Indian Rural Market Environment
Indian Rural Market: A Detailed Explanation
Rural marketing involves planning marketing activities to meet the needs and requirements of people living in rural areas. It focuses on identifying the needs and wants of rural consumers and creating products or services to satisfy them while also considering the organization's benefits.
Characteristics of Rural Markets
- Agriculture as the Main Source of Income
- Agriculture is the primary economic activity in rural areas, directly or indirectly involving the entire village population. It supplies inputs for manufacturing and various economic activities, including textiles, paper, and furniture making.
- Seasonal and Fluctuating Income
- Rural income is largely seasonal, depending on crop production, leading to fluctuating purchasing power and demand stability.
- Large but Geographically Scattered Market
- The rural market is vast but spread over wide geographical areas, making distribution a logistical challenge.
- Religious, Cultural, and Economic Disparities
- Rural areas exhibit significant diversity in terms of religion, culture, and economic status, affecting consumer behavior and preferences.
- Underdeveloped Market with Adequate Purchasing Power
- Despite being underdeveloped, rural markets have substantial purchasing power due to improvements in income and infrastructure.
- Agricultural Orientation and Low Standard of Living
- The market orientation is primarily agricultural, with low standards of living, low per capita income, and general social backwardness.
- Regional Preferences and Distinct Behavioral Patterns
- Rural markets show sharp regional preferences and unique behavioral aspects influenced by local customs and traditions.
- Outcome of Rural Development Process
- Rural marketing is closely tied to the broader rural development process, focusing on managing social and economic changes in rural sectors.
Challenges in Rural Market
- Low Per Capita Income
- The primary dependence on agriculture means income levels are low and unstable, affecting purchasing capacity.
- Standard of Living
- A significant portion of the rural population lives below the poverty line, requiring tailored marketing strategies different from urban areas.
- Low Literacy Levels
- Low literacy rates create communication challenges, making print media less effective compared to other media channels.
- Transportation and Warehousing
- Inadequate infrastructure and connectivity hinder efficient physical distribution and storage, with many villages lacking proper road links and organized warehousing.
- Ineffective Distribution Channels
- Distribution networks are often unorganized, requiring multiple intermediaries, which increases costs and complicates logistics.
- Cultural and Language Diversity
- Varied languages and cultural behaviors across different regions pose challenges in handling customer relations and communication.
- Lack of Communication Systems
- Poor access to modern communication tools like computers, internet, and telecommunication systems hampers effective marketing communication.
- Dummy Brands
- The presence of counterfeit products that look similar to original brands affects rural consumers, who might be unaware of the differences due to lower literacy levels.
- Seasonal Demand
- Demand in rural markets is often seasonal, linked to agricultural production cycles, with purchasing power peaking during harvest seasons.
Opportunities in Rural Market
- Physical Distribution and Transportation
- Marketers can use stockists and clearing-cum-forwarding agents to manage physical distribution, sharing costs and utilizing various transportation modes like delivery vans and bullock carts for rural areas.
- Periodic Markets
- Periodic markets, including fairs and weekly markets, play a crucial role in rural economies, providing opportunities for marketers to reach rural consumers.
- Mobile Traders
- Mobile traders fulfill rural consumers' needs for essential commodities by moving from village to village, offering products like vegetables, fruits, clothes, and toiletries.
- Permanent Retail Shops
- As village populations and incomes grow, permanent retail shops emerge to meet daily demands, though traditional distribution methods still dominate rural areas.
Reasons for Increasing Importance of Rural Markets
- Cut-Throat Competition in Urban Markets
- Intense competition and market saturation in urban areas drive companies to explore rural markets, offering minimal or no competition and opportunities to generate demand and profits.
- Socioeconomic Changes
- Government policies, cooperatives, and technological adoption have improved agricultural productivity and rural incomes, motivating companies to expand into rural areas.
- Scope and Size of Rural Market
- With a significant portion of the population living in rural areas, the market size and scope are expanding, creating opportunities for companies to tap into new demand for consumer goods and services.
- Occupation
- Rural occupations vary, including farming, trading, and skilled work, with big farmers owning major brands and small farmers having limited resources.
- Reference Groups
- Influential individuals in rural areas, such as health workers, teachers, and local leaders, form key reference groups that impact consumer decisions.
- Media Types
- Modern media, especially television, have revolutionized rural marketing, replacing traditional folk programs and enhancing consumer awareness about products and brands.