Abstract Before launching a product in the rural market, it is important to conduct a proper market research and analyze the same to ensure that the product, its features and design suits the rural community's requirements. Most Fast Moving Consumer Goods (FMCG) companies in India are introducing customized products especially for rural areas. Thus the sale of FMCG products in rural markets is growing at a fast pace, even faster than that in the urban markets. Key Words Rural Market, Rural Marketing, Rural Household Income Per Capita, Rural household spending, Corporate Initiatives and Innovations for Rural Market, Challenges and Opportunities of Rural Marketing in India. Introduction India's rural market is gaining increasing importance day by day, mainly because of the large population and its gradually increasing purchasing power. Before launching a product in the rural market, it is important to conduct a proper market research and analyze the same to ensure that the product, its features and design suits the rural community's requirements. Most Fast Moving Consumer Goods (FMCG) companies in India are introducing customized products especially for rural areas. Thus the sale of FMCG products in rural markets is growing at a fast pace, even faster than that in the urban markets. The economies of India and China have a huge untapped market for better products/services. Both have large rural population. Many multinational companies are keen on entering India and China because of the demand for new products/services by the countries gigantic populations, accompanied with workforce or labor support for production and marketing. The Indian rural market is influenced by various sociological and behavioral aspects. India's rural population accounts for around 70% of the total population. Objectives of the Study * To Study the Challenges of Rural Marketing in India * To identify the Corporate Initiatives and Innovations to overcome Challenges of Rural Marketing in India. Research Methodology * Researcher has extensively relied on Secondary Sources of Data. * Research is limited to India. Brief Overview of Rural and Urban Market of India In numerical terms, India's rural market is indeed a large one; it consists of more than 740 million consumers. According to the 2001 census of India 73% of India's total population is rural. Of the 121 crore Indians, 83.3 crore live in rural areas while 37.7 crore stay in urban areas, said the Census of India's 2011 Provisional Population Totals of Rural-Urban Distribution in the country, released by Union Home Secretary RK Singh. "For the first time since Independence, the absolute increase in population is more in urban areas than in rural areas. The rural–urban distribution is 68.84% and 31.16% respectively," Registrar General of India and Census Commissioner C Chandramouli said. Facts state that India's 70 per cent of the population resides in hinterlands and 56 per cent of the overall consumption comes from there. Rural Indians are no more inferior to the country's urban clan. Increase in incomes, rising non-farm employment opportunities, higher aspirations and the Government's focus on rural sustainability schemes are major factors that have been driving the rural markets' growth. Rural spending was significantly higher at Rs 3,75,000 crore (US$ 67.57 billion) than urban consumption at Rs 2,99,400 crore (US$ 53.95 billion) between 2009-10 and 2011-12; wherein rural consumption per person outpaced its urban counterpart by 2 per cent, according to a study by CRISIL and preliminary data released for 2011-12 by the National Sample Survey Organization (NSSO). Understanding Rural Market of India According to the Census of India, villages with clear surveyed boundaries not having a municipality, corporation or board, with density of population not more than 400 Sq. Km. and with at least 75 percent of the male working population engaged in agriculture and allied activities would qualify as rural. According to this definition, there are 5,85,764 villages in the country. Of these, only 0.5 percent have a population above 10,000, and 2 per cent have a population between 200 and 1000, and another 18 per cent has a population less than 200. Interestingly, for FMCG and consumer durable companies, any territory that has between 20,000 and 99,999 population, is rural market. So, for them, it is not rural India which is rural. According to them, it is the Class-II and III towns that are rural. According to the data from the Census of 2011, cities and towns can be broadly classified as: * Class I: 100,000 and above * Class II: 50,000 to 100,000 people * Class III: 20,000 to 49,999 * Class IV: 10,000 to 19,999 * Class V: 5,000 to 9,999 * Class VI: Less than 5,000 persons Population List * >5,000,000- Megacity * 1,000,000-4,999,999 - Metropolis * 500,000-999,999 - Sub-Metropolis According to the 2001 census, there are 4,378 towns and cities in India. Of these 35 are metropolitan cities (population of 1 million plus) that are included in the total of 393 Class I cities with population exceeding 1,00,000. Together they account for 108 million of the urban population of 285 million. The rest live in towns with population of less than 100,000 going down to just 5,000. While urban India as a whole faces huge problems, particularly of infrastructure, to support a burgeoning population, the worse-off are these 4,738 urban centres that have to contend with the absence of basic services, inadequate new investment and entrenched poverty. Characteristics of the Indian Rural Market * Large and Diverse Market The Indian rural market is large and diverse. Therefore, the density of shops to market the products is less when compared to the total population. * Agriculture is the major source of Income The main source of income of the rural people is agriculture. If crops fail, then their income gets affected automatically and this reduces their purchasing power. * Traditional Outlook People in rural areas are traditional in their thinking; they are superstitious in their beliefs. This trend too is changing because of increasing literacy levels among the rural youth. * Diverse Socioeconomic Background Rural consumers are spread across different states in distant parts of India. Thus, their social norms and economic status differs widely from each other. * Change in Standard of Living Rural population has in general a low literacy rate, low per capita income and thus low savings. Many of the rural people's standards of living are below the poverty line and they are also socially backward. There is, however, a change for the better on these fronts as a result of reduced tax structures, Government subsidies and favorable regulations on pricing of farmers produce. Thus, their disposable income is increasing slowly. Challenges and Opportunities of Rural Marketing in India Latest data from the NSSO's 66th round of survey on household consumption expenditure has also revealed that the difference between the spending patterns of the urban and rural poor have narrowed down over the last two years with average spending by a rural household in 2009-10 at Rs 1,053.64 and urban households at Rs 1,984.46. Crisil, in its report, has pointed to a marked shift in spending on discretionary goods by rural households as against only necessities. The report states that more than half of India's stock of consumer durables and two-wheelers are now in rural India. "Rural consumption has outstripped urban consumption as a result of the government's strategy of inclusive growth, through programmes like MGNREGA ... The rise in prices of agricultural commodities as well as loan waiver scheme and stimulus packages benefited rural households," said NR Bhanumurthy, professor at National Institute of Public Finance and Policy, adding that the economic slowdown impacted urban incomes more than rural incomes. In addition to the consumption trends, the market potential of the rural market is considered to be the driver of the future growth by a number of companies.