Rural product, Rural product classification

21/10/2022 0 By indiafreenotes

The rural population in India is around 70 per cent. Of the total population, 62 per cent of consumer expenditure in India comes from rural market. The rural market in India is not a separate entity in itself and it is highly influenced by the sociological and behavioural factors operating in the country. Rural markets are tomorrow’s market and marketers should know how to penetrate these markets. Rural markets are the new markets which are opening up for various product categories.

Rural market offers growth opportunities as the urban markets are increasingly becoming competitive and in many products even getting saturated. Now income level and standard of living is increasing rapidly in rural areas. The demand of branded products is also increasing. The rural market in India brings bigger revenues in the country, as the rural regions comprise of the maximum consumers in this country. The rural market in Indian economy generates almost more than half of the country’s income.

Rural market covers all marketing activities ascertain the demand, product planning, distribution and facilitating the entire marketing process, with aim of satisfaction of rural consumer. Rural market includes all business activities which involved in flow of goods and services from producers to rural consumers.

Rural market products are growing at a quick pace in developing countries. With the increase in wages and income, there is an increase in the middle class. As a result, the consumption rate in rural areas is increasing day by day. It has been estimated that 12% of the world’s population resides in the rural areas of India. Therefore the rural market has become a powerful economic booster. Seeing this change, many corporations are trying to utilize this opportunity to gain a strong footing in India’s rural market. But entering into a rural market and making a mark is not easy to process; one has to face a lot of challenging situations, like:

  • Undeveloped transport systems
  • Inadequate electricity services
  • Unreliable telecommunication services
  • Unavailability of appropriate rural market infrastructure
  • Low level of literacy
  • The consumers are dispersed over a large area
  • Unavailability of partners to support the identification of the needs and marketing in the rural areas
  • Unavailability of properly channelized distributors.

Classification of Products


Fast Moving Consumer Goods (FMCG) goods are popularly named as consumer-packaged goods. Items in this category include all consumables people buy at regular intervals. The most common in the list are toilet soaps, detergents, shampoos, toothpaste, shaving products, shoe polish, packaged foodstuff, and household accessories.

Major players are HUL, Dabur, Marico, Colgate Palmolive, Nirma, CavinKare and Godrej.

As per the analysis by ASSOCHAM, Companies Hindustan Unilever Ltd,
Dabur India originates half of their sales from rural India.

While Colgate Palmolive India and Marico constitutes nearly 37% respectively. Nestle India Ltd and GSK Consumer drive 25 per cent of sales from rural India.

Agricultural Products

Agricultural inputs such as seeds, fertilizers, pesticides, insecticides and implements (tractors, tillers and threshers) Livestock, poultry and fishery.

Major players are Rallis India, Monsanto, DCM Shriram, Chambal Fertilisers, IFFCO, Mahindra & Mahindra, Eicher and Escorts.


Telecommunications (BSNL), transport, health care, banking (SBI), insurance (LIC) and education.

Five levels of Products

Five levels of the product offering: Core benefit, basic product, expected product, augmented product, potential product.

The core benefit (mobility, entertainment) and the basic product (eg. Motorcycle, television) remain the same both in rural and urban.

At the third level, the marketer prepares an expected product and defines a set of attributes and conditions that a buyer normally expects when he purchases a product.

A rural television buyer expects good picture quality, clear sound and an easy to operate set, whereas an urban consumer looks for digital sound, flat screen, and features such as child lock and picture in picture. A motorcycle buyer in rural expects good shock absorbers, fuel efficiency and low maintenance cost, whereas an urban buyer expects good appearance, power and style.

At the fourth level, rural consumers expect a Television set that can run on batteries and provides better picture quality in weak signal conditions and on-screen display in local Languages for easy operation. For urban consumer, could be an in-built DVD player with a television and a set top box to watch his or her favourite.

Fifth level, by offering TV sets that can sustain high voltage fluctuations or TV that can run on alternate sources of power.