Market Research: How to increase Market Share in Rural Areas by established MNCs.

Mahatma Gandhi was perhaps right when he said that the True India resides in it’s Villages. With 128 million households, the rural population is nearly three times the urban. India’s 627,000 villages are spread over 3.2 million sq km, and close to 700 million Indians or staggering 70% of India’s Population lives in Rural India. Naturally, Rural India’s Market is a fountain of youth for established MNCs. The untapped market of Rural India coupled with it’s sheer vastness gives pleothra of options for MNCs to expand their interests.

These opportunities do come with their fair share of problems. We must note that Rural Market works on a strikingly different note than their Urban Counterpart. The main problem in Rural India resides in the fact that standard of living for many people are abysmally low. Most of the Rural Population is still around or below poverty line (BPL) level, which significantly dents their purchasing power. Further, wide spread illiteracy adds to the woes, removing much scope of Print Media. Rural Market in fact offers very unprecedented demand topology. This is due to the fact that the heart of most of the rural areas prospers chiefly in agricultural economy. Hence, faithful dependence on monsoonal seasons and other factors influences their income generation rate, which in turn trickles down to their purchasing power. Other problem arises in the form of poor road connections, electricity problems and warehousing problems. Improper Communication may also arise as a challenge, as different rural dialects spoken in different rural culture can expatriate the advertisement process. Then perhaps the big challenge arises in addressing the Local Brands, who with their very cheap look alike products, have established predominance in the rural market.

To address all these problems, we have systematically divided the solution into four parts. What we propose here the 4As solution scheme, namely: Acceptance, Affordability, Availability and Advertisement.

1.) Acceptance: To make a product to be actually accepted and prospered among the rural masses, a through site analysis of the rural areas where the product is intended to launch must be done. Right from the radio stations used to the different dialects spoken, every tiny detail must be known about the rural culture in order to facilitate better product penetration. We mustn’t, for example, expect a meat product to be sold in a rural area whose culture is predominantly Vegetarian. To further solidify the workings of the rural areas, educated youth of that area could be recruited as trainees to act as cheap substitutes. These trainees could further act as our agents in promotion schemes of our product. And due to their solid knowledge of Rural Foundations, they would provide us with very useful information about the rural market demands, helping us greatly in implementing our product launch strategy. We could, for example, completely rediscover or tweek the product to suit the rural tastes or needs.

2.) Affordable: To address the chief problem of low purchasing power capacity of rural market, the product has to be of as bare minimum cost as possible. Chief resources in the R&D department could be allocated for designing products with strict cost constraint. Advancement in Technology here could be utilized to the fullest in greatly reducing the production cost. Engineers can rediscover the established products in innovative ways to further strip down the cost. Innovative strategies could also be employed, such as selling the products in tiny packages but in far lesser cost. Employing various free schemes, such as one free for purchase of two can also work as a great ploy. Making the product attractive and easy to function also works wonders in sales. And if the product instructions & general packaging are done in local dialect, it would greatly boast the local rural morale and would be our prime supplement of the sales figure. Furthermore, we can also remove the unnecessary functions of the product that are not required by an average villager. For all of this to work though, we need to properly understand the mindset of the villager (hence, Acceptability), before we cave into actually designing and launching the product.

3.) Availability: After successfully strategizing and launching the product, it’s very crucial to secure the supply chain in order to maintain a constant demand-supply ratio. The first step for this regard would be in establishing area offices in connecting central villages or towns to monitor the distribution process effectively. The site analysis done earlier could help a lot for this cause. Regarding transportation, conventional means such as bullocks, auto rickshaws and hired trucks can help us in proper running of the chain. Furthermore, symbiotic collaboration with the private distributor chains can help us penetrate the product deeply into the market as these distributors have their network plugged in the rural areas. Collaboration with other self help rural groups and/or microlenders that are already established in the rural scenario can also be beneficial. To further monitor the process, we could place our trainees and/or local stockists at strategic locations in and around the area. Regarding storage issues, suitable dealers or private goddowns would help us a lot in this regard, as they could provide us with well maintained warehouses to properly store the products for distribution. Also, Direct distribution of the product in the weekly bazaar can serve the dual purpose of availability and advertisement.

4.) Advertisement: Advertisement plays a key role in any market scenario, be it rural or urban. However, in rural market, print media and televisions hardly pays any role due to widespread illiteracy and the fact that only 41 percent of rural population owns TV. Henceforth, new and innovative methods must be established in this genre to facilitate better advertisement of our product. Conventionally, we could begin by placing our advertisement in the local radio channel or Doordarshan Channel. For this, our advertisement shouldn’t be text oriented as villagers wont be able to understand, instead, it must be heavy on graphics and attractive to the general masses. It should feature a theme which is local and close to the rural heart. Banners and Posters to be set up must be visually aesthetic to garner appeal. Furthermore, the local haat and melas of the villages serve as the breeding ground of unconventional methods of advertising, namely: stalls, publicity vans, mouth to mouth advertising, colourful pamphlets distribution and promotional events. Also, we could target the opinion leader of the area (generally Village Sarpanch or Rich Landlord) to facilitate our advertisement cause. Their influence sphere could serve our advertisement process to great extent, as they could help us in making the masses aware of the duplicate items manufactured by local brands. To further tap the potential of advertisement, we could establish a brand ambassador, (likely to be a Local or National Film star) which is loved and admired by the locals. This could help us in establishing a direct emotional chord of our product with the locals.

Future and Conclusion:

Even after establishing oneself in rural market, the work would be half done. To cement our market shares, we must have expansion plans ready. We could establish permanent godowns and factories in rural areas to facilitate better production and distribution. In this aspect, providing employment to the rural youth in these factories could be very much beneficial. We could, by collaboration of the villages, even provide free or cheap education to the rural masses to strengthen our support and also to train future managers. The support factor can also help us in extirpating any opposition faced by extremists.  Furthermore, local banks could be targeted to facilitate better bank loans with low interests, greatly increasing both support and purchasing power of the villagers.

In the end, we can only conclude that Rural Market, though with its fair share of dillemas and problems, presents itself as raw opportunity. It’s sheer vastness and enrootment in the Indian Market is the leading cause to pursue the cause of establishment in the rural areas. Illiteracy, Poor Road connections & Low Purchasing Power does dents the process, but it paves ways to new and innovative methods of market philosophy. Solution exists in the 4As: Acceptance, Affordability, Availability and Advertisement. The product must adhere to the rural standards in order to be properly accepted. It must cost less, but yet provide the bare minimum functionality that is required by the customers.  Tapping in the local distribution chains and using conventional methods established in the rural area can help make the product properly distributed among the masses. Advertisement must follow the unconventional path, with stalls and publicity vans helping the purpose. Future endeavor must be established by garnering local and government support, by providing education and employment opportunities. Through all these means and methods, we can successfully capture and increase our Market Sharein the rural scenario to a far greater extent, tapping our ways in this vast open market.


~ by gravito on February 12, 2011.

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