The Hindu Business Line : `Reaching remotest destinations a big challenge for rural marketing'

THE good news is most economic indicators reaffirm the potential of the rural goldmine. However, that is only half the news. The rest lies utilising this potential. Thus spoke some of the doyens of rural marketing at the Rural Marketing Summit 2004 here today.

"We all love the rural markets but when it comes to allocations, the amount of investment in rural marketing is very limited," said Mr R Gopalakrishnan, Executive Director, Tata Sons Ltd.

"While affordability, access and availability were critical to rural marketing, there was an urgent need for engagement of governance, reforming of agricultural marketing, and reconsidering subsidies," he said at the meet organised by the Federation of Indian Chambers of Commerce & Industry (FICCI).

Mr P.M. Sinha, Chairman, FICCI, Agriculture and Rural Development Committee and Chairman, Bata India Ltd, agreed that agricultural subsidies should be removed and have those funds released for the uplift of the rural sector. He was also emphatic that the private sector should understand, feel and work in the rural areas in order to capture the rural market.

Marketing in hinterlands also has its share of myths abound the rural sector such as rural people not buying branded goods, going for cheap products and market being a homogenous mass, said Mr Pradeep Kashyap, member, Rural Network. Rural people account for 80 per cent of sales for FMCGs and they seek value for money in a heterogeneous market.

The greatest challenge for the rural marketer lay in reaching out to the remotest destinations and in the bargain roping in a number of vendors at the retailing end, he added

A background paper released on rural marketing also threw a few encouraging facts that there were 42,000 rural supermarkets in India that exceed the total number of retail chains in the US (35,000). Of the 20 million, who have signed up for some of the retail portals, 60 per cent were from small towns and there were as many as 50,000 small towns that transacted business through such online shops.

Dr Rajesh Shukla, Principal Statistician, National Council for Applied Economic Research (NCAER), said increasing product utilisation directly resulted in increasing share of rural markets. This led to products such as radio and bicycles having higher utility in rural areas as compared to urban areas. Also, more infrastructure-intensive the product the less it will be accepted in the rural areas, he said, citing the examples of high-end consumer durables, which did not take off despite sufficient purchasing power of the rural consumer.