Despite the diverse heterogeneous nature of rural markets. why are marketers focusing on rural market ?
Rural India : A Brief Profile
Reasons why Marketers focus on Rural Markets ?
A Case Study
The census of India defines rural as –
- Any Habitation with the population density of less than 400
- At least 75% of male working population is engaged in
- There exists no municipality or board .
RURAL INDIA: A BREIF
Villages are the heart of India. Approximately 75% of India’s
population(equaling 12.2% of the world’s population)lives in
6,38,365 villages spread over 32 lakh square kilometers.
As per the census (2001) rural segments comprises 13.5 crore
household which constitute 72% of total households in India
with 48 crore adults individuals.
Rural marketing is defined as managing all the activities
involved in assessing, stimulating and converting the
purchasing power of the rural consumers into effective
demand for specific products and services and moving
them to the people in rural areas to create satisfaction and
a better standard of living and thus achieving
Rural marketing is a two-way
• Urban to rural - Major part of rural marketing. Includes
transactions of urban marketers who sell their goods and
services in rural areas pesticides, fertilizers, FMCG
products, tractors, bicycles, consumer durables, etc.
• Rural to urban - Basically falls under agricultural
marketing. A rural producer seeks to sell his produce in urban
market like seeds, fruits and vegetables, forest
produce, spices, milk and related products, etc.
As many as 20,000 ethnic groups are present rural India and
this poses a formidable challenges to the marketer.
There are 24 languages and 1,642 dialects (boli) varies ever
100 km or so it extremely difficult to develop a uniform
Distribution of Population by Age Group (2001)
Source: Census of India , 2001
Per capita income in rural and urban areas.
Reasons why marketers must focus
on rural market :
Rural population has grown by 12% in last decade.
Rural market, accounts for 40% of Indian economy.
Now urban market is saturated so they have chance to exposure
to rural markets.
Rural markets account for 30 percent of our volume and it is
growing at a fast pace.
Socio-economic conditions of rural people is increasing so
they are focusing on rural markets.
The mindset of divide between urban and rural market has been
changed with the tactical promotion of products.
Connectivity from rural to urban or urban to rural is good
which encourage marketers to focus on rural areas.
There are various segments of products for different age
Rural India has huge, heterogeneous and growing consumer
market, which contributes more than 50% to India’s total
consumer market size.
A humiliating loss of 400 Million USD in the 2000 and a flat
2001 made Coca Cola India (CCI) rethink and reinvent its
strategies in India. The flat sales in the urban areas made it clear
for the CCI that they would have to shift focus to the untapped
Coca-cola’s Rural marketing
Coca-cola’s rural marketing strategy is based on 3A’s
TV Commercials/ Mass Media
37% growth in Rural market in the year 2003
CCI’s success on India’s vast, rural markets is a lesson on how
to grow an untapped market. It is an indication that if an MNC
does its home work right and gets the right distribution mix,
then it need not restrict itself to India’s urban middle class.