Importance of rural markets


Today rural markets are providing substantial market share to consumer goods firms due to increase in purchasing power of rural population. In this article we have elaborated the reasons as to how the rural standards have gone up from what they were and the demand for the consumer goods.

Increasing Competition in Urban Markets

Urban markets are becoming competitive and even getting saturated. Consider the case of toiletries, packaged tea, dry cell batteries and even the electronic entertainment products. The demand has reaches the saturation point. In such situation one has to find strategy to find new market for the existing products. Rural markets are the new markets which are opening up for most of these package goods. Companies which have expanded in these areas are able to ward off competition, generate a new demand and in turn increase their sales or profits. Some famous companies like Hindustan lever, Pepsi, Coca cola etc have long realized the potential that existed for their products in these areas and had gone out to penetrate these markets. They expanded their distribution network and employed staff which could motivate the rural consumers to use the product. Products like T.V. soft drinks and even social products like condoms are also reaching the rural markets.

Rural markets today offer growth opportunities to firms caught up in an intensive inter-firm rivalry in urban and metro markets.

Socio-economic changes in Rural India

The socio-economic changes can be linked to an increase in productivity in the farm sector. Following agricultural revolutions green or white-the yield per acre or animal increased substantially. This is largely due to the application of technology to the farm sector and modern farming methods. Cooperatives in India helped the farmer to increase farm productivity.

The increase in productivity helped the farmers to have more income and buy the same products as his / her urban counterpart did. The rural electrification programs, and irrigation and rural programs have brought a new hope to the areas.

The income generation and better standards of living where accelerated by the companies and banks to adopting villages for an integrated rural development. The Integrated Rural Development Programs has education, health, modern farming practices, land development and cooperative marketing of produce as its pillars Development of village industry and craft is also another component of this programs.

All these changes mean more income, higher aspirations and changing life-styles in rural India. And these changes cut across caste or religious barriers.

The radio programs have reached more than 95% of the total Indian Population. Television and Satellite communication has created the maximum change in rural areas. The rural population can now watch not only Doordarshan channel now but also a number of other channels through cable network to know what is happening in all over the world. Today, it is not surprising to see that one small room or hut has been converted into a video theatre in villages. These video cassettes are brought from the nearest towns and runs for fixed hours for the rural people as information and entertainment. CDs are now viewed commonly even in villages from CD players which are hired to public by small businessmen over there.

Another technology which influences socio-economic changes in Rural India is ‘Gobar Gas’ plants. In this product, the waste of animals in the village is converted into gas which can be used as fuel which in turn provide lights and also cooking gas to the village and power to the crushers and village industries. The ‘Gobar’ plants are also installed by individual households if they own sufficient number of cattle.

Today’s women has not to find fuel or lighting up fire place to cook food for the family. They have more time to help there husbands and look after the children. She has more leisure time.

All these socio-economic changes, largely fueled by technology, government policies, corporate strategies and satellite communication mean more demand for consumer goods.

Higher awareness of brand names of consumer products as also better financial capacity to purchase and social status awareness lead to a pull for the purchase of consumer products’ purchase by farmers and their families in the rural markets.