RURAL MARKETING

RD TH
BBA 3 YEAR(6 SEMESTER)
RATNESH PAL SINGH
ASSISTANT PROFESSOR
DEPARTMENT OF MANAGEMENT STUDIES
MATA GUJRI COLLEGE, FATEHGARH SAHIB
 Definition - Rural & Urban Areas
Urban Unit:
All places which satisfied the following criteria :
A minimum population of 5,000;
At least 75 per cent of the male main workers engaged in non-
agricultural pursuits; and
A density of population of at least 400 per sq. km.
All areas which are not categorized as Urban area are considered as
Rural Area
What Does Rural Area Mean?

• A rural area is an area of land outside the densely populated urban

areas in a town or city.
• Rural areas are traditionally areas not included in the urban
definition, and are usually large, open areas with few houses and few
people, as opposed to urban areas which have larger populations.
• Agriculture is the primary industry in most rural areas
Definitions
• ‘Rural marketing’ is similar to simply ‘marketing.’ Rural marketing differs only in
terms of buyers. Here, target market consists of customers living in rural areas. Thus,
rural marketing is an application of marketing fundamentals (concepts, principles,
processes, theories, etc.) to rural markets.
• 1. Let us define the term in simple way as: Rural marketing concerns with planning
and implementing marketing programmes (often referred as marketing strategies or
simply 4P’s) for rural markets to achieve marketing goals.
• 2. In more specific words: Rural marketing is a process of developing, pricing,
promoting, and distributing rural specific goods and services leading to desired
exchange with rural customers to satisfy their needs and wants, and also to achieve
organizational objectives.
• 3. Marketing efforts remain same, only important aspect is type of buyers. So, the
term can be defined as: When marketing activities are undertaken for rural segments,
it is turned as rural marketing and the management is called rural marketing
management.
An another one………..
• Rural marketing is a process of developing, pricing, promoting, and
distributing rural specific goods and services leading to desired
exchange with rural customers to satisfy their needs and wants, and
also to achieve organizational objectives.
Concept of Rural Marketing:

• The concept of Rural Marketing in Indian Economy has always played an

influential role in the lives of people. In India, leaving out a few
metropolitan cities, all the districts and industrial townships are connected
with rural markets. The rural market in India generates bigger revenues in
the country as the rural regions comprise of the maximum consumers in this
country. The rural market in Indian economy generates almost more than
half of the country’s income.
• The Rural Marketing is a two-way process, i.e.,
• Urban to Rural: FMCG Goods, Agricultural fertilizers, automobiles, etc. are
offered by the urban market to the rural market.
• Rural to Urban: The agricultural supplies viz. Fruits, vegetables, flowers,
milk, etc. is offered from the rural market to the urban market.
Rural marketing in Indian economy can be
classified under two broad categories.
i. The market for consumer goods that comprise of both durable and
non-durable goods.
ii. The market for agricultural inputs that include fertilizers, pesticides,
seeds, and so on.
• To be precise, rural marketing in India Economy covers two broad
sections, namely:
i. Selling of agricultural products in the urban areas.
ii. Selling of manufactured products in the rural regions.
Nature/Scope/Potential of Rural Marketing
Explanation
• Large Population: Still, the majority of the population in India resides in Villages
and therefore, the marketers find more potential in the rural areas and direct their
efforts to penetrate the rural market.
• Increased Income: The income and the purchasing power of the rural people have
increased. With the use of modern agricultural equipment and technology, the
farmers can produce more and can get better returns for their agricultural
produce.The increased income motivates a farmer to improve his livelihood by
purchasing a good quality product and thus, the marketer gets an opportunity to
enter into the rural market.
• Competition in Urban Market: There is a lot of competition in the Urban market,
where people are well aware of the goods and services and have created a brand loyalty.
Therefore, the marketers move to the rural market to escape the intense competition and
generate revenues from the untapped areas.
 Conti…………….
• Improved Infrastructure facilities: Today, many villages are well connected with the
roads and transportation facilities that enables the marketer to access the rural market and
promote his goods and services. With the growth in telecom services, the rural people can be
reached easily via mobile phones.
• Saturated Urban Market: Also, the marketers may move to the rural markets, when the
urban market has reached the saturation point, the i.e. market is well stuffed with the products,
and the consumers are not likely to make a frequent purchase due to the varied options
available in the market.
• Support of Financial Institutions: Several Co-operative banks and public sector banks
offer the loan facility to the rural people at low-interest rates. With the loan, the purchasing
power of an individual increases, thus resulting in a better standard of living.
• New Employment Opportunities: The Government is running several employment
opportunity programmes, with the intention to engage people in other activities apart from the
agriculture occupation. The Integrated Rural Development Programme (IRDP), Jawahar
Rozgar Yojana (JRY), Training Rural Youth for self-Employment are the certain programmes,
designed to increase the livelihood of rural people.
Difference between Urban & Rural Marketing
 The challenges of Rural Marketing
• Under developed people
• Under developed market
• Improper communication facilities
• Many languages
• Vastness & uneven spread
• Low per capita income
• Poor infrastructure facilities
• Seasonal demand
• Ineffective distribution channel
• Spurious brands
• Low Literacy Levels
• Transportation
• Warehousing
 Explanation
1. Underdeveloped people: Rural society is found by tradition, old customs, practices
etc. The impact of modern science & technology has made very less impact of the old
beliefs are still continuing.
2. Underdeveloped market: Rural markets are not developing because of inadequate
banking & credit facilities. Rural market needs banks to enable remittance, to transact
on credit basis and to obtained credit support from the bank.
3. Poor or improper communication facilities: Most villages even today largely
depends on telegrams and phones for their communication needs print media and visual
media[Television cinema] etc reaches only a small percentage of rural Indians.
4. Many languages: India is a country of many languages. Language becomes a barrier
in effective communication in the marketing efforts. The languages vary from state to
state, place to place, district to district. There are now 18 schedule national languages.
5. Vastness & unevenly spread: India is a vast time & major approximately 3214km
from North to South &2933km from East to West. Rural market consists of
approximately 75 cores rural consumers spread across approximately 6,38,365 villages.
Despite the urban migration, the rural areas continue to be the place of living for a vast
majority Indians.
 Conti…….
• 6. Low per capital income: Most farmers have small lands and many villages are brought prone,
this result in low per capita income. Low per capita income results in low consumption pattern as
compared to the urban population. The marketers faces challenges in rural marketing to decide
about quantities, frequency of distributions, package size etc… due to the low per capita income of
the rural people.
• 7. Poor infrastructure facilities:Infrastructural facilities like roads, ware houses, powers etc… are
inadequate in rural areas. Infrastructural cost are very high and impact adversely in the rural market
activities.
• 8. Seasonal demand:Rural economic is seasonal, rural people have two seasonal namely khariff &
rabi. Villages have money mostly in these seasons. As village income are seasonal, demands are
also.
• 9. Ineffective distribution channels:The distribution chain is not very well organized and requires
a large number of intermediaries, which in turn increases the cost and creates administrative
problems. Due to lack of proper infrastructure, manufacturers are reluctant to open outlets in these
areas. They are mainly dependent on dealers, who are not easily available for rural areas. This is a
challenge to the marketers.
• 10. Spurious brands:Cost is an important factor that determines purchasing decision in rural areas.
A lot of spurious brands or look-alikes are available, providing a low cost option to the rural
customer. Many a time the rural customer may not be aware of the difference due to illiteracy.
 Conti………
• 11. Low Literacy Levels: The low literacy levels in rural areas leads to a
problem of communication. Print media has less utility compared to the other
media of communication.
• 12. Transportation: Transportation is one of the biggest challenges in rural
markets. As far as road transportation is concerned, about 50% of Indian
villages are connected by roads. However, the rest of the rural markets do not
even have a proper road linkage which makes physical distribution a tough
task. Many villages are located in hilly terrains that make it difficult to
connect them through roads. Most marketers use tractors or bullock carts in
rural areas to distribute their products.
• 13. Warehousing: Warehousing is another major problem in rural areas, as
there is hardly any organized agency to look after the storage issue. The
services rendered by central warehousing corporation and state warehousing
corporations are limited only to urban and suburban areas.
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