What differentiates the two markets is not mere income, but a host of other infrastructural & socio-cultural factors. The rural market cannot be tapped successfully with an urban marketing mindset & would definitely require its thorough understanding. In other words, the approach toward rural markets needs to be distinct from the one adopted for the urban markets. Increased telecom broadband penetration, clean energy investments, Foreign Direct Investment (FDI) in rural development, PURA (Providing Urban Facilities in Rural Areas), growth in food processing industry and several new initiatives are set to transform India rural and make it an even bigger market place for the global corporates to pounce upon.
Several management studies have proven the strength of rural markets over urban. “Rural market potential in India is so huge that a mere one percent increase in India’s rural income translates to Rs 100,000 million of buying power,” according to a study quoted in Marketing to Rural Consumers- Understanding and tapping rural market potential’ by Sanal Kumar Velayudhan and Gudha Sridhar (Excel Books). Rural market is already bigh for FMCG (53%) and durables (59%). Money available to spend on FMCG products by urban India in 2001 was Rs 495,000 mn as against Rs 635,0000 mn in rural India, the book quoting another
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