Rural Marketing - Introduction

Marketing may be described as the process of defining, anticipating and knowing customer needs, and managing all the resources of the organizing to satisfy them. The satisfaction of customer’s needs and wants provides the existence for the organization. The consumer’s behavior comprises the acts, processes and social relationships shown by individuals, groups and organizations with products and services.

Knowledge and understanding of the motives of consumer behavior helps an organization in seeking better and more effective ways to satisfy the consumers. It helps to select appropriate sales and advertising strategies to plan marketing program in a more efficient manner.

The rural market of India started showing its potential from the 1960s and the 70s and 80s showed its steady development. During 90’s, there was a steady growth of purchasing power of rural India, and there are clear indications that the 21st century is going to see its full blossoming.

In our country, where research on consumer behavior has been limited to names only, not much synchronized information is available about the rural consumers. Only a few big companies known for their marketing orientation, for example Hindustan Lever, Philips India, Asian Paints, Larsen and Toubro, TATA group have made concrete efforts in this direction.

There are many aspects that affect rural marketing, for instance, the rural buyers are not very discriminating. Once they are persuaded to buy a particular product, they develop a strong felling for it, and become brand loyals. As a result, Indian manufacturers generally prefer selling fewer items at higher prices than selling more items at lower prices.

Another thing is that the rural buyers are not particularly keen about quality and packaging because of which consumer research is not accurate for entering the rural market.

In recent years, the rural sector gives a unique opportunity to expand their market since the urban segment is showing clear signs of saturation. The nature and characteristics of rural market is quite different than the urban market. Therefore, it is necessary to understand the rural area characteristics and environment and take action accordingly.

Rural Market and Marketing

India is a land of diversity and about 70% of the population lives in villages. To a large extent, villages contribute towards the economic development of the nation through the production of food grains, vegetables, fruits etc. Export of these agricultural products generate capital and earnings from foreign exchange.

Rural Marketing

There are approximately 600,000 big and small villages in India according to rural market researchers. 25% of villages account for 65% of the total rural population. So we can calculate 65% of 700 million populations by from only 150,000 villages – which becomes a huge potential of this market.

If we go by statistics, around 70% of the Indian population lives in the rural areas. This accounts to almost 12% of the world population.

To expand the market by making inroads into the countryside, more number of MNCs are getting into India's rural markets. Among those are the bigshot companies like Hindustan Lever, Coca-Cola, Pepsi, LG Electronics, Britannia, Philips, Colgate Palmolive and the foreign-invested telecom companies as well.

Rural marketing involves a bunch of processes that includes developing, pricing, promoting, distributing rural specific product and service which satisfies the consumer demand and also achieves organizational objectives as expected from the target market. It is basically a three-way marketing stage where the transactions can be −

  • Urban to Rural − It is a process of selling the products and services by urban marketers in rural areas. These products mostly include pesticides, FMCG products, consumer durables, etc.

  • Rural to Urban − It is a process where a rural producer sells his products in urban market. This may or may not be direct, but mostly there are middlemen, agencies, government co-operatives etc. who take initiatives in the successful running of the selling process happen successfully in an appropriate price.

  • Rural to Rural − It is a process which includes selling or exchange of agricultural products, tools, cattle, carts and others to another village in its proximity.

Nature and Characteristics of Rural Market

There is a saying that the proof of the pudding lies in eating it, like this the proof of all production lies in consumption or marketing. The speed of technological improvement increases the buying capacity in people. They prefer more and better goods and services. The globalization of the Indian economy has given an advantage to production and mass distribution of goods and services

Taking these into consideration, there may arise a question whether marketers can concentrate their activities in urban India consisting of metros and large industrial townships only, or extend their activities to rural India. The heart of India lies in its rural parts.

Rural market is different from urban market with respect to its economic and functional characteristics. The characteristics, purchasing and consumption pattern of rural people are completely different from the urban people. Due to the impact of globalization there is a fast change in rural environment. The composition of supply and demand has also changed significantly.

Supply Chain Management

To understand this development process in the rural areas, awareness on current environment is very necessary. Knowing the exact change in consumption of durables is also very important for the marketers to deal with rural consumers.

Rural market in India is not a different entity in itself, but it is highly influenced by the sociological and behavioral factors of the country. The rural market in India brings in bigger revenues for the country, as the rural region consists of a maximum number of consumers in this country. The rural market in Indian economy generates revenue almost more than half of the country's annual income.

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