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The major inhibiting factors to rural marketing are institutional and infrastructural
issues; many of these have yet to be addressed by government policies, and
need to betaken fast-forward to implementation.
Corporate marketers have been quick to hit the rural dirt-tracks but they came
adequately prepared. Hard selling to the heart of India is a formidable challenge
because reaching 6.3 lakh villages and feeding a retail network of over 20 lakh
village shops is a distribution nightmare,says Pradeep Kashyap^ ,and suggests
innovative and cost effective ways to reach the rural consumer through haats
(weekly village markets) and melas{ fairs).
Most companies in FMCG and agri input sectors would define Yural' as any place
with population upto 20,000. Similarly, companies selling durable goods consider
any town with population below 50,000 as rural. These are some of the
challenges that companies face in tackling rural markets^.
For the Indian farmer, agriculture is more a way of life than a profession. This
is the something that professionals who have trained at management schools
There are more than 38 lakh retail outlets in rural India, which averages to
averaging 5.8 shops per village. (The term "shop" refers to any type of premises
- huts, stalls, or shacks that sell goods). Overall, the rural market has been
growing at 3-4 per cent per annum, adding more than 10 lakh new customers
evey year. It now accounts for close to 50 per cent of consumption of Fgoods
produced by the MCG sector in India"^.
The Indian rural markets are vast and in most cases still an enigma to marketers.
What then is the biggest challenge that faces marketers of fast-moving consumer
goods? Simple, it is to increase penetration and consumption in rural markets.
Rural markets be damned. Fickle, slow moving, irrational, often ludicrous - are
they perhaps a mix of it all. It is difficult to put the finger on the pulse of the
rural consumer. Given the lack of infrastructure, facilities like power and difficult
logistics making for high cost of operating in rural markets, says Sachin Baxi^.
According to G Srinivas Rao^°, the Indian market with its vast size and demand
potential offers great opportunities to marketers. The rural markets provide vast
potential as many new products have already made their entry into them. Thus,
the rural market has been growing in magnitude for both traditional and modern
consumer goods and services. In spite of its large size and high potential, many
marketing firms are not able to tap the potential of the rural market because of
the problems they face in selling goods there.
There is a need for a thorough examination of the rural marketing scenario. For
this purpose, efforts should be made to analyse the rural market environment,
and measures initiated to develop the rural market by charting appropriate
RajagopaP says that rural marketing is a mix of farm and non-farm produce
marketing activities. The role of rural marketing needs to be understood in view
of the social dynamics and various economic and operational gaps therein.
Thus, appropriate planning is needed for rural product marketing in terms of
trade channels, developing infrastructure, and tapping technology in an attempt
to improve the economic efficiency of marketing operations.
The marketing mix strategy has to flow from a thorough understanding of the
rural consumer. Therefore, in the first instance, the rural consumer has to be
understood in the right perspective, his background and mindset needs to be
explored, and an assessment made of how this consumer is different from his
urban counterpart^^.
Rural marketing has often been defined in a narrow sense to include only the
marketing of agricultural production. Marketing of agricultural production has
received adequate attention of researchers, policy-makers, and the central and
state governments resulted. As a result, there are about 5000 agricultural
commodity markets in the country, which are being regulated by the State.
The advent of commercial and market-oriented farming with the help of modern
agricultural technology, necessitated the use of manufactured inputs like
fertilisers, pesticides high-yielding varieties of seeds, electric pumps and
frictionless pipes. Thus, the definition of rural marketing has expanded in scope.
Rural citizens who occupy a pivotal position in rural markets, are both buyers as
well as sellers of goods and services. Hence, changes in rural markets, changes
in rural marketing and their inter-relationship, affectsthem both in the capity of
sellers as well as buyers. There two aspects independently as well as collectively,
have a bearing on rural market situations^''.
The interesting position that finally emerges abut the profile of the rural
consumer is that one cannot proceed on the basis of a stereotype of the rural
consumer, or of rural consumer behaviour. The most interesting aspect is that
the rural market is growing at an astounding rate of 25% per annum^°.
The first great boom is over. "Now companies must dig deeper to create a
second sustained surge. With the dominant position that the rural market in
India has come to occupy in recent years, the country is is all set for rapid rural
transformation. India is a huge dormant market, but good marketing can help to
awaken the giant, says Balakeritz^^.
The challenges lying in wait for rural marketers are many, and they are also
tough. New approaches have to be adopted and new models have to be
developed that are both imaginative and innovative. The self-help groups, being
apart of rural community, can be a good source of information. They can give
insights that will help design the behavioral models that facilitate product
marketers to understand their target audiences^^
Rakesh Handa^'^ says the rural markets are neglected not because companies
would need have to develop new marketing strategies, but because of
perceptions based on biased industrial views. Commonly followed by all
companies due to labour involved in developing these markets. He further
reaffirms that if they develop these markets, it Is possible that they may not be
able to cope with the demand that would be generated.
In any economy, marketing is a critical factor that can affect all stages of
economic development. In a country like India, which is largely agrarian,
marketing of goods and services to consumers in rural areas can contribute
significantly to rural development. Marketing activity can help introduce an
entirely new line of products based on new concepts or principles, and reach
Bose^^ says that the rural market, however, has always been seen as an
unmanageable territory; due to its vastness and scattered spread managing it
calls for a hard look at available data.
According to an ORG report^^, the rural markets for packaged consumer products
has grown nearly threefold, from Rs. 733 crore in 1984 to Rs. 2,083 crore in
The socio-economic survey by Hindustan Lever Limted^° revealed that the high
percentage of school-going children will increase substantially as literacy levels
are poised to rise during the next decade. An encouragingly high proportion of
the village population - particularly among upper income groups - already read
language newspapers and magazines, and are regular radio listeners.
A survey in rural Tamil Nadu shows that upper income households (those with
income above Rs. 12,000 per annum) are beginning to acquire a number of
Nagarajan^^ suggests the use of many media channels, viz, posters, signboards,
magazines, hoardings, wall sites, shandies or mandis, participation in fairs,
exhibitions and meSas, use of propaganda / demonstration vans, etc. to win
favour with rural customers. He also suggests that while marketing in rural
areas, advertising strategies should lay more emphasis on using the media
channels suggested and time the release of ads with events and festivals
observed in the villages.
Multi-national companies are going deep into rural India to sell soaps,
detergents and toiletries. Multinational companies HLL, P&G and Indian
companies like Tata, Nirma and Godrej are all in the race to sell packaged
consumer goods in the rural market. Gandhiji said that India lives in its villages.
The modern markets are realising that truth now, says Naidu-^^. He adds that
the rural market will soon outstrip the urban market. It appears to be a market
segment where consumer goods manufacturers can gainfully sell their products
even as they satisfy a need.
The major reasons for the small size of the rural market are low purchasing
power, slow rate of change in attitudes, widespread dispersal of villages,
inadequate road networks and communication facilities. The other factors
impeding rapid growth of rural markets are scant marketing research, poor
media reach, a limited number of outlets and the widespread availability of
spurious products, as observed by Rajendra Aneja^''.
The development of rural market will involve additional cost both in terms of
promotion and distribution. This cost of developing markets will have to be built
into the pricing policy for specific brands. It would be a welcome step if the
additional distribution cost which is incurred in the development of the rural
Purushotham Rao ^^ in his study says that the media habits in rural areas were
found to be poor, resulting in low awareness. The task of the marketer would
be to develop awareness among rural consumers through retailers. The
implications are clear: to succeed in rural markets, a manufacturer or retailer
should be quick to adopt to change. The penetration of rural markets is easier
when marketers introduce economy-oriented products that stress on functional
benefits in their promotional efforts.
Venkateshwarlu ^^ in his study says that those in the corporate world who are
dismayed by the low brand awareness in the rural sector might be shaken by the
fact that is the urban sector, even some commonly used products command only
moderate brand recall. He reports that rural buyers are in the dark when it
comes to knowledge of consumer durables, and that brand awareness among
them is very low - except for some products like watches and two-wheelers.
The Indian rural market is vast and expanding, and the manufacturers consumer
products have started to tap this growing market. While analysing the
scenario of rural markets, it is necessary to note that institutional reforms
increased investment in rural development. No uniform strategy can be adopted
to market goods which are varied in nature, says Patro''^ Hence he has
recommended that a region-wise study of various marketing parameters be
undertaken for a better understanding of the rural marketing system.
According to Mukunda Das and Somnath''^ the values and aspirations of the
heterogeneous rural populace are different from those of urban people. The
A majority of rural buyers believe that since prices are generally highest in
villages, they prefer to go for economy products, says Rama Rao"*-^. He adds that
the perception of products varied with income levels. Most of the rural
consumers make their purchases on the advice of retailers and pay little or no
attention to advertisements. Rao also observes that the influence of peer groups
and neighbors is substantial in rural markets.
Sontakki'*'* says that marketing in rural areas has varied conceptual dimensions.
Rural markets offer excellent opportunities to become focal centres for rural
development. Today rural folk are not as conservativeon as they were in the
past. They are responsive to new ideas, technologies, products and services and
the level of education amongst them is rising. They now have greater access to
purchasing power, but it needs to be channeled properly.
Ramaswamy and Nama Kumari''^ explore the problems of rural markets. They
observe that problems result from the peculiar dynamics of the rural market of
India - the uniqueness of the rural consumer, the uniqueness of the structure of
the rural market, and the unique distribution infrastructure in the rural areas.
The special problems in physical distribution in the rural context relate to : (i)
transportation (ii) warehousing (iii) communication. Though India has the
fourth largest railway system in the world, many parts of rural India remain
outside the rail network. As far as road transport is concerned, the constraints
are two-fold: (i) inadequate road networks (ii) constraints of carriers. Nearly
50% of the 6,38,365 villages in the country are not connected by roads at all.
W W Rostow"*^ has stressed the need for national market development processes
in developing countries to lay emphasis on rural areas. He suggests there are
four major jobs that might be done, and that they should be done
simultaneously as part of conscious national strategy, with public and private
authorities working in tandem. The four elements are: (i) a build-up of
agricultural productivity, (ii) a revolution in the marketing of agricultural
products in the cities, (iii) a shift of industry to the production of simple
agricultural equipment and consumer goods for the mass market, and (iv)
revolution in marketing methods for low-cost manufactured goods that can be
marketed in the rural areas.
According to other estimates, the market for clothing cosmetics, toilet soaps
washing soaps, books, newspapers and journals, household utensils, torches and
batteries, sewing machines, electrical goods and bicycles will grow spectacularly
in rural areas. The total expenditure In rural areas on non-food items is likely to
be 2 to 2.5 times more than in the urban sector. The same author estimates that
the share of the rural sector for items like domestic utensils, cotton textiles, and
While constituting nearly 80 per cent of the population, the lowest income
groups in India account for 63 per cent of the total spending in 22 FMCG
categories. In rupee terms, this means that this group spends nearly Rs. 42,000
crore on FMCG goods; in contrast, high-income groups who comprise only 3.5
per cent of the population consume goods to the value of Rs.7000 crore.
The logic in simple. Of the 6 lakhs villages in India, Lever's products reach just
70,000. Even among these, there are thousands where 70% of Lever's products
are not consumed, often because retailers don't want to stock them because of
low demand. Lever wants to crack that by generating demand. They are doing
so by taking a leaf out of the success of the Grameena Bank in Bangladesh.
Lever wants to tie-up with institutions like the National Bank for Agricultural &
Rural Development (NABARD) and non-government organisations (NGOs) to
provide small loans to villagers, who could use-part of it to buy HLL products
and sell them in their villages, say Sanjay Narayan and Roshi Jakar^^
Rural media habits according to NRS 2001": The print medium reaches 17.4 per
cent of rural adults, television penetration reaches 42 per cent of rural house
holds, C & S penetration is 8.8 per cent of rural households, C& S viewership
(at least 1 hour a week ) is 5.9 per cent for rural adults, radio listenership ( at
least 1 hour a week) stands at 26.6 per cent for rural adults, and cinema-going
habit ( at least once a month ) is prevalent among 11 per cent of rural adults.
The vastness of the rural market poses both a challenge and an opportunity to
marketers. The desire to improve the living standards is felt as keenly in the
rural areas as it is in urban areas. Rural incomes are rising and the poverty ratio
is falling. The marketing strategy to tap this vast market potential must take into
account the special characteristics of the rural areas in terms of attitudes and
socio-psychological characteristics. In fact, improving the marketing channels
distribution outlets, and communication facilities can help being about a
transformation of rural areas ^^.
Here is a happy coincidence of data and visual evidence. The familiar blue and
red signage that spread like wildfire across the vast rural hinterland during the
last decade has stormed its way into macro economic data. An analysis of
consumer expenditure in rural India by various categories of food items over the
last two decades clearly shows that rural India is increasingly spending more on
beverages. According to NSS data for the 80's & 90's, the share of beverages
and processed foods In total food expenditure has gone up from 5.5 per cent in
1983 to 7.6% in 1999. What is interesting is that this increase seems to come
from across all population groups - bottom, middle, and top - which could imply
Among the different components of the marketing mix, price plays an important
role in bringing about product-market integration. In the rural areas, most of
the products consumed are in the nature of basic goods like soaps, cooking oils,
tea, kerosene etc. The general level of disposable income among rural
consumers as compared to urban consumers is low. Villagers have limited and
incomes, and the flow of income is quite erratic. They do not care much for
brand image, and seek value for money. The price of the product is a major
variable for them to arrive at a purchase decision^°.
The composition of the Indian rural market is probably much more complex than
the whole market in Europe in terms of cultural, religious, linguistic and other
diversities^\
The social and religious customs, climatic considerations, duel ownership due
to prevalence of joint family system, mould the buying habits of the rural
population. The chairman of Hindustan Lever Ltd., also corroborates this view:
"Our survey shows that rural consumers tend to be more subject to local
religious, cultural and social pressures, and there and regional variations in
tastes and habits"^l
Dr. N Raman and Prof J Suganthi^^ say that in modern society, villages are
acquiring a new profile by adopting themselves to the technological change that
are revolutionizing life in urban areas. There is an indirect d impact of modern
means and methods on the life of rural folk. This impact has a bearing on rural
marketing. The rural market is growing at five times the rate of urban market.
The villages flush with disposable income thanks to bountiful harvest in the last
four years. Companies that are targeting rural consumers with a plethora of
products are hopeful about a positive change in their outlook. Even as they do
The approach to win over rural consumers has to turn savvy, and anchor in an
understanding of felt needs. It is value that he seeks? If so, is the value
dictated by price, quality, function, or other factors? Will an emotional pitch
appeal to them?
Creating brand for rural India is a science that will require many ardent students
who are willing to move off the beaten track as they chart brand strategies. It
will require swimming against the tide of all that marketers have been doing in
the past, and exploding many myths. It will demand many years of hard work,
something the urban-based marketers will find daunting. The rural market for
Michel Porter''° asserted that there are two basic steps to attain the competitive
advantage. First, firms may pursue a strategy of low costs, which enable them
to offer similar products at lower prices than those charged by the competitors.
Second, firms may pursue a strategy of differentiation - that is one of trying to
convince customers that their products have unique benefits that offset their
premium prices. Both these strategies have the same effect. They increase the
perceived benefits of the product.
Gary Hamel and C K Prahlad''^ found that only few competitive advantages are
long lasting. Keeping up with the existing advantages is not the same as
Jeffery Bracker^"* quoted that business strategy has the following characteristics:
an environmental and situational analysis is first used to determine a firm's
posture in its field; then, the firm's resources are utilised in a manner appropriate
to attain its major goals. Strategic management in the direct application of the
business strategies that have been developed in the academic realm. It entails
the analysis of internal and external environments of a firm to measures
the utilisation of resources in relation to objectives. Alfred Chandler''^ specified
that strategy is the determination of the basic long-term goals and objectives
of an enterprise, by allocating resources and adopting courses of action to
achieve set goals.
Philip Kotler'''' defines the strategic marketing process as taking place within the
content of strategic management, and as being concerned with the development
of marketing positions and programmes at product and market levels. Jerome
McCarthey''^ suggested that the marketing strategy focus on some target
I:N'2 •
successes and suffer fewer disappointments than tliose tliat do not pay attention
to fundamentals.
Brands constitute a large part of the intangible assets that companies own.
Today companies are beginning to recognise the balance sheet value of their
brands. Successful companies have realised that branding is much more that
the mere use of names, logos, etc., and that it encapsulates the relationship
the customer has with the organisation. Developing brand equity does not just
happen. Its creation, maintenance and protection need to actively managed,
and require the use of strategic planning as well as tactical programmes'^.
Srivastava'^ suggested that the marketing plan be like a religious book for
marketing personnel. However, in the absence of proper understanding and
involvement at different decision-making levels in companies, the charting of the
marketing plan has been reduced to a ritualistic exercise.
The implementation of the marketing plan will lead to desired results and
realisation of stated goals only if the people who will direct its execution are
involved right from the planning stage. They, in turn, will set performance
targets, and review them on a periodic basis. Companies must improve in this
area which they often neglect. Only then will the company be able to monitor its
performance against set benchmarks, and even improve on it.
Kay^^ found that long term competitive advantage derives from capabilities
which other firms lack. Firms underpin these capabilities with supporting
strategies to gain market advantage over competitors.
The first and foremost requirement is to see how they companies can inspsire
their employees by infusing into them a sense of urgency in achieving set goals.
Management competence can be viewed in two contexts: "given competence"
and "acquired competence". When engineering firm, L&T went into manufacture
of tractors, they depended more or less on "acquired" competence. There are
many instances where 'given competence' or 'core competence' may appear
limited, but fortunately the country has a large pool of talent that canbe tapped
once the management is committed to a business opportunity and is willing to
take the business risk, it can 'acquire competence' to succeed in the task.
According to Michael E Porter^^ the success of failure of any firm depends on its
competitive advantage, its ability to deliver the product at lower cost than its
competitors or offering unique benefits to the buyer that justify a premium price.
But exactly how does a company achieve cost leadership? And how does it
differentiate itself from it rivals?
C K Prahllad and Garry HameP'' say the core competencies of the corporation are
the real sources of its advantage. They enable the management of a company to
consolidate technologies and production skills, and empower individual
businesses to adapt to changing market situations and advantage opportunities
that could come up. It is also about the organiation of work and delivery of
value, and it involves many levels of people and all functions.
According to Robert A Petts and David Lee^^, firms must compete with each
other to win business. Each firm is likely to come up with its own strategy to
deal with its rivals, to serve its base of customers, and to act upon the changes
that impact the way its operates. Each firm needs to develop a competitive
advantage that enables it to compete successfully against their rivals. Strategies
help firms achieve competitive advantage. Competitive advantage allows a
firm an edge over rivals when competing competitive advantages comes from a
firm's ability to perform activities more distinctively on more effectively than
its rivals. It enables a firm to generate successful performance over an extended
period of time.
According to C K Prahalad & Garry HameP^ to realise the potential that core
competencies create, a company must also have the imagination to envision
markets that do not yet exist, and the ability to stake them out ahead of the
competition. A business will strive to create new competitive space only if it
Strategic marketing^^ authority and educator Mark E. Parry shows you how to
identify your most important customers, and then position yourself successfully
in relation to your closest competitors. Built around the percepts of the proactive
means - end theory, targeting and positioning. The interdependence of these
two fundamentals lies at the heart of every successful marketing programme of
consistently successful marketers. Strategic marketing management provides
you with the information and strategies you need to create a benefit framework
that encompasses functional, experiential, financial and psycho-social benefits.
Present evidence and support to make promised benefits both credible and
valuable use customer decision maps to "ladder" from concrete product
attributes to benefits and personal values. Create and employ creative
strategies that speak only to those values considered most essential. Foster and
nurture appropriate brand meanings that retain value in the market place - and
"Competing for the future" develops a coherent model of how today's executives
can accomplish heroic goals in their company's future, pioneering ideas on
strategy and leadership. Competencies and market forces abound and also
provide a new and thought-provoking look at strategy formulation for large
corporations that participate in global markets. Hamel and Prahalad argue
persuasively that traditional approaches to strategic planning are unlikely
to prepare a firm for industry leadership in the future.
It offers a masterful blueprint for what companies must be doing today if they
are to occupy the competitive high ground tomorrow. It shows that the key to
future industry leadership is to develop an independent point of view about
tomorrow's opportunities and build capabilities that exploit them; what it means
to be strategic, - and successful^^.
In fact the two go hand in hand, and a firm cannot have one without the other.
Competitive advantage actually serves as the backdrop for strategy. If a firm
has no competitive advantage whatsoever, it cannot put in place any worthwhile
strategy. Even in well-managed companies, carefully formulated strategies fail if
they lack the competitive advantage required to make them work.
HDPE PIPES
High Density Polyethylene (HDPE) pipes are extruded from HDPE Polymer resin,
which is manufactured by various processes pioneered by companies such as
Zeigler - Solvay, Phillips, etc. The main advantage of HDPE pipes made from
these various processes and grades of resin are: low weight, easy to transport,
easy to lay, resistance to aggressive media and soils, low friction losses, no
deposits and encrustation, frost-resistance (ideal for areas that experience suz-
zero temperature) and fortuity^°-^.
Rama Rao says ^^'^ tat HDPE pipes are highly abrasion and corrosion resistant,
and can handle a wide variety of slurries, abrasive materials as well as almost all
acids, caustics, salt solutions and other corrosive liquids and gases. The use of
this material in India is fairly extensive in industrial and chemical plants, and its
advantages in routing water supply coupled with its cost advantages are now
being discovered.
The use of HDPE pipes^°^ in replacement of GI suction and delivery pipes for
pump sets helps considerably in conserving electrical energy. According to a
study carried out by Karnataka State Electricity Board (KSEB), replacement of GI
suction and delivery pipes by HDPE pipes resulted in energy savings of almost
29% and improved water discharge by 43% due to lower transit losses.
On this basis, it was estimated that Karnataka alone would save as much as 240
millions units of power by replacing GI pipes with HDPE pipes. The national
enumeration of electric pump sets was 6479000 Nos. in 1986/87. That figure has
since grown manifold, and could lead to tremendous power savings for the
country if HDPE pipes find extensive use. Karnataka is one of the first states to
recognise this energy-saving potential and has issued relevant directives. It is
time for other states to follow suit.
The plastic industry is more than 100 years old, but polyethylene^°^ was not
invented until the 1930's. Early polyethylene was low density and was used
primarily for cable coatings. Today's modern polyethylene pipes began with
The multitude of persistent problems due to the use of conventional pipe sytems
(GI pipes etc.) has been a matter of grave concern for all especially the
agricultural sector. With HDPE pipes finding increasing use in the agriculture
sector, and destined to replace older GI and RCC systems, hopes of overcoming
the constraints to getting more water to crops in a cost-effective way have
reached promising dimensions'"^.
HDPE pipes besides density and crystalline there is also another characteristic
parameter at that commonly arrest in defining PE Behavior. This is melt viscosity
or melt flow rate 9 MFR or MFF. The melt flow rate is that amount of melted
material, in grams, which will pass through the orifice of die of a specified
diameter and length, when the melt has been subjected to a specific pressure
and temperature as stipulated by certain standards. As a rule, the temperature
used is 190°C and the melt flow rate unit is g/10 minutes. Usually, high material
strength is required, which means that high density and crystalline are also
desirable. However, increasing molecular weight creates a high melt viscosity
which in turn influences the material process ability during pipe manufacture.'°^
In terms of quality, price and utility, HDPE pipes are better than conventional
pipes. Therefore, if conventional pipes were replaced by HDPE pipes in all new
piping taken up in the of three districts of Yavatmal, Nashik, and Kolhapur, in
A WHO report says^^^ that there is a pressing need to provide convenient and
safe drinking water, especially for the poor. It is not hard to " generate demand"
for drinking and irrigation water supply among the poor, they already calculate
the time it costs to fetch water, and are often willing to pay vendors far more
than affluent families pay the public utility services for safe drinking water.
The current challenges in water supply involve the development of appropriate
institutions, economic and financial arrangements to attract the initial to ensure
continual sustainability these problems can be solved by HDPE Pipes.
The strength of a HDPE pipe may be considered as its ability to withstand (hoop)
stress in the pipe material under internal pressure over a prolonged period of
time. The design stress considered within the water industry is chosen to ensure
a design life in excess of 50 years. Based upon the service performance of PE80
pipe since its introduction in the UK, a service life is excess of 100 years may
confidently be expected. PEIOO pipe has been in service for a shorter-time but it
is likely that it will have a similar service life. In the realisation of purpose, -
whether social or commercial - two factors play a prominent part. They are:
quality decisions, and their committed implementation. These are based on
adequate technology, an interface with the world's economies, and an ethos
based on valves, and a commitment to a Nation's well being. However, this
depends on existing human factors which when perverse (such as profiteering)
lead to shortfalls, says Rama Rao^^^