Difference between Profile of Rural Consumers and Profile of Rural Demand

1. Size and location of rural population:

According to the 2001 census, over 70 percent of India’s population live in rural areas. The rural population is increasing at a faster rate and is scattered in over 6 lakhs villages. The rural population is highly scattered but holds a big promise and chal­lenge for the marketers. The urban population is highly concentrated, whereas a little over 10 percent of the villages have a population of over 5,000 and about 55 percent of the villages has a population of 500 people or less.

2. Age distribution of rural consumers:

The age-wise distribution of rural consumers is as follows: 32 percent of the population belongs to the age group of up to 15 years, 60 percent of the population belongs to the age group of 15-60 years, 8 percent of the population belongs to the age group of over 60 years. Thus, a major portion of the population is young people with whom the purchasing power lies.

3. Literacy level:

As per the 2001 census, the all India literacy level has gone up to 65 percent of the total population. About 50 percent of the rural population is literate. This has contributed to an increase in rural demand. Communication in rural markets, therefore, does not pose any major problems for marketers.

4. Land distribution:

In rural areas, the land distribution is uneven because of which the income distribution is also uneven. Lower-income groups of households are larger than higher-income groups. Subdivision and fragmentation of land holdings is a major problem where farmers are unable to get the benefits of economies of scale.

5. Land use pattern:

The rural land use pattern reveals excessive dependence on food crops. About 70 percent of the land under cultivation is used for food crops and only 30 percent is used for commercial crops.

Profile of Rural Demand:

1. Seasonal demand:

The demand for goods is irregular and seasonal. As agriculture is the predom­inant occupation in villages, demand for goods generally depends on the harvest periods. Their cash flows are better after harvest. The demand is also festival and marriage linked. For example, the demand for sweets goes up during Durga Pooja in the villages of Bengal.

2. Composition of rural demand:

A large variety of transactions are considered a part of rural demand:

a. Agricultural inputs such as fertilizers, pesticides, and farm equipment.

b. Products made in-urban centers and sold to rural areas such as soaps, toothpaste, and electronic items.

c. Products made in rural areas sold to urban centers such as khadi cloth and handcrafted products.

d. Products made and sold in rural areas such as milk and milk products. Locally manufactured toothpowder, cloth, and so on.

3. Size of rural demand:

The size of the rural market is quite vast in India. The rural market is grow­ing steadily over the years. The demand for traditional products such as bicycles, mopeds, and agricultural inputs, and branded products such as toothpaste, tea, soaps, and other FMCG goods, and consumer durables such as refrigerators, TV, and washing machines have also grown over the years.

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