UNIT 7

RURAL MARKETING
Rural Marketing : Relevance and Importance in
emerging scenario
Rural Market Environment and the Structure of
Indian Market
Problems in Rural Marketing

Rural Marketing
Markets are made and not found.
This is also true for the rural markets in India
Rural denotes an environment
The word rural is somewhat associated with
agriculture and farmers and thus is often confused with
agricultural marketing but is one component
Rural areas are large and isolated areas with low
population density
Rural marketing is promotion of a companys products
in the rural markets by using strategies which differ from
that of urban market.
The rural market more price sensitive but it has
preference quantity.

Meaning of Rural Marketing

Dictionary Meaning - Market located away from towns or
cities
Sociology - A group of people with deep rooted in the land
and practices cultural values
Psychology - A community who are traditional in their out
look and resist change
The census of India
Not under municipality or corporation
Population is not more than 5000 people
At least 75% of male workforce engaged in agricultural
activities
A population density is not over 400 person per sq.km
The Reserve Bank of India - All locations irrespective of
village or town, up to a population of 10,000 people

Relevance of Rural Marketing

Large Population - As per 2011 census, rural population is 72% of
total population and it is scattered over a wide range of geographic area.
Rising Rural Prosperity - Due to modern farming practices, contract
farming, industrialization, migration to urban areas etc.
Growth in Consumption Habits - The average per capita house hold
expenditure is Rs. 382
Change in Life Style Due to modern communication facilities
High Market Growth Rate - The growth rate of FMCG market and
durable market is high, and the market share is more than 50% for
products like cooking oil, hair oil etc.
Life Cycle Advantage - The products which have attain the maturity
stage in urban market is still in growth stage in rural market.
Un Expensive Marketing Promotion
Joint Family Culture

Rural Market Environment & Structure

Large and diverse but scattered market
Major income source is from agriculture
Traditional outlook
Affluent Life Style
Elasticity in Demand
Growing disposable income
Sensitive to Stimuli
High Savings Inclination
Preference for value products
More Aware about the Happenings Around
Rising literary levels
Diverse Socio and Economic Background
Inadequate Infrastructure facilities
Challenging Physical Distribution System

Importance of Rural Market

Increase in customer prosperity and business prospect
More purchasing power and diversified consumption pattern of
the rural population
Government initiative for rural growth through various programs
like 20 point program, Jawahar Rozgar Yogana
Movement of cluster of urban population to the rural areas
Exhausting competition in the urban market
Change in the social and economical condition of the rural
residents and the mindset
Huge size of the rural market offers more viable prospects
Government inclination for more infrastructure development in
the rural areas
Less dependence on monsoon for agriculture
Effective penetration of IT in rural areas
More concern about their rights and duties

Problems in Rural Marketing

Managing Physical Distribution
It includes transportation (road, rail etc), warehousing,
channel management, sales force management,
marketing promotion activities and communication
(postal and courier services)
Underdeveloped People and Markets
More people below poverty. Moreover, they believe in
old customs, traditions, habits, taboos and practices
Many Languages and Dialects
Even though the numbers of recognized languages are
only 16, the dialects are estimated to be around 850.
Also, communicating through signs and symbols and
body language involves a high risk of misinterpretation.

Problems in Rural Marketing

Dispersed Market
Rural areas are scattered and advertising is very
expensive in such a highly varied and widely spread
market
Low Per Capita Income
As estimated nearly 33-35% of GDP is generated in
the rural areas but it is shared by 74% of the
population. And hence per capita incomes and the
purchasing power
Low Levels of Literacy
This leads to problem of communication for promotion
purposes. Print medium becomes ineffective and to
an extent irrelevant because of poor literacy rate

Problems in Rural Marketing

Popularity of Local Brands

For any branded product there are a multitude of
local variants, which are cheaper, and thus more
desirable to villagers
Different Thinking and Perception
The rural customer has a fairly simple thinking and
varied perceptions hence, communicating to rural
consumer is one of the biggest challenges
Dissimilar Lifestyle
There is a vast difference in the lifestyles of the
people and thus different product and brand choices
The rural customer has few brands to choose from
whereas the urban one has multiple choices