Importance of Rural Marketing in India Essay

2528 Words Dec 30th, 2010 11 Pages
Why Rural Market is so Important?
Rural market has following arrived and the following facts substantiate this.
• 742 million people
• Estimated annual size of the rural market
• FMCG Rs 65,000 Crore
• Durables Rs 5,000 Crore
• Agri-inputs (incl. tractors) Rs 45,000 Crore
• 2 / 4 wheelers Rs 8,000 Crore

• Infrastructure is improving rapidly.
• In 50 years only 40% villages connected by road, in next 10 years another 30%.
• More than 90 % villages electrified, though only 44% rural homes have electric connections.
• Rural telephone density has gone up by 300% in the last 10 years; every 1000+ pop is connected by STD.
• Social Indicators have improved a lot between 1981 and 2001
• Number of “pucca” houses
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The company, which made a rights offer to fund the acquisition, hopes these brands will give it the critical mass when it comes to competing with the heavyweights.
Growth trends of the industry
In terms of value, the Rs.4, 000 core detergents market is among the largest FMCG categories in India, next only to edible oils and biscuits. The Indian market for detergents is among the largest in the world. Volume growth can be impacted by a variety of factors. Plateauing of demand in the urban market and a slowdown in the rural off take due to a fall in disposable incomes are factors which could have had an impact on volumes. Another is consumer resistance to sharp increases in the selling price by most manufacturers in late 1990’s.

Resurgence in rural demand

For players such as Hindustan lever, the recovery in volume growth has been spurred by resurgence in rural demand in 1999 first half. According to CMIE statistics, agricultural output in 1998-99 was higher by 6.8 percent after declining by 5.4 percent the previous year. This is likely to have left consumers in rural areas with higher disposable incomes. Mr.Arun Adhikari, Vice-President, Marketing (Soaps and Detergents)), Hindustan Lever feels the recovery in 1999 can be attributed entirely to higher rural disposable incomes, after the contraction in the rural economy over the past two years. “:We can see this in the kinds of brands, pack sizes and markets that the growth is coming from. The growth

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