Importance of Rural Marketing

This is the fifth blog post in my blog series on rural marketing. Earlier, I had written blogs covering various aspects of rural marketing in India – types of rural marketing, the scope of rural marketing, and the challenges in rural marketing. There was a time when companies were primarily targeting urban customers while developing, pricing, promoting, and distributing products. Enterprises were making products available in rural markets long after launching them in urban markets.  But “Go Rural” is one of the hottest trends in marketing, as the importance of rural marketing has been on the rise.

Most manufacturers these days develop and distribute rural-specific products and services. In addition, they launch new products simultaneously in rural and urban markets. Hence, a surge is being noticed in the number of enterprises implementing rural marketing strategies.

While developing, pricing, and distributing products, they focus on meeting the needs, preferences, and expectations of consumers living in rural environments. Likewise, they create brand awareness and generate demand in rural markets by integrating traditional and digital marketing channels.

Several market research studies suggest the steady growth of rural markets for pharmaceutical products, auto parts, and fast-moving consumer goods in countries like India. There are a number of reasons why most enterprises tap into rural markets. We can understand some of the reasons by discussing the importance of rural marketing for companies and startups.

Importance of Rural Marketing: 11 Reasons Why Rural Marketing is Critical for Companies and Startups

Large Consumer Base

In many countries, the rural population is much larger than the urban population. For instance, the statistics released by the World Bank suggest that 64% of Indians live in rural areas. Rural marketing creates opportunities for companies to expand customer bases by reaching out to a large percentage of the population living in rural environments.

Infrastructural Development

In many countries, governments are driving economic growth through infrastructure development. The infrastructural development brings down logistics costs by enhancing connectivity. Companies can leverage the enhanced connectivity to make existing products available and accessible to rural consumers. Also, the enhanced connectivity helps them run rural marketing campaigns without building channels of distribution.

Purchasing Power Growth

There was a time when most rural people were engaged in agricultural and related activities. Their dependence on agriculture makes them earn seasonal income. However, the employment schemes launched by governments have created opportunities for rural people to earn regular income without engaging in agricultural activities. The income rise enables them to demand and buy products/services popular with urban consumers.

Varying Consumption Patterns

Rural consumers differ from urban consumers in many aspects, including needs, preferences, and expectations. Sociocultural factors like traditions, values, and beliefs often influence the purchase decisions made by rural consumers. The differences in consumer behavior and consumption patterns create opportunities for companies to increase sales revenue by localizing products and marketing strategies.

Low Competition

Urban consumers these days have the option to choose from a wider range of products and services. Also, most urban consumers switched brands frequently to enhance their experiences. The abundance of product choices and frequent product switches make urban markets highly competitive.

However, the level of competition is still lower in rural markets than in urban markets. The absence of cutthroat competition makes it easier for companies to acquire customers and generate demand by running rural marketing campaigns.

Emerging Demand

The demand for non-agricultural products has been increasing in many rural markets consistently. For instance, rural consumers these days buy fast-moving consumer goods, while accessing quality education facilities and availing of healthcare services. Hence, companies and startups have the option to promote and sell a variety of products and services in rural markets.

Access to Natural Resources

No enterprise dealing in agricultural products can accomplish and sustain growth without reaching out to rural consumers. Rural marketing creates opportunities for them to set up channels of distribution in rural areas. A company can further curtail production costs by setting up operations in villages that are hubs for natural and agricultural resources. Hence, rural marketing becomes essential for companies and startups in specific sectors like agriculture, forestry, and mining.

Market Diversification

As a tried and tested growth strategy, market diversification emphasizes the addition of new products, services, and locations regularly. Rural marketing helps them leverage the growth strategy by making products and services available in rural markets. Furthermore, enterprises can expand their business by localizing products/services according to the precise needs and preferences of rural consumers.

Digitalization

As highlighted by several studies, most rural consumers these days access smartphones and spend time on social networks. Digitization and mobility make it easier for companies to create brand awareness and generate demand in rural areas using popular digital marketing channels.

They can reduce rural marketing costs by publishing content and ads that target both urban and rural customers. Additionally, they can boost rural marketing campaigns by leveraging traditional marketing channels like televisions and newspapers.

Incentive Schemes

In many countries, governments make essential services accessible to rural populations by running incentive programs. For instance, the Indian government has been incentivizing enterprises to provide ancillary health services to rural communities. Companies and startups providing specific services can reduce rural marketing costs by leveraging such incentive programs.

Sustain Profitable Growth

As noted earlier, cutthroat competition makes it challenging for enterprises to accomplish and sustain long-term growth. Despite incurring high customer acquisition costs, companies find it difficult to promote brand loyalty. Rural marketing helps them sustain profitable growth by building brand presence and promoting customer loyalty by tapping the expansion potential of rural markets.

Recent Updates Showing How the Importance of Rural Marketing is on the Rise

Growth of the FMCG and Retail Sectors

Fast-Moving Consumer Goods (FMCG) companies have seen tremendous potential in rural markets. Brands like Dabur, Patanjali, and Godrej have launched rural-specific products, often in smaller packaging and at affordable price points, to cater to the rural audience. ITC’s ‘e-Choupal’ initiative, which provides farmers with agricultural information and connects them to markets, is a prime example of rural marketing done right.

Digital Penetration and E-commerce Boom

The rapid expansion of internet services, powered by initiatives like Digital India and the availability of affordable smartphones, has revolutionized rural marketing. Platforms like Flipkart and Amazon have expanded their reach to Tier 3 and Tier 4 towns, while startups like Meesho cater specifically to rural entrepreneurs. Social media platforms such as WhatsApp and Facebook have become key tools for word-of-mouth marketing in villages.

Government Initiatives Driving Rural Development

The Indian government has introduced several schemes to uplift rural areas, indirectly benefiting businesses looking to tap into this market. Initiatives like Pradhan Mantri Gram Sadak Yojana (PMGSY) for improved road connectivity, Ujjwala Yojana for LPG penetration, and the PM-KISAN scheme, which provides direct financial support to farmers, have increased rural purchasing power and boosted demand for consumer goods.

Recent developments underscore the growing significance of rural marketing in India. Here are five notable instances:

1. Rebound in Rural Demand for Consumer GoodsAs per Reuters data, In the quarter ending December 31, 2024, ITC Limited, a major Indian consumer goods company, reported a higher-than-expected profit of ₹56.38 billion. This positive outcome was largely driven by a resurgence in demand for consumer goods and cigarettes in rural and semi-urban areas, supported by state income schemes. The company’s revenue saw an approximate 9% increase, reaching ₹182.9 billion. This trend highlights the revitalization of rural markets and their crucial role in the consumer goods sector.
2. Significant Growth in Rural FMCG SalesAccording to NielsenIQ, India’s rural areas, which account for over a third of consumer goods sales, have demonstrated strong performance. In the December 2024 quarter, rural sales volumes increased by 9.9%, surpassing the 5% growth observed in urban centers. This surge is attributed to income support schemes from various states, indicating the rising purchasing power and importance of rural consumers in the FMCG sector.
3. Durex’s Strategic Focus on Rural MarketsIn September 2024, Reckitt Benckiser, the maker of Durex condoms, announced a strategic shift to target women and rural consumers in India. Recognizing the low contraceptive use in rural areas and changing attitudes toward sexual health, the company is reformulating products and tailoring marketing campaigns to cater to these demographics. This move underscores the untapped potential of rural markets for health and wellness products.
4. Colgate Palmolive’s Expansion into Rural AreasIn October 2024, Colgate Palmolive (India) reported a 16% rise in second-quarter profit, driven by its expansion into rural markets and increased demand for premium personal care products. The company’s efforts to promote oral health programs in rural areas have bolstered product demand, highlighting the effectiveness of targeted rural marketing initiatives.
5. Technological Advancements Enhancing Rural ConnectivityThe Indian government’s Digital India initiative has significantly improved internet infrastructure in rural areas. Enhanced connectivity has enabled businesses to reach rural consumers more effectively through digital platforms, facilitating e-commerce, digital payments, and online marketing. This technological integration has opened new avenues for rural marketing, allowing brands to engage with a previously hard-to-reach audience.

These developments illustrate the increasing importance of rural marketing in India, driven by rising rural incomes, targeted corporate strategies, and improved digital infrastructure.

Challenges in Rural Marketing

Despite the opportunities, rural marketing in India presents several challenges:

• Lack of Infrastructure: Poor roads, limited electricity, and inadequate supply chains make logistics a major hurdle.
• Cultural Diversity: India’s rural population speaks multiple languages and has region-specific buying behaviors, making it difficult to implement a one-size-fits-all strategy.
• Limited Media Penetration: While digital marketing is growing, traditional media like radio and local fairs still dominate. Companies need a mix of both online and offline strategies to succeed.
• Trust and Awareness: Rural consumers rely heavily on community opinions and word-of-mouth recommendations. Establishing brand trust takes time and requires consistent engagement.

Conclusion

The importance of rural marketing can be assessed from the increase in the number of enterprises implementing rural marketing strategies. They complement urban marketing strategies with rural marketing strategies to increase customer reach by leveraging growth opportunities.

However, no company can gain rural market share without adopting the right rural marketing mix. They have to reach rural consumers by integrating conventional and digital marketing channels. Likewise, their rural marketing strategies must boost customer acquisition and demand generation by focusing on 4As and 4Ps.

For instance, they can boost the sale of products or services in rural markets by focusing on 4As – accessibility, affordability, availability, and awareness. At the same time, they can make rural marketing campaigns successful by focusing on the 4Ps – product, pricing, placement/distribution, and promotion.

We refreshed this content in February 2025 to make it more suitable for our readers.