Rural markets in Karnataka

Rural markets in Karnataka

Market in Karnataka for the consumer products is made up of two distinct parts, one is urban and other is rural market. The vastness of the rural market poses both a challenge and an opportunity to the marketers. The desire to improve the living standards is felt as keenly in the rural areas as in the urban areas. Rural incomes are rising and the poverty ratio is falling.

The rural consumer in majority of the cases is illiterate, a low income consumer, more price sensitive, more of social interaction within his group, psychologically emotional, guided by opinion leaders, having lower aspirational levels, and having imitational characteristics. This fact matrix leads a greater challenge to deal with the rural consumer.

Important features of Rural marketing

Large, Diverse and Scattered Market

Rural market in Karnataka is large and scattered into a number of regions. It consists of  crores rural consumers who live in lakhs of villages. It is scattered and widespread over unlike the urban market confined to a handful of metros, cosmopolitan cities and towns. Covering, such a large and widely scattered geographical market, characterized by less population per settlement, raises the inventory and transportation cost and thus affects the viability of the route schedule operations of the distribution system in rural areas.

Major Income of Rural Consumers is from Agriculture

Rural prosperity is tied with agriculture prosperity. Major part of income of rural people comes from agriculture. In the event of crop failure, the income of rural masses is directly affected. However, the recent past has seen a gradual reduction in the sole dependence on agriculture, as other sectors have started playing significant role in the rural economy.



Low Standard of Living

Rural population is employed in small-scale agricultural and related occupations. This unreliability factor in case of rural income makes the rural consumers extremely conscious in their purchase behaviour as they are not confident about their future earnings. Majority of the rural population lives below poverty line and have low literacy rate, low per capita income, social backwardness etc.

Infrastructure Facilities

Inadequate infrastructure is the single most important factor that distinguishes urban and rural markets. The infrastructure facilities like cemented road, warehouses, communication system and financial facilities are inadequate in rural areas. Promotion and physical distribution thus becomes very difficult in the rural areas because of inadequate infrastructural facilities, which has increased the scope of rural marketing.

Diverse Socio-Economic Background

Due to dispersion of geographical areas and uneven land fertility, rural people have separate socioeconomic background, which ultimately affects the rural market. Villagers belong to different religions, culture, and social groups. Socio-cultural background influence consumer willingness to accept innovations and new products in different areas.

The variations in behavior due to consumer environment geographical, occupation, demographical and behavioral, influences the lifestyle and create altogether different sets of needs in different areas. This creates the need to segment the rural market to cater it effectively and profitability.

Purchasing Capacity

The purchasing power of the people in rural areas in dependent on several direct and indirect factors related to the rural economy. Marketing agricultural surplus and rural – urban terms of trade are the main sources of purchasing power for rural consumers. To a large extent, Indian agriculture is dependent on rainfall.

Therefore, the rural demand for consumer goods is indirectly influenced by the rainfall. This result into inadequate purchasing power of the rural consumers. But now a day’s purchasing power of the rural people is increasing because government spends huge amounts of money on irrigation, flood control, infrastructure development, antipoverty schemes, subsidies etc.

Growing Rural Market

Apart from agricultural inputs, there is a growing market for consumer goods in rural areas. According to NCAER, the rural consumers represent more than 50 per cent of India’s “consuming classes” and form the target group for consumer goods and services. People living in rural areas are now buying luxury goods in Karnataka.

Traditional Outlook

Villages develop slowly and have a traditional outlook. Change is continuous process but most rural people accept changes gradually. They mostly resist to change. This is gradually changing due to literacy especially in the youth who have begun to change the outlook in the villages.



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