Rural Marketing...Final

8/8/2019 Rural Marketing...Final

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Indian

Economy

Urban Rural

Agriculture Non agriculture

Industry Business Service


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` The Census defines urban India as - "All the

places that fall within the administrative limits of a

municipal corporation, municipality, etc orhave a

population of at least 5,000 and have at least 75per cent male working population in outside the

primary sector and have a population density of at

least 400 per square kilometer. Rural India, on the

oth

erh

and, comprises all places th

at are noturban!"


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o Rural Marketing involves reaching the rural customer,understanding their needs and wants, supply of goods and

services to meet their requirements, carrying out after

sales service that leads to customer satisfaction and

repeat purchase/sales.

o It is the process of developing, pricing, promoting,

distributing rural specific product and a service leading to

exchange between rural and urban market which satisfies

consumer demand and also achieves organizational

objectives.


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` Urban to Rural: It involves the selling of products andservices by urban marketers in rural areas. These include:

Pesticides, FMCG Products, Consumer durables, etc.

` Rural to Urban: A rural producer (involved in agriculture)

sells his produce in urban market. This may not be direct.There generally are middlemen, agencies, government co-

operatives, etc who sell fruits, vegetables, grains, pulses

and others.

` Rural to rural:These include selling of agricultural tools,cattle, carts and others to another village in its proximity.


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` Large, Diverse and Scattered Market

` Major Income of Rural consumers is from

Agriculture

` Standard ofLiving and rising disposable income ofthe rural customers

` Traditional Outlook

` Rising literacy levels (approx 45% of rural Indians are literate)

Diverse Socioeconomic background

Infrastructure Facilities


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` Standard of living

` Low literacy levels

` Low per capita income

` Transportation and warehousing` Ineffective distribution channels

` Languages and diversity in culture

` Lack of communication system

` Seasonal demand

` Dispersed markets


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`

Government sh

ould encourage private shopkeepers and cooperative.

` Due care in the recruitment and selection of sales people.

` Demonstration, short-feature films with disguised advertisement messages, direct

advertisement films and documentaries that combine knowledge and

advertisements will perform better rural marketing communication.

` Companies may also use audiovisual publicity vans, which may sell the products

with promotion campaign.` Companies can organize village fairs, dance and drama shows, group meetings to

convince the rural consumers about the products and services.

` For the rural markets, only those sales people should be preferred for selection

who is willing to work in rural areas like Sarpanch, Pradhan and other elderly

persons.


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` It is well known that Markets are created and not born.

` LIC started a scheme called Gram Vikas where the Sarpanch is

given a target to sell a minimum of 10 policy plans and thecommission so earned is spent on the development of their

respective villages.


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` A huge population 720 million people in 630,000villages across 3.2 million square miles.

` Amassive economy over 50% of Indias total GDP.

There are almost same number of middle to highincome households in rural areas (21.16 mn) as urbanIndia (23.22 mn).

` A booming economy with the consumer durables

market, for example, growing at 25% per year (vs 10%nationally).` A parallel economy with the same needs as

developed markets but a reduced ability to pay.


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` No celebrities will work

` No mass media coverage

-Due to lack of access to technology

Rural market lies in the bottom of the Pyramid. The 4 Aswork for them

` Availability

` Affordability

` Acceptability` Awareness


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` Agricultures share in GDP is going down, but, India still

lives in villages

` Urban markets are crowded and saturated

` The understanding of rural is diffused and sometimes

confusing

` Is rural marketing different from urban marketing ?


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Organisation Definition Limitations

NSSO (

Census) Population density < 400 / Sq Km

75 percent of the male working population

is engaged in agriculture

No Municipal corporation / board

rural not defined

Planning

Commission

Towns upto 15,000 population are

considered rural

Town characteristics

not defined


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LG Electronics All places other than the 7

metros

Only clarifies what are the

cities

NABARD All locations with a

population upto 10, 000

considered rural

Village & town

characteristics not

defined

Sahara Commercial

establishments located in

areas servicing less than

1000 population

Population characteristics

unknown


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National Commission on

Agriculture

NGOs Corporate Rural

Marketing Definition

Decisions to produce

saleable farm

commodities involving allthe aspects of the market

system or structure, both

functional and

institutional, based on

technical & economic

considerations and

includes the pre & postharvest operations.

Marketing products

produced in rural areas to

urban areas

Marketing products

produced in rural areas in

rural markets

Function that manages all

activities involved in

assessing, stimulatingand converting the

purchasing power of rural

consumers into effective

demand for specific

products and services to

create satisfaction & a

better standard of livingfor achieving

organisational goals.


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Sr. No Time Frame Key Events & Trends

1 Phase One( Pre 1960s) Marketing rural products

in rural and urban areas

Agricultural inputs in

rural areas

Agricultural marketing

Farming methods were

primitive and

mechanisation was low

Markets unorganised


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2 Phase Two ( 1960s to 1990s) Green Revolution

Companies like Mahindra

and Mahindra, Sri Ram

Fertilisers emerged

Rural products were also

marketed throughagencies like KVIC

3 Phase Three( 1990s to Present) Demand for consumables

and durables rise

Companies find growth

in urban marketsstagnating or falling


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` Diverse change levers in rural India

` The pull of the cities & towns migration and its side

effects.

` Effect of government programmes.

` Natural & manmade disasters

` Slow but sure change


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` The joint family system is being replaced by the nuclear

family system

` The occupational pattern shows a predominance of

cultivators and wage earners

` Cultivators( 40.86 %) and Wage Earners( 35.28 %)

according to NCAER studies (2002)


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Food Grain Crops

On land activities

Farm Activities

Non food, cash crops

Livestock & fisheries

Manufacturing &services


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Sector Year 1987 ( % share in

employment)

Year -2004 ( % share in

employment)

Agriculture 75 67

Transport &Communication

2 8

Trade & Hotels 5 7

Construction 4 7

Manufacturing 7 8

Source: NSSO data, Mckinsey Global Institute Study, 2004-05


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1971 1981 1991 2001

TotalPopulation (in

million)

548.2 683.3 848.3 1026.9

RuralPopulation (in

million)

524.0 628.8 741.6

As a proportionof total

population

76.7 74.3 72.2

DecadalVariation

19.8 16.7 15.2

Source: Census 2001


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` Key findings from 2001 census

` Population density 253/ sq kilometer and total number of villages is

638, 588

` Villages having less than 500 population are falling

` Villages having 2000 + population most prosperous

` Size of villages/ habitations are changing

` Role & influence of towns is changing

` Social interaction is a mix of rural and urban


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Annual Income ( at

1998-99 prices)

Income Class 1989-90( %

Households)

1998-99 ( %

Households)

1,40,000 High 0.5 3.0

Source: National Council for Applied Economic Research, 2000

Rural Marketing...Final

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