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Why is Rural Marketing an Important Strategy in the Indian Market?

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Rural Marketing: Important Strategy in Indian market

Why is Rural Marketing an Important Strategy in the Indian Market?

Rural marketing is a type of marketing in which activities are designed to meet people’s needs and desires in rural areas. Marketing agricultural products, items from rural industries, and various services are all part of it. The rural economy as a whole cannot thrive without solid and efficient rural marketing.

Marketing in Rural India is a dynamic state of affairs intertwined with the Indian economy as a whole. So, yes, rural marketing is an intriguing option because it offers at least four advantages to businesses and startups.

REASONS WHY RURAL MARKETING IS AN IMPORTANT STRATEGY?

Rural marketing is an essential strategy in the Indian market because of the below-mentioned reasons-

Rural income currently accounts for 56% of total income and is growing at a 5.6 percent annual rate, whereas urban income is only growing at a 5.4 percent annual rate. Almost Rs 14,000 crore was invested in rural development during the Seventh Five-Year Plan. As a result, disposable income increased in rural areas. The value of this revenue has also increased as a result of the relatively low cost of living in comparison to cities. The rural economy accounts for 25-30% of the GDP. According to an IBEF report, the Fast Moving Consumer Goods (FMCG) business in rural and semi-urban India is expected to reach US$ 100 billion by 2025.

Market growth 

Moreover, according to a recent survey conducted by the National Council of Applied Economic Research, 33 million rural Indian households have a monthly income of Rs 1,000 or more. Additionally, Rural markets outperformed urban in both volume and value terms with value growth of 11.6 percent and volume growth of 4.4 percent, against 10.2 percent value growth and 3.3 percent volume growth in urban, according to the report of Kantar’s 2021 Consumer Connections.

The large population resides in rural India 

Although income and purchasing power are essential factors in driving demand in rural areas, the quantity of consumers is also a necessary characteristic of rural marketplaces. In states like Uttar Pradesh, Madhya Pradesh, Bihar, Rajasthan, and Odisha, the rural population ranges from 80 to 90 percent. As a result, the high number of consumers adds to the vast potential of rural marketing efforts.

According to Macrotrends, India’s rural population for 2020 was 898,024,053, a 0.29% increase from 2019; also, the current population of India in 2021 is 1,393,409,038, a 0.97% increase from 2020. Hence, a rural market in 2021 refers to a community with a population of over eight hundred ninety-eight million people located in a rural location which signifies the potential of the rural market as with the population increase comes the demand. Therefore, population growth is a key component of economic growth, development, and a rising standard of living. 

Employment opportunities 

A spike in employment prospects for the rural poor has resulted from the implementation of numerous rural development programs. The fact that the rural market is underutilized and underexploited is one of the main reasons for its continual expansion. 

India’s rural market is enormous and dispersed, offering a diverse range of employment opportunities. According to the data shared by The Hindu, Rural India accounted for 69% of the jobs in Oct this year. Job gains in the rural regions in September 2021 were driven by the construction and manufacturing sectors. As a result, 7.5 million and 4.7 million jobs were added in both industries, respectively.  

Also, suppose you look at the worker population ratio that indicates the percentage of the rural population that is employed. In that case, there is a significant increase from 35% in 2017-18 to 39.2% in 2019-20. This signifies the rising employment in rural India.

Consumer Behaviour Changes 

In rural markets, increased literacy and awareness generate new needs. This is especially prevalent among the younger generation. According to the last census of India in 2011, a survey conducted by National Sample Survey Office, the literacy rate in rural areas was 71 percent which included 64% of adult literacy rate and nearly 4.5% males and 2.2% females completed their graduation and above. These statistics show the rapid increase in the literacy rate in rural India with changing times. 

But how is education related to consumer behavior change? Education teaches rural people to question and think critically. Their activities are now supported by logic and scientific reasoning, bringing up a plethora of possibilities, which is especially true in today’s world. 

Hence, there is a noticeable growth in consuming a wide range of products, durable which can easily be seen. When you study the consumer behavior of rural people, you’ll see a significant change in income levels and literacy rate that, in return, is changing the rural market scenario. Now, these consumers are not afraid to try new products. 

Conclusion

Rural markets have grown in importance in recent years in India, as the overall growth of the economy has resulted in a significant increase in the purchasing power of rural communities. Nevertheless, rural markets are notorious for being slow to adopt new items but will assist businesses in phasing their marketing efforts.

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5 Responses

    1. By 2025, there will be more internet users in rural India than in urban India. This indicates that rural people are coming to use their knowledge and awareness to make decisions. The Indian rural market, with its vast size and diverse demand base, presents businesses with a plethora of attractive prospects.

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