Vidyabharati International Interdisciplinary Research Journal 5(2) 79-83 ISSN 2319-4979

OPPORTUNITIES AND CHALLENGES OF INDIAN RURAL MARKETING

M. Pangrikar
MIT School of Distance Education, Pune, India
malharpangrikar@gmail.com
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ABSTRACT
In India's rural economy, the idea of marketing is constantly playing a major role in the daily routine of individuals.
The market in the country or rural India is more profitable for the country as these areas or the majority of consumers
in rural India are involved. India's rural market produces the country's economic benefits. Rural marketing in India is
constantly difficult to understand due to its uniqueness. But many companies were able to enter the market in rural
India. With the help of smart sales techniques, they entered the rural market with the right understanding. It is difficult
for corporates to maintain all the major opportunities available in the Indian rural market. More than half of India's
population lives in rural areas. It is extremely volatile to overcome the Indian rural market and to be efficient in the
Indian markets. Companies have to face some difficult tasks like price of products and distribution of products. The
study focuses on rural market conditions, use of different marketing methods, various challenges as well as
opportunities, key decisions and strategies before entering India’s rural market. The main objective of this research is
to explore the potential of the Indian market and the many lunar problems of the rural market. Due to the fresh demand
in rural Indian income, Indian rural markets provide a good way for targeted marketing strategy.
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Keywords: Rural Marketing, Marketing Strategy, Sales Strategy

Introduction The Indian rural concept may be a new idea, as

well as the opportunity for market vendors to
From a rigorous marketing standpoint, the
grow in the market recently. Another way to
Indian market is unique among rural and urban
enter the market is to target availability, access
markets. But a lot of people don’t agree with
and affordability. To reduce the volatility of
this opinion because they say that everywhere
rural management, the focus should be on
the customer is a customer and therefore their
market research, key decision making, and the
needs, aspirations, beliefs and attitudes will
marketing environment in rural areas.The rural
also be the same. However, the fact remains
market in India generates huge revenue for the
that there are certain features that require the
country as it has the largest number of
development of an independent marketing plan
customers in rural areas. The rural market in
that suits the behaviour of rural and urban
the Indian economy yields more than half of
markets. The current situation in the urban
the country's income. Rural marketing in the
market can also be analysed in this context.
Indian economy can be classified into two
First, urban markets have almost reached
broad types.
saturation levels and it has become difficult to
Some or less attention must be paid when
tap them with more profit margins. Second,
designing the approximate duration of a
competition in the urban market is becoming
marketing program in a rural area. Despite the
tougher, forcing many companies to incur hefty
reality, sales can be a volatile affair as it is a
spending on incentives. Third, the level of
part of the entire Indian economy. So
awareness of urban consumers is high and
production and sales are the two main parts.
therefore product features need to be changed
Sales in rural areas are a group selling method.
frequently. Needless to say, this process
Statistics is not only about the advertisement of
requires a large investment that will have a
goods going to the Indian market but also the
negative impact on profits. Thus, urban
sale of goods sold in the urban market in the
markets have become an oasis without easy
rural market. In addition, the competition is an
access. The concept of Rural Marketing in
inclusive sale in the Indian market. Distribution
India Economy has always played an effective
in rural India can be more than one method, so
role in people's lives. With the exception of a
this study focuses on the problems and issues
few metropolitan cities in India, all districts
related to the distribution system in rural areas.
and industrial towns are connected to the rural
Some of the sales practices of rural products
market.
also include features with special respect for

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Vidyabharati International Interdisciplinary Research Journal 5(2) ISSN 2319-4979

goods and services, including the Indian rural high profit margins, high value unit sales to
market. Marketing in rural areas is still in its high volume, capital efficiency and one-
infancy. It is a time of recession for businesses solution fit-all mind-sets to market innovation.
in India, with the exception of a large market Companies are taking specific initiatives to
with huge needs; they give sellers any basis for succeed in the dynamic rural market.
the situation. About 70 per cent of the country's There are many studies available in the context
consumers are in these markets and earn more of the Indian market in rural areas which have
than half of their income. The Indian rural revealed that the unpredictable approach of low
market has an incredible abundance compared value to potential supply such as rural India
to the urban as a whole and is recorded as the marketing is critical.
largest free and profitable market in India. But Kumar and Dangi, (2013) studied that rural
there are still various problems in terms of India provides sustainable sales and profits for
distribution, product designing and location, development. The Green Revolution and the
price, sales and marketing. Nowadays, White Revolution have led to the growth of
companies need to consider the Indian market rural markets, which has resulted in the
with a number of factors to increase their creation of substantial wealth in rural areas.
market share, increase sales as well as the Most of the research sheds some light on
potential opportunities available in the Indian marketing implementations and problems, as
region. well as in numerous ways across different
departments. The NCAER study is India's
Review of Literature
leading economic study institute and it is now
Hagargi S. and Anil Kumar (2011) are certain that rural income growth easily
observed in their research study ‘Rural competes with urban income.
Marketing in India: Some Opportunities and
Challenges’ that there is no doubt that rural Challenges in Rural Marketing
India gives a huge opportunity to any company Rural markets are fraught with challenges due
to tap. However, companies face many to illiteracy, distance, wide market potential,
challenges in handling rural markets, transportation, rail and road transport,
understanding the needs of rural customers, distribution of products and services,
reliable distribution channels and some of the understanding of consumer behavior, socio-
key reasons for effective marketing cultural factors, language, lack of
communication to reach rural customers. With infrastructure, etc. The rural market is so wide,
some new techniques in distribution and remote and wide that it is difficult to cover and
marketing of products in rural India, these reach. One section is completely different from
companies can get more profit, market share, the other sections. Each district, region and
etc. state is different from the others. The whole of
Mishra S. and Vinay Kumar (2012), are India is different in itself and yet it is a perfect
concluded in their research study ‘Rural example of a country with a different culture.
Marketing in India Challenges and Although rural market offers immense
Opportunities’ are concluded that the NCAER potential, but due to the many challenges it is
estimates that the number of poor households important to note that the market is not easy to
will be more than halved from the current operate. Three main challenges remain in the
million1 million, with middle-income families rural market due to distance, diversity and
doubling and wealthy families, based on a spread. There are still many challenges ahead
percentage assumption of GDP growth. Triple as far as rural India is concerned. Other barriers
in a decade in rural India. This rising trend include a large number of intermediaries in key
from rural poverty to prosperity will increase value chains such as dispersed population and
purchasing power. Today, poor consumers in trade, high prices for rural customers and
rural areas will enter the market in large retailers, rare banking and credit facilities,
numbers as first-time buyers. Gaining a large highly credit-driven markets and low
share of the growing rural pie could lead to a investment potential of retailers. Thus, there
radical change in management thinking, from are many barriers that make it difficult to take

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Vidyabharati International Interdisciplinary Research Journal 5(2) ISSN 2319-4979

advantage of the potential in the rural market. from all audiences in rural areas. The limited
When sellers enter rural areas, they face many reach of mass media in rural areas and its
problems such as physical distribution, regional and state differences limit the
logistics, proper and effective deployment of universal mode of communication for rural
sales force and effective marketing consumers.
communication.
The large population base and the number of Major Challenges
families indicate a ubiquitous market and The rural market offers a huge available
dealing with a scattered market is a challenge capacity, it should be noted that the market is
for the marketer. The number of villages is not easy to operate, because of the challenges
more than five lakh and they are not stable. of many attendants. The rural market is
About half of the population lives in medium- available mainly due to three challenges:
sized villages with a population of 1,000 to distance, range and spread. The greater the
5,000. This type of population distribution opportunity, the more challenges rural India
guarantees appropriate distribution and faces. Other barriers include a large number of
advertising strategies to determine the extent of intermediaries in key value chains due to single
the rural market. population and trade, high value for rural
Per capita income is lower in rural areas as customers and retailers, scarce banking and
compared to urban areas. Per capita income has credit facilities, highly credit-driven market
low purchasing power. Apart from this the and low investment capacity of retailers. Thus,
distribution of income is highly erratic, as the there are many roadblocks that make it difficult
method of holding land with basic assets is to make progress in the rural market. Vendors
itself uneven. Thus, the rural market presents encounter many problems when entering rural
an extremely heterogeneous view. So some areas such as physical distribution, logistics,
challenges arise in this regard, such as; taking proper and efficient use of sales power and
any product from rural customers, maintaining effective marketing communications.
inventory level, distribution system options and 1. The huge population base and the number
frequency of delivery. This aspect should be of families indicate a wide spread market
considered carefully by the seller. and it is a challenge for the marketer to
There is a lack of proper physical transport serve this single market. The number of
facilities in rural areas. Nearly half of the villages is more than five lakh and is not
villages in the country do not have proper uniform in size. About half the population
connection. So it is very difficult to reach this lives in medium-sized villages with a
village. Therefore, the efforts delivered by the population of 1,000. This type of
vendors proved costly and ineffective.Rural population distribution guarantees
and large scale markets are developed people appropriate distribution and advertising
and consequently underdeveloped markets. strategies to determine the extent of the
Most people in rural areas are not financially rural market.
stable and they are traditional, put back, stuck 2. Per capita income is lower in rural areas as
in old customs and are traditional in their compared to urban areas. Per capita income
habits and practices. Unfortunately, the impact has low purchasing power. This is not
of agricultural technology has not been combined, the distribution of income is
consistently felt across the country. A large extremely skewed, as the method of
portion of the rural population has remained holding land with basic assets is itself
untouched by technological advances. broken. Thus, the rural market presents an
There are many changes in the level of literacy extremely heterogeneous view. So some
among the people in rural areas. Nearly two- challenges arise in this regard, such as;
fifths of the rural population are illiterate and Taking any product from rural customers,
only one-fifth have a matriculation or higher maintaining inventory level, distribution
degree. Also, the level of literacy varies greatly system options and frequency of delivery.
in different states. These changes challenge This aspect should be considered carefully
easy and clear understanding of the message by the seller.

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Vidyabharati International Interdisciplinary Research Journal 5(2) ISSN 2319-4979

3. There is a lack of proper physical contact region a success with the help of regional
services in rural areas. Nearly half the hubs to be set up in villages under the
villages in the country do not have all- 'Digital India' initiative.
weather roads. So getting to this village is 3. With the demand for skilled workers
really taxing. Therefore, the vendors increasing day by day, the government has
proved the delivery effort to be classic and decided to train more than 700 million
ineffective. people by 2030 and MNC is looking for
4. The rural market represents, to a large players as well as emerging entrepreneurs
extent, undeveloped people and to help in this process. Companies,
consequently the underdeveloped market. government and educational institutions are
Most people in rural areas are not coming together and striving to train,
financially stable and are engaged in educate and provide skilled workers.
tradition-binding, acceptance, old- 4. The Union Cabinet of India introduced the
fashioned customs, traditions, habits, Prime Minister's Agricultural Irrigation
taboos and practices. Unfortunately, the Scheme (PMKSY) and planned a donation
impact of agricultural technology has not of Rs. 50,000 for a period of five years
been felt uniformly across the country. A from 2015-16.
large section of the rural population has 5. The objective of these initiatives is to
remained untouched by technological supply water to every village in India by
advances. including various irrigation schemes for a
centralized irrigation scheme. The
Opportunities of Rural Marketing
Government of India intends to provide Rs
The story of Indian progress is now spreading 75,600 crore for agriculture with the help
not only on India's borders, but also in its of alternative food producers and for the
income, consumption and production. The supply of electricity for domestic use in
economy is volatile, incomes are rising, and rural India. The scheme focuses on
habits, tastes, preferences, and attitudes are not increasing the capacity of electric power
changing. The rural market has a strong hold of and therefore offers non-stop power for
country shops, which affects the sales of rural India.
various products and services in the rural 6. To increase agro-based activities, the
market. Companies are striving for government launched the 'Innovation, Rural
development in rural areas. The availability of Business and Entrepreneurship Promotion'
low-cost finance has also increased the (ASPIRE) scheme. Under this scheme, a
affordability of people in rural areas to buy set of technology centres as well as
expensive items. While purchasing power, incubation centres have been set up to
brand awareness is on the rise and accelerate entrepreneurship as well as to
communication networks are expanding drive start-ups with agri-industry
rapidly, rural India offers many opportunities, innovation and entrepreneurship.
all waiting for heartfelt opportunities. India’s 7. The Government of India is working to
rural market offers a huge potential for bring innovation and technological change
marketers and seems to be an urban market to most rural and tribal areas. It is the
place. intention of the government to form groups
1. The Government of India has taken a to review various innovations to present the
number of steps for the supply and renewal study to the concerned department or
of infrastructure in some areas which will ministry. A scheme known as
help increase the impact of factors on the 'NavKalpanaKosh' aimed at improving
distribution of products, goods and other rural areas at various levels such as
services which will increase revenue after governance, agriculture as well as health
rising costs. and sanitation.
2. Multinational companies like Flipkart,
Snapdeal and Paytm have signed MoUs Conclusion
with the Government of India to make the

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The Indian rural market plays an important role as possible. Entering the rural market requires
as corporates have great opportunities to reach dedication and systematic approach to the rural
out to almost seventy per cent of their market. In order to develop marketing
residents. The rural market replenishes the strategies and action plans, corporates must
rural economy by providing basic amenities by consider the complex factors that affect rural
improving the living standards and quality of consumer behaviour. Government initiatives to
the rural population. Although every seller in increase rural market purchasing power,
the rural market has become the desired change consumption patterns, increase access
location, it is important to understand that it to information and communication technology,
has a lot of challenges and risks; Companies improve infrastructure and boost the rural
should therefore evaluate barriers as carefully economy.

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