Introduction
Our country is endowed with a good degree of ethnic and regional diversity. About three quarters of the total population resides in rural areas and most of them depend on agriculture for their livelihood. Agriculture contributes around 24.7% of the country’s Gross Domestic Product (GDP). It also contributes around 13.1% to total Indian exports. This sector provides employment to 58.4% of the country’s active population and a livelihood for more than 650 million people. Despite this fact, the condition of these people has not shown any significant improvement.
The development of the nation depends to a great extent on the development of the rural population. Mahatma Gandhi had once said: “The way of India is not that of Europe. India is not Calcutta or Bombay. India lives in its several hundred villages.”
Rural market potential
India is an agriculture-based economy and the growth of most other sectors of the economy is driven by rural demand. The urban market is reaching saturation point, creating an urgent need to focus on rural development. In addition, more than 70% of the population of India lives in villages and constitutes a large market for the industry due to increased disposition income and awareness level.
Compared to just 5,161 cities in India, there are 6,38,365 villages in India. This in itself is an indicator of where the real India resides. Businesses are slowly but surely realizing that the key to true market leadership lies in tapping into rural potential. However, the rural sector of India suffers from different kinds of problems. Some areas have enough money, but their level of consciousness and therefore consumerism is very low. But there are many areas where economic empowerment, education, health, etc., are major issues.
What is rural marketing
While there is great growth in the urban market, the rural or latent market has yet to be tapped and has enormous growth potential. A rural market can be defined as any market that exists in an area where the population is less than 10,000. The rural market in India is dispersed and distributed over a wide geographical area. The Indian market is divided into urban and rural markets.
o The urban market is flooded with low demand.
o The rural market is witnessing high demand. It is the rural market segment that brings more profits than its urban counterpart. Rural marketing generally involves reaching out to customers, understanding their wants, supplying goods and services, and ultimately satisfying consumers, leading to more sales. The general impression is that only agricultural inputs such as seeds, fertilizers, pesticides, livestock feed and agricultural machinery have growth potential in the rural market. However, there is now a growing market for consumer goods. The rural market has been estimated to be growing five times faster than the urban one.
Challenges of rural marketing
While rural markets are a great attraction for traders, it is not easy to enter the market and take a considerable share of the market in a short time due to the following reasons.
Low literacy
There are not enough opportunities for education in rural areas. The literacy level is so low (36%) compared to the all-India average of 52%.
Seasonal demand
The demand for goods in rural markets depends on the agricultural situation, since agriculture is the main source of income. Agriculture is highly dependent on the monsoon and therefore demand or purchasing power is neither stable nor regular.
Transport
Many rural areas are not connected by rail transport. Kacha’s roads become unusable during the monsoon and inland villages are cut off.
Distribution
An effective distribution system requires a village-level merchant, a Mandal / Taluka-level wholesaler or preferred merchant, a district-level distributor or beefier, and a state-owned company-owned warehouse or consignment distribution . The presence of too many levels in the distribution system increases the cost of distribution.
Communication problems
Facilities such as telephone, fax and telegram are quite poor in rural areas.
Traditional life
Life in rural areas is still governed by customs and traditions and people do not adapt easily to new practices. For example, even the wealthy and educated farmer class does not wear designer jeans or shoes.
Buying decisions
Rural consumers are cautious when buying and decisions are slow and delayed. They like to take a test drive and only after being personally satisfied do they buy the product.
Media for promotions
Television has had a great impact and a large audience has been exposed to this medium. Radio reaches a large population in rural areas at relatively low cost. However, the reach of formal media is low in rural households; therefore, the market has to carry out specific sales promotion activities in rural areas such as participating in melas or fairs.
Career in the rural market
While rural marketing offers a challenging career, a rural salesperson must require certain specialized skills and talent.
Cultural factors
Culture is a system of shared values, beliefs, and perceptions that influence consumer behavior. There are different groups based on religion, caste, occupation, income, age, education and politics and each group influences the behavior of the people in the villages.
There is a belief among the rural population that experience is more important than formal education and they respect vendors who can offer practical solutions to their problems. Therefore, it is desirable that vendors, especially those who have grown up in cities, receive a comprehensive training consisting of both theoretical and practical aspects of village life. The training will help these salespeople align themselves with the realities of the market and settle smoothly in their jobs.
The rural market has enormous potential that has not yet been exploited. A small increase in rural income translates into an exponential increase in purchasing power.
Future trends
Markets that cannot cope with the stiff competition posed by multinational companies can regain their profits in the rural sector. The market share of the urban market compared to the rural market is low, so if Indian industries concentrate on rural markets, their sales will increase. If rural markets become the focus of development, they pave the way to prosperity. India’s prosperity lies in the prosperity of all Indians, so no rural segment should be left untapped.