Module 1
RURAL MARKETING
Rural Marketing • Definition: “The study of rural marketing
comprises all the operations and the agencies conducting them, involved in the movement of farm produced food, raw materials and their derivatives, such as textiles, from the formers to the final consumers and the effects of such operations on producers, middlemen and consumers” - Thomson
Rural Marketing
• Definition: Rural marketing can be seen as a function which manages all those activities involved in assessing, stimulating and converting the purchasing power into an effective demand for specific products& services, and moving them to the people in rural area to create satisfaction and a standard of living to them and thereby achieves the goals of the organization.
The Rural Marketing MixFrom/To Rural Urban
UrbanOrganized Branded consumables& Durables
Not concerned
Rural
Un-organized Farm& Non-Farm goods
Semi-Organized Handicrafts, Handloom textiles, leather products
Evolution of rural marketingConcept& scope
• Phase I: (Before mid 1960s)From/To Rural Urban
Urban
Agricultural inputs Fertilizers, seeds& pesticides Durables Tractors, harvesters, threshers, power tillers, pump sets, oil engines, electric motors
Not concerned
Rural
Artisans services and products bamboo baskets, ropes, window& door frames, household items by carpenters, blacksmiths, pot makers& cobblers
Agricultural products: food grains, cotton, oil, seeds, sugarcane etc
• Phase II (Mid 1960s-Mid 1990s)
From/To Rural Urban
Urban
Agricultural inputs Fertilizers, seeds& pesticides Durables Tractors, harvesters, threshers, power tillers, pump sets, oil engines, electric motors
Not concerned
Rural
Artisans services and products bamboo baskets, ropes, window& door frames, household items by carpenters, blacksmiths, pot makers& cobblers
Agricultural products: food grains, cotton, oil, seeds, sugarcane etc
Phase III (After Mid 1990s)
From/To Rural
UrbanHousehold goods: Consumables and durables
RuralArtisans services and products
Evolution of rural marketingPhase Origin Function
Major Products
Source market
Destination market
ISince Independence
Agricultural Marketing
Agricultural Produce Rural Urban
II Mid-Sixties
Marketing of Agricultural inputs
Agricultural inputs Urban Rural
III Mid-NinetiesRural Marketing
Consumables& durables for consumption and production
Urban& Rural Rural
Components of rural markets• Goods, commodity or service• Buyers• Sellers• Interaction between buyers& sellers • Demarcation of area place, region, country or global• The existence of price uniformity or competition
Classification of Rural Markets Consumer Market Industrial Market Services Market
ConstituentsIndividuals& Households
Agri& allied services, poultry farming, fishing, animal husbandry, cottage industries, health center, school, cooperatives, panchayat office etc
Individuals, House holds, Offices and production firms
Consumables
Food products, Toiletories, Cosmetics, Textiles and garments, Foot wear etc
Seeds, Fertilizers, Pesticides, Animal feed, Fishnet, Medicines, Petrol/Diesel etc
Repairs, Transport, Banking, Credit, Insurance, Healthcare, Education, Communication, Power etc
Durables
Watches, Bi-cycles, Radio, TV, Kitchen appliances, Furniture, Sewing machines, 2 wheelers etc
Tillers, Tractors, Pump sets, Generators, Harvesters', Boats etc
Aspect Transactional Development
ConceptConsumer Orientation, Marketing Concept
Society orientation, societal concept
RoleStimulating& conversational Marekting
Catalytic& transformation agent
Focus Product-market fit Social change
Key taskProduct innovations& communications
Social innovations& communicaitons
Nature of activity Commercial Socio-cultural, economic
Participants Corporate enterprise, Sellers
Government, voluntary agencies, corporate enterprises
Nature of Rural Marketing
Aspect Transactional Development
Offer Products& services
Development projects/schemes/programmes
Target group Buyers Beneficiaries& buyersCommunication Functional Developmental
Goal
Profits, Customer satisfaction& brand image
Market development, corporate image
Time-Frame Short-Medium Medium-Long
MotivationProfit-motive& business policy
Service policy& ideological/Public policy
Nature of Rural Marketing
Aspect Urban Rural
Market
Philosophy
Marketing& Societal concepts, Green marketing relationship marketing
Marketing& societal concepts, Development marketing and relationship marketing
Demand High Low
CompetitionAmong units in organised sector
Mostly from unorganised units
Economy Open Closed
Infrastructure Abundant& strong Poor& weak
Manufacturing High Low Mobility High Low
Rural Vs Urban
Aspect Urban Rural
Market
Consumers Location Concentrated Widely spreadLiteracy High Low
Per capita Income High LowExpenditure Planned, Even Seasonal (vary)
Needs High level Low LevelProtection Easily Available Rarely Available
Innovation adoption Faster SlowAttitude to modernization Ready for adaption& change Tradition bound
Family Structure Nuclear Joint Possession of household
assets High Low Occupation Trade, Industry& Services Agri
Attitude to Life Scientific FatalisticExposure High Low
Rural Vs Urban
Rural Vs Urban Sources of InfoAny media Word of mouth
Product
Awareness of needsHigh LowConceptKnown Less Known
PositionsingEasy DifficultUsage MethodEasily grasped Difficult to grasp
Quality PreferenceGood ModerateTimeliness of supplyTimely Untimely
After sales serviceAdequate InadequateAs a status symbolMostly yes Mostly noGuidance of usageNeeded Not needed
Features Important Less important
Price
SensitiveYes Very Much
Level DesiredMedium-High Low-Medium
Rural Vs Urban
Distribution
Channels
Wholesalers, Stockists, Retailers, Supermarkets, Speciality stores& Authorized show rooms
Village shops, Shandies, Haats
Transport Facilities Good Average
Distribution outlets More Fewer
Product Availability High Limited
Rural Vs Urban
Promotion
Advertising
Print, Audio-Visual, Media, Out doors, exhibitions etc
TV, Radio, Print media to some extent
Personal SellingDoor-to-door frequently Occasionally
Sales PromotionContests, Gifts, Price discounts
Gifts, Price discounts
PublicityGood oppurtunities Less
• Environment different– Concentration, infrastructure, population density,
• Social relations– Interactions, identification of individuals, Social
norms, Status, Caste• Employment& incomes seasonal
– Occupations, income frequency
Rural Vs UrbanMarket Differences
• Exposure to marketing stimuli– Product exposure, Ad exposure& brand
awareness, exposure to market researchers, multiple sources of info& learning, convenience of buying, retail outlets per 1000, market reach& availability of range of products
• Dependence on nature– Availability of natural resources, dependence for
employment& incomes
Rural Vs UrbanMarket Differences
• Marketers– Understanding, respectful& humble, patience,
courteous& concerned and social skills• Philosophy
– Development marketing• Marketing research
– Durables: income, family structure– Research instruments
Rural Vs UrbanMarketing Differences
• Consumer behavior– Value for money– Emphasis on functionality rather than frills– Collective decision making (opinion driven)
• Segmentation– Variables: 1)family size& income,2) landholding and
incomes (crop pattern, rainfall& farming method)• Product strategy
– Functional value not frills – Encountering fakes
Rural Vs UrbanMarketing Differences
• Price strategy– Price sensitive
• Distribution– Retailers, co-operatives, haats& melas
• Promotion– Close knit groups– Wall paintings, vans with audio-visual, puppetry,
street theatre etc
Rural Vs UrbanMarketing Differences
Value addition in rural market
• Offer small unit of packing• Reinforce quality through service initiatives
– Hero honda• Use local idioms to convey message in a meaningful context
– BBLIL (Brooke Bond and Lipton India Ltd)• Striking core values of brand
– Cavinkare: Meera, Chic for rural& Nyle for urban• Go rural& be rural
– Anacin• Innovative channels
– Reckit& colman uses NGO’s
Practical aspects of rural marketing
• Automobiles– TATA (display vans, test drives)– Hyundai (sales camps AP& Punjab)– Maruthi Suzuki (rural executives, sponsoring kabaddi tournaments&
tie-up with panchayat members and sales fairs)• Pharma
– Elder pharma (rural executives)• Banking
– SBI (probationary officers in rural area) • Retailing
– ITC choupal sagar – Hariyali Kisaan Bazaar (HKB)– Godrej aadhar (VAS: banking, pharmacy, postal service)
• Telecommunication– Airtel (Haats, rural airtel service centre, VAS)– BSNL (Bhoomi project; Tie-up with NFL)
• VAS: Daily mandi price, soil testing, farming techniques, dairy, weather forecasts in the local language
• Idea, TATA• Reliance (KRIBCO Reliance kisan -Krishak Bharthi Co-operative)
Practical aspects of rural marketing
• FMCG– DABUR (ASTRA – Advanced Sales Training for rural ascendance in local
languages); Amla hair oil– Coca-Cola (Parivarthan program to train rural retailers)