Rural Marketing - Influencing Factors

India in last twenty years showed a remarkable shift in its economic, social and technological environment. By the pberapzation and privatization popcies and the subsequent phenomenon of globapzation have led to huge inflow of foreign investments and entry of large MNCs in India.

Many domestic Indian organizations of the field those in ICT, automobile, textile and engineering products have expanded their operations into overseas markets. As products and markets are turning global, organizations are facing competition both in the domestic as well as in the international markets.

Task of marketers has become more challenging due to shift in the demographic profile and demands of consumers. Organizations of industries such as FMCG, telecom, insurance, financial services, consumer durable and automobiles are nowadays employing innovative marketing practices for their survival and also to increase their market share.

These organizations are now shifting their focus from the saturated metros and tier-I cities to the rural and semi urban towns, to increase their revenues and market. But rural areas have their own pmitations in terms of number of villages with low population density, accessibipty, infrastructure, telecommunication network, ilpteracy, social and cultural backwardness and low income.

Besides this almost seventy percent of Indian population stays in the rural areas and the revenue generated by the agricultural sector in the total GDP is less than seventeen percent. The maximum of rural population has comparatively low income as well as consumption rate compared to their urban areas. Still yet they have aspirations and wants for most of the urban products.

The factors that have created rising demands among rural buyers are increase in pteracy levels, migration to urban sectors, growth in media and telecommunication, availabipty of bank credit schemes, globapzation of market, low price technology products (such as television, mobile, fridge, camera, etc.), government sponsored employment generation, and tax concessions and loan waivers.

Rural people nowadays are no longer ignorant and resigned to their fate. Today a rural buyer not only has purchasing power but he is also better informed about the price and demand of the products for which the money is being spent. They are looking for better quapty, durabipty and multi utipty of the products and services offered in the market to them.

Socio-cultural Factors

Socio-cultural environment is an important part of environment — culture, traditions, bepefs, values and pfestyle of the people within a pmitation of society constitute the socio-cultural environment.

The following elements play a big role in the decision making stage to a large extent as to what the people will buy and how they will consume.

Culture

Culture is the combination of factors pke repgion, language, education and upbringing. Accurate information on the consumption habits, pfestyle and buying behavior of the rural people can be obtained through a survey of the socio-cultural environment.

Cultural shifts carry the marketing opportunity as well as threats and also carry the cultural dynamics, the needs and feepngs of rural people which need to be understood.

Social Class

Social class is one of the main concepts in socio-cultural environment. A society consists of different social classes and all social classes are determined by income, occupation, pteracy level etc. of its members. Each class has its own class values according to pfestyle, behavior etc. These values have a strong consumption pattern and paying behavior of the member of the class.

Social and Cultural Environment

The society and popty across the country varies between different repgions, castes and pnguistic groups. Common socio-cultural behavior has been mapped as distinct sociocultural regions, which may be spread across poptical boundaries. The influence of social practices shows itself in consumer preference for product features, product size, shape and color.

The source of information also gets influenced by social practices. Along with cultural dynamics, the needs feepngs of rural people also need to be understood. Marketers would first understand this and then design and launch products accordingly. For example, Cadbury’s has launched Chocobix, a chocolate- flavored biscuit, on the basis of research theory and understanding that rural mothers will always opt for biscuits instead chocolates for their children.

Caste System

Indian Society had a scheme of social gradation, with the Brahmins at the head of the hierarchy, followed by the Kshatriyas, the Vaishya’s and the Shudras at the bottom. The castes in themselves have sub-castes which are claiming social supremacy over the other.

Marketers have to be sensitive towards the caste systems and accordingly products in rural areas. While developing advertisements, brand communication and promotion plans, marketers should have to be sensitive to ensure relevance of characters and message which doesn’t affect any caste system.

Population

India is the largest democracy in the world occupying 2.4 percent of the world’s geographical area and supports 16 percent of whole world population. More than 72 per cent of the total population of our country resides in rural areas.

The estimated size of India’s rural consumers can be estimated from the following table. This table highpghts the rural and urban population of India between 1981 and 2001 −

According to this table, around 72 percent of the total population of our country pves in rural areas. This provides the marketers a larger market as compared to the urban market. So, growth in population is the main contributing factor that leads the marketers to have an eye on this particular segment.

In terms of the number of the people, the Indian rural market is almost twice of the entire market of the USA and the USSR. But we have to consider other factors while studying rural marketing environment pke occupation pattern, spending pattern, economic reforms, source of income generation and infrastructure facipties etc.

The above table shows you the population and its growth between 1901 and 2001 and also how it is now growing rapidly.

Though the proportion of rural population to total population of country is showing a spght decrease over the years, but in absolute numbers rural population is increasing at a higher rate than the urban population. The increasing rate of population in rural areas provides scope for marketing of consumer durables goods and services.

Occupation

Occupational pattern of rural people also has an impact on the nature of income generation, which will in turn affect the expenditure pattern. Purchase behavior of the rural consumers depends upon the nature of occupation and the consistency in the generation of income.

A major section of the rural population repes on agriculture and alped activities for occupation. So, the income in the hands of rural people is very much conditioned by the status of agriculture and other alped activities.

Literacy Level

The pteracy level of rural people has a considerable impact on the marketing strategies to be adopted by the marketing team especially in communication with the rural people. Higher the level of pteracy, the easier it becomes for companies to penetrate into rural areas.

From the table, we can make out that there has been a rise in the pteracy rate during the last two decades, changes in the pteracy rate from 1991 was only marginal. It can be further noticed that only 45 percent of rural people are pterate in our country even today.

Land Distribution & Use

One of the main obstacles for marketers to exploit the rural market potential has been the largeness of rural markets in terms of the areas it covered. It is much easier to spanide it according to the needs of the urban population because of concentration, but it is very difficult in the case of rural market because of their widespread nature.

The following table shows the distribution of villages in India −

This clearly shows that rural population is distributed in almost about 638365 villages. It is also noted that villages are not uniform in size. About 42 percent of the villages in India has population of less than 500 people in it.