Rural Marketing

Mahatma Gandhi made several statements about rural India, including:

"The future of India lies in its villages"

"If village perishes, India will perish too"
"The progress of the country lies in the development of majority of its rural villages, the rural economy, industry
and rural skills"
"Development will be a distant and unfulfilled dream, until we realize that the development of villages is an
essential precondition to development of the nation“

Gandhi believed that villages are self-sufficient units and the backbone of India because most of the food crops are in
villages. He also believed that peace and non-violence exist in India.
Rural Population in India

https://www.theglobaleconomy.com/India/rural_population_percent/
Rural Population in India

https://www.theglobaleconomy.com/India/rural_population_percent/
State wise rural population of India
Problem Identified in Marketing
The rural population in India accounted for approximately 65-70% of
the total population.
30%
Urban
Market

80% Marketing
70% Efforts
Rural
20% Marketing Market
Efforts
Ecosystem of Rural Marketing
 Agri Related Products Raw Material

Producers
Marketing Labor
Marketing

Labor
Finished Products
Producers Rural Market

Marketing
Finished Products
Marketing

Urban Market

Products
The Fortune at the Bottom
of the Pyramid
So, What is Rural Marketing
Rural marketing is a systematic process of …

Developing
Pricing
Promoting
and Distributing Goods and Services

to rural people in rural areas to satisfy consumer demand and achieve

organizational objectives.
Examining Rural Marketing:
An Illustrative Case Study
How ITC Earn Money ???
 Education to Farmers

Increase Earning of
the Farmers
E Choupal Sanchalak
Importance of Rural Markets
in India
Large Population Base
Large Population Base: India has a
substantial rural population, with
around 70% of its people residing
in rural areas. This vast consumer
base offers immense market
potential for various products and
services.
Economic Contribution:
Economic Contribution: Rural
areas contribute significantly to
India's GDP, with agriculture being
a primary source of income. Rural
markets are critical for the growth
and development of the
agricultural sector, which is the
backbone of the Indian economy.
Consumption Patterns:
Consumption Patterns: Rural
consumers have distinct
consumption patterns and
preferences compared to urban
consumers. Understanding these
preferences is essential for
companies seeking to expand
their market reach and tailor their
products and marketing strategies
accordingly.
Government Initiatives:
Government Initiatives: The
Indian government has introduced
several initiatives and policies
aimed at boosting rural
development and increasing rural
income. These measures create
opportunities for businesses to
engage with rural consumers and
contribute to their economic well-
being.
Employment Generation
• Employment Generation: Rural
markets are not only important
for sales but also for generating
employment opportunities in
agriculture, agri-processing,
manufacturing, and services.
These employment opportunities
are essential for addressing rural
unemployment and poverty.
HUL's Project Shakti:
• HUL's Project Shakti: Hindustan
Unilever Limited (HUL) initiated
Project Shakti to empower rural
women by providing them with
training and micro-entrepreneurial
opportunities. Rural women are
trained to become direct-to-home
sales agents, selling HUL products in
their communities. This initiative
has not only expanded HUL's rural
reach but also created income-
generating opportunities for
women in remote areas.
Untapped Potential
• Untapped Potential: Many rural
markets remain untapped or
under-penetrated by businesses,
offering opportunities for
growth and expansion. As urban
markets become saturated,
companies increasingly look to
rural areas for further
expansion.

Image: World Bank Report on Developing countries https://www.superheuristics.com/bottom-of-pyramid-marketing-detailed/

Inclusive Growth
• Inclusive Growth: Targeting rural
markets fosters inclusive
economic growth, bridging the
urban-rural divide and reducing
income disparities. It promotes
social and economic
development across the country.
Diversification of Product Portfolio
• Diversification of Product
Portfolio: Companies often need
to diversify their product
portfolio to cater to rural
consumers' needs, resulting in
innovation and adaptation of
existing products and services.
This can lead to new revenue
streams.
Diversification of Product Portfolio
Infrastructure Development
• Infrastructure Development:
Investment in rural markets can
lead to the development of
infrastructure such as roads,
transportation, and
communication networks, which
benefits not only businesses but
also the overall quality of life in
rural areas.
Sustainability
• Sustainability: Rural markets can
support sustainable business
practices, such as eco-friendly
agriculture and local sourcing,
which align with the global trend
of sustainability and responsible
consumption.
Socio-economic characteristics
of rural consumers
Income Levels
• Income Levels: Rural consumers
typically have lower average
incomes compared to their
urban counterparts. This can
influence their purchasing power
and the types of products and
services they can afford.

Number of rural households in India from 2018 to

2022, by annual income
Occupation
• Occupation: Many rural
consumers are engaged in
agricultural activities or work in
primary industries such as
farming, forestry, or mining.
Their occupation often
influences their spending
patterns, with seasonal
fluctuations in income affecting
their purchasing decisions.
 Education
Education: Rural areas may have
limited access to quality education
and vocational training, leading to
lower educational attainment
among rural consumers. This can
impact their awareness of and
preferences for various products
and services.
Infrastructure and Access
• Infrastructure and Access: Rural
consumers often face challenges
related to inadequate
infrastructure, including limited
access to transportation,
healthcare, and communication
facilities. These challenges can
affect their access to markets
and choices in products and
services.
Family Structure
• Family Structure: Rural
households often have larger
family sizes, and extended
families living together are
common. This can influence
their consumption patterns, as
they may need to cater to the
needs and preferences of
multiple generations under one
roof.
Social and Cultural Factors
• Social and Cultural Factors:
Rural consumers are often
deeply rooted in traditional and
cultural practices. These factors
can influence their consumption
habits, including choices in
clothing, food, and other
products.
Agricultural Dependence
Agricultural Dependence: In many
rural areas, people are dependent
on agriculture for their livelihoods.
The success or failure of crops and
agricultural seasons can have a
direct impact on the income and
spending capacity of rural
consumers.
Healthcare and Health Awareness:
• Healthcare and Health
Awareness: Rural areas may have
limited access to healthcare
facilities and lower health
awareness. This can impact their
healthcare spending patterns
and preferences for health-
related products and services.
Healthcare & Connectivity
(BBC Media Action)
Connectivity
Connectivity: Rural consumers
may have limited access to the
internet and digital technology,
affecting their ability to engage in
online shopping and access
information about products and
services.
Mobility and Transportation
• Mobility and Transportation:
Limited access to transportation
options can influence rural
consumers' shopping behaviors,
as they may need to travel long
distances to make purchases.
Housing Conditions
Housing Conditions: Housing
conditions in rural areas can vary
widely, with some consumers
living in more traditional
dwellings. This can affect their
needs for household goods and
services.
Government Policies and Subsidies:
Government Policies and
Subsidies: Government policies
and subsidies can play a
significant role in shaping the
economic well-being of rural
consumers, influencing their
ability to access certain goods and
services.
Rural lifestyle and cultural
Agricultural-Based Economy
• Agricultural-Based Economy: In
many rural areas, agriculture
plays a central role in the
economy. Rural communities
often rely on farming, livestock
raising, and related activities as
their primary source of income.
Close-Knit Communities
Close-Knit Communities: Rural
communities tend to be smaller
and more tightly knit. People
often know their neighbors well
and are actively involved in
community events and
organizations.
Traditional Values
• Traditional Values: Rural areas
often uphold traditional values
and customs. These values can
include a strong work ethic,
respect for nature, and a sense
of self-reliance.
Cultural Celebrations
• Cultural Celebrations: Rural
areas often have their own
unique cultural celebrations and
festivals that may be tied to the
agricultural calendar, historical
events, or religious traditions.
Dialects and Languages
• Dialects and
Languages:
Many rural
regions have
distinct
dialects
Culinary Traditions
Culinary Traditions: Rural areas
often have their own culinary
traditions, with dishes and
cooking methods passed down
through generations. These may
be influenced by locally available
ingredients.
Clothing and Fashion
• Clothing and Fashion:
Traditional clothing and fashion
choices can be influenced by
climate, occupation, and cultural
heritage. In some cases,
traditional garments are still
worn as a matter of cultural
pride.
Religious and Spiritual Practices
• Religious and Spiritual Practices:
Rural communities may have
unique religious and spiritual
practices, with places of worship
and rituals that reflect the local
culture.
Art and Crafts
Art and Crafts: Rural areas often
have their own art and craft
traditions, which can include
pottery, textiles, woodwork, and
other artisanal products.
Connection to Nature
Connection to Nature: Rural
lifestyles are often closely
connected to the natural
environment. People in rural areas
may have a deep appreciation for
the land and the environment,
and this connection can influence
their cultural practices.
Traditional Music and Dance
• Traditional Music and Dance:
Rural areas frequently have their
own forms of music and dance
that are tied to their cultural
heritage and traditions.
Economic Challenges:
• Economic Challenges: Rural
areas may face economic
challenges, with limited access
to job opportunities and
services, which can have a
significant impact on the lifestyle
and culture of these
communities.
 Several Indian companies have implemented
successful initiatives in rural marketing. Here are
some major initiatives along with examples
Successful initiatives in rural marketing
1.HUL's Project Shakti
2.ITC's E-Choupal
3.Marico's Saffola Swasth India
4.Mahindra & Mahindra's ShubhLabh
5.Rural Electrification Corporation's REC Foundation
6.Amul's Cooperative Model
7.Tata Motors' Rural Distribution Network
8.ICICI Bank's Gramin Loans
9.Nestlé's Project Jagruti
Mahindra & Mahindra's ShubhLabh
Rural Electrification Corporation's REC
Foundation
Amul's Cooperative Model