Rural means a place with less than one lakh population; others consider the income level of the population to determine the rural segment.
If the income levels are less than Rs.11,000/- per annum then the segment is a rural segment. Yet to some others the term rural means smaller towns and mofussil areas having population of less than 10,000 persons.
The Census Department of India defines the term ‘Urban’ as (a) All places with Municipality, Corporation, Cantonment Board or Notified town area committee, (b) All the places with a minimum population of 5,000 persons, with at least 75% of the male working population engaged in non-agricultural activity and with a population of at least 400 persons per square kilometre or 1000 persons per square mile. If we exclude the areas that come under the above definition, the remaining areas can be considered to be the rural areas.
When marketing activities are carried out in the rural markets it is known as ‘Rural Marketing’.
With regard to the term ‘rural area’ also there is no unanimity among the authorities. A few authorities defined a geographical place as a rural area with a population of 10,000 while few others defined place with a population of 20,000 as rural area. But, for the present study, the criterion adopted by the census of India, 1981 for defining an urban area has been taken as the basis for defining the rural area.
Accordingly, rural area is defined as a place with human habitation of 5000 and below with agriculture as the main economic activity and with a density of population less than 400 sq. km. Some areas with a population more than 5000 are also classified as rural area in view of the agriculture being the main economic activity of a vast majority of population in that area.
On the basis of the definitions of the above two terms, the rural market may be defined as any market that exists in the rural area with a population less than 10,000 where the areal density of population at any population nucleation is low without any significant infrastructure.
Agriculture is the chief economic activity in rural areas, the entire village population is associated directly or indirectly to agriculture. In the process of development of civilisation agriculture and pastoral life along river banks are the first form of settled life.
In the Bronze Age, major civilisation evolved. Archaeological evidence reveals that bronze industry supplied tools and implements to agriculture. Textiles, paper, iron and furniture making developed to lid man in his economic activities.
Villages are the heart of India:
- 75% of population lives in 6,38,365 villages.
- 90% is concentrated in the village having population less than 2000.
- Rural segment comprises 13.5 crore households which constitute 72% of total households in India.
- But the rural market is not homogeneous across the country.
- The consumer willingness to accept innovation also varies among the rural market.
- India is a predominantly agrarian society.
- Western Marketing has no experience to manage it.
- Urban markets are saturating in India.
- There are immense opportunities at the bottom of the pyramid.
- Rural Marketing can change rural business.
- Retail boom will also expedite the growth of rural marketing.
Most of the rural customers are engaged in farming, trading, poultry work, plumbing, electric works, dairy, etc. We have different varieties of the occupation in the rural areas. In rural areas also big farmers usually possess almost everything like TV, fridge, furniture, and other home appliances etc. of the major brand. Small farmers have scarcity of resources and funds etc. so there is no question of possessing almost any branded products, specially costly products.
Data existed pertaining to socioeconomic classifications, more specifically on occupation profiles, education profile or ownership profile, but data on income, its allocation and buying preferences was not available. Hence, it became difficult to segment the markets. Most organisations wanting to enter rural markets either relied on the existing published sources or commissioned studies