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Rural Market

The Indian rural market, with its vast size and demand base, offers great
opportunities to marketers. Nearly three-fourths of the country’s consumers
are in the rural. About 70 per cent of India’s population lives in villages. More
than 800 million people live in villages of India.
Profile of Rural Consumer Group
1. Location Pattern of Rural Consumers
The rural market of India is a geographically scattered one, across 570,000 villages and out of
them, only 6,300 villages, or less than 1.1 per cent, have a population of more than 5,000 each. By
and large, rural consumers continue to be marked by low purchasing power and low per capita
2. Literacy level
It has been estimated that rural literacy level is 47% compared to 73% in urban areas. They
continue to be a tradition bound community; with religion, culture and tradition, strongly influencing
their consumption habits. Two aspects need to be specially emphasized: (1) In absolute numbers,
there are 11.5 crore of literate people in rural India compared with 12 crore in urban India, and (2).
Every year 60 lakh is getting added to the literate population of Rural India.
3. Rural Income
Rural income pattern reveals that nearly 60% of the rural income is from agriculture. Evidently,
rural prosperity and the discretionary income with the rural consumer is directly tied up with
agricultural prosperity. Anything that contributes to agricultural prosperity will directly result in
increase income for the rural population and the consequent increase in their spending capacity.
The pre dominance of agriculture in the income pattern has one more significance ie- rural
demand is more seasonal.
4. Lifestyle Undergoes Major Change
The lifestyle of a sizeable segment of rural consumers has already changed
significantly in recent years, and that of a much larger segment is currently going
through the process of change. As such, the earlier practice of bracketing all rural
consumers as people with a tradition-bound lifestyle does not hold good in the new
context. The change can be attributed to several factors such as:
5. Buying Decisions
The prerogative of making the final purchase decision still rests with the chief male. In
other words, the "chief wage earner" syndrome still applies in the rural markets;
they are the ones who actually travel out from the village frequently. So they are the
real drivers of the rural market. They may not be the final consumers (those who pay
the money) but often they are the people who influence the purchase of high value
products and they decide on which brands to choose.
The rural consumer has a very high involvement in any product purchased.
Purchases products more often (mostly weekly), usually in small quantities.
Looks more for functionality of the product.
Is brand loyal. Once loyalty formed is difficult to dislodge.
He understands symbols and colors better, and looks for endorsement by local
leaders or icons.
Purchasing decisions taken by the eldest member of the family. Usually buyer is
different from the user.
Brisk buying is done after the harvesting period. Major purchasing is done during
the festivals.
The buying preferences of India's rural consumers are changing fast and several
factors - economic, psychological, and technological.
Disposable incomes have gone up and fuelled aspirations, thus, resulting in a
change in buying preferences.
Spending on non-food items also rose.
Shift in the awareness levels of the rural consumer and the increased media
penetration has played a vital role in rural India's values and attitudes.
Three broad dimensions characterizing behavior change emerging among India's
rural consumers:
More Aspirational
Indian rural consumers are fuelled by a deep desire to provide their children a better
future through education and healthcare. They plan to spend more on education of their
children and healthcare of their family. Today's rural consumer is also more brand savvy
and is willing to spend more as long as quality is assured. As consumers are becoming
brand conscious, they are also trading up and seeking more features and better product
designs that enhance their social image.
2. Better Networked
They are better connected in both the physical and digital sense. Technological
developments, particularly deeper penetration of mobile telephony and direct-to-home
(DTH) television into India's hinterlands, have also reshaped lifestyle and consumption
patterns among rural consumers. The total number of telecom subscribers (mobile plus
landline) in rural India crossed more than 378 million. And of the 205 million internet
users in India, 68 million lived in rural areas.
3. More Discerning
Rural consumers are street-smart about common retailer ploys and schemes and view
value through a broader lens and share more information with more peers. While
companies might feel that a rural consumer can be swayed by celebrity endorsements
or catchy ad lines, in reality, consumers don't fall for such tactics.
That there is no singular definition that fits all rural consumers in our country. It varies
from one state to another and from one culture to another. Media exposure, education
levels, and many other factors come into play when we describe the rural consumers.
So, while the profile of the rural consumer is changing, they are becoming more aware,
they are buying more luxuries than ever before. Yet certain basic beliefs and values are
still the same.