Home Management What is Rural Marketing? Nature, Scope, Types, Importance

What is Rural Marketing? Nature, Scope, Types, Importance

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what is rural marketing

Rural marketing refers to marketing activities in a rural area that covers a major portion of the total geographical area and population of the country. Rural markets refer to marketing centers operating in rural areas where favorable marketing infrastructure may not be present. Here in this article, we have shared What is Rural Marketing, its meaning, definition, Nature, Scope, Types, Importance, and Challenges.

What is Rural Marketing?

Rural Marketing is the term Rural marketing used to be an umbrella term for the people who dealt with rural people in one way or another.

It got a separate meaning and importance in India after 1990.

◉ Rural Marketing Meaning

Rural Marketing refers to the process of developing, pricing, promoting, and distributing rural-specific product and service leading to an exchange between rural and urban market which satisfies consumer demand and also achieve organizational objectives.

Definition of Rural Marketing

  • Rural marketing is defined as managing all the activities involved in assessing, stimulating, and converting the Purchasing power of the rural customers into Effective demand for specific products and services and moving them to the people living in Rural areas.
  • To create satisfaction and a better standard of living and thus achieve organizational objectives.
  • It involves the Planning & implementation of marketing functions for rural areas.

According to the National Commission on Agriculture,

Rural Marketing is a process that starts with a decision to produce a saleable farm commodity and it involves all the aspects of the market structure or system, both functional and institutional that are based on technical and economic considerations. It includes pre and post-harvest operations, assembling, grading, storage, transportation, and distribution.

According to Thomsen,

The study of Rural Marketing comprises all the operations involved in the movement of agricultural food and products, raw materials, and their derivations, such as textiles, from the farms to the final consumers and the effects of such operations on producers, middlemen, and consumers.

Concept of Rural Marketing

It is a two-way marketing process wherein:

  1. Urban to Rural
  2. Rural to Urban
  3. Rural to Rural

► Nature of Rural Marketing

  • Occupation pattern
  • Large diverse and scattered market
  • Socio-economic position
  • Low literacy level
  • Low standard of living
  • Inadequate infrastructure facilities
  • Traditional outlook
  • Distance
  • Diverse Socio-economic background
  • Conservative lifestyle
  • Poor Media reach
  • Poor Medical facilities

► Importance of Rural Marketing

  • Size of rural market
  • Rural target population
  • Employment
  • Better living
  • Contribution to national income
  • Increase in farm income

► Scope of Rural Marketing

  • Large population
  • Growth of market
  • Rising rural prosperity
  • infrastructure is improving rapidly
  • increasing income and purchasing power
  • Social indicators have improved a lot between 1981 to 2001
  • Accessibility of markets
  • Competition in urban markets
  • Saturation of the urban market
  • New employment opportunities
  • Government initiatives
  • Rural marketing is not expensive
  • Huge Media Reach
  • Growth in consumption

► Challenges in Rural Marketing

  1. Understanding the rural consumer
  2. Low per capita income
  3. Low literacy levels
  4. Seasonal Demand
  5. Lack of infrastructure and physical facilities
  6. Underdeveloped people and underdeveloped markets
  7. Traditional outlook
  8. Many languages and Dialects
  9. Barter system
  10. Inadequate Media coverage for promotions
  11. Availability of duplicate and cheap brands
  12. Slow purchasing decision
  13. Problems related to distribution and channel management
  14. Cultural factors
  15. Vast and scattered market

► 4 A’s of Rural Marketing

  1. Affordability
  2. Availability
  3. Awareness
  4. Acceptability

Must Read :What is Poverty?

► What is Rural Demand?

Rural Demand refers to the wants for specific products in the rural markets that are backed up by an ability and willingness to buy them.

Demand for traditional products such as agricultural inputs, FMCG products such as tea, biscuits, soaps, and consumer durables such as refrigerators, TV, and electric machines has grown over the years.

Buying Characteristics of Rural Market

  • High involvement in any product purchased.
  • Purchases products more often (daily, weekly in small quantities)
  • Quality conscious / value for money.
  • Looks like functionality rather than frills.
  • Brand loyal/difficult to dislodge.
  • Understand symbols and colors better.
  • The Source of information is critical.
  • Mostly, the buyer is different from the user.
  • Brisk buying after harvesting period / major in festivals.

Size and Scope of Indian Rural Market

  • FMCG products 65,000 crores
  • Consumer Durables 5,000 crores
  • Agri inputs including tractors 45,000 crores
  • 2/4 wheelers 8,000 crores
  • Total 1,23,000 crores

In the FMCG market, the size of the rural market is larger than the urban market. Problems with logistics supply and storage. Rural markets accounted for 54% of the durables sold in the country. The decadal growth rate for consumer durables is 100% in rural against 40% in urban.

► Structure of Rural Market

  • The share of the Rural Population is almost 70% in India
  • Occupational Pattern 40% of the rural population is in Cultivation
  • followed by 35% wage earners
  • 11% are Salary earners and 5% are Petty Shopkeepers 4% are Artisans
  • Cultivator’s disposable income is highly seasonal and it is available at the time of harvesting.
  • Social and Cultural Environment variations between regions and subregions.
  • Outward migration to urban is very high.
  • The settlement pattern is in clusters largely around caste line
  • Activities limited to smaller geographic areas result in higher adherence to customs and traditions.

► Role of Government in Rural Market

Introduction of rural policies of government among rural areas to raise innovation level. There are various incentives monetary and subsidies that should be given to rural entrepreneurs. Good MSP to the farmers for their crops.

Development of cold storage and warehouse for farmers to sell their product at the time when the price is attractive.

Road and transport connectivity to improve the logistics and supply chain for the FMCG and agricultural products.

The government of India has taken many initiatives to improve the functioning of the Rural Market.

Few of the Government programs in recent years are as follows;

  • Pradhan Mantri Gram Sadak Yojana (PMGSY)
  • Pradhan Mantri Krishi Sinchayee Yojana (PMKSY)
  • Pradhan Mantri Fasal Beema Yojana (PMFBY)
  • Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY)
  • Sampoorna Grameen Rozgar Yojana (SGRY)
  • Organic farming
  • Soil Health Card
  • Use of Neem Coated Urea Fertiliser
  • Cold Storage and Food Processing
  • Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
  • Samagra Siksha Abhiyan (SSA)
  • Pradhan Mantri Awaas Yojana (Gramin) / Indira Awas Yojana
  • Provision of Urban Amenities In Rural Areas (PURA)
  • Antyodaya Anna Yojana (AAY)