According to the World Bank Open Data, about 44% of the world’s population currently live in rural areas. Several studies suggest a steady increase in the disposable income and purchasing power of consumers living in rural areas. Rural prosperity creates opportunities for domestic and multinational companies to maximize revenue and profit by implementing rural marketing strategies.
Many companies already leverage rural marketing by planning and launching various rural-specific products and services. They boost the demand for products/services in rural markets by focusing on distribution, pricing, and promotion. However, many companies and startups still find it challenging to enter into rural markets and capture rural market share.
Some of these challenges of rural marketing emerge when decision-makers fail to understand the specific and distinct characteristics of rural markets. At the same time, they have to manage several rural marketing challenges due to the preferences and expectations that differentiate rural consumers from urban consumers.
Hence, a company has to address a slew of challenges while implementing rural marketing concepts like urban to rural, rural to urban, and rural to rural. We can identify and understand some of these major challenges of rural marketing based on information gathered from diverse sources.
Several studies suggest a consistent increase in agricultural income. Also, many people living in rural areas these days earn recurring income by engaging in non-agricultural activities. However, the data released by the International Monetary Fund (IMF) suggest that over 63% of people experiencing poverty live in rural areas. Income inequality and rural poverty reduce the purchasing power of a significant percentage of rural consumers.
Major rural markets in a country consist of hundreds of villages. However, the size of the consumer base varies across rural markets. Likewise, the purchasing power of consumers varies across rural markets. That is why; companies find it challenging to boost a product’s availability and affordability simultaneously in various rural markets. Also, they have to implement multiple marketing and promotional strategies to target consumers living in specific rural markets.
While creating marketing content and ads for urban consumers, companies prioritize English over local languages. However, a significant percentage of consumers living in rural areas are not proficient in English. Companies can attract, engage, and influence rural consumers only by communicating in their native language. Language diversity creates communication barriers that make it challenging for enterprises to introduce and promote their offerings in rural markets.
While making rural marketing strategies, companies have to focus on keeping products or services affordable. Some enterprises offer products at lower rates, while others launch rural-specific product editions. The differential pricing makes it challenging for enterprises to determine break-even pricing. They can recover costs only by selling a larger number of products in rural markets.
Large consumer goods and FMCG companies have already set up robust distribution systems across rural markets. However, small companies and startups lack the resources and network required to make products available across rural markets. The low sales volume makes it challenging for them to open stores or outlets in various rural markets. Also, they find it difficult to find reliable retailers who will manage marketing and sales in rural markets.
Companies find it easier to launch and market products in urban markets due to robust infrastructure. Poor infrastructural facilities make it challenging for them to market existing products and launch new products in rural markets. Many companies overcome this challenge using conventional distribution channels. However, they still find it difficult to ensure product availability due to the absence of proper transportation and road connectivity.
Despite new employment opportunities, a large percentage of rural people rely on agriculture. Their purchasing power increases after copping seasons. However, farming seasons vary across rural areas. Hence, agriculture makes rural markets seasonal. Also, many consumers lack the purchasing power required to avail of high-value products and services. Companies find it challenging to boost the sale of non-consumer durables in rural markets throughout the year.
Rural areas and markets differ from each other in the category of road connectivity and density. Many villages are still not connected with rural areas. Companies overcome transportation challenges using warehousing. However, most warehouses in developing countries are located in urban and suburban areas. Also, the warehouses located in rural areas are not managed and controlled by organized agencies.
Low literacy level makes it difficult for rural consumers to evaluate and differentiate products. Also, their choices of products are often impacted by local customs and superstitions. That is why; companies often find it challenging to explain the features and quality of a product to rural customers clearly. Hence, enterprises find it challenging to increase rural market share using new-age communication and marketing strategies. They need time to convince rural consumers to buy and use a new product.
Unlike urban markets, rural markets are uncertain and unpredictable. Marketers find it challenging to understand and predict rural consumer behavior due to a lack of reliable data. Hence, they implement commonly used urban marketing strategies. However, the inability to make data-driven decisions makes it difficult for them to customize and update marketing tactics according to recent changes and emerging trends. The market unpredictability often discourages companies from entering new rural markets.
Rural marketing creates opportunities for enterprises to maximize revenue by leveraging the number and purchasing power of consumers living in rural areas. But no company can enter into rural markets and gain market share without overcoming several problems and challenges of rural marketing. The rural marketing challenges vary across regions.
In some countries, governments have been extending the scope of rural marketing by prioritizing and accelerating rural infrastructure development. Likewise, per capita income, level of literacy, and communication facilities vary across rural areas. That is why; companies must customize rural marketing strategies to address and overcome rural marketing challenges faced in each targeted rural market.