Some myths about the Indian rural market

03 Jan 2001

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Myth no 1: In the aftermath of urban-rural convergence, rural market will be mainly an extension of urban markets and will eventually embrace the product and brand lifestyles of the latter, supported by higher disposable incomes, aggressive retail promotion and advertising.

The reality: Rural markets represent a distinct dynamic in how they come into being and make unique demands on how the product is designed and how the brand is positioned and promoted. Greater the strategic attention to these unique demands, assure greater the chances of product's success in the rural market.

Myth no 2: The market size can be estimated based on mere demographic interpolation of current penetration levels and sales volumes and that even fringe presence or limited acceptance of lifestyle consumer products in rural market would translate into future market potential to be tapped.

The reality: Fringe acceptance of consumer products or brands is no indication of market potential. It actually would only result in higher incidence of brand and product mortality as more firms try to choke those segments with competing brands. Rural market dynamics instead demand sustained effort at brand building and product acceptance.

Myth no 3: That rural market represents a more or less homogenous matrix of attitudes, values and purchasing behavior across regions leading to what may be termed "one size fits all" approach.

The reality: The Indian rural market is a complex mosaic of mind-sets, cultures, and lifestyles. While education, employment, income, agricultural land ownership may still be the major deciding factors accounting for social differentiation, they do not yield reciprocal cohort behavioral patterns, with respect to consumption patterns, purchasing decisions and priorities of product ownership.

Myth no 4: That rural markets are highly price-inelastic and only suited for 'value-for money' products as against premium quality products.

The reality: Despite lower incidence of premium product purchases, the rural consumers across all income segments exhibit marked propensity to spend on premium high quality products which are backed by strong brand values, where they correspond to their own aspirations and quality needs. The problem really lies in market not being able to offer a premium product in the specific context of rural demand.

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