Rural Marketing: Challenges, Opportunities & Strategies

 | May 26,2010 03:38 pm IST

"The future lies with those companies who see the poor as their customers."                                                                                                        -C K Prahalad
                                             Addressing Indian CEOs, Jan 2000.


In recent years, rural markets have acquired significance, as the overall growth of the economy has resulted into substantial increase in the purchasing power of the rural communities.


On account of green revolution, the rural areas are consuming a large quantity of industrial and urban manufactured products. In this context, a special marketing strategy, namely, rural marketing, has emerged. But often, rural marketing is confused with agricultural marketing - the latter denotes marketing of produce of the rural areas to the urban consumers or industrial consumers, whereas rural marketing involves delivering manufactured or processed inputs or services to rural producers or consumers.


What Makes Rural Markets Attractive?

Rural market has following attributes and the following facts substantiate this: -

742 million people


Estimated annual size of the rural market -

                              FMCG                                                                     Rs. 65,000 Crore

                              Durables                                                               Rs. 5,000 Crore
                              Agri-Inputs (including tractors)                       Rs. 45,000 Crore
                              2 / 4 Wheelers                                                     Rs. 8,000 Crore


In 2001-02, LIC sold 55% of its policies in rural India.

Of two million BSNL mobile connections, 50% are in small towns / villages. 


Of the 6.0 lakh villages, 5.22 lakh have a Village Public Telephone (VPT).

41 million Kisan Credit Cards have been issued (against 22 million credit-plus-debit cards in urban), with cumulative credit of Rs. 977 billion resulting in tremendous liquidity.


Of the 20 million Rediffmail sign-ups, 60% are from small towns. 50% of transactions from these towns are on Rediff online shopping site.

42 million rural households (HHs) are availing banking services in comparison to 27 million urban HHs.

Investment in formal savings instruments is 6.6 million HHs in rural and 6.7 million HHs in urban.



1. Infrastructure is improving rapidly -

In 50 years only, 40% villages have been connected by road, in next 10 years another 30% would be connected.

More than 90% villages are electrified, though only 44% rural homes have electric connections.

Rural telephone density has gone up by 300% in the last 10 years; every 1000+ pop is connected by STD.


Social indicators have improved a lot between 1981 and 2001 -

Number of "pucca" houses doubled from 22% to 41% and "kuccha" houses halved (41% to 23%).

Percentage of BPL families declined from 46% to 27%.

Rural literacy level improved from 36% to 59%.


Low penetration rates in rural areas, so there are many marketing opportunities -


DurablesUrbanRuralTotal (% of Rural HH)
  CTV30.4  4.8  12.1  
  Refrigerator33.5  3.5  12.0  


FMCGsUrbanRuralTotal (% of Rural HH)
  Shampoo66.3  35.2                 44.2  
  Toothpaste82.2  44.9                55.6  
Marketers can make effective use of the large available infrastructure -

    Post Offices1,38,000    
    Haats (periodic markets)42,000    
    Melas (exhibitions)25,000    
    Mandis (agri markets)7,000    
    Public Distribution Shops3,80,000    
    Bank Branches32,000    
Proliferation of large format Rural Retail Stores, which have been successful also -
DSCL Haryali Stores
M & M Shubh Labh Stores
TATA / Rallis Kisan Kendras
Escorts Rural Stores
Warnabazaar, Maharashtra (Annual Sale Rs. 40 crore)




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Chandrashekhar on 06/11/10 at 04:07 pm

Very well written and captured all aspects. However challenge continues on how to tab huge opportunity keeping in mind various road blocks.

Bhavna wagh on 06/23/10 at 12:04 pm

Good work, straight to d point..

Myname on 08/07/10 at 03:07 am

I liked this. Very informative article with lots of data that could be put to use. Thank you.

neeraj on 09/13/10 at 11:06 pm

it is very clear

hari on 09/24/10 at 12:07 pm


nishu on 09/28/10 at 06:42 pm

indeed a very detailed overview of rural marketing

Shaun on 10/28/10 at 01:39 am

I have something that can make a huge differance in rural and informal settlements with regards to trading; water supply and an opportunity. Please contact me.

Debdatta on 10/30/10 at 06:35 am

All the marketing of goods in rural areas depends on a huge label by electric supply.So I think until and unless there is a competition in
Power industry this is quiet hard to acheive.

Shahbaz on 10/30/10 at 08:59 pm

Gd Article. But needs to look at many important aspects that many companies miss too & fail.
I too learmed hard way aftr wrkg wid d lowest strata upto village level fr more than 5yrs. I sell bidi's (desi cigarette).
Contact for rural marketing consultancy

Prakash Panigrahi on 11/12/10 at 01:26 pm

conceptwise it is very good & clear. I m very pleased. thank u

Prakash Panigrahi on 11/12/10 at 01:27 pm

It is very good

hari on 11/28/10 at 11:35 am

please update the information

hari iibm on 11/28/10 at 11:39 am

all information are true

mukesh budhori on 12/03/10 at 04:30 pm

what a presentation. it is going to help in our examination. Indeed nice.

mukesh budhori on 12/03/10 at 04:32 pm

what a presentation. it is going to help in our examination. Indeed nice.

shumaisa on 01/13/11 at 07:43 pm

rural marketing is one gift of the god to MNC,S

Dr Ram Sagar Singh on 03/14/11 at 03:57 pm

matter is very relevant to the marketers point of view, if it felt deeply this may enhance the longitivity of company life.

Ravindra on 03/28/11 at 11:03 pm

i like this is too useful.......if u use it in ur GD,u r going to rock....thnx for this data

prashant pinjare on 04/02/11 at 01:16 am

it help me lot to understand the basics of rural market thank for proving such a wonderful data

prashant pinjare on 04/02/11 at 01:16 am

it help me lot to understand the basics of rural market thank for proving such a wonderful data

jiu jitsu gear on 08/05/11 at 04:10 pm

great article..
thanks for sharing the information....
excellent information presented..
thank you...

prashant on 09/05/11 at 04:43 pm

growth only rural india.