The past decade and even prior to that, has seen more and more companies rushing to capture the rural markets. This mad rush is due to a number of reasons like saturation of urban markets, growing potential of rural markets, increased income and educational levels of rural consumers, easy in rural communication due to the deep penetration of satellite television, internet and mobiles, increased aspirations of rural folks etc. Research has shown that rural markets have outpaced the growth of urban markets and will continue to do so in the years to come. In future going rural will no longer remain an option for big companies which aspire for a strong market growth. After all more than 65% of the country’s population resides in the rural areas in approximately 6, 35,000 villages. Among the 4Ps of marketing mix, “the place” seems to be the most complex with reference to rural marketing, as the rural markets are not only large and scattered but a large percentage of villages have a population of less than 2000. Many villages are not accessible during rainy season. Very few states in the country like Pubjab, Kerala and Goa have excellent road connectivity in rural areas.
In spite of all the revolution in shopping i.e. online shopping, advent of Malls and super markets, the weekly bazaars (haats) and Mela’s still continue to be popular with the village folk. This paper based on secondary data attempt to compare the pros and cons of using the haats and melas for making products available to rural consumers.Keywords
Rural area, Haats, Mela’s, Consumer Durables, FMCGs.Introduction
Companies like HUL, P & G, Nirma, Colgate, ITC etc. had long proven that rural markets are difficult but not impossible. Most of these companies generated huge revenues from rural areas. Innovative techniques like Self -Help Groups, e-Choupal were used by HUL and ITC respectively. These companies are financially strong and they looked at rural markets as long term investments. Various surveys have indicated that 80% of the products sold in rural areas were local, regional or national brands. This only goes on to prove that brands which are popular in urban markets will automatically have a huge demand in rural markets. Availability is the key to success. But making the product available is the toughest challenge. The incomes and aspirations have gradually gone up, so price is no longer the main reason that keeps the product beyond the reach of the rural consumer. Awareness has increased due to increased educational levels, more rural to urban migration and penetration of satellite television and mobile network. So rural folks are now well informed about brands and new products. Many companies have already modified their products to suit the needs of rural consumers, e.g. Godrej Chotukool, Tata water purifiers and many other companies have modified the products in order to make them all the more appealing to rural consumers. The big question that marketers now face is the distribution. Rural haats and Melas to some extent help in answering this question. The large number of rural haats and the hugely attended melas if used in an ideal way could help solve the problem associated with distribution, the main issue faced by the business houses in reaching out to villagers. Rural area refers to country side that is sparsely populated and are distinct from thickly populated urban areas.
Definition of rural area: There are many definitions for the term rural area.
• The census of India defines rural as any habitation with a population density of 400 per sq. km, where at least 75 per cent population is engaged in agriculture and where there exists no municipality or board. (Kashyap)
• Planning Commission of India defined rural market as towns up to 15,000 populations are considered as rural market.
• According to marketers an underdeveloped area which is sparsely populated and lacks amenities like good schools, roads hospitals electrification and where agriculture is the main source of income. These places are generally influenced by the nearby town or city.
• A place which is not a city or a town is a rural area.
• A remote area far away from the urban cities.
What is rural marketing?
Rural marketing is defined as the flow of goods and services from urban area to rural area, from rural area to urban area and also includes the flow of goods and services from rural area to rural area.
What is distribution?
The movement of goods and services through a distribution channel right up to the final customer, consumer or user.
A holistic view of rural markets will show that rural markets offer huge potential, but there are many challenges which marketers will face like high distribution cost (almost 25% of villages with population of less than 500 have no access to a shop), seasonal demand, many languages and dialects, lack of all-weather roads, low per capital income, low literacy levels etc. Many companies are trying innovative ideas to generate sales from rural markets. Most of the companies, generally tap the feeder towns with assistance from dealers/ wholesalers/ retailers, who in turn work towards making the products available to nearby villages. These middle-men are extremely demanding as they are well aware of the company being completely dependent on them. They demand long term credits, promotions and advertising for the products, distribution at required location etc. Increasing competition in rural areas generally forces the company to give in to the demands of the retailers. On many occasions benefits of promotions are not passed on to consumers by the middlemen, and the sales representatives of the company turn a blind eye as they do not want to antagonise the middlemen. Thus distribution proves to be an aspect where the companies generally end up making compromises.
Overview of rural haats and melas
Distribution through rural haats and melas seems to be a bright option as the dependence on the middlemen will be greatly reduced. Haats and melas offer the perfect settings for transactions between buyers and sellers. Many companies make theirs goods available at haats and melas but these haats and melas generally are not looked up to with much significance. It is considered to be just one of the additional techniques of distributing the goods. If companies plan and execute innovative marketing strategies for haats and melas, it would result in huge sales. This distribution would be of immense help to companies who are new to rural markets and are focused at generating sales from the hinterland. According to Pradeep Kashyap, Director, MART, who has conducted many studies on rural haats concluded that rural haats have immense potential, which the corporates are now waking up to.
Haats are considered to be the oldest form of retail outlets for purchases and trade. The existence of haats can be traced back to era of Chandragupta Maurya. Transactions during that period used to be in the form of barter system. A haat is an open air market, where goods are generally display on a carpet or sheet on the road side. Haats are held on a weekly basis (say on a specific day of the week). They are held at a specific location and people from the nearby villages visit haats for their weekly shopping. Each haat caters to the needs of minimum 8 to 10 villages around it. Almost all villagers make shopping trips to weekly Haats. The most important aspect of a village haat is that almost all utility products needed are available at the haat. Items like vegetables, fruits, clothing, FMCG goods, handicrafts etc. are commonly found and purchased in weekly haats. These weekly haats generally lack the basic infrastructure like a shade, counters, billing machines etc. The weekly bazaars start early in the morning and ends by lunch time. In some places it could start late noon and will be over after before sunset. The selling overheads in a haats are very negligible.
Local and national brands are available in haats. Around 43,000 haats are held in rural India. Rural haats account for ` 50,000 crore sales annually. Villages generally have less disposable income, hence the price of the products have to be kept less. The price of the products in the weekly haats are generally low as there is no money spent in shop rent, shop interiors, salesman salary etc.(Kashyap P. , 2011)
Sellers at haats are typically mobile. They sell in a particular geographical region one day and move to another region the next day. The participation fees in haats are very low and hence affordable even to small time traders. Baring a few states like Harayana, western Rajasthan and North Eastern States, haats are held in almost all the other states of the country.
Melas are held on specific occasions, especially during festive seasons and includes food, entertainment, shopping etc. Melas are held less frequently as compared to haats. The average duration of melas could be anywhere from 1 day to a couple of weeks. A large fair could well have over 500 stalls. Participation fees in melas are much higher as compared to haats. The crowd strength at fairs increases gradually with each passing day. Similar to haats both branded and unbranded products are sold at melas. In melas people tend to try out new things. Visits to melas is considered to be a joy outing. Melas generally have a specific theme and they are organised continuously for a number of days and is attended by thousands of people. The number of visitors to melas is comparatively very large as compared to haats. Timings of melas are of longer duration as compared to haats, they run late into the night. Unlike haats, the stalls in melas have the basic infrastructure and amenities. Melas are generally organised after the harvest season, keeping in mind that people have enough money for spending. According to Indian Market Research Bureau 8000 melas are held every year. Almost 80% of the melas are commercial melas and the remaining are cultural melas. A majority of the melas are held during October- November and January-April. This coincides with the Kharif and Rabi harvest, when the farmer’s purchasing power is high. The visitors to melas are estimated nearly up to 100 million. The Pushkar mela in India is visited by around 10 million rural consumers. (Chetan Bajaj, 2017)
Distribution through haats and melas
The numbers of retail outlets in rural areas are very less as compared to its vast population. Most of these retail outlets are very small and lack the basic infrastructure required and are generally a side business for most of the retailers. These retailers demand credit facilities from the companies whose product they display, as they have to provide credit to most of their customers who visit on a regular basis for their daily needs. Dealing with retailers can be very tough as consumers in rural areas are more shop loyal than brand loyal. The company cannot afford to annoy the retailers.
Haats and Melas offer one of the best alternatives for distribution and promotion of goods and services to companies who desire to make their goods available in rural areas. Haats and melas may have different names in different regions but have a striking resemblance in the nature of products sold, if the haats and melas are held in regions where the culture is quite similar.
Advantages of distribution through Haats and Melas
• Distribution network is already in place.
• All transactions are in cash. No credit system exists.
• Big opportunity to promote your brand as there are large gatherings.
• Caters to all villages located nearby.
• Stock left unsold is used at the next haat.
• Rural consumers well informed about the haats and melas.
• People generally visit Melas along with family members.
• There is a positive government approach towards the haats and melas as many farmers also display their produce in weekly haats.
•Melas offer huge entertainment opportunities and hence would be repeatedly visited by rural folks during the stipulated time period.
• May encourage a retailer to stock your product if he sees that a huge demand for the same among the consumers.
• Melas can be used to sell high priced consumer durables. Visitors come there with the intention to buy.
• Sometimes it’s a question of pride among rural folks on how many times they have visited a particular mela and how much they have spent.
• School going children of illiterate parents greatly influence buying decisions. As melas are a family outing, these children could greatly influence buying decisions.
• Melas are visited with extended members of the family and neighbours which results in more spending and buying.
• Sources of entertainment are limited in rural areas and hence melas are always eagerly awaited by village folks.
• Word of mouth has a huge impact in rural areas. So if a product is purchased and authenticated, many others would visitfor purchase of the same.
• Big melas held in particular locations are looked upon with pride by local population of the region.
• Weekly purchases are planned keeping in mind the week-day of the haat.
• Weekly haats could be used to sell surplus agriculture produce.
• Haats and melas can be looked up to as re-distribution arrangements for villages which are very less populated and lack retail outlets.
• Haats and melas are well attended and do not require any advertising or publicity. People are well aware on which day of the week a haats are held and melas are repeated year after year according to the Hindu calendar.
Disadvantage of distribution through Haats and Melas
• Many spurious brands are sold in haats and melas. They look very similar to the original brands.
• Weather may at the last moment spoil the whole effort.
• Stiff competition as alternate brands available at the same location.
• Many shops and huge crowds may result in the potential consumer missing out on your product.
• The local population in the village may sometime make things difficult for traders, who are outsiders.
• Haats are generally once in a week and melas are for a few days once in a year. Due to this product cannot be made
available wheneverthe customer needs it.
•The customer may need to travel some distance to visit haats and melas. The return journey with all the purchases
becomes allthe more tedious.
• Haats are generally used to sell items which are low cost.
• If same are products are available at same price with local retailers, people would generally buy it from them. As
rural consumers share a strong relationship with local retailers and also get credit facilities from him.
• Products may not be sold at fixed price in haats and melas.
• Buyers many times are sceptical about the authenticity of the products sold in haats and melas.
• Durables which require guarantee/warrantee, service, face difficulty in sales at melas, as consumers would rather
buy them atfixed shop locations.
• May invite presence of anti-social elements.
• Natural calamities and droughts may have a major impact on the business of haats and especially meals.
Observations and Suggestions:
• Sellers come to haats and melas' with the intention of selling their stock (even if discounting the price is required, they
do not intend to carry back their stock and bear transportation cost), on the other hand buyer visits haats and mela's
with money in their pockets and have strong inclination to buy. Thus haats and mela's are a place where committed
buyer and seller meet.
• The advantages of distribution through haats and melas far outweigh the difficulties associated with it.
•Haats are visited for purchases of utility products (generally) FMCG, while melas are visited with aim of having fun
and to purchase items like clothing, imitation jeweller, consumer durables etc.
• Sales in weekly haats may be low if melas are organised in that region during the same time, as people prefer visiting
meals as compared to haats.
• Haats and Melas can be used for testing new products in the rural markets and response can be noted.
• Companies need to keep a track of where main weekly bazaars and melas are held in different regions.
• Tie-up with local residents/traders for displaying goods in haats and melas.
• Collaborate with non-competing companies to distribute products in rural haats and melas.
• More support from the government is needed for providing basic infrastructure facilities for haats.
•Displaying new goods and services will attract more crowds to rural haats instead of sticking to only the basic
necessary goods and services.
•Haats and Melas offer huge opportunity not only for sale of goods and services but also promotions and for
• Bargaining at haats and melas is a common practice.
• People have leisure time during visits to haats and especially melas. It offers the right opportunity to carry out product
•The population in rural areas is scattered and haats and melas offer the ideal settings where high number of villagers
• Local village youth can be trained in product promotions and demonstrations. They would carry it out more
effectively as they are familiar with local dialect and culture.
• Haats and melas are visited not only by the individual consumer but also by retailers from small nearby villages; to
buy stock fortheirretail outlets and hence bulk purchases may happen.
• The number of non-agro products that are sold in haats is growing very rapidly.
• Haats and melas can also be used to sell defective goods with minor defects at throw away prices, as rural consumer
would not mind the minor defectifthe price is very less.
• Melas could be used for collecting useful information about potential customers, who could be contacted in future, if
they did not purchase the product now. This database could also be used in generating references.
• It gives the perfect opportunity for free sampling and consumer feedback.
• Haats and melas which have high turnover need to be catered to on a priority basis, small haats and melas could be
targeted at latter stage.
• Loose commodities, as well as packaged goods are sold at haats and sometimes even melas.
• All convenience goods required for daily use available at one place is the main utility of haats.
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