There are over 638,000 villages in India, with varying populations and purchasing power. Around 250,000 villages have populations between 500-2,000 people with at least 5 shops per village, representing high potential for companies. As incomes have risen in rural areas due to good harvests and economic reforms, consumption patterns have changed and rural consumers now aspire to purchase branded goods rather than just commodities. Literacy rates have also increased in rural India, aided by the growth of satellite television which has influenced lifestyles.

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Rural Market
Characteristics

2. Rural Market
Characteristics

3. There are 6,38,667 Indian villages in all.
Out of these 50% share a very small
population of less than 500 and a
limited purchasing power. Many of
these villages don’t even have a single
shop.
In the second category there are
2,50,000 villages with a population
between 500-2000. There are at least 5
shops per village.
Lastly there are 60,000 villages with a
population of more than 2000.

4. Companies should try and focus on the
last two categories more as they have
high potential.
This in turn influences purchasing
power.

5. There is a cutthroat competition in
urban markets, which have reached a
stage of saturation.
As a result, marketers are shifting focus
to rural markets, as there is equal
number of households in rural areas as
in urban areas.

6. New tax structures, good monsoons,
the green revolution have raised
disposable incomes in rural areas.
It is ironic that rural people spend so
lavishly on weddings, ceremonies and
festivals.
Today the rural consumer shop for
‘value’.
It is this ‘income’ that the companies
are going to tap in the near future.

7. Nearly 45% of rural Indians are literate
out of which 59% are men and 31% are
women.
Around 12 crore people in villages are
literate as compared to 12.5 crore in
urban India.
Every year produces 60 lakh literate
people.
Farmers are remarkably well informed
about the changing world around them.

8. The growth of satellite TV channels
has had a major impact on villagers.
It has led to a change in lifestyle and
consumption patterns.
Television has high capacity to raise
interest levels as it has greater
accessibility compared to other
media.
Rural consumers now aspire to buy
brands rather than to just purchase
commodities

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