Academic journal article Journal of International Business Research

A Study of Consumption of Consumer Durables in Rural India with Specific Reference to Backward States (Part 1)

Academic journal article Journal of International Business Research

A Study of Consumption of Consumer Durables in Rural India with Specific Reference to Backward States (Part 1)

Article excerpt

INDIAN RURAL MARKET

The concept 'Rural' and 'Marketing', though used very frequently in various forums, have eluded any precise and non- controversial definitions. When combined, the resulting concept 'Rural Marketing' means different things to different persons. This confusion leads to distorted understanding of the problems of rural marketing poor diagnosis and, more often than not, poor prescriptions (Kashyap. 2010). Census India defines "rural as any habitation having a population density of less than 400 per sq. km., where at least 75 per cent of the male working population is engaged in agriculture and where there exists no municipality or board". The definition does not consider the total population into consideration (Census of India 2011). The Central Banker of India, Reserve Bank of India "defines location with population up to 10, 000 will be considered as rural and 10000 to 100000 as semi-urban". The definition does not include villages with population above 10000; rather classifies towns with 5000-10000 populations as villages (GFICC 2013).

Marketers today define "rural as people living a different lifestyle as opposed to that of those who have settled in the bigger cities and towns". If we also look at enterprises definition, SAHARA Group (a business conglomerate in India) defines "location having shops/commercials establishments' up to 1000 are treated as rural". LG Electronics defines "towns and semi urban area as rural area". These definitions by the industries are suited to their marketing needs (Kashyap & Raut, 2009). Rural India accounts for 68.5% of India's population, 57% of national income, and 65% of total expenditure and one third of total saving.

While an over whelming share of illiterate households are based in rural areas (85.6%), there are also (36.1%) percent households whose chief earner are graduates. The average household income of the large farm owing households is about four times that of the landless households. Landless households end up spending more on medical expenses (28.7% of all nonroutine expenditure) and less on education (4.5)% compared to their richer counterparts who spend who spent 15% and 8% respectively. In real terms (at 1999 prices) the size of rural economy will be about Rs18, 000 billion by 2015-16 which was Rs2, 000 billion in 2007-08. The traditional vision of rural economies as a purely agriculture is clearly obsolete. The share of non-farm income will be about half by 2015-2016. The term non-farm encompasses all the non-crop agriculture activities. It includes manufacturing activities, energy consumption, construction, mining, trade, transportation and service in rural areas. It supplements employment to small and marginal form households, especially during the agriculture slack season, and reduces income inequalities and rural-urban migration, which has fallen from 6.5% in 1981 to 2.8% by 2011(Kashyap 2010 and Census 2011).

How do the rural households, particularly the salary/wages and self-employed non-form earning ones, compare with their urban counterparts? There are 21 million urban households that are engaged in self- employed non-agricultural activities and their annual income is about Rs125, 000 which is much more than their rural counter parts. Urban India also has more regular wage/salary earning household 25 million and these have an annual income of Rs1, 30, 000. These two groups of rural households form prime targets for marketers of consumer goods and services. These households are scattered over a large geographical area than urban households. But the point to consider here is that these rural households have a higher earning weight, that is, they have a higher share of income than other household type in rural India. The rural middle class is growing at 12 per cent, a rate close to the urban middle class, which is growing at 13 per cent (Narang and Singh 2009). Regarding consumption patterns, just as urban income is higher than rural ones, so are expenditure levels. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.