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 Indiatypes 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.

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.

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 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.

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.

Understanding 10 Major Problems and Challenges of Rural Marketing

Income Inequality

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.

Uneven Population Spread

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.

Language Diversity

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.

Differential Pricing

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.

Distribution Channel Development

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.

Lack of Infrastructural Facilities

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.

Demand Fluctuations

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.

Warehouse Quality Control

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.

Lethargic Lifestyle

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.

Market Unpredictability

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.

Conclusion

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.

This is the third blog in this blog series on Rural Marketing. The other blogs in this series are types of rural marketing and rural marketing in India.

In many developing countries, the rural population is much higher than the urban population. For instance, 65% of Indians live in rural areas, while 45% of India’s population lives in cities and towns. Several researchers have highlighted a steady increase in the disposable income and purchasing power of people living in rural areas.

After the pandemic, 30% of 40% of smartphones sold in India were purchased by customers living in rural areas. The rural population and rural prosperity create opportunities for domestic and multinational companies to maximize revenue by making products and services available in rural markets.

Companies and startups have been adopting rural marketing in various forms and ways. For instance, some companies capture rural market share by introducing rural-specific products. At the same time, many companies make the same product launch in urban and rural markets simultaneously.

Hence, rural marketing strategies adopted by companies vary. Also, each company customized rural marketing strategies according to the needs, preferences, and expectations of targeted customers. We can discuss different types of rural marketing based on products offered and strategies implemented by various companies.

Classification of Rural Marketing

An enterprise can adopt rural marketing in multiple ways. For instance, a company can develop rural-specific products and make them available in rural markets. Likewise, a company can promote and popularize its existing products in rural markets. Hence, we can classify and categorize rural marketing based on products and market structure.

Products/Services

Both rural and urban companies these days distribute and promote their products in rural markets. Some companies usually market crops, seeds, fertilizer, and similar agricultural products. Likewise, many companies provide irrigation tools and agricultural machines to rural customers.

At the same time, many companies these days generate revenue by selling non-agricultural products like vehicles, books, household appliances, and other consumer durables. Hence, rural marketing can be divided into two broad categories – agricultural and non-agricultural – based on products or services sold by companies.

Market Structure

While categorizing rural markets, companies often use the size of the customer base and the purchasing power of consumers as the primary parameter. However, rural marketing can be either primary or secondary according to the way products are distributed and sold by companies.

In a primary rural market, companies distribute and sell products directly to consumers. Also, many companies these days deliver products to rural customers using e-commerce platforms. However, businesses redistribute products in secondary rural markets using intermediaries like dealers, retailers, and agents.

Marketing Mix

Marketing mix can be described as the strategies and tools companies use for promoting and selling products in targeted markets. The marketing mix in rural marketing consists of four important components – product, price, promotion, and placement. Product refers to the goods or services offered by a company.

Price refers to the cost incurred by consumers to avail of the product or service. Promotion refers to the promotional and advertising activities required to create awareness, generate demand, and boost sales, while placement refers to the distribution channels used by a company to make its products available in rural markets.

Types of Rural Marketing

Companies these days promote and market products in rural areas through multiple channels. Increasing smartphone penetration creates opportunities for them to engage and influence rural consumers by running social media marketing, email marketing, and mobile marketing campaigns.

However, a significant percentage of companies still promote their products using conventional advertising tactics like mobile van marketing, retailer marketing, and billboard advertising. Hence, rural marketing can be divided into several categories according to promotional strategies used by companies.

Direct Marketing

A low literacy rate is one of the major challenges of rural marketing. Companies run direct marketing campaigns to inform rural consumers about products or services in simple and local languages. They deploy marketing executives who create product awareness and generate demand by educating rural consumers. Also, many companies facilitate direct selling by setting up kiosks in selected rural areas.

Periodic Marketing

Local marketplaces are an integral part of most rural marketplaces. Local people purchase products by visiting the traditional marketplace held on a specific day every week. The gathering of local consumers creates opportunities for companies to capture market share by displaying and promoting various products to a large number of rural customers.

Retail Marketing

Many consumers find it challenging to promote their products directly in rural markets. They save time and resources by partnering with local retailers and store owners. The retailer helps companies promote products by interacting with local customers. At the same time, they facilitate the distribution and promotion of products on a regular basis.

Mobile Van Marketing

This form of rural marketing helps companies overcome key challenges like poor and limited infrastructural facilities. The marketing professional driving the van promotes and sells products in rural markets. Also, they generate demand and promote customer loyalty by answering questions asked by consumers.

Traditional Display Marketing

While planning urban marketing campaigns, marketers prioritize digital display ads over conventional display ads. However, they still use wall paintings, posters, and billboards while promoting products in rural areas. Traditional display strategies help companies create brand awareness and attract potential customers.

Mobile Marketing

A surge is being noted in the number of rural families owning smartphones. A significant percentage of rural people still use feature phones. Mobile device penetration creates opportunities for businesses to run mobile marketing campaigns. Many companies create brand awareness and generate demand in rural markets by sending text messages to consumers.

Digital Marketing

Smartphone penetration enables employees to influence rural consumers by running digital marketing channels. Many companies promote products and services by sending targeted marketing emails to rural consumers. Also, they engage rural consumers by creating dedicated social media profiles and pages.

Conclusion

The number and prosperity of people living in rural areas make rural marketing the next destination for companies and startups. But purchasing power of rural consumers varies across regions. Also, the purchase decisions of rural customers are often impacted by local customers and beliefs.

Hence, companies must understand different types of rural marketing to decide the best way to enter a rural market and capture market share. In addition to classifying and categorizing rural marketing activities, they need to choose and combine the right rural marketing strategies.

According to the World Bank Collection of Development Indicators, 64.13% of Indians live in rural areas. Likewise, a report published by the National Sample Survey Organization (NSSO) suggests a steady increase in demand for consumer goods/services and the average monthly per capita expenditure (MPCE) in rural areas.

The consistent growth of the rural market in India makes it essential for domestic and multinational companies to consider consumers living in rural areas while planning, distributing, promoting, and marketing a product or service. Many analysts believe that rural marketing in India is the next stop for aspiring and experienced marketers.

Their marketing strategies consider the functional and economical characteristics that differentiate rural consumers from urban consumers in India. At the same time, they keep in mind the distinct purchasing and consumption patterns of consumers living in villages. However, rural marketing strategies and tactics differ across organizations.

Rural Marketing Process in India

Digital communication and marketing channels create opportunities for enterprises to market and promote products in rural markets in several ways. Some companies in India run marketing campaigns that simultaneously target consumers living in urban and rural areas.

At the same time, some companies implement marketing strategies that focus extensively on consumers living in rural areas. That is why; the rural marketing process in India is multidimensional. We can understand the process by discussing various aspects of rural marketing transactions.

Urban to Rural

Many companies these days sell the same consumer durables and FMCG products in urban and rural markets. They engage urban marketers to generate demand for a product/service in rural areas. Urban marketers help employers generate revenue by promoting and selling the product across villages.

Rural to Urban

Many rural companies these days sell products to consumers living in urban areas. Some of them sell the products at lower rates to consumers directly or digitally. At the same time, some companies distribute and market the product through intermediaries like agencies and cooperative societies.

Rural to Rural

Many rural entrepreneurs generate revenue by selling products to consumers living in the same or neighboring villages. This form of rural marketing transactions usually involves agricultural products, cattle, livestock, and common tools.

Common Rural Marketing Strategies in India

Enterprises promote rural marketing in India using both digital and conventional communication channels. Hence, rural marketing strategies adopted by individual companies differ. Hence, marketers should understand and evaluate commonly used rural marketing strategies in India.

Retail Marketing

This strategy makes companies create awareness and generate demand using channels of distribution. Urban companies partner with stores in rural areas to promote their products or services. The retailers provide elaborate product information to consumers by displaying ads with textual and visual elements. Also, consumers can gather information and answer questions by interacting with the retailer directly.

Mobile Van Marketing

While implementing this strategy, companies promote products or services using mobile vans. Van marketing creates opportunities for them to market a product in several ways – displaying ads, distributing flyers, showing product demos, and giving product samples. Companies further attract and engage rural consumers by organizing contests.

Periodic Marketing

Many consumers living in rural areas still prefer local marketplaces like haats and mandees. Every village sets up an open marketplace once a week. The local marketplace creates opportunities for companies to showcase their products and create brand awareness. Many companies in India implement periodic marketing strategies to promote products ranging from consumer durables to automobiles.

Digital Marketing

Most consumers living in rural areas these days use online search engines and spend time on social media regularly. The growing popularity of digital channels helps enterprises connect with rural consumers by publishing and promoting a variety of digital content – blogs, social media posts, videos, and infographics. Many companies boost rural digital marketing campaigns by distributing multi-format content tailored for consumers living in rural areas.

Mobile Marketing

The Annual Survey for Education Report (ASER) suggests an exponential rise of rural families owning smartphones in India after the COVID-19 pandemic. The increased proliferation of smartphones helps companies promote products by sending text messages and voice messages to consumers living in rural areas. Also, they can build relationships and share additional information with consumers by running missed call campaigns.

Influencer Marketing

Rural entrepreneurs in India promote their products or services by partnering with various influencers. Leading companies promote their products digitally by partnering with content creators and YouTubers popular with rural people. Also, they work with local influencers to promote products or services in rural areas using local languages.

Approach to Make Rural Marketing Successful in India

In India, urban and rural marketers can influence consumers living in rural areas using several strategies. However, they must differentiate rural marketing strategies from urban marketing strategies by adopting a consumer-oriented model. Also, they can enter rural markets and run successful rural marketing campaigns by focusing on some important factors.

Availability

Many rural markets in India lack robust physical and distribution systems. In addition to promoting a product or service, companies must make the offering available in rural areas. Many companies ensure product availability by building strong distribution systems. However, enterprises have to address location-specific issues to deliver a product to rural areas seamlessly and continuously.

Affordability

The per capita income of consumers living in rural areas is lower than the per capita income of urban consumers. Companies must make their products affordable to rural consumers by adopting a differential pricing strategy. Leading consumer brands have already launched low-priced products for consumers living in rural areas. Likewise, some companies have launched special editions of electronic appliances targeting rural markets.

Awareness

No company can create and enhance brand awareness in rural markets using only digital communication channels. In addition to running multichannel digital marketing campaigns, enterprises must create product awareness by running television ads, distributing flyers, installing billboards, and using wall paintings. The combination of conventional and digital marketing strategies is essential to engage and influence rural consumers.

Acceptance

Companies often find it challenging to make rural consumers accept their products due to various misconceptions. For instance, some marketers believe that rural consumers are less quality-conscious than urban consumers. Likewise, some brands make limited and selected products available in rural markets. Digital communication and urbanization have bridged the gap between towns and villages in India. Marketers must eliminate such misconceptions and leverage market research data to enter rural markets successfully.

Conclusion

About 65% of consumers in India live in rural areas. They differ from consumers living in urban areas in purchasing and consumption patterns. Rural marketing in India creates opportunities for domestic and international companies to increase revenue by leveraging the steady increase in their average monthly per capita expenditure.

However, an enterprise can make rural marketing successful in India only by considering the socio-cultural differences across villages. In addition to using traditional and digital communication channels, they must address issues and solve problems by boosting the availability, affordability, awareness, and acceptance of a product or service.

Client Says

He has a laser-sharp focus on the goals to be achieved.

Nishant Kadian
Founder of laykaik.com

He is a leader who has ’empathy’ as the core competency.

Deepanshu Gahlaut
Founder of deepanshugahlaut.com

His knowledge on Web Analytics is commendable and he used this information in each and every step,

Amit Mallick
Technology Leader