Perspective The Opportunities and challenges in accessing Rural India By Akanksha Pandey Introduction to the Rural market The 742 million strong rural segment, which was not willing to spend much barring a few necessities has finally loosened its purse-strings for discretionary items too. The buying capacity of this segment of population (rural community) has been estimated to be a whopping $25 billion, a large part coming from the overall growth in economy. This huge figure will catch by surprise anyone who has not kept pace with the development, the way India’s rural market has done. The other factors for this boom in rural economy are a marked increase in the rural income due to agrarian prosperity, large inflow of investments for rural development programs and increase in demand due to forever increasing population. Also, increase in literacy and education level and increased contact with urban counterparts due to development of a wide communication network are some of the factors attributable to the growing demand of this segment of population. Be it increased awareness, buying capacity, technology or telephonic penetration, change in spending habit has definitely been for the good for companies who were facing stagnation in so called developed urban markets. The saturation level may not be absolute but Aug 2012
tapping the urban market with a high profit margin has certainly become difficult. The difficulty comes not only from the increased competition there but also from the higher awareness level of consumer who wants his product to be continuously upgraded. Fulfilling this forever growing demand for product enhancement and upgradation needs a lot of investment which for lack of increased margins will have a negative impact of profitability.
Interestingly, this scenario in urban market has made Brand managers and creative agencies more thoughtful of how to catch the rural segment’s fancy and market the product among these 742 million people. Consumers may be consumers at the end of day but the aspirations, beliefs, attitudes and needs of India’s dichotomous rural and urban markets are vastly different. This difference calls for separate marketing strategies to be developed to suit these two completely different segment behaviours. Coming on to the other aspects of this segment besides its size and huge buying capacity, we find a number of interesting facts.
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