Chapter I
RURAL MARKETING:
A CONCEPTUAL
FRAMEWORK
Learning objectives of this chapter:
 Conceptual clarity about fundamental Rural
Marketing concepts: Rural and Rural Marketing.
 Learn about evolution of Rural Marketing in India
 Comprehend the Rural Marketing process as
Rural Marketing Model
 Comparative analysis of Rural vs. Urban Marketing
Rural
 Census of India (2001), defines rural as, that what is
not urban.
 Urban is: All locations with a municipality/
corporation, cantonment board or a notified town area
committee. All other locations satisfying all the
following Criteria:
a) Minimum population of 5,000.
b) At least 75 percent of male workforce
engaged in non-agricultural activities and
c) Population density of over 400 persons per sq km
Definition of Rural by Marketing World
 Most FMCG and Agri-input companies define
rural as a place with the population up to 20,000.
 Consumer Durable companies consider any town
with population below 50,000 as a rural.
 Some MNCs define rural/semi urban area as all
cities other than seven metros.
 Rural in marketing parlance is also defined as an
area, which begins where the controllable
distribution and media reach ends.
Rural Urban Continuum
 Customers in India have also been divided into
three broad groups in terms of geography and
sociological characteristics (Jha, 2003):
a) Urban
b) Rural
c) Rurban
 Rurban being the overlap between the two, with
pretensions to being closer to urban in physical
features and proximity to large urban centers,
but with deep rural sociological moorings.
Rural Marketing
 Planning and implementation of marketing function
for the rural areas.
 It is a two way marketing process, which
encompasses the performance of business activities
that direct the flow of goods from urban to rural
areas (for manufactured goods) and vice-versa (for
agriculture produce) and also within the rural areas
(Gopalaswamy, 2005).
Rural Marketing
It is a distinct specialization of marketing discipline,
which encompasses customized application of
marketing tools and strategies to understand the
psyche of rural consumer in terms of needs, tailoring
the products to meet such needs and effectively
delivering them to enable profitable exchange of
goods and services to and from the rural market.
Rural Marketing Scope: Flow of Goods
and Services (Mithileshwar, 2003)
From/To
Urban
Rural
Urban
1. Consumables & Durable
Agricultural Inputs
2. Consumables
3. Consumer Durables
Not concerned
1.
Rural
1. Rural Artisans
Services & Products
Agricultural & Allied
Production
2. Rural Artisans & Rural
Industry Products
Phased Evolution of Rural Marketing
Phase
Time period
Purpose
Major Products
Source
Market
Target
Market
I
Since independence
but before Green
Revolution
Agricultural
Marketing
Agricultural
produce
Rural
Urban
II
Green Revolution to
Pre-liberalisation
period
Marketing of
Agri-inputs
Agricultural
inputs
Urban
Rural
III
Post-liberalisation
period in 20th
century
Rural Marketing
Consumables and
durables for
consumption and
production
Urban &
Rural
Rural
IV
21st century
Developmental
Marketing
All Products and
Services
Urban &
Rural
Urban &
Rural
Rural Marketing Model
Research
Segment rural market
Study lifestyle of
rural population of different segments region
Develop profile of rural consumers
of different market segments
Define and prioritize their needs in
general terms
Develop specific need profile
for a product category in that region
Select target markets
Develop/Modify Marketing Mix
Implementation
Control
Factors Differentiating Rural Marketing from
Urban Marketing
Sr.
List of Factors
1.
Infrastructure Availability: electricity supply, media reach,
availability of finance facility, education level, roads, connectivity,
presence of organized markets; in rural market is very different from
that of urban markets.
2.
Income Streams: The pattern of income generation in rural areas
based on agriculture is seasonal and highly unreliable unlike the fixed
monthly income in the urban areas. This creates a consumption
pattern, which is different from urban one.
3.
Lifestyle: The lifestyle and daily routine of consumers in two markets
is markedly different. This creates significantly different profile of
consumers for the same product in these two markets.
4.
Context: Because of variation of infrastructure and income streams,
the context in which an individual exists in rural areas is very different
from the one in urban areas. This creates difference in nature and
priorities of needs in two markets.
Factors Differentiating Rural Marketing from
Urban Marketing
Sr.
List of Factors
5.
Socio-cultural Background: Value system and thus perception toward
goods /services and consumption is different in two markets
6.
Accessibility: The cost and logistics of accessing consumers in a highly
widespread and heterogeneous rural market are very different from
those involved in reaching urban consumers, concentrated in good
number in single location. Thus, demanding two different types of
approaches.
7.
Media Reach & Habits: The reach of media vehicles and the media
habits are very different in rural and urban markets. Requiring very
different type of promotional strategy in these two markets.
8.
Nature of Competition: The nature and intensity of competition
amongst the brands is very different in the two markets.
9.
Consumer Behaviour: The response of consumers to marketing stimuli
is very different in two markets. Rural consumer’s behaviour is quite
different from that of urban buyer’s behaviour.
Summary: Points to Ponder

Rural is a distinct type of market and is not just a
poor extension of the urban areas. Apart from
income there are host of infrastructural and sociocultural factors that differentiate the rural from
urban market.

Rural cannot be tapped effectively with an urban
mindset. It requires a distinct approach and
thorough understanding of the rural markets.

There is no single definition of rural that suits all
the stakeholders operating in the rural market.
Summary: Points to Ponder

Rural Marketing is a distinct specialization of
marketing discipline, which encompasses
customized application of marketing tools and
strategies to understand the psyche of rural
consumer in terms of needs, tailoring the
products to meet such needs and effectively
delivering them to enable profitable exchange of
goods and services to and from the rural market.

Understanding of lifestyle and developing a
generic profile of rural consumers in a particular
segment of rural market is of utmost importance
along with the income of the rural consumer in
order to select or reject it as target market.
Income alone should not be used as basis for
making a target market decision.