Challenges in Rural Marketing
Introduction
Our country is endowed with a good degree of ethnic and regional diversity. Around three quarters of the total population resides in rural areas and most of them depend on agriculture for their livelihood. Agriculture contributes around 24.7% to the country’s Gross Domestic Product (GDP). It also contributes about 13.1% of the total Indian exports. This sector provides employment to 58.4% of the country’s labor force and supports more than 650 million people. Despite this fact, the condition of these people has not shown significant improvement.
The development of the nation depends largely on the development of the rural population. Mahatma Gandhi once said: “The way of India is not that of Europe. India is not Calcutta and Bombay. India lives in its several hundred villages.”
Rural market potential
India is an agriculture based economy and the growth of most other sectors of the economy is driven by rural demand. The urban market is reaching saturation point, creating an urgent need to focus on rural development. Furthermore, more than 70% of India’s population lives in villages and constitutes a large market for the industry due to rising disposal revenues and level of awareness.
Compared to just 5,161 cities in India, there are 6,38,365 villages in India. This in itself is an indicator of where the real India lies. Companies are slowly but surely realizing that the key to real market leadership lies in harnessing rural potential. However, the rural sector in India suffers from different types of problems. Some areas have enough money, but their level of awareness and therefore consumerism is very low. But there are many areas where economic empowerment, education, health, etc., are major issues.
What is country marketing?
While there is huge growth in the urban market, the rural or latent market is yet to be tapped and has huge growth potential. A rural market can be defined as any market that exists in an area where the population is less than 10,000. The rural market in India is dispersed and spread over a wide geographical area. The Indian market is divided into urban and rural markets.
o The urban market is inundated with low demand.
o Rural market witnesses high demand It is the rural segment of the market that brings in more profit than its urban counterpart. Rural marketing broadly involves reaching customers, understanding their wants, supplying goods and services, and ultimately satisfying consumers, leading to more sales. The general impression is that only agricultural inputs such as seeds, fertilizers, pesticides, cattle feed and agricultural machinery have growth potential in the rural market. However, there is now a growing market for consumer goods. It has been estimated that the rural market is growing at a rate of five times its urban counterpart.
Challenges in Rural Marketing
Although rural markets are a great attraction for traders, it is not easy to enter the market and capture a considerable share of the market in a short time due to the following reasons.
low literacy
There are not enough educational opportunities in rural areas. The level of literacy is so low (36%) compared to the all-India average of 52%.
seasonal demand
The demand for goods in rural markets depends on the agricultural situation, since agriculture is the main source of income. Agriculture is heavily dependent on the monsoon and therefore demand or purchasing power is neither stable nor regular.
Transportation
Many rural areas are not connected by rail transport. Kacha’s roads become unusable during the monsoon and inland villages are cut off.
Distribution
An effective distribution system requires a village-level trader, a Mandal/Taluka-level wholesaler or preferred distributor, a district-level distributor or stronger, and a company-owned warehouse or state-level consignment distribution . The presence of too many levels in the distribution system increases the cost of distribution.
Communication problems
Facilities like telephone, fax and telegram are quite poor in rural areas.
traditional life
Life in rural areas is still governed by customs and traditions and people do not easily adapt to new practices. For example, even the rich and educated class of farmers do not wear brand name jeans or shoes.
purchase decisions
Rural consumers are cautious when buying and decisions are slow and delayed. They like to give it a try and only after being personally satisfied do they buy the product.
Media for Promotions
Television has had a great impact and a large audience has been exposed to this medium. Radio reaches a large population in rural areas at relatively low cost. However, the reach of formal media is low in rural households; therefore, the market has to carry out specific sales promotion activities in rural areas, such as participating in melas or fairs.
Rural Market Race
While rural marketing offers a challenging career, a rural salesperson must require certain qualifications and specialized talent.
cultural factors
Culture is a system of shared values, beliefs, and perceptions that influence consumer behavior. There are different groups based on religion, caste, occupation, income, age, education, and politics, and each group influences the behavior of people in the villages.
There is a belief among rural people that experience is more important than formal education and they respect vendors who can offer practical solutions to their problems. Therefore, it is desirable that vendors, especially those who have been brought up in the cities, receive a thorough training consisting of both theoretical and practical aspects of village life. The training will help these salespeople align with the realities of the market and establish themselves smoothly in their jobs.
The rural market has tremendous potential that has yet to be exploited. A small increase in rural income results in an exponential increase in purchasing power.
future trends
Markets that are not able to face the tough competition posed by multinationals can recover their profits in the rural sector. The market share of the urban market compared to the rural market is low, therefore, if the Indian industries concentrate on the rural markets, their sales will increase. If rural markets are placed in the development spotlight, they pave the way to prosperity. India’s prosperity lies in the prosperity of all Indians, therefore no rural segment should be left untapped.