Subtitle

Definition

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.

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 or system, both functional and institutional, based on
technical and economic considerations, and includes pre and post harvest operations
, assembling, grading, storage, transportation and distribution.
Rural marketing is now a two-way marketing process. There is inflow of
products into rural markets for production or consumption and there is
also outflow of products to urban areas. The urban to rural flow consists
of agricultural inputs, fast-moving consumer goods (FMCG) such as soaps,
detergents, cosmetics, textiles, and so on. The rural to urban flow consists
of agricultural produce such as rice, wheat, sugar, and cotton. There is
also a movement of rural products within rural areas for consumption.
Significance

Rural India accounts for more than 50% of the GDP.

Out of total 62.97 million households, having income more than 5 lakhs
per annum; nearly 28.68 million households (46%) live in Rural India.
The rural market is projected to be bigger in India than the urban market
for the fast moving consumer goods, with an annual size of Rs. 4,80,000
crore in 2015 and growing.
 Rural consumption expenditure is accounted for around 60 per cent, or
Rs. 14,13,500 crore of the country’s total consumption expenditure.
 Opportunities

India's rural population comprises of 12% of the world's population presenting a huge,
untapped market .
Infrastructure is improving rapidly.
Increase communication resources.
 Increase in rural credit .
 Rural Literacy level improved (After the 2011 census, literacy rate India 2011 was found to be
74.04%.) .
 Rural Development programs.
 Percentage of BPL families declined (29.5 % of India's population was poor in planning
commission report 2011-12).
Challenges

• Understanding the rural consumer

• Low per capita income
• Low literacy levels
• Seasonal Demand
• Lack of proper infrastructure and other physical facilities
• Underdeveloped people and underdeveloped markets
• Traditional outlook
• Many language and Dialects
• Barter system
• Inadequate Media coverage for Promotions
• Availability of duplicate and cheap brands.
• Slow purchasing decision
• Problems related to distribution and channel management
• Cultural Factors
• Vast and scattered market
Challenges
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