Business Strategy

Rethinking Innovation Strategies for Rural Markets in India: Focus and Imperatives

Article Details

Pub. Date	: Sep' 2022
Product Name	: The IUP Journal of Business Strategy
Product Type	: Article
Product Code	: IJBS020922
Author Name	: Subho Chattopadhyay, Indranil Bose and Upasana Gupta
Availability	: YES
Subject/Domain	: Strategic Journals
Download Format	: PDF Format
No. of Pages	: 10

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Abstract

Although rural markets are different from urban markets in India in terms of demographics, psychographics, behavioral patterns, consumer purchase habits, and the amenities present therein, they have been evolving steadily and rapidly over the last few decades. According to a recent survey conducted by Kantar and cited by Tandon (2021), the rate of growth of rural markets has surpassed that of urban markets. In terms of value, rural markets grew by 11.6% against a growth rate of 10.2% in the urban markets. At the same time, the rate of volume growth witnessed by rural markets was 4.4% against 3.3% in urban markets. Those very rural markets which were considered insignificant till a few decades ago have now become the hotbed of competition, strategic innovation, product innovation, and process innovation. For certain sectors and industries like the FMCG sector, the two-wheeler industry, the cycle manufacturers, etc., rural markets have emerged to be more important than urban markets. A major portion of the sales in these industries comes from rural markets today. The tremendous potential that lies hidden in the Indian rural markets can be unleashed using the right blend of strategies and tactics, appropriate technologies, and suitable innovations in products, processes, and delivery. The paper dwells upon the imperatives of innovation required to penetrate, thrive and grow in rural markets.

Introduction

For a very long period of time, the Indian rural markets were considered as insignificant and unviable by businesses and marketers. Since the true potential of Indian rural markets was realized, the scope and prospects of these rural markets have intrigued strategists and lured businesses, new and old, that have been making a beeline to churn out the treasures from them. Though full of promise, rural markets are different from their urban counterparts in many respects. The same strategies that help in dominating over the urban markets may not yield very encouraging results in rural markets. Herein comes the significance and necessity for innovating for the rural markets. Not only do these innovations come in handy in penetrating the rural market, but quite a number of innovations that were born in the heart