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Adhyaapan
Rural Marketing
Aurora’s School of Business
www.adhyaapan.in
Adhyaapan
Rural Marketing
Component Weightage
Project 30%
Quiz 15%
Class Presentation 15%
Final Exam 40%
Total 100%
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Adhyaapan
1. Expand NABARD
2. Name any two objectives of NABARD
3. What is the function of NABCONS?
4. What is the function of NABFINS?
5. Mention any 3 thrust areas of NABARD
NABARD
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Adhyaapan
Government Interventions– Bharat Nirman– NREGA– NABARD
Corporate Initiatives– Project Shakti– e-Choupal– India Agriline– SKS Microfinance
Focus Areas
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Adhyaapan
– Villages• 638,365
– Population• 742 million (72%)
– Sex ratio• Females per 1000 males• Overall – 933• Urban – 900• Rural – 946
– 1161 people / village
Some facts and figures
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* Census of India
Adhyaapan
• FMCG consumption– Rs. 3230/HH(‘95) to Rs. 3384/HH(‘99)
• Population BPL– Rural – landholding, type of house, clothing, food security, sanitation,
consumer durables, literacy status, labour force, means of livelihood, status of children, type of indebtedness, reasons for migrations(score 0:4, total < 15/52)
– Urban - roof, floor, water, sanitation, education level, type of employment, and status of children in a house
– 1983-1994-2000– 252-244-193million– 46-37-27%
• Human Development Index– Life Expectancy at birth, Knowledge & Education, Standard of Living– 1981-1991-2001– 0.30-0.38-0.47
Why Rural Marketing?
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* Census of India
Adhyaapan
Demographic Infrastructure Occupation Housing Income Education
Rural vs. Urban
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Adhyaapan
• Rural = Population density < 400/sq.km• India stats
– Overall density• 325/sqkm
– New Delhi – 9340– Bangalore – 8231– Mumbai – 21880– Hyderabad – 16988
• Nalgonda – 227• Ranga Reddy District – 468• Prakasam – 173
Src: Census of India 2001, APOnline
“Rural”
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Adhyaapan
Institution / Study Definition
Census Population >= 5kDensity >=40075% male in non-agri activity
RBI Population< 10,000 = rural10k – 1 lakh = semi urban
NABARD Population < 10,000
Planning Commision Population < 15,000
Sahara <1000 shops / commercial establishments
LG Electronics Non-metros are urban / semi urban
“Rural”
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Adhyaapan
Pre 1960s– Agri inputs in rural markets– Agri products in urban markets
1960s to 1990s– Green Revolution\– Agri inputs – including technology
Post 1990s– Durables– Consumables– Urban focus due to globalisation
Rural Marketing
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Adhyaapan
• Definition– Rural to Urban– Urban to Rural– Rural to Rural
• Evolution– Green Revolution
• Origin?– Norman Borlaug(1943)
• Results?– High-yielding wheat, rice– Fertilizers– Pesticides– Farm Equipment
Rural Marketing
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Adhyaapan
• Market Environment– Demographic
• Age– ~48% < 20 yrs
• Education– 1981-1991-2001– 35-45-59%
– Housing / Infrastructure• Type of houses
– Economic• Income / Type of expenditure• Income type
“Rural” Market
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Adhyaapan
Year % Population %Income contribution
1975 79.1% 66.8%
2005 74.6% 55.6%
“Rural”
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Type Households Population Income
Rural 72.6 74.6 55.6
Urban 27.4 25.4 44.4
Adhyaapan
Income Type
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Income Type
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Adhyaapan
Annual Income(Rs.)
Income class
1992-93 1998-99
<=35K Lower 65.6% 47.9%
>35-70K Lower Middle 22.6% 34.8%
>70-105K Middle 8.2% 10.4%
>105K-140K Upper Middle 2.3% 3.9%
>140K High 1.4% 3.0%
Income Pattern
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Adhyaapan
Income Pattern
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Annual Income(Rs.)
Income class
1992-93 1998-99 Urban(1998-99)
<=35K Lower 65.6% 47.9% 19%
>35-70K Lower Middle 22.6% 34.8% 33.8%
>70-105K Middle 8.2% 10.4% 22.6%
>105K-140K Upper Middle 2.3% 3.9% 12.2%
>140K High 1.4% 3.0% 12.5%
Adhyaapan
92% of wage earners < Rs. 70,000/- pa 75% of cultivators < Rs. 70,000/- pa 41% of professionals > Rs. 105000/- pa 74% of shopkeepers < Rs. 70,000/pa
Occupation vs. Income Level
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Adhyaapan
Population % %
<200 17.9 15.6
201-500 24.3 21.4
501-1000 25.0 24.4
1001-2000 19.7 21.9
2001-5000 10.8 13.5
5000+ 2.3 3.2
Rural Market – Physical Environment
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Adhyaapan
Market Influencers– Socio-Cultural
Caste– Technological
Green Revolution White Revolution
“Rural” Market
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Adhyaapan
Road Connectivity
Year <1000 people 1000-1500 people
>1500 people
1991-92 (‘81) 36.52% 72.32% 89.82%
1994-95 (‘81) 37.45% 76.54% 91.92%
1996-97 (‘91) 49.18% 74.58% 78.04%*National Human Dev Report 2001
Rural Infrastructure
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Adhyaapan
Communication– Post Offices– Radio– Television– Print Media– Telecom
Mobile / Fixed Line
Rural Infrastructure
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Adhyaapan
Health– 3-tier Primary Healthcare
Sub-Centre(SC) Primary Health Centre(PHC)
– 4-6 beds– 14 staff – paramedics, etc.
Community Health Centre(CHC)
Rural Infrastructure
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Adhyaapan
Marketing / Distribution– Mandi
Agri markets by state govts to procure farm produce– Agriculture Cooperative
Network of cooperatives– Haats / Melas / Jataras
Seasonal / periodic markets
Rural Infrastructure
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Adhyaapan
Infrastructure: Bharat Nirman, Pradhan Mantri Gramodaya Yojana(rural housing – 2001-02)
Employment: Pradhan Mantri Rozgar Yojana, Swarnajayanti Gram Swarojgar Yojana(self-employment)
Food Security: Sampoorna Grameen Rozgar Yojana Finance: NABARD(Kisan Credit Cards)
Govt. Interventions
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Adhyaapan
Consumer Behaviour
Calvin and Hobbes
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Adhyaapan
• What is consumer behaviour?– How individuals decide how to spread their resources to
consume goods / services• What they buy• Why they buy it• When they buy it• Where they buy it• How often they buy it• How they use it• How often they use it
Consumer Behaviour
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Adhyaapan
Need
Recognition
Pre-Purchase Search
Evaluation of Alternatives
Purchase
Decision
Post-
purchase behaviour
Consumer Behaviour
The Buying Process
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Adhyaapan
• Stimuli– Visuals, ads, packaging, etc
• Perception• Awareness of stimuli• Interpretation of stimuli
• Attitudes– Beliefs, feelings, values, etc.– How to change attitudes?
• Change effect– Classical conditioning / Pavlov’s dog
• Change belief– How can marketing change beliefs?– Coke– Tide– Surf– Pepsodent– Axe
• Change behaviour
Influences on Consumer Behaviour
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Adhyaapan
• Needs & Motives– Types / Levels
• Basic• Security• Social• Esteem• Self Actualisation
• Social Class• Influence Group
– Reference Groups– Opinion Leaders– Innovations
• Crossing the chasm
Influences on Consumer Behaviour
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Adhyaapan
Need
Recognition
Pre-Purchase
Search
Evaluation of Alternatives
Purchase
Decision
Post-
purchase behaviour
Stages of Influence
Stimuli, Perception, Attitudes(Change behaviour, effect, belief), Needs, Social Class, Influence Group(Reference, Opinion Leaders, Innovations)
Buying Roles• Initiator• Influencer• Decider• Buyer• User
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Adhyaapan
Buyer's Remorse• An emotional condition whereby a person feels remorse
or regret after a purchase– What goods / services?– Why?
• Wrong product• Wrong time• Wrong price• Could have waited for a newer version• Purchase considered unacceptable
• Pre & Post Purchase– Pre – Wide range of choices– Post – Stuck with what has been bought
Post Purchase Behaviour
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Adhyaapan
Post purchase behaviour– Price comparison
With other products / models With other buyers
– Opportunities for marketers Post purchase service call
Buyer’s Remorse
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Adhyaapan
Targets / Guidelines– 40 litres potable drinking water per capita per day for humans– 30 litres for animals in hot/cold deserts– One hand pump(12 litre / min) for every 250 people
Issues– Excess ground water extraction, insufficient recharge– Continuous / Online monitoring – Panchayat level
Training, financial assistance, and water-testing kits
Bharat Nirman Project – Water
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Adhyaapan
Bharat Nirman Project – Water Quality
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Adhyaapan
Programme Evaluation Organisation “Evaluation Study on Rural Roads Component of Bharat
Nirman” – PEO Report No. 210, May 2010
Bharat Nirman – Roads
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Adhyaapan
Overall Satisfaction – 91.1%– Bihar – 34%– Assam – 16%
Overall Achievement – 66% “Completed In Time” – 20%
– PGMSY – 7.25%– Reasons for Delay
Weather conditions Land Acquisition Labour & Material
Incomplete Roads – 8%
Bharat Nirman – Roads
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Adhyaapan
Impact– Access to Educational Institutions– Access to Health Care
Bharat Nirman – Roads
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Adhyaapan
• What is?– Market research is the process of gathering, recording and
analyzing information about the market
• Traditional Market Research techniques– Questionnaires / Surveys– Focus Groups– Interviews– Observation– Trials
Market Research
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Adhyaapan
• Identify the problem• Define the problem• Determine research design
– Exploratory, Descriptive, Causal
• Identify data types & sources• Design data collection form / questionnaire• Define sample• Collect data• Analyse data• Draw inference / insights & prepare report
Research Process
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• The Market– Lack of knowledge about MR & techniques– Lower literacy levels– Social / Cultural– Poor awareness / media exposure
• The Researcher– Insufficient understanding of the rural market
• Demographics– Density / Sparsity
Challenges in the Rural Market
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Adhyaapan
Simplicity Rapport / Relationship Interviews – Individuals vs. Crowds
Words of Caution
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Adhyaapan
Research Techniques
Faces
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Adhyaapan
• Colour Wheel– Green?
• Healthy crop– Red?
• Danger– Black?
• Death / Misforture– Dark brown?
• Fertile soil
• Primary Colours
Research Techniques
*MART: www.martrural.comwww.adhyaapan.in
Adhyaapan
Dice– Associate each face of die to items– Confusing – not all faces visible at once
Distribution technique – Ranking– Coins
Distribute a limited set of coins among items Assign different stacks to different items
Research Techniques
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Adhyaapan
Ladder – Ranking– Higher rung ~ higher / better rank
Research Techniques
1
2
3
4
5
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Adhyaapan
Playing Cards – Ranking– Ace vs. King
Research Techniques
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Adhyaapan
• Segmentation – What is?– Dividing a heterogeneous group / market into homogenous
clusters with significantly similar characteristics
• Why segment?– Identify & fulfill similar needs– Communicate effectively
• Segmentation requirements– Viable, Measurable, Distinguishable, Accessible
Segmentation, Targeting & Positioning
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Adhyaapan
• Geographic• Demographic
– Age, occupation, Income, Education, Religion
• Psychographic– Relating to lifestyle, class– SEC(Education of bread-winner, ownership of durables & type of
dwelling)• R1 / R2 / R3 / R4
• Behavioral– Occasions, etc
Segmentation Techniques
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Adhyaapan
• Choice of segment / target based on– Attractiveness– Ability / Competence to target
• Positioning– What is?
• Positioning the product / service offering in the mind of the consumer
– Develop / Decide Positioning– Develop communication strategy
Targeting & Positioning
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Adhyaapan
Product Price Place Promotion
Marketing Mix
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Adhyaapan
Challenges in the rural context
Marketing Mix
Element
Product
Price
Place
Promotion
Challenge
Acceptability
Affordability
Availability
Awareness
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Adhyaapan
Product Category– A range of products with an objective to fulfill the same need(s)
of the consumer
Rural Product Categories– FMCG– Durables– Agri Goods / Inputs– Services
Product
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Adhyaapan
Graphical Representation? Product Development Product Introduction / Seeding Product Growth / Sapling Product Maturity / Harvesting Product Decline / Withering
Product Lifecycle
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Adhyaapan
Purposes of packaging?– Protecting– Quantifying– Cosmetic / Aesthetic
Packaging Considerations– Size– Material– Aesthetics
Product Packaging
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Adhyaapan
• Look alike– Similar / Identical logo & packaging material, but different name– E.g AquifinA – AquafinA
• Spell alike– Vesoline – Vaseline
• Duplicates– Spurious product in original packaging
• Nokia
Challenges – Product
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Adhyaapan
• Price – The odd one out in the marketing mix!– Why?
• Pricing Objectives?– Profit– Market share– Break-even
• Pricing Challenges– Income Levels– Income patterns– Discounts / Beneficiaries(Communication)
Pricing
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Adhyaapan
• Challenges– Infrastructure – roads, energy, electricity– Scattered population– Low shop density– Channel costs– Impact on consumer behaviour
• Innovations– Retail– Go-Mobile– Existing channels
Place
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Adhyaapan
Message Medium Source
Promotion / Communication
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Adhyaapan
What are the 6 areas of development undertaken in the Bharat Nirman Project? – Name at least 4– Irrigation, Roads, Electricity, Housing, Drinking Water, Telephone
Connectivity
Bharat Nirman requires a hand pump for how many persons? – i.e one hand pump for every ____ persons– 250
Bharat Nirman targets road connectivity to habitations. What is the minimum population of these habitations?– 1000; for hilly terrain – 500
Who funds the programmes under Bharat Nirman? In what ratio?– Centre : State :: 75 : 25
Name at least 2 types of projects / works to be undertaken under NREGA
Quiz 1
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Adhyaapan
Water Conservation, Water Harvesting Drought Proofing Irrigation Canals / Irrigation Works Irrigation to SC/ST owned land / Indira Awas Yojana
beneficiaries Water-body renovation / De-silting Land Development Flood Control / Protection – Drainage systems All weather rural roads Any other work notified by Central govt
Quiz 1
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Adhyaapan
Water supply Housing Telecommunication and IT Roads Electrification Irrigation
Q1
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Adhyaapan
water conservation, irrigation, land development, rural roads
Q5
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