Potential of Rural Marketing in India | ABM Colleges in Bangalore

Posted by Prof. Kuldeep Sharma On 25/04/2022 11:24:29

The Rural Marketing refers to the activities undertaken by the marketers to encourage the people, living in rural areas to convert their purchasing power into an effective demand for the goods and services and make these available in the rural areas, with the intention to improve their standard of living and achieving the company’s objective, as a whole.  Rural Marketing is a process of developing, pricing, promoting, and distributing rural specific goods and services leading to the desired exchange with rural customers to satisfy their needs and wants, and also to achieve organizational objectives.
In the words of T.P. Gopalaswamy-

“Rural Marketing is a two-way process which encompasses the discharge of business activities that direct the flow of goods from urban to rural area (manufactured goods) and vice versa (agriculture products) as also within the rural areas.”

Another expert, Thomsen defines Rural marketing as-

The study of Rural marketing comprises all the operations, and the agencies conducting them, involved in the movement of farm-produced food, raw materials, and their derivatives, such as textiles, from the farms to the final consumers, and the effects of such operations on producers, middlemen, and consumers.

In a recent development, it is observed that young entrepreneurs are moving into a rural environment with their startup ideas and with government support are establishing new channels of opportunities in rural marketing. So, now multiple rural marketing processes are gaining popularity.

1. Urban to Rural Market: Urban to rural marketing is selling goods and services in rural areas by urban marketers. These products mostly include FMCG goods, consumer durables, agricultural pesticides, etc.
2. Rural to Urban Market: Rural to urban marketing is selling goods and services to urban marketers by rural producers.
3. Rural to Rural Market: This process involves exchanging agricultural products, carts, cattle, and other tools within the rural community.
4. Rural to Consumer (D2C model): This process involves e-commerce companies as Ninzakart, Udaan, Big Basket, Amazon, Flipkart, etc.
The marketers are following the strategy to “Go Rural” because of the following attractions in the rural market:

1.    Large Population: Still, the majority of the population in India resides in Villages, and therefore, the marketers find more potential in the rural areas and direct their efforts to penetrate the rural market.

2.    Increased Income: The income and the purchasing power of the rural people have increased. With the use of modern agricultural equipment and technology, the farmers can produce more and can get better returns for their agricultural produce. The increased income motivates a farmer to improve his livelihood by purchasing a good quality product and thus, the marketer gets an opportunity to enter the rural market.

3.    Competition in Urban Market: There is a lot of competition in the urban market, where people are well aware of the goods and services and have created brand loyalty. Therefore, the marketers move to the rural market to escape the intense completion and generate revenues from the untapped areas.
4.    Improved Infrastructure facilities: Today, many villages are well connected with the roads and transportation facilities that enable the marketer to access the rural market and promote his goods and services. With the growth in telecom services, rural people can be reached easily via mobile phones.

5.    Saturated Urban Market: Also, the marketers may move to the rural markets, when the urban market has reached the saturation point, the i.e. market is well stuffed with the products, and the consumers are not likely to make a frequent purchases due to the varied options available in the market.

6.    Support of Financial Institutions: Several Cooperative banks and public sector banks offer loan facilities to rural people at low-interest rates. With the loan, the purchasing power of an individual increase, thus resulting in a better standard of living.

7.    New Employment Opportunities: The Government is running several employment opportunity programs, with the intention to engage people in other activities apart from the agriculture occupation. The Integrated Rural Development Programme (IRDP), PM  Rozgar Yojana (PMRY), and Training Rural Youth for self-Employment are the certain programs, designed to increase the livelihood of rural people.

The Pradhan Mantri Rojgar Protsahan Yojana(PMRPY) Plan Scheme has been designed to incentivize employers for the generation of new employment, where the Government of India will be paying the full employer's contribution towards EPF & EPS both w.e.f 01.04.2018 (earlier benefit was applicable for employer's contribution towards EPS only) for the new employment. 

This scheme has a dual benefit, where, on the one hand, the employer is incentivized for increasing the employment base of workers in the establishment, and on the other hand, a large number of workers will find jobs in such establishments.

A direct benefit is that these workers will have access to social security benefits of the organized sector 

Due to so much potential in the rural areas, the companies are focusing more on the needs and desires of people living in here and are taking every possible step to stimulate people to buy products and services and improve their livelihood.

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