abhishreshthaa
Abhijeet S
The emergence of an active cash economy is bound to create is bound to create a strong rural demand and promote rural consumption. The traditional growth and dominance of urban industrial centres is undergoing rapid changes. A more equitable distribution in rural areas would also help in slowing down the rapidly increasing influx of people from rural to urban areas.
There are two sections of rural population:
A large portion has a low income and low consumption levels;
The rest are rural rich.
The rural population forms a major portion of the Indian population as seen below:
About 75% of the Indian people reside in rural areas. In other words, for every consumer in the urban area, there are three of them in the rural areas. Though the proportion of rural population is showing a slight decrease over the years, but in absolute numbers, the rural population is growing at a higher rate than the urban population.
This large population will require a wide range of consumable and durable goods and services. At the same time the need of the rural areas does not automatically guarantee a market, unless it is backed by income and the resultant purchasing power.
For a vast majority of the rural population, the main occupation is agriculture and allied activities. The graph below gives the distribution of rural population as per their occupation pattern.
About half of the rural population own or lease land to cultivate it for their livelihood. Another 27% are dependent on these cultivators for their jobs as agricultural labourers. Thus, a total of 77% of rural population depend on land only for their living and land is their source of living.
There are others, constituting small proportions, who are engaged in business like petty shopkeepers or merchants and salary earners like teachers, health workers and village level officials. The implication of this is that the income generation in rural areas entirely depends on how the land is used, what crops are cultivated, how much is marketed, how much is consumed and the marketing arrangements for the production.
If rainfall is adequate, weather conditions are favourable and appropriate technology is available, the rural areas prosper as it has happened in the states of Punjab, Haryana and Western Uttar Pradesh. So the disposable income in the hands of the rural people is very much conditioned by the status of agriculture and other allied activities.
This also indicates that major part of income generated is a source of agriculture. 75% of income generation in rural areas is from agriculture and agriculture-related activities.
One of the deterrents for marketers to exploit the rural market potential has been the vastness of the rural market in terms of areas covered and the location of the rural population. It is much easier to cater to the needs of the urban population because of their concentration, but it is very difficult in the case of rural population because of their widespread nature.
The villages are also not uniform in size. Nearly 48% of the villages have a population of less than 500 persons or about 100 households, which is probably of no consequence to marketers. This may be acceptable since the proportion of population covered by these 48% of villages account for only 12% of the total population. Yet it should be borne in mind that the people of these villages also have land and cultivate and generate some income.
Thus the location and size of population of villages throw a challenge to marketers. This phenomenon is not true for the whole country and there are wide variations among the different states. In states with high irrigation and fertile lands, the concentration of population is more when compared to states with low irrigation facilities and lack of arable land.
Given the distribution of rural and urban population, it can be seen that the number of literates in rural areas are more than in urban areas. It is an interesting got note that has been a considerable increase in the number of literate persons in rural areas since the last two decades. This has its implications in communicating with the rural population. It appears to prove that communication should not prove to be such a big hurdle. Today, television has proved to be an effective medium for communication with the rural masses. The telecasting network in the country today covers about 93% of the population.
Assuming that the entire urban population is covered by the television but the television, which is only 23%, then nearly 67% of the rural population will be covered by television. Thus, television reaches a larger segment of the rural population than any other form of mass media. Though radio is also very popular, people like to see to believe.
The above factors point that the potential for marketing of goods and services depends heavily on agriculture, since it is the main occupation in rural areas. The market for agricultural inputs – fertilizers, pesticides, insecticides, tractors, irrigation equipment and seeds – has been expanding over the years in rural areas as the Indian farming is fast becoming market-oriented.
But the rural market has remained a dark area for those manufacturing and marketing consumables and consumer durables. To successfully exploit the potential offered by the rural market, there is a need to first understand the rural market in terms of the characteristics mentioned above. Only a few established companies – HLL, Lipton, Brooke Bond, TOMCO, and P & G – have been trapping the potential of the rural market for a long time
There are two sections of rural population:
A large portion has a low income and low consumption levels;
The rest are rural rich.
The rural population forms a major portion of the Indian population as seen below:
About 75% of the Indian people reside in rural areas. In other words, for every consumer in the urban area, there are three of them in the rural areas. Though the proportion of rural population is showing a slight decrease over the years, but in absolute numbers, the rural population is growing at a higher rate than the urban population.
This large population will require a wide range of consumable and durable goods and services. At the same time the need of the rural areas does not automatically guarantee a market, unless it is backed by income and the resultant purchasing power.
For a vast majority of the rural population, the main occupation is agriculture and allied activities. The graph below gives the distribution of rural population as per their occupation pattern.
About half of the rural population own or lease land to cultivate it for their livelihood. Another 27% are dependent on these cultivators for their jobs as agricultural labourers. Thus, a total of 77% of rural population depend on land only for their living and land is their source of living.
There are others, constituting small proportions, who are engaged in business like petty shopkeepers or merchants and salary earners like teachers, health workers and village level officials. The implication of this is that the income generation in rural areas entirely depends on how the land is used, what crops are cultivated, how much is marketed, how much is consumed and the marketing arrangements for the production.
If rainfall is adequate, weather conditions are favourable and appropriate technology is available, the rural areas prosper as it has happened in the states of Punjab, Haryana and Western Uttar Pradesh. So the disposable income in the hands of the rural people is very much conditioned by the status of agriculture and other allied activities.
This also indicates that major part of income generated is a source of agriculture. 75% of income generation in rural areas is from agriculture and agriculture-related activities.
One of the deterrents for marketers to exploit the rural market potential has been the vastness of the rural market in terms of areas covered and the location of the rural population. It is much easier to cater to the needs of the urban population because of their concentration, but it is very difficult in the case of rural population because of their widespread nature.
The villages are also not uniform in size. Nearly 48% of the villages have a population of less than 500 persons or about 100 households, which is probably of no consequence to marketers. This may be acceptable since the proportion of population covered by these 48% of villages account for only 12% of the total population. Yet it should be borne in mind that the people of these villages also have land and cultivate and generate some income.
Thus the location and size of population of villages throw a challenge to marketers. This phenomenon is not true for the whole country and there are wide variations among the different states. In states with high irrigation and fertile lands, the concentration of population is more when compared to states with low irrigation facilities and lack of arable land.
Given the distribution of rural and urban population, it can be seen that the number of literates in rural areas are more than in urban areas. It is an interesting got note that has been a considerable increase in the number of literate persons in rural areas since the last two decades. This has its implications in communicating with the rural population. It appears to prove that communication should not prove to be such a big hurdle. Today, television has proved to be an effective medium for communication with the rural masses. The telecasting network in the country today covers about 93% of the population.
Assuming that the entire urban population is covered by the television but the television, which is only 23%, then nearly 67% of the rural population will be covered by television. Thus, television reaches a larger segment of the rural population than any other form of mass media. Though radio is also very popular, people like to see to believe.
The above factors point that the potential for marketing of goods and services depends heavily on agriculture, since it is the main occupation in rural areas. The market for agricultural inputs – fertilizers, pesticides, insecticides, tractors, irrigation equipment and seeds – has been expanding over the years in rural areas as the Indian farming is fast becoming market-oriented.
But the rural market has remained a dark area for those manufacturing and marketing consumables and consumer durables. To successfully exploit the potential offered by the rural market, there is a need to first understand the rural market in terms of the characteristics mentioned above. Only a few established companies – HLL, Lipton, Brooke Bond, TOMCO, and P & G – have been trapping the potential of the rural market for a long time