Sunday, June 7, 2009

Rural Markets - Nucleus of future business investments


In last few years, rural markets of developing countries found their significance from the marketing perspective. In consequence of the green revolution, the rural areas are consuming an out-sized quantity of industrial and urban manufactured products. Now, these markets need special attention  for experiencing superior life and welfare of rural communities with the expansion of marketing activities. Taking of market attractiveness, there is no company such company that doesn't wish to make into Rural Markets. Some of the corporates that are gradually making headway in the neighborhood are Coca Cola, Colgate, LG Electronics, Philips, and Hero Honda. To penetrate such market, it is essential for FMCG giants to provide products at affordable price. Since Profit margins are very low in such marketplaces, companies compromise on the price by cutting costs on the packaging.


Sun set


The characteristics of the rural market in terms of low and spread out population along with limited purchasing power leave challenges for data capturing and further research. The greatest challenge for advertisers and marketers is to find the right mix with an accurate rural appeal. Coca Cola with their Aamir Khan (An Indian film actor) Ad campaign for an example succeeded in providing just that. This international soft drink brand tapped into the Indian rural market in a big way, when it introduced bottles priced at Rs 5 in 90s, backed with the ads on radios and local TV channels. Ironically, rural distribution channels, which are incredibly different from their urban counterpart remains to be the largest problem marketers face. Making a product to reach at remote locations that are spread over 600,000 villages with poor roads, telecommunication and lower levels of literacy comes in the way of marketers.

Large population, rising prosperity, and growth in consumption are few of the motives why FMCG and Consumer Goods leaders are paying more concentration to Rural markets. Considering higher growth rate than urban, rural markets will remain priceless for marketers if remoteness is no longer a problem. Although rustic markets of developing countries have immense potential, it seems to be a long way for marketers to derive and reap maximum benefits. Nevertheless, things are changing for sure.

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