RURAL MARKETING ENVIRONMENT
CONCEPT OF ENVIRONMENT
Environment literally means the surroundings, external objects, influences or circumstances under which someone or something exists.
The environment of any organization is “the aggregate of all conditions, events and influences that surround and effect it”.
EXTERNAL ENVIRONMENT
Socio-Cultural Economic Technological Political & Legal
SOME IMPORTANT VARIABLE IN MEGA ENVIRONMENT
Economic Technological Political & Legal Socio-Cultural
GDP trendsInterest ratesInflationType of economyIncomeDisposable incomeWage-price controlMoney supply
Spending by govt on R&DIndustry spending on R&DFocus of technologyPatent protectionProductivityCommunication & InfrastructuralNew productsCommercialization of technology
Type of Govt.Tax LawsForeign trade regulationsConstitutional frameworkAnti trust litigationLabor lawsAttitude toward foreign co.Stability of govt
Life-StyleReligionLanguageCustomsAge distributionLanguagesGrowth rate of population
RURAL ECONOMIC ENVIRONMENT
Rural Economy
Farm Sector
Agriculture
Animal Husbandry
Horticulture
Forestry
Fishery
Non-farm Sector
Rural Industries
Agro Processing
Manufacturing
Mining &Quarrying
Construction
Rural Services
Retailing & Trading
Community & Social Service
Transport & Storage
Communication
JAJMANI SYSTEM A self-sufficient economy system
Revolved around the farmers who owned land
‘Specialist castes’ who provided services to the farmers and to each other
System under threat due to urbanization that provided relief from exploitation
SOURCES AND PATTERNS OF INCOME
Primary source is agriculture No regular income throughout the year
(Seasonality) Cash only at the time of harvest Marketers should notice of time of year when
incomes are due Crop patterns vary, and time of cash surpluses
from harvests vary geographically Cash crops and services leading to stable cash
flows throughout the year. Remittances from outside.
Rural IncomeRs. 7,006 billion
(100%)
Agricultural(53%)
Non-agricultural(47%)
Self-employed (43%)
Wage-earners (10%)
Formal(31%)
Informal(16%)
RURAL INCOME DISTRIBUTION
Rural Per Capita IncomeRs. 9,481
AgriculturalRs. 6,855
Non-agriculturalRs. 16,464
Self-employedRs. 10,150
Wage-earnersRs. 2,860
FormalRs. 19,514
InformalRs. 12,595
PER CAPITA RURAL INCOME
DISTRIBUTION OF RURAL HOUSEHOLD BY INCOME
Annual Income (Rs.) Income class 1989-90 1998-99
at 1998-99 prices (%HHs) (%HHs)
<=35000 Low 63.7 47.9
35001-70000 Low Middle 23.9 34.8
70001-105000 Middle 7.1 10.4
105001-140000 Upper Middle 1.2 3.9
>140000 High 0.5 3
Total 100 100
DISTRIBUTION OF HOUSEHOLDS BY INCOME FROM 1989-90 TO 2009-10
1989-90 2001-02 2009-10
Urban Rural AI Urban Rural AI Urban Rural AI
Middle High 11270 9095 20365 28884 23978 52862 51140 56363 107503
Low Middle 13957 24458 38415 16956 53208 70164 14809 64916 9725
Low 14879 68870 83749 7648 57518 65166 3253 31465 34718
Total 40106 102334 142440 53488 134704 188192 69202 152744 221946
Middle High = above Rs 90,000 p.a. AI = All IndiaLow Middle = Rs 45,000-90,000 p.a. (in, 000 families)Low = below Rs 45,000 p.a.
SAVING PATTERN
Households Availing Banking facilities (figures in million)
Total % of HHsRural
HHs% of Total
HHs Urban% of
HHs
Households (HHs) 192 100 138 72 54 26
No of HHs Availing banking services 68 35.5 42 30.1 27 49.5
RURAL SOCIO-CULTURAL ENVIRONMENT
RURAL SOCIO-CULTURAL SCENARIO
Religious bent of mind. Social customs. Caste system. Gender Discrimination. Literacy. Cultural diversity. Group influence on behavior.
CASTE SYSTEM BRAHMINS at top, then kshatriyas, vaishyas,
and the shudras at bottom. Each have their sub castes. Shudras suffered from entering places visited
by top. Change in zamindari system helps in
abolition. Marketers have to be sensitive on this issue.
DEMOGRAPHIC ENVIRONMENT
1981 1991 2001
Total population (million) 683.3 848.3 1026.9
Rural population (million) 524.0 628.8 741.6
Rural proportion to urban pop (%) 76.7 74.3 72.2
DISTRIBUTION OF POPULATION BY AGE GROUPS (1991)
Age groups Rural Urban
0-4 13 11
05-14 26 23
15-19 9 10
20-34 23 28
35-54 19 20
55+ 10 8
Total 100 100
EDUCATION AND THE LEVEL OF DEMAND
Rural literacy 1981 1991 2001
% of Literates 36 45 59
Education level Rural Urban
Below primary 29.2 18.4
Primary but below middle 31.6 23.9
Middle but below matriculation 21.0 20.8
Matriculation but below graduate 15.5 26.1
Graduate and above 2.7 10.8
1991 2001
Particulars Rural Urban Total Rural Urban Total
Households (million) 112 40 152 138 54 192
Family size (number) 5.55 5.32 - 5.36 5.31 -
HOUSEHOLD PATTERN
HOUSEHOLD TYPE IN INDIA
Type of household Definition Rural urban
Single member Single member 5.15 7.91
Nuclear pair Head and spouse 4.91 5.20
Nuclear Head and spouse with unmarried children 37.88 41.57
Broken nuclear Head and spouse with or without unmarried children but with other relations who are not currently having spouse
4.58 4.24
Supplemented nuclear Head and spouse with or without unmarried children but with other unmarried or separated or divorced or widowed relations
16.81 15.44
Supplemented broken nuclear
Head without spouse with or without unmarried children but with other unmarried or separated or divorced or widowed relations
5.76 5.13
Broken extended nuclear
Head without spouse but with other relations of whom only one is having spouse
3.62 3.07
Lineally extended Head and spouse with married son/daughter and spouses and/or parents with or without other not currently relations/ head without spouse but with at least 2 married /daughter and their spouses and/or parents with or without other not currently married relations
17.65
13.23
Collaterally extended Head and spouse with married brother /sister and their spouses with or without other relations (including married relations)/ head without spouse but with at least 2 married brother/sister and their spouses with or without other relations
3.53 3.85
Others Other households not covered elsewhere 0.11 0.36
TOTAL 100 100
CONTD…
RURAL HOUSING PATTERN
House type 1981 1991 2001
Pucca 22 31 41
Semi-Pucca 37 36 36
Kuccha 41 33 23
Total 100 100 100
Rural Population = 742 millionRural Employed = 312 million
(100%)
Agricultural(73%)
Non-agricultural(27%)
Self-employed (40%)
Wage-earners (33%)
Formal(15%)
Informal(12%)
RURAL OCCUPATION PATTERN
OCCUPATIONAL PATTERN
Distribution of households by occupation of the head, 1999-2000
Head's occupation Distribution of households (%)
Urban Rural All
Housewife 0.84 1.01 0.96
Cultivator 3.45 40.86 29.99
Wage earner 20.93 35.28 31.12
salary earner 40.72 11.28 19.84
professional 3.59 0.73 1.56
Artisan 6.9 3.41 4.42
Petty Shopkeeper 16.05 4.97 8.19
Businessman 3.68 0.46 1.4
others 3.85 1.98 2.52
Total 100 100 100
RURAL POLITICAL ENVIRONMENT
POLITICAL ENVIRONMENT
Historically controlled by upper castes (panchayat & village pardhan)
Then Panchayati raj system came into effect in which all government departments, such as; education, health, agriculture, development etc. form an integrated approach for the development of rural areas.
PANCHAYATI RAJ INSTITUTIONS Provide 3 tire system to panchayati raj for all
the states population exceeding 2 mn. To hold panchayat elections regularly every 5
years. To provide reservations for SC/ST/Women at
least 33% To appoint a state finance commission. Preparation for economic development &
social justice To collect taxes, duties, tolls & fees.
RURAL TECHNOLOGICAL ENVIRONMENT
TECHNOLOGICAL ENVIRONMENT
It is triggered by three main revolutions : Green revolution White revolution Introduction of non-govt. agencies in the
development sector.
GREEN REVOLUTION
Period under 1967-1978 aimed to improve in food self sufficiency.
Introduction of mechanization first time. Increase in farm production also introduced
mechanized processing spurring growth of manufacturing sector.
Boosted farm productivity, employment creation, standard of living changes.
WHITE REVOLUTION
Aims for achieving self sufficiency in milk products by the govt.
Develops linkage between rural producers & urban consumers.
Formation of producers cooperatives which institutionalizing & producing processing milk.
Milk production increases almost 5 folds(from 1950 to 2001)
Areas effected Gujarat, Punjab, Haryana, U.P.
NGO MOVEMENT
Provide numerous services for up gradation of rural sector
Helps in providing assistance of technological extensions in rural areas.
Also providing basic health and child care services education training opportunities which helps in development.
RURAL PHYSICAL ENVIRONMENT
PHYSICAL ENVIRONMENTRURAL AND URBAN LIFE: DISTINGUISHING FEATURES
Population Density (Urban & Rural) (per sq. km.)
1971 1981 1991 2001
Pop. Density (total) 177 216 267 312
Rural 171 214 253
Distribution of Towns and Villages
1991 2001
No. of towns 3697 5161
No. of inhabited 580779 593154
Total no. of Villages 634321 638588
Total no. of Villages also include non-inhabited villages
CONT…….
Inhabited Villages Classified by Population Size, 1991 and 2001
Villages in size group
(1991)Villages in size group
(2001)
Number % Number %
Less than 200 102952 17.9 92541 15.6
201-500 141143 24.3 127054 21.4
501-1000 144998 25 144817 24.4
1001-2000 114395 19.7 129662 21.9
2001-5000 62915 10.8 80313 13.5
5000+ 13376 2.3 18758 3.2
Total 580779 100 593154 100
INFRASTRUCTURE Physical Infrastructure
-Roads-Electricity-Telecommunication
Marketing-Mandis, Melas, Haats-Small Kirana shops-PDS shops-Post-offices, PHCs, Petrol Pumps
Commercial-Credit Availability-Banking facility-Political Policy
RURAL MARKET STRUCTURE
PRODUCTS AND SERVICES IN RURAL MARKETS
(A) Products For personal consumption
-FMCGs-Durables
Agricultural Inputs-Perishable-Durable
(B) Services Personal Agricultural Financial
-Personal-Agricultural
CONSTITUTION OF RURAL MARKETS
CONSUMER MARKET INSTITUTIONAL MARKET SERVICES MARKET FMCG MARKET DURABLES MARKET
CONSUMER MARKET
Constituents: Individuals & Households Products
Consumables: food products, toiletries, cosmetics, textiles.
Durables: watches, bicycles, radios, TV, home appliances.
INSTITUTIONAL MARKETS
Constituents: agriculture & allied activities, food processing, poultry, fishery, animal husbandry, NGO, etc.
Products Consumables: agri-inputs animal feed, fishnets, fuel etc. Durables: agri-implements (tractors, pump sets)
SERVICE MARKET
Constitution: individuals, households, production firms.
Services: banking, insurance, credit, tuition, communication power etc.
SIZE OF RURAL MARKET
FMCG- Rs.65000cr DURABLES-Rs.5000cr AGRI INPUTS- Rs.45000cr 2-4 WHEELER- Rs.8000cr TOTAL Rs.1,23,000cr
FMCG: RURAL SHARE
1998-99
Washing Cake 67%
Tea 60%
Toilet Soap 58%
Tooth Paste 47%
Tooth Powder 78%
Electric Bulb 42%
Shampoo 33%
MOST POPULAR ITEMS
Rural Ranking Urban Ranking
Toilet Soap 1 Toilet Soap
Washing Powder 2 Biscuits
Packaged Tea 3 Washing Powder
Biscuits 4 Packaged Tea
Detergent Cakes 5 Detergent cakes
RURAL CONSUMERS EXPENDITURE PATTERN
Per capita consumption Expenditure (Rs. Per month)
Rural Urban
1983 112 166
1991 281 458
2001 486 855
Consumption of Rural per capita consumption expenditure
Food Non-Food
1983 66 34
1991 63 37
2001 59 41
COMPARISON OF RURAL AND URBAN ENVIRONMENT
Urban Rural
Size and Characteristics
• Large population size growing at a fast growth rate
• Incoming immigration from the rural area for education and employment.
• The population density is high.
• Towns are smaller urban units.
• Villages is the human settlement with a small administrative unit.
• Comprises few hundred households and the population growth due to immigration is insignificant.
• Migration from village to city/Towns is to get better education and employment.
Settlement Pattern
City settlement is compact though spread over a larger area. Land used is residential, commercial, industrial and community facilities, etc.
Village have land for human settlement and for cultivation. The settlement are clustered but in some areas households settle on cultivable land holdings.
Structure of houses is permanent and often rises to more than one storey. Housing on rental is highly prevalent.
Houses are largely semi-pucca or kuchha. They are owner occupied.
Clustering pattern based on class. e.g. neighbourhoods and streets indicate some caste/sub-caste and extended family influences.
Clustered according to kinship, caste or religious groups. Some villages are locally referred to as ‘thakur gaon’ or ’harijan basti’ depending on the majority caste residing in the village.
Primary resource base is production and distribution of industrial goods and services.
Land is the primary resources for livelihoods. Other forms of resources are water bodies, forest and mountains. Cows, buffaloes and poultry are kept for households need for milk, eggs, and meat.
Occupation
• Occupations are diverse, ranging from professionals, skilled, semi-skilled to unskilled workers.
• Occupational specialization is achieved with higher education and training to build skills.
• Predominant occupations are cultivation and agricultural labour.
• People continue to practice traditional occupations.
• Skill upgradation with technology has been limited.
Realms of activities
• Interaction and mobility is spread over large geographical, social and economic area.
• Relationship is more complex with differentiation in personal and professional life. There is erosion of custom, tradition, and religion.
• Women have freedom in choice of activity and interest.
• Restricted to smaller geographical, social, and economic areas.
• Individuals are recognized or referred to on the basis of family, caste and village. Individual behavior is governed by custom, tradition and religion.
• Women have limited freedom in choice of activity and interest.
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