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Rural Marketing is defined as any marketing activity in which

the one dominant participant is from a rural area. This implies
that rural marketing consists of marketing of inputs (products or
services) to the rural as well as marketing of outputs from the
rural markets to other geographical areas. Marketing is the
process used to determine what products or services may be of
interest to customers, and the strategy to use in sales,
communications and business development. It generates the
strategy that underlies sales techniques, business
communication, and business developments. Rural areas of the
country or countryside are areas that are not urbanized, though
when large areas are described country towns and smaller cities
will be included. They have a low population density, and
typically much of the land is devoted to agriculture Marketing
strategies that worked for urban markets do not necessarily work
for the rural ones.
Rural Marketing meant different in 3 different periods.
Part1(before 1960):
It was a completely an unorganized market, where baniyas and
mahajans dominated the market .Rural marketing was another
word for agricultural marketing because agricultural produces
like food grains and industrial like food grains and industrial
like cotton, oil seeds, sugarcane etc occupied primary attention
and the supply chain activities of firm supplying agricultural
inputs and of artisans in the rural areas received secondary
Part 2(1960 to 1990):
The greatest thing which happened in this period was green
revolution which led to farming involving scientific and
technological methods and many poor villages became
prosperous business centers. With better irrigation facilities, soil
testing, use of high yield variety seeds, fertilizers, pesticides and
deployment of machines like power tillers, harvesters, threshers
etc, the output increased especially wheat and paddies .Due to
this marketing of agricultural inputs was also now there a new
potential market. Now marketing of rural marketing meant
marketing of agricultural inputs andagricultural
marketing.Agencies like Khadi and Village Industries
Commission, Girijan Cooperatie Societies APCO Fabrics,
IFFCO, KRIBHCO Company bloomed and government paid
special attention to promote these products.Sale of
handicrafts,handloom textiles,soaps ,safety matches and
crackers increased on large scale in urban areas.
Part 3(after mid 1990):
Since 1990 ,Indias industrial sector had gained strength and
maturity.Its contribution to GNP increased substantially.There
was metamorphosis of agricultural society to industrial society.
With support and development programmes of central and state
governments, service organizations and socially responsible
business groups like Mafatlal, Tatas Birla, Goenkas and others
the rural areas progressed socially and economically. The
economic reforms further increased competition in the market,
the rural market grew steadily for household consumables and
durables. A few other companies known for their marketing
orientation Hindustan Lever, Philip India, Asian Paints, Singer
and Larsen and Turbo have also taken great efforts in this
direction. Hindustan Unilever(HUL) started successful rural
marketing projects like Project Shakti and Operation Bharat
in India. Hindustan Unilever began the first home to home
operation in rural areas inpersonal products in 1998 which was
known as Operation Bharat.By 1999 BharatOperation
covered 13 million rural household.During the course of
operation, there were HUL vans which visited villages across
the country distributing sample packs comprising a low unit
price pack each of shampoo, talcum powder ,toothpaste and
skincream priced at 15rs.This was to create awareness of the
companys product categories and of the affordability of the
product. Coca Cola also explored the market by introducing
bottles atrs.5,backed with Aamir Khan advertisement . Amul is
another case in point of aggressive rural marketing .In 2000,ITC
tried developing direct contact with farmers in remote villages in
Madhya Pradesh.ITC E- choupal was a result of this initiative.
Rural Marketing is growing at a far greater speed than its urban
counterpart .Multinationals have realized the potential and are
ready to tap rural markets .To name a few Colgate, Eveready
batteries ,LG Electronics ,Phillips ,BSNL, Life Insurance
Corporation, Britannia and Hero Honda are trying to seep in
rural markets. Problems in Rural Marketing Communication:
The literacy rate among rural consumers is very low there print
media has very little scope in the rural areas .In India there are
18 languages which are recognized, these languages and many
dialects are spoken in rural India. English and Hindi are not
understood by many people. Due to this rural consumers do not
get exposure to new products. Transportation: The transportation
infrastructure is extremely poor in rural India. In India there are
six lakh villages. Almost 50 per cent of them are not connected
by road also. India has second largest railway system in the
world,many parts in India are not connected through railways.
Availability of appropriate media:The radio network in theory
covers 90 per cent,but people who actually listen is less.T.V is
not available in every house in rural areas.Therefore
opportunities are very low in rural areas. Warehousing: There
are many agricultural products which are produced in a
particular season but is demanded throughout. Due to lack of
adequate and scientific storage facilities in rural areas, stocks are
being maintained in towns only.

Marketing process of rural marketing.
Rural marketing is a two way marketing process that can be in
the form of:


1.Urban to Rural: A major part of rural marketing falls into this
category. It involves the selling of products and services by
urban marketers in rural areas. These include: Pesticides, FMCG
Products, Consumer durables, etc.
2. Rural to Urban: Transactions in this category basically fall
under agricultural marketing where a rural producer seeks to sell
his produce in an urban market. An agent or a middleman plays
a crucial role in the marketing process. The following are some
of the important items sold from the rural to urban areas: seeds,
fruits and vegetables, milk and related products, forest produce,
spices, etc.
3. Rural to Rural: This includes the activities that take place
between two villages in close proximity to each other. The
transactions relate to the areas of expertise the particular village
has. These include selling of agricultural tools, cattle, carts and
others to another village in its proximity.
Indian agricultural industry has been growing at a tremendous
pace in the last few decades. The rural areas are consuming a
large number of industrial and urban manufactured products.
The rural agricultural production and consumption process plays
a predominant role in developing the Indian economy. This has
designed a new way for understanding a new process called
Rural Marketing.
The concept of rural marketing has to be distinguished from
Agricultural marketing. Marketing is the process of identifying
and satisfying customers needs and providing them with
adequate after sales service. Rural marketing is different from
agricultural marketing, which signifies marketing of rural
products to the urban consumer or institutional markets. Rural
basically deals with delivering manufactured or processed inputs
or services to rural producers, the demand for which is basically
a derived outcome.
Rural marketing differs from
agricultural or consumer products marketing in terms of the
nature of transactions, which includes participants, products,
modalities, norms and outcomes. The participants in case of
Rural Marketing would also be different they include input
manufacturers, dealers, farmers, opinion makers, government
agencies and traders.
Rural marketing needs to combine concerns for profit with a
concern for the society, besides being titled towards profit. Most
of the jobs of marketing and selling are left to the local dealers
and retailers. The market for input gets interlocked with other
markets like output, consumer goods, money
and labour. Rural marketing in India is not much developed
there are many hindrances in the area of market, product design
and positioning, pricing, distribution and promotion .

Nature of Rural Market
Large, Diverse and Scattered Market:
Rural market in India is large, and scattered into a number of
regions. There may be less number of shops available to market
Major Income of Rural consumers is from Agriculture:
Rural Prosperity is tied with agriculture prosperity. In the event
of a crop failure, the income of the rural masses is directly
Standard of Living and rising disposable income of the
rural customers:
It is known that majority of the rural population lives below
poverty line and has low literacy rate, low per capital income,
societal backwardness, low savings, etc. But the new tax
structure, good monsoon, government regulation on pricing has
created disposable incomes. Today the rural customer spends
money to get value and is aware of the happening around him.
Traditional Outlook:
Villages develop slowly and have a traditional outlook. Change
is a continuous process but most rural people accept change
gradually. This is gradually changing due to literacy especially
the youth who have begun to change the outlook in the villages.
Rising literacy levels:
It is documented that approximately 45% of rural Indians are
literate. Hence awareness has increases and the farmers are well-
informed about the world around them. They are also educating
themselves on the new technology around them and aspiring for
a better lifestyle.
Diverse socioeconomic background:
Due to dispersion of geographical areas and uneven land
fertility, rural people have disparate socioeconomic background,
which ultimately affects the rural market.
Infrastructure Facilities:
The infrastructure facilities like cemented roads, warehouses
communication system, and financial facilities are inadequate in
rural areas. Hence physical distribution is a challenge to
marketers who have found innovative ways to market their

Characteristics of rural market
1) Large and Scattered Market
a) It consists of approximately 75 crore rural consumer who
live, 38,365 villages and the rural market is geographically
b) About 1,45,098 v 23 percent of the total number of village in
India have population less than 200 and another 21 percent have
population between 200 and 500 and on the other hand 13
percent villages have 50 percent rural population and they
posses 60 percent of the rural wealth.
2) Heterogeneous Market:
a) It shows linguistic, religious and cultural diversities and
economic disparities. As many as 20,000 ethnic groups are
present in rural India and this poses a formidable challenge to
the marketer.
b) There are 24 languages which varies every 100 km.
3) Income from Agriculture
Agriculture is the main source of income. Nearly 55 percent of
rural income comes from the agriculture and the income being
seasonal in nature is fluctuating. The type of crop production
method of agriculture and the amount of land directly influence
this income.
4) Standard of living
a) Over 70 percent of the rural population is employed in small
scale agriculture and its related occupations
b) The rural market is undeveloped, as the people who constitute
it still lack adequate
purchasing power. It is largely agricultural oriented, with poor
standard of living, low-per capita income.
5) Infrastructure facilities
a) The infrastructural facilities like Roads, Warehouses,
Communication system and financial facilities are inadequate in
rural areas. Nearly 50 percent of the rural villages in the country
are not properly connected by roads.
b) Over 50 percent rural household has access to electricity as
main source of lighting but 46 percent use kerosene or other
means for lighting.

Impact of Globalization on Rural

The impact of globalization has been felt by the Indian rural
market as much as the urban counterpart. Hence, we can see that
today changes are taking place rapidly in all walks of life and
rural areas are no exception to this. Improved infrastructure
facilities, economic liberalization, renewed emphasis on
agribusiness and small industries, fast changing agricultural
technology, scope for commercialization of agriculture, greater
budgetary provision for rural people are few reasons to mention.
Moreover, various socio-cultural, psychological and political
aspects of rural life are also changing. Rural people today are
less fatalistic, less attached to religious beliefs, getting more
individualistic, achievement-oriented and aspiring than before.
All this has opened up new vistas for the marketers at least in
the states, which are leading in per capita income with a
sustained growth, like Punjab, Haryana, Maharashtra,
Tamilnadu, Karnatka, Gujrat, Delhi and Western UP etc.

Many features of rural India have been analysed by

National Council for Applied Economic Research (NCAER) and
some of these are as follows:
1. Rural India constitutes of 70 percent of India's total
2. It accounts for 56 percent of national income.
3. It contributes to 1/3rd of India's total savings
4. It accounts for 64 percent of total Indias expenditure.
5. Rural economy is estimated to reach a size of Rs 18 trillion by
2012-2013 as against Rs. 12
trillion in 2007-2008.
6. Rural consumers share of total ownership of low cost items
like bicycles, pressure cookers and watches during 2006-07 was
60 percent.
7. The share of rural India in the FMCG market is around 53
percent and is expected to reach 60 percent in future. There are
as many middle income and above households in the rural
areas as there are in the urban areas.

Impact of globalization on farmers
In India, roughly 90 percent of the rural population is engaged in
agriculture. In absolute terms they are nearly 600 million or 60
crore. Since 1990, when Globalization was implemented in
India then many important changes were made in cultivation
like-Multi cropping.The shift from rain fed to irrigation
dependent farming in many areas.
And a certain degree of development of productive forces like-
in inputs like HYV seeds Machinery, Techniques, Skills.
Due to the opening of agriculture sector for the multinational
companies and big corporations. Consequently, the cost of
agricultural production has increased because cost of chemical
fertilizers, pesticides, irrigation etc. has increased in manifolds.
The capital intensive and import based agricultural activity have
naturally started displacing mostly poor, small and marginal
peasants from land. Multinational agri-business companies like
Cargill, Pepsico, Monsanto, ITC etc. Are already in the field to
monopolize this lucrative market. A new class has emerged in
rural India during the period of globalization which has been
benefited by this globalization. These are mainly the rich and
high middle class farmers.
Basically, these classes have more purchasing power and are the
main customers for durable and other luxurious goods in rural
India. The remaining poor and marginal peasants ironically who
constitute the major portion in rural areas have been subjected to
deep trouble in the era of globalization and their purchasing
power are too low and has been decreasing over the years. Small
farmers in particular are least benefited by this globalization
whereas big farmers with their economic and political influence,
are able to reap the benefits of globalization as they can get best
technologies, grow cash crops, negotiate agreements, and move
their products.