Saturday 11 July 2015

Decision Dilemma

India is the second largest country in the world, with more than a billion people. Three quarter of population lives in rural area. there are total 6 million villages. Presently, the population in India is described as poor and semi literate. Moreover, rural population accounts for only one third of total annual national product sales. Less than 50 % of households in India have electricity and man of the roads are not paved. The annual per capita consumption of toothpaste in rural India is only 30 grams as compared to 160 grams in Urban India. In USA the consumption is 400 grams.

These is the kind of data company s want to target rural India as upcoming market for their products. The people in rural areas are becoming conscious about their life style and their living. So, the market rate in rural India is increasing 5 times the rate of Urban India. There is reduction of gap in the tastes of rural and urban customers and the literacy rate is also increasing in rural areas. Two third of population in rural India now have main source of income other than farming.Virtually, every house has a radio, 30 % of them have television and more than 40 % have at least one account in bank.

In early 1990's the toothpaste consumption in rural India doubled and the use of shampoo became fourfold. Recently, other products have also done well in rural India. So, man US and Indian firms have entered the rural market with enthusiasm. Marketing to rural India customer is very difficult and involves building categories persuading them to try and adopt the products that they may have never used before.

Rural India is huge, relatively untapped market for business. However, entering such a market is not without risks and obstacles. The dilemma companies are facing is "Whether to enter this market place, and if so, to what extent".

These are the statistical questions generally companies ask before entering this market place :

1. Are the statistics presented in any report exact figure or estimate ?

2. How and where did the researchers gathered this data ?

3. In measuring the potential of rural Indian market what other statistics have been gathered ?

4. How managers can use this statistics to make better decisions ?

Solving this dilemma is where hiring an analyst proves an excellent move for any organization.

Source : Adapted from "Selling in rural India" and "Understanding the market environment".

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