Prospects and Challenges of Rural Marketing in India

Topics: Marketing, Population, Rural Pages: 13 (3898 words) Published: June 29, 2012


Mrs. Madhulika Dutta Mrs. Megha Bhatia Assistant Professor Sr.Lecturer

Department of Management Studies Department of Management Studies Institute of Foreign Trade and Management Institute of Foreign Trade and Management


Dr. Manjula Jain
Director & Professor
Department of Management Studies
Institute of Foreign Trade and Management

The rural markets are estimated to be growing fastly compared to the urban markets.  In recent years, rural markets have acquired significance in countries like China and India, as the overall growth of the economy has resulted into substantial increase in the purchasing power of the rural communities. Rural India with its traditional perception has grown over the years, not only in terms of income, but also in terms of thinking. The rural markets are growing at above two times faster pace than urban markets; not surprisingly, rural India accounts for 60% of the total national demand. The Bottom of the pyramid marketing strategies and the 4 A's model of Availability, Affordability, Acceptability and Awareness provide us with a means of developing appropriate strategies to tackle the marketing issues for marketing services in rural areas. The paper discusses the challenges, limitations, and opportunities that are necessary to understand the rural markets and develop strategies to supply and satisfy the rural customer. The paper also focuses upon the strategies of leading MNCs like HUL and ITC to tap rural market. KEYWORDS: Rural Market, Penetration Strategies, e-choupal, Project Shakti. INTRODUCTION

"India's way is not Europe's. India is not Calcutta and Bombay. India lives in her several hundreds of villages". Mahatma Gandhi Indian economy is predominantly an agrarian economy. Agriculture provides employment to approximately 60% of the country’s population. The people engaged in these agricultural activities reside in the areas termed as “Rural Area”. Marketers today view rural area as the market with huge potential. Saturated urban market, increasing rural income and changing consumption pattern are among the few most important reasons for increasing attractiveness of the rural markets. The producers now realize that there is a lot of opportunity for them to enter into the rural market. The marketers are excited about the rural population whose incomes are rising and the lifestyles are changing. There are as many middle income households in the rural areas as there are in the urban. Thus the rural marketing has been growing steadily over the years and is now bigger than the urban market. The sector is excited about a burgeoning rural population whose incomes are rising and which is willing to spend on goods designed to improve lifestyle. Also with a near saturation and cut throat competition in urban India, many producers are driven to chalk out bold new strategies for targeting the rural consumers in a big way. But the rural penetration rates are low. This presents a tremendous opportunity for makers of branded products who can convert consumers to buy branded products. Many companies including MNCs and regional players started developing marketing strategies to lure the untapped market. While developing the strategies, the marketers need to treat the rural consumer differently from their counterparts in urban because they are economically, socially and psycho-graphically different to each other.

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