exchange offers, discounts and stiff competition in the market to
attract the growing middle class of the rural market.
Unsurprisingly then, retailers are heading to rural areas. And why not? The ASSOCHAM study
says that the urban consumer durables market is growing at an annual rate of 9-12 per cent,
while its rural counterpart is witnessing a healthy 30 per cent growth. Clearly, the rural market
is growing faster than the urban market and the urban market has now largely become a
product replacement market.

“At present, colour TV, VCD, audio, mobile and refrigerators account for 80 per cent of rural
demand,” says Mehta.
Bysani, on the other hand, says, “Televisions, mixers, wet grinders, gas stoves, water purifiers,
fans and small refrigerators are extremely promising CDIT products in rural India.”

Self Assessment

State whether the following statements are true or false:
9. The State Bank of India (SBI) has started a zero-balance bank account program for villagers.

10. India’s leading automobile manufacturer, today sells 5% of its vehicles in the rural markets.

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