Scope of Rural Marketing

This is the fourth part of our blog series on Rural Marketing. In the previous blogs, we covered the types and challenges in Rural marketing. In the third edition of the blog series, we covered the aspects of Rural marketing in India.

While making and implementing marketing strategies, marketers believe that transportation and communication options have converted the world into a large village. They assume that most consumers these days live in urban areas, and their disposable income grows consistently.

However, the data collected by the United Nations (UN) suggest that only 55% of the world’s population currently live in urban areas. In several developing countries, the rural population is much higher than the urban population. For instance, about 35-37% of India’s population live in urban areas in 2024. So our rural population is around 63-65% of our total population. The statistics and data depict the significance and scope of rural marketing across countries. No domestic or multinational company can sustain profitable growth without supplementing urban marketing with rural marketing.

As a marketing system, rural marketing makes companies consider consumers living in rural customers while planning, developing, pricing, distributing, and promoting products/services. Each company can implement rural marketing concepts by adopting various approaches – urban to rural, rural to urban, and rural to rural.

Rural marketing creates opportunities for enterprises in various sectors to expand their customer base, generate incremental revenue, and outperform competitors. We can discuss the scope of rural marketing based on significant changes and recent developments across regions.

Important Factors Influencing and Impacting the Scope of Rural Marketing

Size of Rural Consumer Base

Rural urbanization is an ongoing process. People living in rural areas move to cities regularly to find better commercial and employment opportunities. However, the annual rural population growth rate is still increasing in many countries. The substantial size of the rural population creates opportunities for companies in various sectors to expand their customer bases across regions.

Increase in Firm Income

Several studies suggest a consistent increase in farmers’ income across countries. Farmers these days increase agricultural income in several ways – growing cash crops, adopting modern farming practices, using modern equipment, and leveraging agricultural subsidies. Rural prosperity results in increasing farmers’ disposable income and purchasing power. Enterprises have been expanding the scope of rural marketing by leveraging rural prosperity.

New Job Opportunities

Governments have been creating new employment opportunities in rural areas. Various programs and schemes launched by governments enable educated and qualified people living in villages to earn money without engaging in agricultural activities. For instance, many educated youth in India these days earn recurring income by working as teachers, Anganwadi workers, craftspeople, and freelance professionals. The new-age rural employment opportunities increase the demand for various products and services in rural areas.

Consumption Growth

Often bloggers use consumption patterns as a key parameter while differentiating urban consumers from rural consumers.  However, several recent studies suggest that there are no differences in food consumption in urban and rural areas. Also, the demand for certain products is 10% higher in urban areas than in rural areas. Hence, companies can increase revenue by offering the same products to rural and urban consumers simultaneously.

Untapped Markets

Most urban markets are already too saturated. No company can acquire market share without spending money on demand generation and customer acquisition. But most rural markets still remain untapped. Hence, companies can enter rural markets and acquire market share without incurring huge advertisement costs. The competition in urban markets makes many companies focus on tapping rural markets.

Lifestyle Changes

As noted earlier, rural urbanization is an ongoing process. The people living in rural areas aspire to adopt and experience urban lifestyles. Consistent increases in income and purchasing power enable rural consumers to afford products and services developed and launched for urban consumers. The lifestyle changes create opportunities for companies to generate incremental revenue by making their offerings available in various rural markets.

Smartphone Penetration

A significant percentage of rural people these days use smartphones and tablets regularly. The data released by a leading research firm depict that rural areas will be the growth driver of smartphone and internet penetration in 2025. Smartphone penetration alters the choices and lifestyle of consumers living in villages. They look for opportunities to buy the desired product without visiting the nearest town or city. Hence, companies can boost sales by making their products available in rural markets.

Rural Infrastructural Development

While implementing rural marketing strategies, companies often find it challenging to build distribution channels due to a lack of infrastructure. Governments have already made rural infrastructure development a top priority. They have been modernizing rural areas by building roads, tracks, bridges, schools, hospitals, and marketplaces regularly.

Rural infrastructural development helps companies make their products available in rural markets. Leading FMCG companies have already set up robust distribution systems in many developing countries. Likewise, many companies make consumer goods available in rural markets by partnering with local entrepreneurs, stores, and dealers.

Low-Cost Marketing Channels

In the age of e-commerce, companies can sell products to rural customers over the Internet. Also, they can create brand awareness, generate demand, and promote customer loyalty by running digital marketing campaigns. In addition to using search engines and social media, marketers can deliver tailored content to rural customers by sending emails.

At the same time, they can promote a product using conventional marketing strategies like mobile van marketing, retailer marketing, billboard advertising, and retail marketing. These conventional and digital marketing strategies help companies enter rural markets and acquire market share without incurring huge marketing and advertising costs.

Education and Awareness

Education and awareness play a pivotal role in shaping the rural marketing landscape. With increasing literacy rates and widespread educational initiatives, rural consumers are becoming more informed and discerning in their purchasing decisions. Awareness campaigns, often amplified by traditional media such as radio and newspapers, serve as key vehicles for building trust and disseminating information. Word-of-mouth remains a highly influential factor in rural communities, where interpersonal recommendations carry significant weight. These factors together create a more receptive audience for marketers, enabling businesses to introduce products and services that align with the evolving aspirations and needs of rural consumers.

Favorable Government Policies

Government policies and support have significantly boosted rural market growth by fostering infrastructure development and economic opportunities. Initiatives like “Digital India,” rural electrification, and rural housing programs have paved the way for better connectivity and enhanced the quality of life in rural areas, creating new avenues for businesses. Subsidies for agricultural tools, fertilizers, and small-scale enterprises further empower rural populations by increasing their purchasing power and encouraging entrepreneurial activities. These favorable policies not only stimulate rural demand but also enable companies to penetrate previously untapped markets effectively, driving mutual growth for businesses and rural communities.

Corporate Involvement and Initiatives

Corporate initiatives have played a pivotal role in unlocking the potential of rural markets through innovative and targeted strategies. Companies like ITC, with its “e-Choupal” initiative, have revolutionized agricultural supply chains by directly connecting farmers with markets through digital kiosks, providing better price transparency and cutting out intermediaries. Similarly, Hindustan Unilever’s “Shakti Project” empowers rural women by transforming them into entrepreneurs who distribute essential products within their communities, thereby creating employment opportunities and expanding the company’s reach. These initiatives showcase how businesses can align profitability with social impact by addressing the unique needs and challenges of rural markets through tailored, scalable models.

Conclusion

In 2024, a large percentage of the global population lives in rural areas. Several studies suggest a steady increase in recurring income and purchasing power of consumers living in rural areas. The rural population size and growing rural prosperity expand the scope of rural marketing.

Rural marketing creates opportunities for domestic and multinational companies to increase revenue and profits by targeting rural consumers. However, an enterprise cannot enter into rural markets using urban marketing channels and strategies.

It has to implement custom rural marketing strategies that consider the consumer behavior that differentiates rural customers from urban customers. Also, the strategy must focus on driving sales by overcoming existing and emerging rural marketing challenges proactively.

We refreshed this blog in November 2024 to make it more suitable for our readers.