Understanding Rural Marketing and Rural Marketing Strategy How to develop a Rural Marketing Strategy? What is Rural marketing? You might face these questions if you are pursuing a Marketing Specialisation or are a Marketing Aspirant. Read on to explore the nuances of Rural Market along with its Opportunities and Challenges.

A great philosopher once said, “It doesn’t matter where you come from…” Well, it does matter to a marketer!
It does because not every continent, country, state or city has the same type of consumer. Different consumer demands a different marketing strategy.
Thus, was born the concept of rural marketing, that studies and understands the behaviour of the people living in the rural area and builds up marketing strategies that are distinct than the marketing strategies used for the urban markets.


What is Rural Marketing?

Rural marketing is defined as the process of selling products from the urban areas to the rural areas as well as selling and marketing of non-agricultural products manufactured in the rural areas into the urban areas.

This process starts with designing a rural marketing strategy, which is discussed further in the article.

Companies engage in rural marketing to expand their business, explore new markets, and increase their consumer base.


Rural Marketing in India

In India, 70% of the total population lives in the rural sector. The rural market in India is large, with a large consumer base and thus offer eminent opportunities for companies that want to expand their market.

However, the lifestyle and consumption patterns of the people living in the rural area are different as compared to the urban area. Thus, for marketers, it becomes necessary to engage in intense research and study the consumer behaviour of the rural habitants in order to achieve their rural marketing goals.

Let us look at the opportunities and challenges of the rural market that marketers face while implementing the rural marketing strategy.


Opportunities of the Rural Marketing

  • Vast Base of Consumers: The Indian rural market has a total population of around 895 million people spread over 664,000 villages, and this population is said to increase by 1.7% by 2022.
  • Increase in use of Mobile Phones and Internet: Currently, around 227 million people in rural India make use of internet as compared to around 205 million in urban India. This figure is estimated to increase with a good percentage in the coming few years.
  • Increase in Employment Opportunities: Rural development due to government initiatives in the past years has led to financial growth in rural areas. This has increased the employment opportunities for the rural habitants and thus an increase in the income level.
  • Improvement in Literacy Rates: People in rural India are getting more and more aware of the importance of education. As of 2015, the literacy rate of rural India is 71%.
  • Rural Marketing Strategy

    Challenges of the Rural Marketing

  • Lack of Transport Infrastructure: Companies generally have a manufacturing unit near the urban area and products have to be transferred to the rural areas via roads or the railway. Many small villages are not connected by railway and have a very bad condition of the roads.
  • Lack of Warehousing Infrastructure: Storage of products becomes difficult when warehouses are not available. Even if warehouses are available, they are not properly maintained.
  • Seasonal Demand: People in the rural area generate income during the harvest season that is when the demand for products is high, and the rest of the time is low.
  • Low Purchasing Power: Low-income levels leads to low purchasing power.

  • Rural Marketing Strategy

    The consumer behaviour in the rural sector is considerably different than the urban sector in terms of various factors such purchasing power, consumption levels, literacy rate, media availability, socio-cultural beliefs, infrastructure availability of transport, warehouses, retail stores etc. that are crucial for marketers while designing a marketing strategy.

    Here I give you a guide to develop a rural marketing strategy with the help of various examples-

    Rural Marketing Strategy

    Rural Marketing Strategy of Coca Cola


    Product Strategy

    While launching a product, you as a marketer should take into consideration the consumption levels of the consumers, their socio-cultural beliefs and if the product is really needed by the rural habitants.

    Not every product that was a success in the urban market can be launched as it is in the rural market; some alterations and redesign have to be done.

    In the example of the rural marketing strategy of Coca Cola in the image above, even if the product is same, they reduced the size of the bottle to 200 ml as compared to the conventional 300 ml bottle that is sold in the urban market. This strategy altered the product in accordance with the price of the product, which was just ₹5.

    In case of the rural marketing strategy of LG, the company understood the pain points of the rural consumer, i.e., their inability to understand the English language which was conventionally used on TV display screens, and thus they came up with a TV called as “Sampoorna TV” that displayed all options in regional languages.

    Sampoorna was small in size and easy to understand and thus stood out to be a revolutionary product in the rural market.

    Similarly, in the case of the rural marketing strategy of Hero Honda, they redesigned the bikes based on road infrastructure in rural areas. Rural areas are known for their “Kaccha Rastas”, and a bike with adjustable suspensions was a need of the hour.

    Rural Marketing Strategy

    Rural Marketing Strategy of Hero Honda


    Pricing Strategy

    It becomes obvious when we take income levels into consideration that price has to be lower while launching a product in the rural area.

    Here the product size, packaging, variants, etc. play an important role when deciding how to lower the price of the product. Alterations in size, packaging without any glitters or sparks and offering minimal variants can help in lowering the price of the product.

    However, the companies should keep an eye on the price offerings of the competition because rural consumers are loyal to those who offer less prices.

    In the example below, the packaging of Colgate toothpaste is shown both in rural and urban areas. Colgate altered the size of the product along with the price and sold it at Rs.10 to be positioned as an affordable product in the rural market.

    Rural Marketing Strategy

    Promotion Strategy

    Promotional strategies should be taken into account the literacy levels of the rural market. A newspaper advertisement or a hoarding might not be effective in this case.

    Rural marketing strategies are most effective when personal selling is involved. As in the case of Hero Honda, where they appointed sales representatives to go to the rural areas and talk with the people and tell them the benefits and features of the bikes.

    Personal selling enables the building of relationships which guarantees sales. Personal selling sometimes also requires to target a specific set on consumers, even in the small population of the village. For example, Hero Honda built relationships with teachers, panchayat leaders or members, doctors etc. Basically, people that have a strong influence over the people in the village.

    In an example of Colgate, they persuaded the women of the village and educated them about the importance of oral care since women in the concern of their child’s health will definitely be ready to use the product.


    Place Strategy

    Infrastructure is always a constraint in the rural market. Companies should understand the characteristics of the product, its life cycle to form a structured distribution system.

    Here building relationships with the distributors and retailers is also important since these people are mainly the local village people and would recommend your product to the consumer.

    Rural Marketing Strategy

    Rural Marketing Strategy of LG


    Conclusion

    Rural marketing is a vast area and requires proper designing and structuring of each element of the strategies. I suggest you keep in mind the following points in regards to rural marketing and rural marketing strategies-

    • Engaging in rural marketing can bring you a large consumer base and larger market share.
    • 70% of the total Indian population lives in the rural areas which is a considerable amount for exploring rural marketing.
    • Rural marketing strategy is considerably different than a conventional marketing strategy due to various factors.
    • Rural marketing strategy is most effective when personal selling is involved.
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    About the Author:

    Rajasi is an MBA student at the Indian Institute of Management (IIM), Nagpur. She completed her engineering in 2018 from SVPCET, Nagpur. Having experience as a digital marketer in the education industry, she has a keen interest in digital marketing and SEO practices. Her favorite subjects at IIM Nagpur are Consumer Behaviour and Design Thinking. As a person, she is creative and likes to paint and also read in her leisure time. She aims to publish her own book one day. To get in touch with Rajasi, connect on LinkedIn.
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