Rural Marketing.docx

Q1. Comment on the future of rural marketing in the lights of this case study.

 Rural marketing is a process that consist of developing and empowering people in rural communities through capabilities enhancement and social innovation to facilitate a two way marketing of economic and socio goods between rural and urban case.

 This case talks about how usha has worked towards capabilities enhancement which lead to developing and empowering rural communities.

 Usha realized that 95% of rural population preferred buying products from their town or nearby town and did not prefer travelling to bigger towns to purchase their products, so it focused on the ‘A’-Availability out of 4A’s. It started the SILAI school thereby promoting ‘A’-Awareness of a product which priced ‘Affordably’ as is it was highly Acceptable by the rural consumers.

 Out of the 3BOP strategies companies should focus on 2nd and 3rd ones co-creation of production with the help of rural consumers and investment in social business.

 Unless the consumers aren’t reachable and if they aren’t aware about the products/services of the companies they have no ways of purchasing it.  By developing a bond between companies offerings and consumers, sales can be boosted, companies can enjoy consumers loyalty and they can gain consumer trust and acceptance.

Q.2. Is the way forward converting into social business? Any other alternative?  BOP strategy 3 says- Go beyond, co-creation of products to changing the very approach by companies towards marketing-a complete change in purpose and mindset of companies and investment in social business.  This is the highest level a company go upto. By doing so, not only the rural people will benefit but also the companies. Capability enhancement of rural people and by doing social innovations or social business, the companies will open the gates for the unserved or underserved millions of rural customers.  If the companies succeed in connecting with these rural people and build their trust , then the sales of the company will pick up and so the standard of living of rural consumers will improve as they will get access to so many products and services.  Best way to attract rural population is by showing them that the company cares for them, is aware about their problems will solve their problem.  Connecting with rural consumers through social business is a great way of entering and/or sustaining in rural market. Another strategy is BOP2- Co-creation. But investment in social business is a better alternative amongst these two as it helps in empowering rural consumers.

Q3. What are the benefits to companies of empowering rural consumers?  The potential of rural market is visible when we consider two factors: 1. The general rise in the level of prosperity as people move away from agriculture and find other employments 2. Large government investments and schemes for rural areas.  The general rise in the level of prosperity has bought in two dominant shifts in the rural consumption patterns.  First, because of lifestyle marketing, people want to use the products that are used in urban marketing.  There is also an element of conspicuous consumption, as people want to show their neighbors that they are modern by consuming the latest products and brands. Second, better communications and branding have caused a shift in preference for branded goods.  That is the reason that rural markets are said to represent huge opportunities. The factors that have contributed to some amount of modernization of villages are:  Large Population: According to the census 2011, 833 million people, representing more than two-thirds of Indian population, live in villages. This population is also increasing annually. More over, these consumers are underserved, that is many companies simply do not have a presence in rural market. This attracts companies who see an immense opportunity as urban markets are saturated.  Market growth :According to a study by India Brand Equity Foundation (IBEF), 2015), per capita Gross Domestic Product (GDP), In India has grown at a compound as annual growth rate (CAGR) OF 6.2 per cent in its rural regions since 2000.

 Rural per capita consumption increased by 19 per cent annually in the period from 2009-10 to 2011-12. In the same period, spending in rural India touched US$69 Billion.  The market has been growing at 3-4 per cent per annum adding more than one million new consumers every year.  Impact of globalization: Improved global information is also providing rural areas an exposure their productivity and earn better prices.  Increase in income and rural indebtedness: Dependence on agriculture is decreasing due to people finding alternative livelihoods and also because of the development and social security programmers undertaken by the government. This has resulted in an increase in income in rural areas and a consequent increase in purchasing power.  Accessibility of market: Improved roads and communications are changing Indian villages. They are improving access to villages to sell produce on the one hand and for providing market access to companies on the other.  Improved literacy and awareness: Due to increased literacy and education as well as greater awareness in rural markets , there has also been change in consumer behavior. Rural customers are no longer willing to accept inferior products and are gradually becoming discriminating buyers.  Mainly, the companies can benefit by educating and empowering rural people so as to increase their standard of living which will ultimately lead to rise in income so they will purchase the companies products and these consumers will eventually be responsible for the companies profit generation.  Empowering rural communities may also mean formulation of salesforce within that rural community. In either ways companies will benefit by empowering rural consumers and the rural population as a whole.