Page 247 - DMGT509_RURAL MARKETING

Rural Marketing Hitesh Jhanji, Lovely Professional University

Notes Unit 13: Rural and Urban Markets

CONTENTS
Objectives
Introduction
13.1 Rural and Urban Markets: A Comparative Analysis

13.1.1 Rural vs Urban Consumers – Challenges
13.2 Parameters Differentiating Urban and Rural Markets
13.3 Difference in Consumer Behaviour in Rural and Urban Markets

13.4 Governing across and beyond the Rural-urban Boundary
13.5 Stages of Buying Decision Process
13.6 Market Targeting
13.7 Segmenting Consumer and Business Markets
13.8 Summary

13.9 Keywords
13.10 Review Questions
13.11 Further Readings

Objectives

After studying this unit, you will be able to:
 Define Rural Markets.
 Discuss the Rural and Urban Markets.
 Describe the Challenges and Opportunities of Rural Market.

 Explain the Parameters Differentiating Urban and Rural Markets.

Introduction

India is the world’s 12th-largest consumer market. By 2025, it is projected to be ahead of Germany,
the fifth largest, according to a recent McKinsey (2007) survey. The biggest strength of Indian
markets lies in the size, not in individual spending. With the rise in income, over 291 million
people will move from desperate poverty to a more sustainable life, and India’s middle class
will increase incredibly by over ten times from its current size of 50 million to 583 million
people. Besides urban and semi-urban areas, rural India has a huge potential. Indian corporations
have now recognized the importance of rural markets. It is evident from the efforts made by the
companies like Coke, ITC (Indian Tobacco Company) and Hindustan Lever Limited. According
to Rajan (2005), Coke, in India has doubled the number of outlets in rural areas from 80,000 in
2001 to 160,000 in 2003, and increased market penetration from 13 per cent to 25 per cent. ITC
Limited and Hindustan Lever Limited (now Hindustan Unilever Limited) have initiated rural
approach through strategic initiatives such as e-choupals and Project Shakti. In case of white goods
and automobiles, the differences between prices of national and foreign brands have been
narrowed down. Majority of the companies have introduced number of services to induce the

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