Rural Marketing

Introduction

Definition and Scope of Rural India

Let us take at some of the points with respect to
Rural India as per Census
Population density of less than 400 per sq.km.
At least 75% of the male working population is
engaged in agriculture.
No municipality or board.
If we go by statistics, roughly around 70% of the
Indian population lives in the rural areas. That is
almost 12 % of the world population. To expand the
market by tapping the countryside, more and more
MNCs are foraying into Indias rural market.

Average MPCE (Rs.)

NSS
Round

MPCEURP

MPCEMRP

MPCEMMRP

Rural

Urban

Rural

Urban

Rural

Urban

66th
(200910)

927.70

1785.81

953.05

1856.01

1053.04

1984.46

68th
(201112)

1278.94

2399.24

1287.17

2477.02

1429.96

2629.65

Examples
Proliferation of large format Rural Retail

Stores, which have been successful also

DSCL Haryali Stores
M & M Shubh Labh Stores
TATA / Rallis Kisan Kendras
Escorts Rural Stores
Warnabazaar, Maharashtra (Annual Sale Rs.
40 crore

Contd.
Below are the few points why organizations are

looking at rural marketing with a positive attitude

1. Population
2. Rising rural prosperity
3. Growth in consumption
4. Change in life style and demand
5. Market growth rate higher than urban
6. Life cycle advantage
7. Decision making units
.Rural Mktg 2nd video.mp4

Definition of Rural Marketing

According

to the National Commission on Agriculture: Rural

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

Definition of Corporate Rural Marketing

Rural Marketing

can be defined as a function that manages all

activities involved in assessing, stimulating, and converting the
purchasing power of rural consumers into an effective demand for
specific products and services and moving these products and
services to the people in rural areas to create satisfaction and a
better standard of living and thereby achieving organizational goals.

The 4 A's of Rural Marketing

Affordability
Availability
Awareness
Acceptability

Rural vs. Urban Markets

URBAN MARKET
Mostly concentrated
High infrastructural level
High density of population

per sq km
Good physical connectivity
and high mobility
Incomes are more stable and
permanent
Occupations are government
employment, business,
industry etc.
Income received at regular
interval.

RURAL MARKET

Widely spread and scattered

Low infrastructural level

Low density of population per sq km

Poor physical connectivity and low mobility

People work in less certain environment

Mostly agricultural occupation

Acute seasonality in income receipts

Contd.
Large number of interactions

with persons and less frequent

between same persons
Social norms are less visible

Less number of interactions with persons and

more frequent between same persons

Social norms influencing individuals

Caste influence indirect and less

Caste influence direct and strong

visible
High exposure to variety of
products
High brand awareness
High exposure to marketing
researchers and multiple source
of information
More convenient buying, more
retail outlet per 1000 population

Low exposure to variety of products

Low brand awareness

Low exposure to marketing researchers and

limited source of information

Less convenient buying, less retail outlet per

1000 population

Classification of Rural Markets

1. Area of coverage

--Local Market
--Tehsil level Markets
--Regional level Markets
--National level Market
2. Location
--Village Market, Primary Market, Wholesale
Market,
Terminal Market
3. Volumes of Trade
--Retail Markets, Wholesale Markets
4. Time Span
--Short Period Market, Long Period Market, Permanent
Markets

Contd.
5. Number of Commodities
6.
7.
8.
9.

--General Market, Specialized Market

Type of Transactions
--Spot or Cash Markets, Forward Markets
Degree of Competition
--Perfect Markets, Imperfect Markets
Nature of Commodities
--Commodity Markets, Capital Markets
Government Intervention
--Regulated Markets, Unregulated
Markets

Some Startling Facts

200 million rural mobile users, more than the total number of

subscribers in Brazil
14 million DTH connections in rural areas, out of a total 20 million
87 million Kisan Credit Cards issued, which exceeds the total
number of (credit+debit) cards in urban areas
Rural India is growing faster that Urban India --- Durablers (25%
vs 10% urban growth in2009), FMCGs (18% vs 12% urban growth
in2009)
11% car sales coming from rural areas and small towns
There are 42,000 rural supermarkets (haats) in India, which
exceed the total number of retail chain stores in the United States
(35,000)
--Rural Marketing by P.
Kashyap