rural marketing of services

8/6/2019 Rural Marketing of Services

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Rural MarketingRural Marketing

of Servicesof ServicesDr. Satish Jangra

2009A229M



Overview

Overview� The rural market in India is a huge unorganized

market as well as much of it is still untapped invarious domains.

� A huge scope for services exists in these marketswhere still major companies have directed their focus on.

� Major of Indian population exists in rural segment,prospects of huge demand exists for the products.

� But the demand and supply pattern in the ruralsegment is majorly different than those in the urbansegment.



Urban

Urban vsvs RuralRuralThis difference is due to vast difference in:

� Income level

� Expenditure capacity

� Taste and preferences

� Educational level

� Social, Cultural and environmental



Urban

Urban vsvs RuralRural� These differences results in Gaps between Service

provider and the consumers/customers in both themarket segments.

� Hence a service provider clearly needs tounderstand these gaps and the strategies to fillthese gaps effectively.

� Therefore the mantra for successful strategyimplementation in rural markets for service deliveryis ´Think Global Act Localµ



Areas of Potential

Areas of Potential1. Agricultural consultancy

2. Banking, microfinance and loan facilities

3. Healthcare

4. Telecomm services

5. Automobiles Services

6. T.V. Channels Services

7. Travel and reservation Services

8. Low Cost Hotels

9. Event Managements10. Beauty Parlours

11. Affordable Movie theatres

12. Educational and Career consultancy



Agricultural consultancy

Agricultural consultancyRural customers require proper consultancy services

about the

� best methods (of farm practice),

� timings and seasons,� technology, tools,

� prices and best markets for selling their farmproducts.



Banking, microfinanceBanking, microfinance

and loan facilitiesand loan facilities� The rural market has huge

potential for banking services for

providing following facilities ataffordable prices:o Agricultural loans

o Educational loans

o Housing loans

o Savings accounts and safe deposits

o Automobile loans

o

Personal loans



Healthcare

Healthcare� A large population in India resides in Rural areas

and lack proper facilities for proper health care.

� The availability and location of these services is of

great concern as most of the areas either do nothave any or many rural and remote areas needs tobe dependent on very few and distantly locatedHospitals.



Telecomm servicesTelecomm services� Due to increased awareness and improved telecomm

infrastructure across India, the demand for telecomm(Fixed and wireless) and internet services have increaseddrastically.

� Even the government·s policies for reduced tariffs, callrates, lesser mobile handset prices and privateparticipation involvement has helped in increasing thelevel of competition, continuous improvement intechnology and thus has resulted in the growth of therural telecomm market.

� Hence the rural market has now become attractive andlucrative for many National and Global telecommcompanies, who now are focusing more on this hugeuntapped market.



Automobiles Services

Automobiles Services� There has been a huge increase in the number of

two wheeler, four wheeler and Agricultural toolsand vehicles in past few decades because of

reduction in prices and government support to therural population.

� This has given rise to a new business for providingmaintenance and repair services to these vehicles

with more attractive service quality, location and

availability.� This segment has huge potential in the upcoming

trends of services to the rural markets.



T.V.Channels Services

T.V.Channels Services� Due to the increased awareness, arenas of interest,

leisure requirements, and number of entertainmentoptions like televisions and computers due toreduced & affordable prices, the demand for

entertainment services like T.V. entertainmentchannels have increased.

� This provides a huge potential for cable and Directto Home services providers to tap the rural marketsto meet their demands. Many companies have

already gained profits by targeting rural marketswhich include Airtel (DISH TV), Reliance (BIG TV),and Tata (SK



Tourism, Travel andTourism, Travel and

reservation Servicesreservation Services� The travel and reservation booking and organizingservices for booking train, busses, taxies and tour consultancy has also been observed to create a

huge demand in last few decades as more andmore rural population need to mobilize for businessand personal needs. Hence these services hold ahuge potential for service providers.



Low Cost

Hotels

Low Cost

Hotels� Due to increased mobilization because of business

and personal needs, there is also increaseddemand for hotel and lodging services to the

travellers but majorly driven by the pricing of suchservices and facilities.

� Hence provide a great platform for the serviceproviders to focus on these demands to capture a

big untapped market.



Event Managements

Event Managements� The rural population are majorly involved in

celebrating and organizing festivals, which requirelightning arrangements, venue decoration, food,

lodging, transportation, catering and eventplanning etc. for:o Family gatherings, Marriages, engagements, birthday parties,etc.

o Festivals like Diwali, Onam,Christmas, lorhi, Eid, Dushera, Kannada

Rajamahotsava, Navratri, Garba and Dandia mahotsava etc.

o Religious/Caste based events like poojas, various ceremonies, etc.

� Hence these services also have great potential tomeet the rural customer·s demand for eventmanagement.



Beauty

Beauty ParloursParlours� As there has been major improvement in the quality of

life style and increased awareness among the ruralcustomers (especially females), there has been greatdemand observed for beauty products and services.

� A huge increase in the demand for FMCG products likeshampoos, beauty soaps, beauty creams, cosmetics,etc. has also been observed lately in rural India.

� This market is still dominated by unorganized and localplayers who lack adequate tools, methods, skills,process, technology and beauty products to meet thedemand of rural population.

� Hence focusing on this segment would be a profitablebusiness for any company.



Affordable Movie theatres

Affordable Movie theatres� Till now the entertainment service providers for

movie theatres at affordable prices in rural marketsare dominated by local and unorganized players

who lack proper facilities and infrastructure as wellas quality delivered. Focusing on this market is agood profitable business



Educational and Career Educational and Career

consultancyconsultancy� The rural markets lack adequate and qualityeducational services which are majorly catered bygovernment agencies and bodies.

� But due to lack of proper infrastructure, expertise,

knowledge, talent, funds and participation of theservice provider, this sector is unable to meet thedesired level of service expectation of the ruralcustomer for career building.

� Hence there a great business opportunity for anycompany if it is able to fill this gap effectively andwould also be imparting its social responsibility tothe growth of the society and country.



7 P¶s analysis of Rural7 P¶s analysis of Rural

andU

rban MarketingandU

rban Marketing� The most potential among all the above describedservices is the Rural Banking Service. Lets us examinethis sector on the basis of difference between Rural

and Urban markets on the grounds of 7 P·s ofMarketing.



ProductProduct� The Products (Services) provided to Rural customersdiffer from that of urban customers as rural segmenthave more demand for agricultural loans, lower

limits for savings accounts, microfinance, lower amount of loans for education, automobiles, small& medium scale industry and personal loans.

� The duration for these loans, schemes and

capacity also differs from that of urban customers.



PricePriceThe price of these services as expected by the ruralcustomer is lesser as compared to urban customer due to the fact that income level as well as savings

pattern of the rural customer are lesser. The risk appetite and affordability is also a matter of concernfor the rural markets as they are lesser as compared tourban markets.



PlacePlaceThe place of availability is of very intense concern inrural markets due to lack of adequate and proper transportation facilities in rural India. The rural

customers face major problems with the availability ofservice location in vicinity and thus are reluctant toderive benefits due to lack of travel support.



PromotionsPromotions� The promotional strategies in rural marketing needsto be more personalized and simple as comparedto the urban markets which needs to reach more

remote areas as rural markets lack more in meansof communications and technology.

� The promotional tools also need to be customizedaccording to the regional languages so that it

clearly states the service details and benefits.



Physical evidencePhysical evidence� The physical evidence provided to the ruralsegment differ from that of the urban markets asthey need to be more simple, colourful, artistic and

personalized as most of the rural customers lack adequate education or low educationalbackground and thus need to be clearly explainedabout the features and benefits of the services thusprovided.



PeoplePeople� The people and staff appointed for the service deliveryfor rural banking services needs to be properly selected,recruited and trained to properly understand the ruralcustomer·s needs and requirements.

� They need to be made well aware of the regional,cultural, social, economic and technological needs ofthe customers.

� The employee involvement in the service delivery to theservice (banking) sector is more in rural markets thanurban markets as the employees need to constantlyeducate and assist the customers about the serviceprocess, price, product and simultaneouslycommunicate the benefits as well as the precautionsand risks involved with the services being offered.



ProcessProcess� The process of rural banking differs from that ofurban banking sector as it needs to be more simpleand thus less documentation involved and morecustomized as per the economic capacity of the

customers.� The process of banking in rural markets is observed

to be more affected by the Government policiesand rural customer psychology driven.

� The process also need to be timely revived andrevised to remove any complexity arising due toinclusion of new economic policies and changingdemand & supply patterns.



Do¶s for Rural

Banking

Do¶s for Rural

Banking� The focus of the service quality should be customer

driven and hence need to be customized as per the rural requirements of customers having lowincome group as major target group. Hence more

of benefits driven by the customer from savingsschemes should be included in the Servicesprovided through accounts maintenance with thebanks.

� The service providers should be clearly aware of the

local languages, culture and behaviour of the ruralcustomers. Thus the inclusion of local employeeswould be beneficial for the banks to dealeffectively with the customers.



Do¶s for Rural

Banking

Do¶s for Rural

Banking� The banks should be able to provide these banking services

such as loan and microfinance services at lowest and mostprofitable interest rates with flexible and customizedrepayment options to the customers.

� The Bank need to clearly understand the best possible

location for its setup and operations as the location andfacility layout of the service provider plays a very significantrole in rural banking because the rural areas do not havesufficient transport facilities like urban markets.

� The customers should be made aware clearly about theservices provided by the bank through effective physicalevidence and promotions that should be made as simple as

possible to the rural customers to understand properly. Theassistance should be provided regularly to the customers toeducate them about the current as well as prospectivefacilities and benefits derived from the banking servicesprovided.



Don'tsDon'ts for the Ruralfor the RuralB

ankingB

anking� Do not put much focus on providing any complex andunessential services like corporate loans and credit cardfacilities as still the market demand for such services aremuch lesser as compared to other banking services.

� Do not use any illegal or unethical means for repaymentof loans and other services as this would result in more ofcustomer dissatisfaction and grievance which wouldharm the brand equity and image of the bankingcompany.

� Do not provide services to the customer before properlyeducating the customer about the details product andprocess of the service so as to avoid confusion anddiscrepancy.



Don'ts for the RuralDon'ts for the RuralB

ankingB

anking� Do not focus on the short term profitabilitybut the bank needs to focus on the buildinglong term relationship with the customer by

putting more concentration on:o Service quality

o Service recovery

o Reach to the customer and building prospective future customers

o Improving market share

o Building Brand loyalty

o Providing new facilities as per the customer needs andrequirements

rural marketing of services

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