Rural Marketing Environment

  • Post last modified:14 April 2022
  • Reading time:14 mins read

Rural Marketing Model

Companies work marketing models before entering any market. They approach different models to reach the target market. They work in an organised way which gives the step by step process to implement.

Depending upon the market the model may get slight change but the steps may remain same. The process helps the companies to analyze the real market and launch their business. There should be clarity in this so as to reach success in the rural market.

Rural Marketing Environment

Environment literally means the surroundings, external objects, influences or circumstances under which someone or something exists. The environment of any organization is “the aggregate of all conditions, events and influences that surround and effect it”.

External Environment:

  1. Rural Economic Environment
  2. Rural Socio-cultural Environment
  3. Rural Political Environment
  4. Rural Technological Environment

Rural Economic Environment

Jajmani System

  • A self-sufficient economy system
  • Revolved around the farmers who owned land
  • ‘Specialist castes’ who provided services to the farmers and to each other
  • System under threat due to urbanization that provided relief from exploitation.

Sources and Patterns of Income

  1. Primary source is agriculture
  2. No regular income throughout the year (Seasonality)
  3. Cash only at the time of harvest
  4. Marketers should notice of time of year when incomes are due
  5. Crop patterns vary, and time of cash surpluses from harvests vary geographically
  6. Cash crops and services leading to stable cash flows throughout the year.
  7. Remittances from outside.

Rural Socio-cultural Environment

Rural Socio-cultural Scenario

  1. Religious bent of mind.
  2. Social customs.
  3. Caste system.
  4. Gender Discrimination.
  5. Literacy.
  6. Cultural diversity.
  7. Group influence on behavior.

Caste System

  1. Brahmins at top, then kshatriyas, vaishyas, and the shudras at bottom.
  2. Each have their sub castes.
  3. Shudras suffered from entering places visited by top.
  4. Change in zamindari system helps in abolition.
  5. Marketers have to be sensitive on this issue.

Rural Political Environment

Political Environment

  1. Historically controlled by upper castes (panchayat & village pradhan)
  2. Then Panchayati raj system came into effect in which all government departments, such as; education, health, agriculture, development etc. form an integrated approach for the development of rural areas.

Panchayati Raj Institutions

1. Provide 3 tire system to panchayati raj for all the states population exceeding 2 mn.

  1. To hold panchayat elections regularly every 5 years.
  2. To provide reservations for SC/ST/Women at least 33%.
  3. To appoint a state finance commission.
  4. Preparation for economic development & social justice
  5. To collect taxes, duties, tolls & fees.

Rural Technological Environment

Technological Environment

It is triggered by three main revolutions:

  1. Green revolution
  2. White revolution
  3. Introduction of non-govt. agencies in the development sector.

Green Revolution

  1. Period under 1967-1978 aimed to improve in food self-sufficiency.
  2. Introduction of mechanization first time.
  3. An increase in farm production also introduced mechanized processing spurring growth of the manufacturing sector.
  4. Boosted farm productivity, employment creation, and standard of living changes.

White Revolution

  • Aims for achieving self-sufficiency in milk products by the govt.
  • Develops linkage between rural producers & urban consumers.
  • Formation of producers cooperatives which institutionalise & producing processing milk.
  • Milk production increases almost 5 folds (from 1950 to 2001)
  • Areas effected Gujarat, Punjab, Haryana, U.P.

NGO Movement

  1. Provide numerous services for up-gradation of rural sector.
  2. Helps in providing assistance of technological extensions in rural areas.
  3. Also providing basic health and child care services education training opportunities which
  4. helps in development.

Features of Indian Rural Markets

Large and Scattered Market

The rural market of India is large and scattered in the sense that it consists of over 63 crore consumers from 5, 70,000 villages spread throughout the country.

Major Income from Agriculture

Nearly 60 % of the rural income is from agriculture. Hence rural prosperity is tied with agricultural prosperity. Roughly speaking, a location is defined as “rural”, if 75 per cent of the population is engaged in agriculture-related activity. In India, close to 70 per cent of the population is agrarian and contributes to about one-third of India’s GNP.

Low Standard of Living

The consumers in the village area do have a low standard of living because of low literacy, low per capita income, social backwardness, low savings, etc.

Traditional Outlook

The rural consumer values old customs and tradition. They do not prefer changes.

Diverse Socio-Economic Backwardness

Rural consumers have diverse socio-economic backwardness. This is different in different parts of the country.

Infrastructure Facilities

The Infrastructure Facilities like roads, warehouses, communication system, and financial facilities are inadequate in rural areas. Hence physical distribution becomes costly due to inadequate Infrastructure Facilities.


Factors Contributing to the Growth of Rural Marketing

New Employment Opportunities

The income from new employment and rural development efforts launched in the rural areas has increased the purchasing power among the rural people. Self-employment policy with assistance from the bank has become a great success in the rural areas.

Green Revolution

A technological break through has taken place in Indian agriculture. Rural India derived considerable benefit from green revolution. Today, rural India generates 185 million tonnes of food grains per year and substantial output of various other agricultural products.

Expectation Revolution among Rural Masses

More than the green revolution, the revolution of ‘rising expectation’ of the rural people influenced the marketing environment of rural India. It brought about a powerful change in the environmental dynamics. It enlarged the desires as well as the awareness of the rural people.

Favorable Government Policies

As a part of the process of planned economic development, the government has been making concerted efforts towards rural development. The massive investment in the rural India has generated new employment, new income and new purchasing power.

In the recent years as a part of new farm policy, high support prices are offered for farm products. Various measures like tax exemption in backward areas, subsidy, concessions, incentives, assistance, literacy drive in rural areas has brought rapid growth of rural markets.

Literacy Growth

The literacy rate is on the increase in the rural areas. This brings about a social and cultural change in the buying behaviour of the rural consumer. They are exposed to mass media which create new demand for goods and services.

Growth in Income

The rise in the income resulting from the new farming strategy is adding meaning and substance to the growing aspirations of the rural people. Remittances from Indians working abroad have also made a sizeable contribution to the growing rural income and purchasing power.

Attraction for Higher Standard of Living

The rural consumers have been motivated to change their consumptions habits enjoy a higher standard of living by the growing awareness about better living and easy availability of information about the goods.

Marketing Efforts

Firms like Bajaj, HUL, etc., have started penetrating the rural market realizing the rising expectations and the demand revolution in the rural India.

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