Department of MBA
IMS Engineering College,
Ghaziabad
Marketing Management – II
UNIT 5
(Part 1A)
Rural Marketing

Rural Markets – Introduction
• Indian rural market is vast in terms of size and
demand base, it comprises of millions of
households, it has been growing steadily over the
past few years and now is bigger than the urban
market.
• More than 800 million people live in rural areas
which is almost 70% of India’s population. ‘Go
rural’ is the new slogan of companies. Not only
Indian companies but also multinationals like
Unilever Ltd., Procter and Gamble etc are
interested in rural market for its high business
potential

Rural Markets – Introduction
• Looking at 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.
• Many new products have entered the consumption
basket of the rural consumer; and the relative shares of
the different categories of products in the consumption
basket have also recorded a good change. The upper
segments, in particular, have started buying and using a
variety of modern consumer products, which were till
recently unknown in the rural market.

Rural Marketing – Meaning
• Rural marketing can be defined as the process of
identifying the needs of rural customers and
potential customers, informing them about the
products and services (rural specific) which they
need and providing products / services to them in
right quantity, at the right time and at the right
place
• Since rural markets are different from urban
markets, the needs of rural consumers are also
different from urban consumers. Marketers need
to understand this difference.

Difference between
Rural and Urban Consumer / Markets
Rural Consumer / Market
• Low level of education
• Less income level
• Less awareness about products
/ services
• Low purchasing power in
comparison to urban
consumers
• Rural areas do not have well
developed infrastructure like
roads, flyovers etc
• Market places are not well
developed, only limited items
are sold
Urban Consumer / Market
• Higher level of education
• Higher income level
• More awareness about products
/ services
• High purchasing power because
of high income of urban
consumers
• Urban areas have well
developed infrastructure like
road connectivity etc
• Market places are well
developed and a number of
items are sold in urban markets

Rural Markets
Characteristics
Low standards of living
Traditional outlook
Low literacy level
Rural markets need their own marketing mix
Scattered population
High capacity to purchase because of good
propensity to consume

Rural Marketing
Importance
• Rural marketing balances urban and rural economic growth
• Rural marketing improves standard of living of rural population
• It provides employment to rural population
• Rural marketing is responsible for development of agro-based
industries
• Rural marketing utilizes untapped rural resources (physical as well
as human)
• Rural marketing helps in finding markets for rural produce such as
crops etc.
• Rural marketing helps in setting up a two way distribution channel –
urban to rural (for urban products) and rural to urban (for rural
products)
• Rural marketing results into better infrastructure, transportation,
warehouses and communication facilities. Agricultural products can
be systematically marketed throughout the year, huge gap between
demand and supply can be reduced.

Marketing Strategies
for Rural Markets
Rural markets require different types of rural
specific products (the one that suit the needs of
rural population) e.g. motorcycles that can
survive the rigorous rural roads are demanded
more in rural areas.
Often, the lower priced versions of products
are better suited for rural population.
Often bright color products are preferred by
rural consumers, Asian Paints introduced
bright colors for rural markets

Marketing Strategies
for Rural Markets
• Rural consumers may not be very aware of brands, they
identify products through its packaging or packets.
Thus packing plays an important role in rural marketing
• Information displayed on the packet must be in local
language and images should be used in the packets for
easy identification
• Cost of distribution is high in rural areas, in case of ITC
and Hindustan Unilever Ltd. who re pioneers of rural
marketing in India, they used ‘delivery vans’ for
distributing products to rural retailers as well as for
doing promotion and interacting with rural consumers

Issues / Problems
in rural Marketing
• It is tougher to organize distribution in rural
markets due to scattered population and
inadequate connectivity, distribution channel
needs more tiers in rural markets
• Availability of dealers / wholesalers is limited or
rural markets due to low profitability and high
cost
• Feasibility of opening retail outlets is low
• Banking and credit facilities are underdeveloped