India: Innovation in Rural Marketing
Prof. Pankaj Arora
"Rural Market: Currently, it's a black hole, there's not enough data; we will try to create a knowledge base," ‐ Mr Pradeep Kashyap
Abstract: Rural marketing is equated with marketing by MNC in rural India. The extent literature on rural marketing has uncritically used the same theories, models, concepts and framework as have been used in the marketing discipline. As well as this research also focuses on Information technology (IT) and it’s contribute in rural development. In this Paper researcher also focus on innovative approaches in Rural Market for promotion and distribution of products
Key Words: Innovation, IT, Rural market
Introduction: An analysis of the content of a number of textbooks written on the subject ( for example, Dogra and Ghuman 2008; Gopalswamy 1997; Kashyap and Raut 2006; Krishnamacharyulu and Ramakrishnan 2002; Rajagopal 1998; Velayudhan 2002) reveals that the meaning of rural market has changed over the past six decades. Kashyap and Raut (2006) have listed three distinct phase in the evolution of rural marketing during which the term change it meaning and connotation. During the first phase, pre 1960s, rural marketing was synonymous with agricultural marketing. During 1960s – 1990s the marketing of agriculture input and marketing of non farm rural product was considered as rural marketing. Post 1990s‐ With rising income and mushrooming middle class across the country, various companies focused on tapping rural market potential. Rural marketing now refer to FMCG and Consumer durable goods in rural area. A great number of studies have shown that yet today approximately 60% of Indian Population lives in Rural Areas. Today, Improvement in living condition and enlargement of Rural area is essential for the development of the Indian Economy. Many projects were undertaken in rural area and other’s which are in pipeline; are likely to be introduced with in short span of time. Rural Literacy is ranked at the main concern. Trends shows that rural markets are coming up in big way and growing multiple fold time as faster as urban markets. According to a study by NCAER (National Council for Applied Economic Research), the number of middle and high‐income households in rural India is expected to grow from 130 Million to 172 Million by the end of year 2012 as compared to Urban India that is nearby 71 Million. { Prof. Pankaj Arora, Lecturer, DIMAT, Raipur (Chhattisgarh)}
Literature Review: The focus of literature, mainly written in the post liberalization period, is on highlighting potential of vast rural market and providing description of a few cases of commercial organization of rural areas. The literature has uncritically borrowed theories, framework and concept from the mainstream marketing discipline, which has shifted the growth of the subject as an independent field of academic investigation. There is an urgent need to build a distinctive perspective and a sound theoretical base for rural marketing, which would create its own concepts, frameworks, theories and body of knowledge. The issue needs immediate attention of the researcher in rural marketing.
Creative Approach Toward rural Market: Creative people do not always have as specific idea in mind when they begin to search for an innovation; what they do have is method or way of going about that search. The commercialization process is itself a creative process. From discovery of business idea to product development, feasibility analysis, and business planning, the application of creativity to all of these area is what set successful entrepreneur venture apart from their competitors.
Domestic Consumer: It is widely acclaimed that India is one of the largest consumer market in the world. But the consumer in India shows wide variation in size and potential of various consumer market segment. These difference can be seen in terms of geographical difference , urban – rural consumer ( there style of living consumption pattern etc.), age and family life cycle , income level, education level, linguistic and religion diversity , food habit ; festival etc. revolution in communication technology are forcing marketer to look beyond time tested concept such as brand loyalty and mass marketing . Marketer are trying to determine the underlying need and motive of consumer as well as various factor which influence the formation of these need and satisfaction of these. Marketer are also trying to understand the “Learning Process” adopted by buyer and consumer. The Learning process can also be linked to other cognitive structure such as (values)attitude and beliefs. Buying behavior is also influenced by other psychological concept such as personality, motivation and perception. knowing the impact of these concept on buying behavior will help marketer in the generation of new product ideas and adopted customization for core product; some additional feature and by offering of additional services, all done with the intention to add the customer delight.
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Through Adverfsment and Communicafon
Customer Want
Proper Distribufon and Sales
Induce Customer Trial
Offer Individualised Product
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Marketer in order to adapt to new marketing paradigm shift in consumer taste and preference are going for fundamental shift in the marketing research technique product development, advertising and promotional strategies. (19) Consumer purchase decision are determined by the level of involvement that consumer feel about product in question and as to whether the product purchase is determined predominantly through the thinking or feeling about the process. High involvement products are product where the consumer sees a high perceived risk monetarily or otherwise. Low involvement purchases are possibly low priced and non risky product purchase. Thinking process call for rational functional analysis of methodical thinking process. Whereas falling product are bought based on the basis of personality factor and for sensory and emotional reason. Taking the Indian consumer market scenario, product like TV and automobile, given the nature of their purchase would be high involvement, where as cooking oil and baby food would be high on involvement but mayn’t call for a functional – rational analysis of data. On the other hand, soaps, detergent, pain balm, soft drink and confectionary are purely bought on emotional reason. (26)
Bringing technology to Rural Market: The entire technology commercialization process, from idea to market. Today as technology drives innovation and companies seek more effective way to exploit the intellectual property they create. Technology is different from any other type of new product. For one thing, the market respond differently to technology; customer are slow to accept a new technology with which they are not familiar. New technologies are commercialized in a variety of ways, but the underlying commonalities is an entrepreneurial approach that seek to create new value. IT involves the e‐ processing, storage and exchange of information, where anything that can be represented in digital form is included in the term ‘information’. Thus reports, amusement, personal communications, learning material, blank and filled‐out forms, announcements, schedules, and so on are all information. Software programs that process data (searching, tabulating, and calculating, for example) are also information in this sense, representing a particular kind of intermediate good. The entrepreneur who introduce a new technology must, therefore devise a strategy that capture early adopter in a variety of niches in order to develop sufficient momentum to push the technology into mainstream market.
Bringing technology to market embodies three major themes. 1. The first is value creation. For companies to be successful in sustainable technology innovation, it is critical that they punctuate their incremental or value added innovations with radical or value creating innovations. 2. The second theme is speed. As window of opportunities for new technologies are shrinking product development timeliness are by necessity shortening, creating a real dilemma for product developers‐ how to produce superior high technology product faster, yet at price the market will tolerate. 3. The third theme is entrepreneurship. The tool that entrepreneur employ to recognize and create opportunity , test a business concept in market, and gather resources to execute the business concept.
I.T. AND RURAL DEVELOPMENT: The goal of using ICT with underprivileged group is not only about overcoming the shortcoming , but rather enforcing and passing the process of social inclusion to the next level, which is required for change of the environment and social system that reproduces scarcity. I.T. has varied applications in it, through which the development of the rural area can be possible accurately. Government had introduced a number of programs through which the people of rural India can come forward and use the I.T. enabled services and work more systematically. Some of the programs run by the Government are:
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E‐Mitra: This service is launched by the RAJASTHAN Government for the first time for its rural citizens, so that they can deploy the I.T. enabled benefits to its fullest. E‐ Mitra is State Government started projects, which soon become highly popular in the region. In year 2002, two projects came into existence namely; Lok Mitra and Jan Mitra. Where Jan Mitra is an integrated electronic platform through which the citizens of Rajasthan can avail the benefit if getting the desired information regarding any Governmental Department at kiosks which is very near to there doorstep. These Initiative program of Rajasthan government have not only helped the Government by reducing the burden of attending every call, it has reduced the waiting time for the service and has lead to provide comfort to the citizens also, as with the inception of this service they can easily get the information required at their doorstep. Lok Mitra is an urban electronic Governance Project which was launched in Jaipur city in year 2002, which helps the citizens of Jaipur (now other cities also) to pay their bills online (land, Water, Bus Tickets and BSNL) leading the citizen to save the waiting time. This service also ensures people that their money is going directly to the Government and provides a feeling of security related to their bills payment. Community Information Centers: The program is designed especially for providing the internet access and I.T. Enabled services to the citizens through which the interface between the Government and the Citizens can be setup. These centers connect seven northeast states namely; Arunachal Pradesh, Assam, Manipur, Mehalaya, Mizoram, Nagaland and Tripura. The center helps to gain the connectivity at the time of unsuitable environmental conditions. The centers are commonly termed as CIC which are generally situated at the school, college or any governmental office. People can come for the Internet access, and for accessing the internet, a nominal amount is charged from the people through which the daily expenses of the centers are maintained. Wi‐fi Projects: One of the wi‐fi project under which few villages (of UTTAR PRADESH) are connected to internet is Digital Gangetic Plan (DGP). Through the use of DGP wireless network connectivity is created, this program helped the people residing in villages of India to have the access of internet through which the information on various issues can be collected ad used, at the same time the people living in rural India can be updated with the new technological changes and the innovative changes taking place in the national and the international markets. For instance; Bimari Jankari is a portal through which the information regarding every disease and health related issues is available and Digital Mandi is available as one of the portals where all the information regarding the agricultural commodities are available. This portal provides the information regarding the prices of the commodities and their relative value. Drishtee: Drishtee is present in 5 States and is currently available in six districts. It is a private company, which was previously named as Cyber Edge, which has the main work of developing the
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modules. It is present in Bihar, Haryana, Madya Pradesh, Punjab and Rajasthan. It is generally suited in the Panchayat or in the bazaars. They prepare the module for the poor section of the society who cannot understand the international language. The modules are designed for the rural and semi‐urban areas especially. Gyandoot: It was established in January in year 2000. It is an e‐governance based module designed for the rural citizens. The project was initially initiated by the Government of MADHYA PRADESH. Gyandoot caters the need of the villagers by providing the information related to the prevailing rates of the agro‐based commodities and the rate of land. Each Gyandoot Info kiosks caters to approximately 15 panchayats and 30 villages. The module is designed with the aim to provide cost effective and sustainable delivery model to the people. TARAhaat: It was developed by an NGO (non‐government organization); with the vision to bring internet facility to the rural India. It is a franchisee based business model that attempts to generate revenues by focusing on the marketing services through the module (especial focus on the local applications). It was initiated in the region of PUNJAB with the introduction of different centers called as Kendra’s which are connected to each other through the dial up internet connection facility. These Kendra’s have power backup also; in case, the electricity supply is interrupted. The info kiosks provide online and offline services information on education, prevailing opportunities in the market and other useful information for the villagers. TARAkendra’s are very popular in between the local population as it provides the information in the local language and the portal is designed in such a pattern that semi literate population can also understand it without any difficulty. Different services that TARAkendra’s provide are: TARABazar (for product information) TARAdhaba (for providing connectivity) TARAdak (connect to relatives at distance) TARAgyan (educate rural youth on various issues) TARAguru (helps in mentoring and consultancy) TARAvan (delivery of orders at remote areas) and many other services are also provided. Rural e‐seva: It was initiated by ANDRA PRADESH Government. It was initially implemented in West Godavari District to deliver e‐governance facility. The centers are designed with the view to provide better governance facilities to the people of the Rural India. The popularity of e‐seva can be estimated from the fact that in the year 2003, more than 400 million rupees was collected only for the electricity payment. With the success of the e‐seva in electricity bills payment, Government is looking forward for introducing it in the areas of collection of telephone bills and local Governmental Bills. E‐seva is gaining popularity with passing days as it helps the citizens to avail the benefit of getting the certificates at their doorsteps; which is both relaxing and reliable.
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Bhoomi: The Karnataka Government for maintaining the records related to the land introduced it. The Department of Revenue in Karnataka has computerized 20 million records of land ownership belonging to 6.7 million farmers of the state. With the introduction of the program, the farmers are free from giving the bribe and are protected from the harassment. Framers can easily get the Records of Rights, Tenancy and Crops (RTC) by depositing a minimal fee of Rs. 15. National Informatics Centers (NIC) through which the software online copies of the land records are available developed the software of Bhoomi. By giving an online request, farmers get an online enrollment number through which further processing can be done. In the software, the connectivity is through the LAN through which all the clients are connected to the hubs. With the increasing popularity of the project, Government of India has decided to introduce the project in other parts of the country also, namely: Kerala, West Bengal, Sikkim, Tripura, Punjab, Haryana, Madya Pradesh, Himachal Pradesh, Uttaranchal, Gujrat, Assam, Orrisa, Rajasthan and Pondicherry. e‐choupal: It is designed especially for the farmers of India. Through e‐choupal, farmers who are living in the remote area of the country and cannot manage to have direct contact with the consumer can come forward to have a direct contact. It provides an e‐procurement system through which the farmers can access the latest and updated information (local, national and international) related to different farming practices. It provides real time information and customized knowledge to the farmers through which the farmer can take better decisions and can have direct contact with the customer, reducing the amount wasted by moving through the distribution channel of intermediary. E‐choupal has already become the largest initiative among all internet‐based interventions in Rural India. E‐choupal is present in 36,000 villages through nearly 6,000 kiosks across nine states. ITC (Indian Tobacco Company) is planning to expand the concept of e‐choupal further in 15 states of India. Aksh: It is mostly active in Northern India, it is a fiber optic cable company with its core competence in lay down and maintenance if cable. Aksh has the license to lay down the cables in the rural areas. It initially has collaborated with Drishtee for maintenance of kiosks, but with the changing times; Drishtee and Aksh have separated in different service offerings. While Urban Area has witnessed a penetration of cable T.V., rural areas have left un‐served. The fact behind the low level of cable T.V. proportion in rural as compared to urban area is due to the fact that in rural area there are a limited number of houses which can afford cable T.V. The bandwidth delivered by Aksh supports a large variety of services (including video interactions) which will lead to increase the level information exchange in between the people living in several areas of rural India. n‐Logue
N‐Logue is activated in South India and due to its advantages is entering into the northern areas. The main impetus came from IIT ‐Chennai. It is a non‐profit organization with the responsibility of providing rural IT based services (including hardware and software) through connectivity and application all around the rural area. It is functional with WLL Technology whose construction and maintenance is costly and the connectivity is also limited to a certain area, but has the facility of providing connectivity with a range of services as it provides the voice call facility and overcome the problem of dial up connection errors. N‐Logue is further supported by IIT‐ Chennai, which prepares a variety of local language software for it in short time for convenience and comfort. It has also added the facility of web‐cam through which the remote diagnosis of various problems can be done. Tamil Nadu Government has supported the functions of n‐Logue (especially in its Madurai and Nellikuppam district). N‐Logue charges for connectivity and is relatively popular in the southern region due to its easy connectivity functioning and training of handling the applications.
Innovation and commercialization process: 1. 2. 3. 4. 5. 6. 7.
Invention and innovation: connection , discovery, invention, application Opportunity Recognition: idea + customer need = Business Concept Protecting IPR: Patent, trademark, copyright, trade secreat Product Development: Prototyping technology feasibility alpha testing Business Development : Developing the Business: Business Plan Launching the business
The rural consumer behavior exhibits certain behavior unique to rural settings and this makes it important for marketers to understand rural consumers through appropriate research. Rural consumers, for example, tend to lead a more relaxed lifestyle compared to the urban counterparts and exhibit little urgency. Consumers in rural markets tend to have greater trust in products and services endorsed by the government and its agencies. They tend to be more brand loyal, as habits once formed are difficult to change and they tend to feel a pride in getting a good deal rather than paying premium prices for products and services. THE Rural Network, an alliance of leading rural marketing organizations in the country, is spearheading a series of initiatives designed to put rural marketing issues squarely in the reckoning of corporate looking for new markets. Rural communities tend to be closer than urban societies and reference groups have a greater importance. Relatives and people from the same caste are important reference groups. Joint families still exists in villages although the trend is towards the nuclear families. In rural areas, the consumption is driven to a large degree by the occupation and income of the consumers. Low income levels and inadequacy of credit facilities also affect the consumption patterns. Another important factor that
affects demand patterns in rural areas is the instability of the income of the farmers, which is linked to the seasonality of agricultural production as well as to the unpredictability of the harvest. Similarly, the landless labourers and daily wage earners get their remuneration on a day‐to‐day basis and therefore they purchase in smaller quantities of products at a time, mostly on a daily basis. As compared to the urban counterparts, the rural consumers have different interpretations of colors, symbols, and social activities. The cultural values and norms have a strong influence in determining buying and consumption behavior in the rural areas. There are restrictions on the type of food and the type of intoxicants that can be consumed in the villages. Similarly, women occupy a more traditional place in rural areas and therefore western apparel may not be accepted in the rural markets. However, the rural youth are open to any new ideas, and influenced by the urban consumption patterns. As the exposure to mass media and information technology is increasing, rural consumers are being more informed about products and services and their dependence on traditional reference groups is waning.
Conclusion The increase in the services provided to the rural people (in terms of various services offered) will result in the overall betterment of the society on one side by enriching the people with updated market information and providing latest technological developmental news and organizations on other side by creating more market opportunities for them and adjustment of the market prices. IT can build up the role of each governance pillar in rural development and scarcity reduction. It can facilitate rapid, transparent, responsible, efficient and effective interaction between the stakeholders. This not only promotes better administration and better business environment, but also saves time and money in transactions costs of government operations (IICD 2001)
Prof. Pankaj Arora, Lecturer, DIMAT, Raipur (Chhattisgarh), Email id: arora.pankaj07@gmail.com Contact No: 9827910110
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