Rural marketing environment

Rural marketing environment means all those factors like demographic Physical, Economic, Social etc. which affect the rural marketing. When marketing activities are done in the rural areas, it is necessary to know the conditions of rural markets in terms of environment which is ever changing. Rural marketing requires an understanding of the rural environment in which companies have to operate to deliver product and services.

Rural marketing structure includes the various types of environments which are very important and to be understood by the marketers who want to sell their products in the rural areas.

Demographic Environment:

Growing population is not a sign for growing market unless they have considerable purchasing power. Generally, people between the age group of 15-35 are the largest consumption group for many goods. More particularly, consumers who falls in the age group of 20-35, accounts almost 25% of India’s total consumption. If the corporate gear up their marketing policies to attract the people below the age group of 35, they can easily tap nearly 70% of rural potential.

Education and Literacy Level of Rural Women and Youth:

Fortunately, here also, the change is taking place and the rural literacy rate is risen nearly 25% over the last two decades. The improved literacy rate naturally leads to the growth of demand for education oriented products like pen, pencil, notebooks and electronic goods such as digital diaries, calculators, etc. It also increases the rural employment opportunities, disposable income and finally rural purchasing power for several products in the sectors of consumer durables as well as FMCG. So, the growth in rural literacy level, results in noticeable change for the improvement of rural people’s socio-economic status.

Although the Central and State Governments have implemented many schemes, severe punishments etc., to stop childhood marriage, keep away from education to girls, killing female child at the stage of birth itself, etc., unfortunately, these customs are still exist in many states of India such as – Bihar, Haryana, Rajasthan, Tamil Nadu, Uttar Pradesh and so on. These are all just because of higher illiteracy level among rural people and particularly lack of literacy level among rural women.

But the rural youth education and literacy level shows a good progress and prosperous rural India. Here, the contribution given by both State and Central Governments to improve rural youth literacy rate is noticeable one. This growth in youth literacy level increases the demand for modern, fashionable, current trend products among the younger generation.

Also it increases the brand awareness of rural consumers for various products (national and international level). Marketers can make serious efforts to capture these adults group (falls in the age group of 20-35), for their products such as perfumes, two- wheelers, western outfits, etc., which accounts nearly 25% of India’s consumption.

Density of Population:

Although the rural population has come down over the years, there has been considerable increase in real terms of total number of rural population. If we compare the rural proportion to total population in the past three decades, it is slightly decreasing. But still the total number of rural population is increasing in a considerable manner.

Rural Housing:

One can easily assess the economic status and growth of any sector with the help of housing pattern they have. Over the decades, there has been spectacular change in the trend of housing pattern. People are showing interest to shift from less permanent (semi-pucca) type of houses to more permanent (pucca) type of houses.

In the decade of 1980s, kuccha and semi-pucca houses were more when compared with the more permanent houses. Just 22% of houses only felt in the category of pucca houses. In 1990s, 31% of houses were in the type of pucca and the remaining were in the type of semi-pucca and kuchha.

In the millennium decade, the more permanent natured pucca houses hits more than 40 % of rural houses (approximately 50 million houses) and the rest 60% of housing type cumulates both semi-pucca and kuchha.

In this also, kuchha type of houses accounts only 23% (when compared with past decades, these type of houses are following down) and the balance 36% is a little bit improved semi-pucca. Various state governments are putting more efforts to increase semi-pucca and pucca houses and to reduce kuccha houses.

Rural Household Pattern:

Rural household pattern consists of family structure and housing pattern. In rural areas also, Indian tradition joint family system is slowly goes down and the nuclear family culture is spreading alike in the urban areas.

Family Structure:

Different types of family structures are existing in the demographic India. These can broadly be classified based on the number of households in a family under two groups namely; Joint family and Nuclear family.

Again following the same classification pattern, nuclear family can be divided into two types such as nuclear family with elders and without elders.

Joint Family:

Group of people (grand-parents, parents, their brothers and sisters, their children) living together and using common property and dwelling house. Generally, the elder person is the head of the family and he is responsible to make decisions in all issues.

Nuclear with Elders:

It is a shrieked form of big joint family. It consists of grand-parents, parents and their children alone (not living with parent’s brothers and sisters’ family). Here, also final decision is taken by the senior person. This lack of individual decision making capacity is one of the major marketing hurdles for the marketers while promoting their products in villages.

Nuclear without Elders:

This is the exact nuclear family which is commonly seen in urban sector Father, mother and their children (nowadays, not even children only with single child) is the total family members and they can take individual decisions in all matters.

Recently, one more different type of nuclear family system is emerging in India. In this system, all are living in a big common house but, having separate kitchens, savings, assets/properties, etc.

Occupational Patterns:

Agricultural and allied activities are the main occupation for the rural people. An allied activity includes Horticulture, Forestry, Fishery, Animal Husbandry (dairy, poultry, and goat), Floriculture etc., the everyday needs of the villagers are also met by many other types of occupations. In rural sector, agri-based occupation can be different types.

The occupations which can be generally seen in the villages are:

1. Farm laborer
2. Milkman
3. Washer man
4. Pot maker
5. Blacksmith
6. Barber
7. Carpenter
8. Cobbler
9. Priest
10. Weaver.

Other rural occupation which are non-agricultural and support agricultural requirements and the rural people in their daily life are:

1. Village doctor
2. Policemen
3. Traditional village nurse
4. Anganwadi workers
5. Teacher
6. Peon
7. Grocer
8. Mechanic
9. Cyber cafe owner
10. Venders
11. Agricultural experts
12. Electricians etc.

Census of 2001 reports that, this agri-based occupational trend is slowly changing and a gradual shift towards non-agri based work has been taken place. As per the NSSO Rounds Survey, for the year of 1999-2000, rural India’s Primary sector workforce accounts for 76.1%, Secondary sector 11.3%, Tertiary sector 12.5% and finally non-farm sector hits 23.8%, which is next to the Primary sector.

Economic Environment:

There is a tremendous growth in rural Indian economy. The higher income class in the rural sector has almost grown six times. There is an increase in the rural per capita income also. Let’s understand the progress.

Income Generation:

The occupation pattern reveals the income generation pattern also. From the Table 3.7, we can find out more than 40% of rural people are engaged in agricultural and allied activities. Next followed by the wage earners, salary earners, and small shop keepers and so on. If we compare with urban sector, rural sector hits very little percentage of professionals and businessman.

In contrast, nearly 40% of urban people are earning regular salaries and just 3.45% of people alone engaged in agriculture and related activities. Wage earners and small shop keepers comes in the second and third place respectively which is similar in the rural sector and followed by the artisan, businessman etc.

Expenditure Pattern:

If we compare the availability of disposable income in the hands of rural and urban population, generally less is with the rural people.

Saving Pattern:

As the time is changing the earning, consumption and saving pattern of the Indian consumers are also changing. The research made by Centre for Macro Consumer Research (CMCR) of the National Council of Applied Economic Research (NCAER) reports that there will be rapid shift of 42% in the income level of the rural households by 2015. This would become possible due to the development in agriculture, and other activities like construction, retail, trading, etc.

There is a huge dramatic change in the rural sector with a change with the shift in the income earnings and the consumption patterns of the rural consumers. But there is a huge disparity between the income generation and consumption pattern among the various states of rural India. Bridging this gap is a big challenge for the marketers and government.

The study further reveals that the top 44% of the households in the country currently have 93% of the country’s surplus income. Further it states that even the bottom 60% of households have 40% of total household expenditure. This shows the consumption power of the rural consumers who are at the bottom of the pyramid. Hence, for any marketer it is inevitable to ignore the rural consumers who are at the bottom of the pyramid.

Poor education is another factor that affects the size of the rural work force. Only 14% of the rural population have a graduate and above as a chief bread winner accounting for over 28% of the total household income. Thus, the education factor directly links to the growth of the income level of rural households.

Rural people are also becoming aware of saving their income during the crisis situation. Based on some research it has been reported that around 81% of the rural households save a portion of their disposable income for the future. Because of their savings for the future more than 50% of the rural households are very confident about their steady and bright future.

Physical Environment:

Indian land is a mixture of both domestic land as well as cultivation land. But unfortunately, urban side cultivation land also slowly utilized for household purpose such as constructing factories, apartments, buildings, multiplexes and so on. In contrast with the urban side, the rural cultivation land is still used for the agriculture purpose.

Distinguishing Features:

Rural land is a combination of cultivation land and farm houses. Farmers normally live in their own farm houses and those houses falls in the category of kuchha in general.

Scattered and Clustered Settlement:

Rural India is inevitably connected with towns and villages. Most of the towns are nothing but the developed villages and they have Municipalities instead of Panchayats. But still, other attributes such as dependency on weekly haats, mandis and melas for buying and selling of goods in towns are as same as in the villages.

People in towns are involved in various jobs, such as – teachers, officers, professionals, businessmen, farmers and so on. All though they have different occupations, we can simply group them under two categories like, stable salary earners and unstable or irregular income earners.

Other Major Macro Environments:

As India is growing and has more opportunities for the lower-income group. If we take the data from the past ten years, the lower-income group shifted to higher-income group.

Land Distribution:

It has been clear that nearly 75% of income from rural area is generated through agriculture and allied activities. Land is the basic resource for all agriculture based activities. Land which is an unrecognized asset has changed the living style and attitude of farmers. Rural people enjoy the closeness with nature, soil, animals and other natural things.

Land can be classified in many ways such as:

Land Based on Topography:

1. Plains
2. Plateaus

iii. Hills

1. Mountains.

Land Based on Use:

1. Cultivable land
2. Uncultivable land

iii. Land for public infrastructure

1. Forest land.

Land management is becoming very important due to increase in demand for land because of growth in Indian population.

So, land distribution plays a vital role in the distribution of rural income. Proportion of households and cultivated area under different land holding patterns in rural area.

If we observe, approximately 80% of holdings accounts for 39% total land cultivated and the balance 20% of holdings accounts for 61% of land. It shows the uneven distribution of land and ultimately leads to the uneven income distribution. In rural areas, less number of families only falls in the higher income groups when compared with the larger lower income groups’ category.

From the marketer’s point of view, this is very important situation who are dealing with agricultural inputs. Because unlike the common demand for agro-inputs (such as fertilizers, pesticides etc.) irrespective of income level or streams, durable inputs like tractors, power tillers, etc., may have more demand from higher income groups only.

One more thing to be noticed here is the number of holdings is increasing. If we compare the land holdings pattern with the past three to four decades, nearly 70% of increase is affected due to the fact of subdivision and fragmentation system which is widely spread in rural areas.

Even though the total consumption of rural sector exceeds urban sector, individual family consumption is comparatively less. Marketing efforts should be geared up to cater nearly 100 million rural families. Thus, the rural market is characterized by ample disparities in consumption levels.

Land Use Pattern:

If we observe our land use pattern, from the total cultivation area, approximately 74% is occupied by food crops and only 26% is occupied by non-food crops. This situation clearly exhibits the excessive dependence on food crops rather than non-food commercial crops. It is because of the farmer’s attitude towards food security i.e., they used to retain sufficient quantities of production for their own consumption and the rest alone goes – to the market.

Take the food crops such as rice, wheat, vegetables etc., as example whose retention quantity is estimated nearly 50%. In contrast, the entire production of non-food crops goes to the market without noticeable proportion of retention like food crops. For example, almost the entire production of cotton, sugarcane, groundnut, etc., are marketed. This has an implication in generation of disposable income.

In general, large farmers are able to generate adequate disposable incomes because they can grow food as well as non-food, commercial crops with the help of sufficient land holding pattern. But the small farmers are in a position to grow only food crops that too in a little quantity and are able to generate small disposable income.

So, the marketers surely show interest to target the large rural farmers. Anyway this situation is slowly changing due to the introduction of latest technologies in the agricultural sector for the result of high yield such as, high yield seeds, cross-cultured seeds, pesticides, etc.

Irrigation:

Irrigation plays a vital role while increasing the potentiality of rural market. Actually, in agricultural sector, many new technologies were implemented in irrigation only such as energized pump sets and so on to improve the overall yield and economy. To improve the irrigated area, many kinds of investment schemes like minor, medium and major are continuously framed and implemented by the Government.

For example, states like Gujarat, Madhya Pradesh and Maharashtra are expected to irrigate about 19 lakh hectares of land from the project Sardar Sarofar Project across river Narmada. We can imagine the prosperity of farmers in these beneficiary states.

The major source of irrigation is wells followed by canals. Nearly about 40% of gross cropped area is from approximately 80 million hectares of gross irrigated area. The important point to be noted here is, still nearly 60% of rural India is dependent on rainfall for their agricultural activities.

Anyway, many steps have been taken and major and medium level irrigation projects also initiated to improve the rural irrigation potential. One more important scheme launched by the Government in the year of 2005 was ‘National Project for Repair, Renovation and Restoration of Water Bodies’.

It mainly focuses on the restoration and augmentation of water bodies storage capacities and recovering and extending their lost potential. ‘Drip Irrigation’ programme was launched to cover more areas under irrigation. Currently, about three lakh hectares are under drip irrigation in various states of India and a great scope to extend this method under the context of shrinking ground water supply.

So, it is very clear that the availability of irrigation facilities leads to the higher technology development and finally results in the increased productivity, income and improved rural purchasing power.

Socio-Cultural Environment:

It is very difficult to define a definite boundary for the identification of socio-cultural differences in a country. Because every country has different society and polity and that too varies from region to region. It also varies between sub-regions, different religious, caste and community groups. So, some common factors have been grouped together to form socio-cultural regions.

The major factors which are used to construct different socio-cultural regions in an environment are:

1. Sociological factors: It cumulates the habits, tastes, lifestyle and preferences of different consumers. The social constitution and changes in the constitutions influences these in a big way.
2. Anthropological factors: Existence of regional cultures and sub-cultures plays a predominant role here.
3. Psychological factors: It includes the consumer’s attitude, interest, personality and mind set. These psychological factors influence more in the overall buying behaviour of consumers.

Sales promotional schemes, selling and distribution strategies, advertising are all influenced more by the above mentioned factors. So, the marketers are using these socio-cultural regions as a yardstick for their market segmentation and targeting purpose.

In a nutshell, we can conclude that the urban environment shows degrees of homogeneity across the socio-cultural regions, whereas the rural environment entirely differs.

Values and Beliefs:

Values are nothing but genetic traits and simplicity is the main ingredient. It is customary to respect elders and touch their feet as to seek their blessings. Occasions or festivals demand a lot of participation in terms of rangoli drawing, diyas and an array of yummy treats made in the authentic variety as per the caste and geography.

Hindu rituals are a lot about song and dance and each family has a natural way to adjust to these formats. It is a ritual to pray to the Goddess of learning Maa Saraswathi to achieve success. Similarly, business people always insist on drawing the Swastika which marks prosperity and worship the Goddess of wealth.

The values in India are about living life with an enthusiasm and observing the belief that there is one God existing despite so many religions. Respecting elders, understanding cross culture traditions, free mingling to accommodate tolerance, staying interested in rural welfare are the values of India. The historical object, cuisine handicrafts, attire and lifestyle of the rural folks is still followed and preserved by Indians.

Even though India is a country of various religions and caste, our culture tells us just one thing ‘phir bhi dil hai Hindustani’.