Marketing management

Rural marketing
Marketing:
Identifying the needs of customers and potential customers, providing products or services that satisfy
their needs, and developing efficient processes or systems to deliver your product or service to the
market when, where, and how consumers want it.

Rural Marketing:
Rural marketing is the process of developing, pricing, promoting and distributing rural specific
products and services leading to consumer satisfaction and achievement of organizational objectives.
It aims to improve the standard of living of rural consumers by providing them greater awareness and
accessibility to new products and services.

Why Rural Marketing?

The following areas are the commonest of the worries that trouble the urban marketers, when they
even think of rural markets:
1. The first source of worry is the product price and affordability in the rural markets. With low
income levels, the rural buyer is almost considered a non-buyer, and yet the sales being made in rural
markets by certain companies defies the logic.
2. The next source of worry is the needed distribution patterns with problems arising out of lack of
proper transportation, bad roads adding to the irksome “product availability situation”.
3. Reaching out to the rural customer through advertising poses a major problem due to illiterate
population and lack of media reach.
4. Most importantly, however, it is rural mind-sets that create a barrier of significant magnitude to put
off several prospective rural marketers.

Features of Rural Marketing :

 Large and scattered population
 Higher purchasing capacity
 Market growth
 Development of infrastructure
 Low standard of living
 Traditional outlook
 Marketing mix

Importance of rural marketing

Rural marketing implies applying marketing theory and directing marketing efforts to create and
satisfy needs and wants of rural market (customers). Importance of marketing indicates the
contribution of rural as well as urban marketing.
Reduced Burden on Urban Population :
Rural marketing can contribute to rural infrastructure and prosperity. People can also live comfortably
in villages due to availability of all goods and services in villages, even comparatively at low price.
People, due to growth of marketing activities, can earn their livelihood in rural places. Population
pressure on urban can be reduced.

Rapid Economic Growth:

Naturally, marketing acts as a catalyst agent for economic growth. There are more attractive business
opportunities in rural than urban. Rural market is more potential for consumer durables and services.
Rural population largely depends on agriculture and it can contribute nearly 50% to total national
income. Agriculture enjoys significant portion in export business, too. Rural marketing improves
agricultural sector and improved agricultural sector can boost whole economy of the country.

Employment Generation:
At present, nearly 70% of total Indian population feeds on agricultural activities in rural areas. Rural
marketing can generate more attractive employment opportunities to rural and urban people. Growth
of rural marketing leads to increased business operations, professional activities, and services that can
generate a lot of employment opportunities.

Improved Living Standard:

Due to rural marketing system, rural buyers can easily access needed standard goods and services at
fair prices. In the same way, rural marketing improves rural infrastructure. Additionally, rural
marketing can also improve their income. All these aspects can directly improve living standards.

Development of Agro-based Industries:

Rural marketing leads to set up agro-based processing industries. Fruits, vegetables, cereals, pulses,
etc., are used as raw-materials. Such industries can improve farmers' profit margin and employment
opportunities.

Easy Marketability of Agricultural Produce:

Growth of rural marketing improves whole marketing system. Multiple options are available to
farmers and local producers to market their products. Big domestic corporate houses and
multinational companies prefer to buy agricultural products directly from villages by themselves or
through agents and small firms. Rural producers can sell their produce easily at satisfactory prices.
Their improved income level can improve their purchasing power that can further fuel industrial
demand.
History
There were four phases of rural marketing:
Phase I - Before the mid-1960s, rural marketing focused on agricultural products (such as food
grains) and industrial inputs (such as cotton and sugarcane), while excluding heavy and durable
products such as tractors, electric motors, and harvesters.
Phase II - (mid 1960s-mid 1990s) During this period, it was influenced by Green Revolution , which
enabled rural areas to have better irrigation facilities, high yielding seeds, soil testing , and application
of implements such as power tillers and harvesters.
Phase III - In the 1980s, the industrial sector of many developing countries like India became
increasingly important and its contribution to Gross National Product increased substantially. After
the Indian economic reforms of 1991-1992 competition in rural markets increased significantly.
Phase IV - (around 2015) This phase marks the emergence of the global market. Globalization
resulted in factors such as the information revolution, creation of appropriate technology, increasing
urbanization promoted by greater focus on cities leading to the development of rural markets.

Concept
Because rural markets are in high demand, a range of different businesses are looking to them for
growth support. A marketing mix framework focuses on delivering the right product, at the right
price, using the right promotion strategy, choosing an appropriate distribution channel, and fostering
long-term relationships with customers. Traditional literature in the field focused on 4P's (Product,
Price, Place, and Promotion) as the drivers of marketing. Rural marketing is nowadays understood
through the axes of 4As : Availability, Affordability, Acceptability, and Awareness.
Availability: In remote rural settings, providing consistent product availability is a fundamental
aspect of rural marketing as rural population are known to be daily wage earners who spend money on
their basic needs on a regular basis.
Affordability: Targeting rural consumers who are more price-sensitive, marketers introduced smaller
packages at cheaper rates in order to capture their attention.
Acceptability: To derive some value from the product to satisfy the needs of the consumer, much
emphasis is given to product design. It shows their acceptance towards the brand if the rural
consumers are willing to pay more for the product.
Awareness: Keeping in mind the low accessibility of the media (such as television and smartphones)
among the rural population, marketers need to grab the attention of rural consumers and their focal
point is to opt for that medium of communication and entertainment that are readily available. in rural
areas.

Challenges in Indian Rural Markets

Rural markets, as part of any economy, have untouched potential. There are several difficulties
confronting the effort to fully explore rural markets. The concept of rural markets in India is still in
evolving shape, and the sector poses a variety of challenges. Distribution costs and no availability of
retail outlets are major problems faced by the marketers. The success of a brand in the Indian rural
market is as unpredictable as rain. Many brands, which should have been successful, have failed
miserably. This is because most firms try to extend marketing plans that they use in urban areas to the
rural markets. The unique consumption patterns, tastes, and needs of the rural consumers should be
analyzed at the product planning stage so that they match the Notes needs of the rural people.
Therefore, marketers need to understand the social dynamics and attitude variations within each
village although nationally it follows a consistent pattern. The main problems in rural marketing are:
 Understanding the Rural Consumer
 Poor Infrastructure
 Physical Distribution
 Channel Management
 Promotion and Marketing Communication
 Distribution and logistics
 Payment collection
 Scaling across geographies
 Social and cultural challenges

Conclusion

By looking at the challenges and the opportunities which rural markets offer to the marketers it can be
said that the future is very promising for those who can understand the dynamics of rural markets and
exploit them to their best advantage. A radical change in attitudes of marketers towards the vibrant
and burgeoning rural markets is called for, so they can successfully impress on the 230 million rural
consumers spread over approximately six hundred thousand villages in rural India.

The rural market is very large in comparison to the urban market as well as it is more challenging
market. The consumer wants those products which are long lasting, good, easy to use and cheaper.
The income level of rural consumers is not as high as the income level of urban consumers that's why
they want low price goods. It is one of the reasons that the sale of sachet is much larger in the rural
area in all segments.

It is necessary for all the major companies to provide those products which are easily available and
affordable to the consumers. It is right that the profit margin is very low in the FMCG products, but at
the same time the market size is much large in the rural area. The companies can reduce their prices
by cutting the costs on the packaging because the rural consumers don't need attractive packaging.
Application of 4A* is also a major task for the major companies in this area.

By BHUVANESH B
MBA FIRST YEAR
ROLL NO: 71220049