Most people have lived in rural areas for literally the history of mankind till today; considering India’s demographic conditions, almost 70% of India’s population still live in rural areas and only 30% live in urban cities. Most societies and civilisations have been centred around managing the agricultural sector and labour output. Hence, the market decision-making of the people living in rural areas differs from those in cities.
During the Industrial Revolution, people generally started shifting to various productive forces that evolved urban life and started creating a distinction between the general economic conditions that can now be termed the urban-rural divide. Industrialisation motivated and compelled a huge population to migrate to big cities for better job opportunities and standard living conditions.
Read on to understand the factors influencing market decision-making in urban and rural areas. Urban-rural livelihood changes result from the urban-rural divide, accompanied by migration patterns, changing ways of livelihood, shifting costs, etc.
Major Factors That Influence Decision-making in Different Markets
There is a huge distinction between market conditions and decision-making in rural areas compared to urban cities. The various factors that influenced decision-making across various markets are enumerated as follows:
Economic opportunities
The job market in urban areas generally offers high salaries, better access to healthcare, amenities, and services, diverse job markets, and so on. Urban consumer behaviour is different from rural as they have different priorities and living standards.
On the other hand, people living in rural areas generally depend heavily on the agricultural sector for their livelihood. Rural areas need more job opportunities. Hence, people working and living in rural areas have similar lifestyles.
Access to information
Another major advantage that people in urban areas have is better access to information via internet connectivity, media, and various resources that ultimately aid in informed decision-making. Information access is easier in urban areas than in rural areas.
Rural market trends are quite different from those of cities. Rural areas encounter frequent information gaps, which can be a huge drawback in making market decisions. People may need more awareness of market trends and opportunities because they need convenient access to information or the Internet.
Infrastructure and services
Urban areas have already developed the infrastructure to facilitate business operations, logistics, and transportation. Hence, people working and living in the cities generally have better connectivity and transportation facilities.
Rural areas need more infrastructure and roads that may hinder market operations. The lack of infrastructural facilities is a huge disadvantage as it hinders the smooth functioning of the supply chain and product distribution.
Social and cultural factors
As urban populations are more diverse, there are varied consumer preferences in cities. People in urban areas have innovative ideas regarding market trends and decision-making because they have the advantage of diversity.
On the other hand, rural areas are generally culturally homogeneous and do not have much diversity in a particular area. Hence, they have stronger community ties, but they do not have varied consumer behaviour because of less diversity.
Policy and regulation
Government policies and regulations largely focus on business development projects and sustainable development in urban areas. The policies and regulations are drafted in a manner that concerns industrialisation among the urban population.
However, the policies and regulations designed for rural areas are more focused on our country's primary sector. This promotes sustainability and innovative ideas that are agricultural-centric and boosts the primary sector’s production and output.
Technology adoption
Regarding digital engagement, people living in urban areas have a higher interest rate in gadget usage, including smartphones, laptops, desktops, etc. This usually impacts the way products are advertised and sold in the market. Various e-commerce platforms such as Amazon, Flipkart, Blinkit, and Zepto have become very common in urban households, but this is different in rural areas.
On the other hand, rural consumers rely more on local stores and shops in their locality to purchase groceries and household items. Since they have minimal delivery options and Internet usage, they tend to go to the local market and purchase things they want.
Market size and demand
Urban areas have a higher population density, which ultimately leads to higher demand for products and services. Hence, businesses have better scope to grow in urban areas and help expand the market.
Rural areas have less population density than urban areas, and this is a huge factor that influences and limits market size. A smaller population influences a business's growth and viability.
Globalising the Urban-Rural Divide?
The urban-rural divide is mainly associated with income inequalities between urban and rural areas within a country or across continents. A country drafts various policies and regulations to improve people's income and livelihood so they can market decision-making in an informed and suitable manner.
A welfare state is created to generate value-added employment and reasonable income sources for both the urban and rural populations. Sustainable development has become a part of every country's policy framework, and it is often applied in both urban and rural Work sectors.
Conclusion
Market region variations have always existed, and migration is one of the major outcomes of the same. The urban-rural divide is a game changer when it comes to market decision-making, and one needs to understand each one if one wants to thrive and grow in this industry.
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Frequently Asked Questions
What are the causes of the urban-rural divide?
Several causes exist for the huge division between the lives of rural and urban people, such as technological factors, cultural aspects, economic opportunities, government policies and regulations, and so on.
What are the factors that contributed to the change in the rural market?
The rural market is growing, and this is because of the increased demand for production services due to the increase in population. The agricultural and manufacturing sectors are growing, and so is the rural market as well.
What are the factors influencing rural consumer purchase decisions?
Several factors are involved, but the major eight are advertisement, price, warranty, quality, friends' recommendations, brand, packaging, and family members' recommendations.
