Medium to ruler market and response in uncertain?
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At present, three out of four of country’s consumers are in rural market and one-half of national income is generated there. A number of corporate units have been trying to get grip on the rural market in a variety of ways. There is no doubt that rural market reveals opportunities and great attraction to marketers. But, it not as easy as it seems on surface. It is not so simple to enter and succeed in this market in a smooth way. This market poses a variety of challenges, and, therefore, the marketer has to work hard to tackle these challenges tactfully. A company planning to enter and/or expand rural market must consider these problems seriously.
Some of genuine problems associated with rural market include:
1. Wide and Scattered Market:
Wide and scattered market is difficult to reach in both the aspects – promotion and distribution. Rural India is spread in the entire county in around 6 lakhs villages of different sizes while urban population is concentrated in around 3200 cities. Most of villages are extremely small with population less than 500 people. Only one percent (6300) villages have a population of more than 5000. It is challenging tasks to choose target markets and to serve them effectively.
2. Problem of Designing Products:
Products sold successfully in urban markets, may not necessarily be successful in the rural markets due to difference in utility value of the products. Mind-set of rural segments seems quite astonishing and different. Existence of considerable heterogeneity among rural folks poses challenges for marketers to incorporate their uneven expectations in the products.
3. Transportation Bottleneck:
Transportation is the nerve centre for any type of business. Most of villages are not properly connected with main roads. Every year during monsoon thousands of villages are disconnected for a longer time. Lack of proper transportation hinders marketing activities. Agro-based products cannot be sent to marketing centers, and industrial products cannot be supplied to rural population safely in time. In certain areas, even construction of road or railway is difficult to construct and maintain.
4. Seasonal and Irregular Demand:
Rural demand is characterized as seasonal and irregular. So, companies cannot concentrate on rural segments as it is difficult to plan. In the same way, demand depends on income of rural customers, and income is quite uncertain because they depend on agriculture, and agriculture depends on monsoon.
5. Uncertain and Unpredictable Market:
Market response is difficult to scale. They don’t have stable and predicted behaviour. In such a situation, the effective marketing strategies do not make a sense. Rapid changes are difficult to incorporate and, hence, there are more chances to suffer. Overwhelming response of rural population to some products experiences sudden fall. Market planning remains ever challenging in rural segments.