The rural economy has rapidly transformed in the last decade and is now being led by manufacturing. Indeed, agriculture accounts for only about one-fourth of rural GDP compared to half a decade ago. About 55 percent of manufacturing GDP is rural; nearly 75 percent of new factories built in the last decade were in rural areas, and rural factories account for 70 percent of all new manufacturing jobs. Industrial development in rural India has increased household purchasing power and income stability. Rural India accounts for about 50 percent of India’s GDP.

The majority of world’s rural population lives in rural India. According to the 2011 census, 68.84 per cent of the population are scattered in 6, 41, 00 villages in India. Of the total 1210.2 million populations in India, the size of rural populations is 833.1 million. This enormous opportunity has been clear for a decade or more. However, only in recent years have these markets lived up to their promise. Per capita rural GDP has also experienced strong improvement over the past few years. Since 2000, it has grown faster than per capita urban GDP: 6.2 percent compound annual growth rate (CAGR) versus 4.7 percent. Between 2009 and 2012, rural consumption per person grew at 19 percent per annum, two percentage points higher than its urban counterpart. In incremental terms, spending in rural India during these two years was US$69 billion, significantly higher than the US$55 billion spent by urban populations. As incomes rise, rural consumption shifts from necessities to discretionary goods and lifestyle products, including mobile phones, television sets and two-wheelers. Nearly 42 percent of rural households owned a television in 2009-2010, up from 26 percent five years earlier. Similarly, 14 percent of rural households had a two-wheeler in 2009-2010, twice the penetration during 2004-05. About one in every two rural households has a mobile phone today, even in India’s poorest states such as Bihar and Orissa. Rural consumers have been trading up, and their consumption basket is beginning to mirror that of the urban consumer. Premium products are replacing entry-level versions, and commodities are giving way to branded products.

The demand and living pattern of Indian rural habitants are different and varies considerably. The cultural dimensions are also varies. These factors certainly make an impact on the need and behaviour of rural consumers. With its vast size and widespread array of consumers, marketers have been finding it difficult to understand and penetrate into rural areas, and finding difficulties to understand the norms of enter into the rural market. Rural Markets distinct from the other types of markets like stock market, commodity markets or Labor economic sand urban market. The Concept of ‘Rural Marketing’ means different things to different persons. This confusion leads to distorted understanding of the problems of rural marketing poor diagnosis and, more often than not, poor prescriptions. Rural marketing and urban marketing are identical as regards basic marketing structure. However, rural markets and rural marketing have special features and dilemmas as compared to urban markets. The rural market has been defined from various perspectives. According to Census of India 2011, “Revenue villages with clear surveyed boundaries;, where the density of population is not more than 400 people per sq. meter, with at least 75% of the male population engaged in Magricultural and allied activities and which does not have a municipal corporation and board.” According to Insurance Regulatory Development Authority (IRDA) has explained on different note, “A villages with a population of less than 5,000, with 75% of male population engaged in agricultural activities” NSSO (Census) defined rural market as a Market with population density less than 400 sq km., 75% of male working population is engaged in agriculture and no Muncipal Corporation/board. Planning Commission of India defined rural market as towns up to 15,000 populations are considered as rural market. NABARD defined as all locations with a population up to 10,000 considered as rural area. The Consumer electronics giant LG Electronics defined as all places other than seven metro cities of India. The Sahara group defined as commercial establishments located in areas serving less than 1000 population are rural markets. Fast Moving Consumer Goods (FMCG) sector identified “Rural” as place with a population less than or equal to 20,000 peoples. FMCG refers to consumer non-durable goods required for daily or frequent use. They move fastly at the sales counter. Normally consumer spends less time and efforts in buying these goods. They are relatively high volume and low value products. The FMCG sector consists mainly of sub-segment viz., personal care, oral care, and households products.

1.1 Importance of Rural Markets:

Rural market is getting an importance because of the saturation of the urban market. As due to the competition in the urban market, the market is more or so saturated as most of the capacity of the purchasers has been targeted by the marketers. So the marketers are looking for extending their product categories to an unexplored market i.e. the rural market. In recent years, rural markets have acquired significance in countries like China and India, as the overall growth of the economy has resulted into substantial increase in the purchasing power of the rural communities. On account of the Green Revolution in India, the rural areas are consuming a large quantity of industrial and urban manufactured products. In this context, a special marketing strategy, namely, rural marketing has taken shape. Sometimes, rural marketing is confused with agricultural marketing – the later denotes marketing of produce of the rural areas to the urban consumers or industrial consumers, whereas rural marketing involves delivering manufactured or processed inputs or services to rural producers or consumers. Also, when we consider the scenario of India and China, there is a picture that comes out, huge market for the developed products as well as the labor support. This has led to the change in the mindset of the marketers to move to these parts of the world. Rural India buys small packs, as they are perceived as value for money. There is brand stickiness, where a consumer buys a brand out of habit and not really by choice. Brands rarely fight for market share; they just have to be visible in the right place. Even expensive brands, such as Close-Up, Marie biscuits and Clinic shampoo are doing well because of deep distribution, many brands are doing well without much advertising support — Ghadi, a big detergent brand in North India, is an example. The Indian rural market has a huge demand base and offers great opportunities to marketers. Two-thirds of Indian consumers live in rural areas and almost half of the national income is generated here. The reasons for heading into the rural areas are fairly clear. The urban consumer durable market for products like colour TVs, washing machines, refrigerators and air conditioners is growing annually at between 7 per cent and 10 per cent. The rural market is zooming ahead at around 25 per cent annually. "The rural market is growing faster than urban India now," says Venugopal Dhoot, chairman of the Rs 989-crore Videocon Appliances. "The urban market is a replacement and up gradation market today," adds Samsung's director, marketing, Ravinder Zutshi.

1.2 Review of Literature:

A review of related literature has been made here to gain a proper perception and clarity about the issues and challenges of rural markets. The review of research studies in the related field has been useful in understanding appropriate tools and techniques that can be used in the analysis appreciating the various evidences generated and policy prescriptions suggested there in. There are many studies carried out in India in connection with rural marketing, which have revealed a major setback of temperamental attitude of underrating a potential source like rural marketing. These studies have thrown light on the rural marketing pros and cons, and its dimensions in various manners. There are many studies carried out in India in connection with rural marketing. Narayan Krishnamurthy (2009) revealed that by using the regional language; it becomes much easier to increase the penetration in rural areas. Rakesh Singh and Kapil Bhagat (2005) explained the corporate and rural India has entered into collaborative partnership through vertical coordination.Vivek Parikh (2001) pointed out that most of the rural marketers underestimates the verbal power magic of words to enter into the rural market. Pradeep Kashayap and Siddhartha (2006) elaborated the various aspects of rural marketing like the rural customers, rural marketing research, rural products, pricing, distribution strategies, and the role of media and government initiation contributed in uplifting the rural demand and market. Tarun Narayan (2005) Hansa Yonga (2004), N. Janardhan Rao (2004)and Y. Krishan Mohan Reddy (2006)were focused on challenges faced by the marketers and opportunities available to them. These studies on related problems are useful or indicate the type of difficulties and possible analytical shortcomings and suggest new line of approach to present and study the problem in new context. Rural Markets are defined as those segments of overall market of any economy, which are distinct from the other types of markets like stock market, commodity markets or Labor economics. The so-called urban markets are crowded and saturated and the share of agriculture in GDP is going down but India still lives in her villages. Such a potential market was being ignored by corporate sector and small and medium industries. Hence it is proposed to study the Strategies, Opportunities and Challenges of Rural Markets with special reference Indian Rural Markets.

1.3 Objectives of the Study :

Rural markets, as part of any economy, have untapped potential. There are several difficulties confronting the effort to fully explore rural markets. The study aims at bringing a holistic understanding of the rural markets. The objectives of this study include examining the current market scenario of Indian rural market, and providing in-depth-analysis of the issues and challenges faced by the marketers while operating in the rural environment, and identify rural marketing opportunities. The study also concentrates on the problems faced by rural markets and finally offering suggestions to overcome the problems and tapping the potentiality of the rural markets at maximum level. The present study mainly attempts to examine the following issues:

· To know the Rural Market status in India

· To state different Rural Marketing Strategies

· To highlight the Opportunities and Challenges of Rural Marketing in India.

· To offering suggestions to overcome the problems and tapping the potentiality of the rural markets at maximum level.

2.0 METHODOLOGY OF THE STUDY:

The literature review indicated that there is insufficient theory and understanding of Indian Rural Marketing within the context of particular phenomena. A general research strategy needs to be explored by finding out issues and challenges faced by the marketers to enter into the rural market. The information for this purpose of the present study has been obtained by secondary data viz. from the published reports, internet, libraries, journals /magazines, and reports of certain government agencies:

· Census of India

· National council of applied economic research

· National sample survey

· District statistical reports

· Panchayat office

· Central statistical organization

· Rural Marketing books/Journals/Magazines

· Reserve Bank of India Report

· Planning commission Annual/ Five- Year Plan Reports

2.1.1 Rural Market Status:

The market scenario in the rural areas today is changing very rapidly. The boundaries of nation are disappearing, technological changes are taking place at the flash of an eye, standards are undergoing changes in no time and so are the fortunes of various organizations. Rural families have shown no intentions of cutting down their expenditures on weddings, pilgrimages, construction or consumption. They have their own set of aspirations and are willing to pay right price for right product. CEO‟s of a rural marketing firm says “The rural India has cash in hand and is not bound by EMIs or loans. With the majority of our population based in tier-III, tier-IV cities and villages, it is the right time to penetrate into rural markets”. The consumer in the village knows his math and doesn't merely want the cheapest product. The way they define value is similar to the urban consumers." They have sufficient disposable income and are appreciating brands, customer service, aesthetics and products. There is a growing demand for television sets, two wheelers, cars etc. There are three fastest selling categories in rural market. - Rural-rural, i.e. products mainly used in rural markets eg. Tractors, seeds, fertilizers etc., Rural-urban , i.e. products like bicycle, transistors, soap, shampoo, battery, washing powder etc. and Urban- urban and the best penetration in this segment is mobile phones. Nokia have found that farmers are now getting more familiar with the handsets and it has become a tool of prosperity for them. Nokia has therefore, lined up various applications exclusively for non-urban population which will be providing entertainment, education and agricultural information to subscribers. The village folks previously have no televisions, but now they are skipping cables and going straight to Direct To Home (DTH).

2.1.2 Rural Marketing Strategies :

Dynamics of rural markets differ from other market types, and similarly rural marketing strategies are also significantly different from the marketing strategies aimed at an urban or industrial consumer. This, along with several other related issues, have been subject matter of intense discussions and debate in countries like India and China and focus of even international symposia organized in these countries. Rural markets and rural marketing involve a number of strategies which includes following,

· Client & location specific promotion

· Joint or cooperative promotion

· Bundling of inputs

· Management of demand

· Developmental marketing

· Unique selling proposition

· Extension services

· Business ethics

· Partnership for sustainability.

2.1.3 Opportunities for Marketers:

It offers a great chance for different branded goods as well as services for large number of customers. It is estimated by HLL that out of 5 lakh villages in India,,only lakh has been taped so far , which goes on to indicate the market potentials of the rural market.

· Market Size and Potential: The size of India s rural market is stated as 12.2 % of the percentage of the old population this means 12.2% of the worlds consumers leave in rural India. In India, rural household farm about 72% of total household constitutes a huge market by any standard.

· Increasing Income: Different programs undertaken have helped to improve the economic the economic situation of the rural areas. The increase in income is seen in both absolute values as well as in the increase in average number of days of occupation in a year.

· Accessibility Markets: Though the road network has not developed to the best possible extent but a fire amount of development has been made in many regions, making these regions accessible from the urban region and making in easier for supplying products to these regions

· Competition in Urban Areas: The urban market is getting saturated and thus is enable to provide the much needed market to many companies and in search of greener pastures many of these companies are now targeting the rural market.

2.1.4 Challenges in Rural Marketing: Despite the fact that rural markets are a huge attraction to marketers, it is not easy to enter the market and take a sizeable share of the market, in the short time due to the following reasons.

· Low Literacy: The literacy rate is low in rural areas compared to urban areas. This again leads to the problem of communication for promotion purpose. Print medium becomes ineffective and to an extent irrelevant in rural areas since its reach is poor. Besides, for the purpose of optimally exploiting the opportunities at hand in rural areas, the marketers have to cope up the various challenges before them like educating the rural consumers about the requirements and uses of the products. The marketers should also make the rural consumers understand how their product is different from similar products offered by competitors. This leads to better involvement on part of buyer and fosters long lasting relationship between consumer and company. Trust is another key factor which has to be properly dealt with. Thus, one of the biggest challenges to be met out is to create trust among the rural folks regarding the products. According to Sanjay Muthal, Managing Director, Nugrid Consulting, "Trust is another key factor rural consumers are suspicious of urban market thinking. Rural consumers only buy from people they identify with."

· Low per Capita Income:Per capita income is lower in rural areas compared to those in urban areas. Again, the distribution of rural income is highly skewed, since the land holding pattern, which is basic asset, it is skewed. Thus the rural population presents a highly heterogeneous spread in the villages.

· Seasonal Demand: The main problem of rural marketing is seasonal demand in rural areas, because 75 percent of rural income is also seasonal. For example, the demand for consumer goods will be high during the peak crop harvesting period, because this is the time at which the rural people have substantial high cash flow. Rural marketing depends upon the demand of rural people and demand depends upon income and consumer behavior.

· Transportation: Transportation infrastructure is quite poor in rural India. Nearly 80 percentages of villages in the country are not connected by well constructed roads. Marketing activities require transportation facilities. Due to poor transportation facilities, farmers and marketers find it difficult to reach markets.

· Warehousing : In the rural areas, there are no facilities for public as well as private warehousing. Marketers face problem of storage of their goods.

· Packaging :It is the first important step of product processing. If the packaging cost is high, it will increase the total cost of products. It is suggested that the marketers should use cheaper materials in packaging for the rural markets. For example, small polypack of refined oil is more popular than in containers of the same product due to its lowest cost. One more important factor is the size package e.g. the size of the package should be small.

· Distribution :An effective distribution system requires village-level shopkeeper, Mandal/ Taluka- level wholesaler or preferred dealer, distributor or stockiest at district level and company-owned depot or consignment distribution at state level. The presence of too many tiers in the distribution system increases the cost of distribution.

· Communication Problems :Facilities such as telephone, fax and telegram are rather poor in rural areas.

· Traditional Life : Life in rural areas is still governed by customs and traditions and people do not easily adapt new practices. For example, even rich and educated class of farmers does not wear jeans or branded shoes.

· Buying Decisions : Rural consumers are cautious in buying and decisions are slow and delayed. They like to give a trial and only after being personally satisfied, do they buy the product.

· Media for Promotions :Media have lots of problems in rural areas. Television is a good medium to communicate message to the rural people. But due to non-availability of power, as well as television sets, majority of the rural population cannot get the benefits of various media.

· Career in Rural Market: While rural marketing offers a challenging career, a rural sales person should require certain qualifications and specialized talent.

· Cultural Factors: Culture is a system of shared values, beliefs and perceptions that influence the behavior of consumers. There are different groups based on religion, caste, occupation, income, age, education and politics and each group exerts influence on the behavior of people in villages. There is a belief among rural people that experience is more important than formal education and they respect salespersons who can offer practical solutions to their problems. Therefore, it is desirable that sales persons, especially those who have been brought up in cities are given a thorough training consisting of both theory and practical aspects of village life. The training will help these sales persons to align themselves with the market realities and settle down smoothly in their jobs. But there are more issues also on other sides of challenges which are like the rural population is spread over a large area where reach is expensive and the mass is heterogeneous. The spending power of rural population fluctuates with the agri-yield. Hence, demand is not consistent. Besides this, low level of product exposure, poor standard of living, spurious products with high margins for retailers and lack of infrastructure leads to low penetration.

2.1.5 Suggestions:

· Develop New Products for the Rural Market: Product redesign from the beginning can be done. Marginal changes to existing product will not work effectively. Product must work in hostile conditions in noise, dust and electricity blackouts etc.

· Distribution Network: It should be designed to reach highly dispersed rural markets as compared to highly dense urban markets.

· More Effective Communication: There is a need to find out the appropriate media, which could reach the hearts of the rural masses. This is required as none of the media like television, print, radio etc has absolute reach to the rural masses.

· Pricing: Products can be priced to build up volume in the rural market, especially for smaller pack size SKUs. 5. Marketing Research should be undertaken involving focus groups. Marketers should also build prototypes while strategizing for marketing.

CONCLUSIONS:

The rural market is where the markets of the future are likely to be. Urban markets are becoming increasingly competitive for many products. In some cases they are even saturated. On the other hand, rural markets offer growth opportunities. Rural market is the market of the new millennium. Marketers will have to understand the rural customers before they can make inroads into the rural markets. The size of the rural market is fast expanding. The rural market is fascinating and challenging at the same time. It offers large scope on account of its sheer size. It is often said that markets are made, not found, this is especially true of the rural market of India. It is a market for the truly creative markets.

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Received on 22.10.2015 Modified on 30.10.2015

Asian J. Management; 6(4): Oct. -Dec., 2015 page 336-341

DOI: 10.5958/2321-5763.2015.00050.5