Rural Mktg - 1st Module - 14

8/12/2019 Rural Mktg - 1st Module - 14

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RURAL MARKETING (Sub Code: 10MBAMM415)Module 1 - Introduction

Learning objectives

Definition, scope of rural marketing, concepts, components of rural markets, classification of rural markets, rural vs. urban markets

Definition

What is Rural

Government agencies like I RDA (Insurance Regulatory And Development Agency and NCAER( National Council for applied Economic Research) define Rural as villages with a population =5000 75% of the mail population engaged in Non agricultural activity

What is Rural Marketing

Developing of the market in the area as defined as Rural.

Hence it could be aptly said that it encompasses the Activities such as developing the process to meet this

Objective Right product at the right price to the right people at the right time.

Exchange between rural and Urban is a Factor .

Could be Urban to Rural:

Rural to Urban,

Rural to Rural It involves the process of developing, pricing, promoting, distributing rural specific product &

service leading to exchange between rural and urban market which satisfies consumer demandand also achieves organizational objectives.

It is a two-way marketing process where any of the following transactions may take place :

(1). Urban to Rural : It involves selling of products & services by urban markets in rural areas.These include Pesticides, FMCG products, Consumer Durables etc.

It is major part of rural marketing.

(2). Rural to Urban : This is basically agricultural marketing where a rural producer seeks to sellhis products in Urban Market seeds, fruits & vegetables, milk and related products, forest

produce , spices etc.


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(3). Rural to Rural : It involves selling between two villages close to each other. Transactionsrelate to areas of expertise the particular village has. These include agricultural tools, cattle, cartsand other goods to another village nearby.

Rural marketing scientists term it as Developmental marketing as it involves concern for profitalong with the concern for society.

Participants include-- input manufacturers, dealers, farmers, opinion makers, govt. agencies andtraders.

Reasons for Going Rural

Size of the marketLargely UntappedToo crowded Urban MarketIncome on the rise/disposable incomeIncome from other than agricultureIncome flow from urban /abroad

Better exposure - media

Great success stories

HLL 50% Colgate 50% LG 50% Asian Paints 60% Dabur 40% Videocon 40% Cadburys 25% Hero Honda 40%

Points to Note with Regard to Rural Markets Extremely Diverse Market

Villages Size,Population,

Spread,IncomeLiteracy levels ,awareness level,languages

Urban Market scope and saturation Flow of funds from Urban National /International

Literacy levels on the rise Media PenetrationEncouraging Indicators/Initiatives for Rural Market Growth

Scientific methods major impetus to Production of food grains Export on the rise Increase in agriculture and handicrafts Initiatives taken by banks for more branches and Kisan credit card to buy seeds, fertilizers,

consumer goods on installment basis Reputed Companies helping in changing lifestyles Levers Britania ,Dabur, LG, onda,Videocon Media creating an impact-creating awareness levels


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Government Policies White Revolution Milk products , Yellow Revolution (poultry andedible oils), Blue Revolution Aqua culture

Employment Schemes JRY(Jawahar Rojgar Yojna, PMRY,Small Industries Training, Rural Electrification, Spend on Health and Sanitation, Medical and Health, Primary Education, Credit card for farmers Waiver of Loans Initiatives by leading organization in spreading awareness , Hindustan Levels Shakti, ITC

Reliance etcMove to Rural Market encouraging Data

Rural India buys Soft Drinks approx 45% of all soft drinks Almost 50% motor cycles Approx 55% of cigarettes

Half the total market for TV, Fans, pressure cooker, bicycles, Washing soap, tea, lades, salt,toothpowder

Coca Cola is growing over 35% in Rural areas compared to Over 22 % in Urban According to Hasna Research, a market research firm that Has published a Guide to Indian

Markets 2006, Consumer durables in Indian Villages rose sharply

TV Sales up by 200% Motorcycle by 77% There are 3000 households in rural area that earn > 50 lakhs

We have come some way ahead but there is a long way to go

Evolution of Rural Marketing

It consists of following phases:

Phase I From Independence to Mid-sixties Agricultural Produce Food grains , and Industrial inputs cotton, oilseeds, sugarcanes etc. --

main focus. The marketing action of firms supplying agricultural inputs fertilizers, seeds & pesticides and of

artisans in rural areas- supplying bamboo baskets, ropes, window & door frames, tools like ploughs by sellers like blacksmiths, carpenters, cobblers & pot makers-- received secondaryattention .

Market for Tractors, harvesters, thrashers, pump sets etc. was miniscule.

Phase II From mid-sixties (Green Revolution) to mid-nineties Green revolution scientific farming practices, transformed villages into prosperous business

centers. Demand for agricultural inputs went up. Better irrigation facilities, soil testing, use of high yield variety of seeds , fertilizers, pesticides,

and employment of machinery like power tills, harvesters, thrashers etc. changed the ruralscenario.

Marketing of agricultural inputs assumed significance. Two separate areas of activities emerged:


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Conventional Agricultural Marketing & Marketing of Agricultural inputs -- Urban to rural. Marketing of rural products received considerable attention. Formation of agencies like Khadi & Village Industries Commission (KVIC), Girijan Co-

Operative Societies & APCO Fabrics (in AP) and special attention of govt. to promote these products.

Village industries flourished and products like Handicrafts, Handloom textiles, soaps, safetymatches, crackers etc. were sold in urban markets on large scale.

Phase III Mid Nineties to 20 th century Marketing of household Consumables and Durables, not considered in earlier phases. Earlier the rural market for these products was not large enough. They were inaccessible. Small villages were widely scattered making reach difficult & expensive.

Phase IV 21 st Century : Developmental marketing The objective of rural marketing in current phase is the improvement of quality of life by

satisfying the needs and wants of customers, not through stand -alone products or services but by presenting comprehensive and integrated solutions which involve a set of interrelated products &services.

Accelerated development in Rural India, coupled with increase in purchasing power because ofscientific farming, changing lifestyle and consumption patterns, increase in education, socialmobility, improved means of transportation & communications and other penetrations of massmedia like TV and its various satellite channels have exposed rural India to outside world andhence their outlook to life has changed.

Increase in competition, saturated urban markets, more& more new products, demanding urbancustomers have made companies to think about new /potential markets thereby increasing focus

on rural marketing.Nature of Rural Markets

1. Large, diverse and scattered. 2. Major income of rural customer is through agriculture. 3. Standard of living 4. Traditional Outlook 5. Rising literacy level. 6. Diverse socio economic background. 7. Infrastructure

Is it Developmental or Transactional? It has become an attractive proposition to commercial organization, yet the role of rural

marketing is more developmental than transactional.

Classification of Rural Markets

(A). Consumer Markets Constituents : Individuals & households.


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Products: Consumables Food Products, toiletries, cosmetics, Textiles & Garments, Footwearetc.

Durables Watches, Bi-cycles, Radios, TV, Kitchen appliances, furniture, sewing machines, Twowheelers and so on.

(B). Industrial Markets: Constituents : Agricultural & Allied activities, Poultry farming, fishing, animal husbandry,

Cottage industries, Health Centers, Schools, Co-operatives, Panchayat Office etc. Products : Consumables : Seeds, Fertilizers, Pesticides, Animal Feeds, Fishnets, Medicines,

Petrol/Diesel etc. Durables : Tillers, Tractors, Pump Sets , Generators, Harvesters, Boats etc.

. Services Markets: Constituents : Individuals, Households, Offices & Production firms. Services : Repairs, Transport, Banking, Credit, Insurance, Healthcare, Education, Communication

and Power etc.Attractiveness of Rural Markets

1. Large Population2. Rising Prosperity

3. Growth in consumption4. Life-style changes5. Life-cycle advantages6. Market growth rates higher than urban.7. Rural Marketing is not expensive8. Remoteness is no longer a problem.

Problems in Rural MarketsLow per capita incomeLow disposable incomeInadequate fixed income (daily wages)Majority depends on Agricultural Income

Acute dependence on monsoon Infrastructure problems Low awareness Communication- difficult & expensive Too many languages Geographic Spread

Urban & Rural Markets Key Differences

Per capita Income Disposable Income Literacy levels

Infrastructure Communication Geographical Spread Customer has many choices

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Rural Mktg - 1st Module - 14