For many years, the Indian rural market has been neglected by the business houses. But, the present scenario witnesses a phenomenal change. The business houses are busy in setting up a `separate specialty' unit to focus on the untapped potential of rural market. Needless to say, the selfish motive behind it is to shift the focus from the rapidly saturating urban markets to yet another untapped segment, the rural market. It is a business theory that suggests that a company ought to stay alive in the market by doing continuous business. None of the companies would close down/shut their production units, till they sell their produced goods to the target consumer. The show must go on. Production and sales are the parallel processes that would help the business stay afloat. Recent changes in the rural market have motivated companies to diversify their attention in this market.
Consumer durable companies wager that the rural market is the next big thing. Companies like LG, Samsung, Onida and others expect 65-70% of the volume to come from this lucrative market (The Economic Times, 2004). It clearly shows the increase in disposable income in this evolving arena. As management guru, CK Prahalad, rightly states in his recent book, Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits, that marketers ought to focus on the bottom of the pyramid, by considering India's Socioeconomic Classification (SEC) as the pyramid. Majority of the Indian population belongs to SEC C (Middle-class), SEC D (Lower Middle-class) and SEC E (Lower Class). They lack the buying power as compared to SEC A and SEC B who represent only a fraction of the population. Hence, he suggested that companies make products affordable for these SECs to buy and it proved that, in India, most of the companies, from consumer durables to FMCG, are focusing on these SECs and reaping benefits out of it. |