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Why Rural Marketing is hot?
Rural Push Policy of UPA Government Four Consecutive years of positive growth in rural GDP 40% hike in MSP of Crops over last two years Farm Loan Waiver & NREGS Growing Industry Demand for land (Overnight Wealth) Big rise in remittances from Cities Slowing urban demand forcing corporates to rural markets
% Annual Change in Rural GDP
51% Rs. 13,65,000
49% Rs 13,17,018 Crore
There are immense opportunities at the bottom of the pyramid. . can change rural business. R. M. Urban markets are saturating in India. Western Marketing has no experience to manage it. Retail boom will also expedite the growth of rural marketing.Why Rural Marketing is a New Discipline? Rural Marketing is a new discipline because: India is a predominantly agrarian society.
75% of the male population engaged in non-agri activity. Towns with population up to 15.000 are considered as rural. km.000 will be considered as rural and 10. up to a population of 10. Locations having shops/ commercials establishments’ up to 10.000 to 100.000 are treated as rural. All locations irrespective of villages or town.000 as semi-urban. RBI Locations with population up to 10.What is Rural? Definitions of Rural Census Village: Basic Unit for rural areas is the revenue village. might comprise several hamlets demarcated by physical boundaries. Town: Towns are actually rural areas but satisfy the following criteria. The rural and semi urban area is defined as all other than the seven metros. Nabard Planning Commission Sahara LG Electronics .000 Population density>= 400/ sq.000 will be considered as ‘rural’. Minimum Population >=5.
abase on technical and economic considerations and includes pre and post harvest operations. transportation and distributions‟. stimulating.What is Rural Marketing? According to the National Commission on Agriculture: „Rural Marketing is a process which starts with a decision to produce a saleable farm commodity and it involves all the aspects of market structure or system. “Rural Marketing can be defined as a function that manages all activities involved in assessing. storage. grading. assembling. both functional and institutional.” -Pradeep Kashyap . and converting the purchasing power of rural consumers into an effective demand for specific products and services and moving these products and services to the people in rural areas to create satisfaction and a better standard of living and thereby achieving organizational goals.
Leather products (Semiorganised) Urban Rural Rural (Production) . Handloom Textiles.Scope of Rural Marketing The Rural Marketing Matrix Urban (Market) Brand Consumables and durables (Organised) Farm & Non-Farm and services (Unorganised Sector) Handicrafts.
Evolution of Rural Marketing Phase Origin Function Major Products Agricultural produce Agricultural inputs Source Market Rural Destination Market Urban I Since independence Mid-Sixties Agricultural marketing Marketing of agricultural inputs Rural marketing II Urban Rural III Mid-Nineties Consumables and durables for consumption and production Urban/ Rural Rural IV 21st Century .
corporate enterprises. No. benefactors Development Projects/Schemes/Programmes Beneficiaries and buyers Development Market Development Corporate Image Medium-Long Service-motive Ideological or Public policy 7 8 9 10 11 12 Offer Target group Communication Goal Time-Frame Motivation Products and services Buyers Functional Profits Customer satisfaction Brand image Short-Medium Profit-motive Business policy . voluntary agencies. Marketing concept Stimulating and conversional marketing Product-market fit Product innovations and communications Commercial Corporate enterprises. Socio-cultural.Nature of Rural Marketing (Transactional Vs Development Marketing) S. societal concept Catalytic and transformation agent Social change Social Innovations and communications. Sellers Development Society orientation. 1 2 3 4 5 6 Aspect Concept Role Focus Key task Nature of activity Participants Transactional Consumer orientation. economic Government.
Cosmetics. Officers. . Fertilizers. Fishing. Health Centre.Taxonomy of Rural Markets (Classification of Rural Markets) Constituents Consumer Market Individuals and households Products Consumables: Foods products. Fishnets. Tillers. Medicines. Animal. Individuals. Foot Wear etc. Poultry farming. Bicycles. Tractors. Communication . House holds. Textiles and Garments. Furniture. Kitchen appliances. Two Wheelers etc. Pesticides. Panchayat office etc. Sewing machines. Petrol/Diesel etc.V. Boats etc. Toiletries. Power etc. Education. Pump sets. and Production firms Consumables: Seeds. School.. Radio. Services ------- Industrial Market Agricultural and allied activities. Banking. Animal feed. Husbandry cottage industries. T. Generators. Credit. Durables Watches. ------- Services Market ------- ------- Repairs. Harvesters. Transport. Insurance Health care. Cooperatives.
.Whether Rural Markets are Attractive? Large population Rising prosperity Growth in consumption Life-style changes Life-cycle advantages Market growth rates higher than Urban Rural marketing is not expensive Remoteness is no longer a problem.
Even High level Faster Widely spread Low Low Seasonal variations Low level Slow 3 Products o Awareness o Concepts o Positioning o Usage method o Quality preference o Features High Known Easy Easily grasped Good Important Low Less known Difficult Difficult to grasp Moderate Less Important Contd. No. . and relationship marketing. Green marketing and relationship marketing High Among units in organized sector Rural Marketing and societal concepts. development marketing. Low Mostly from unorganized units 2 Market (a) Demand (b) Competition (c) Consumers o Location o Literacy o Income o Expenditure o Needs o Innovation adoption Concentrated High High Planned.Rural Vs Urban Marketing S. 1 Aspect Philosophy Urban Marketing and societal concepts.
Stockists Retailers. Supermarkets. Gifts.Rural Vs Urban Marketing – Contd. Price discounts Less o Personal Selling o Sales promotion o Publicity . 4 Aspect Price o Sensitive o Level desired Distribution o Channels Urban Yes Medium-High Rural Very much Low-Medium 5 Wholesalers. out doors. Print Media to some extent. S. No. More languages Occasionally Gifts. Few languages Door-to-door frequently Contests. Specialty stores and authorized show rooms Good High Village shops Shandies Haats and Jatras Average Limited o Transport facilities o Product availability 6 Promotion o Advertising Print audio-visual media. exhibitions etc. Radio. Price Discounts Good opportunities TV.
Value Added Rural Marketing HOW TO ADD VALUE THROUGH RURAL MARKETING Identify unique characteristics of rural customer Study demographic patterns Study product ownership patterns Segment rural customers Provide functional benefits Build special brands for rural customers Communicat e unique proposition Are the clusters large enough? Are relevant needs being met? Ensure increase in customer value No No No Yes .
SESSION II Rural Marketing Environment & Rural Economy .
Structure of Rural Markets Demographic Environment 1971 Total population (million) Rural population (million) Rural Proportion to total population (%) Decadal Variation Source: Census of India 2001 80.6 72.8 1991 848.3 628.1 548.3 16.9 741.2 .2 15.2 1981 683.7 2001 1026.0 76.8 74.7 19.3 524.
Education and the Level of Demand Rural Literacy % of literates 1981 36 1991 45 2001 59 Source: Census of India 2001 .
55 1991 Urban 40 5.31 Total 192 Source: Census of India 2001 .32 Total 152 Rural 138 5.Household Pattern Family Structure Particulars Rural Households (Million) Family Size (Number) 112 5.36 2001 Urban 54 5.
Rural Housing Pattern House Type Pucca (%) 1981 22 1991 31 2001 41 Semi-Pucca (%) Kuccha (%) Total Source: Census of India 2001 37 41 100 36 33 100 36 23 100 .
68 3.05 3.59 6.93 40.52 100.73 3.01 40.00 31.84 3.98 100.99 Wage earner Salary earner Professional Artisan Petty Shopkeeper Businessman Other Total Source: NCAER 2002 20.42 8.Occupational Pattern Distribution of Households by Occupation of the Head.96 29.45 Rural 1.00 35.41 4.28 11.90 16.72 3.85 100.86 All 0.00 .97 0.40 2. 1999-2000 Head’s Occupation Distribution of households (%) Urban Housewife Cultivator 0.28 0.84 1.56 4.12 19.19 1.46 1.
154 638. of Towns No. of inhabited Villages Total no.321* 2001 5.Physical Environment Rural and Urban Life: Distinguishing Features Population Density (Urban + Rural) (Per Sq. Density (Total) Rural 177 1981 216 171 1991 267 214 2001 312 253 Distribution of Towns and Villages 1991 No. . of Villages Source: Census of India 2001 3. Km.779 634.588* * The total number of Villages also includes non-inhabited Villages.) 1971 Popu.697 580.161 593.
000 – 19.6 26.057 237 5.Settlements (Scattered and Clustered) Town class Class-I Class-II Class-III Class-IV Class-V Class-VI Total Population No.2 20.999 20.8 0.3 15.3 100.000 * 10 Lakh + : 27.6 100.161 % of total Towns 8.9 30.000 – 49. 5-10 Lakh: 42.0 % of Population 61. of Towns 423 498 1.0 8.386 1.999 10.560 1.999 05.0 Decadal Growth (1991-2001) 24 15 16 7 8 -22 1 Lakh and above 50.5 12.999 Less than 5.2 9.5 4.000 – 99. 1-5 Lakh:354 Source: Census 2001 .000 – 09.1 2.
5 36.a) _________ High (>Rs. NCAER .3 % Households 50 -42.a) 2001-02 2009-10 23.6 39.45K-90K p.9 17.8 20.7 40 -30-20-10-0-8.45K p.8 1989-90 _________ Low (<Rs.Economic Environment 80 -70 -60 -67.90k p.a) Source: Market Information Survey of Households.5 42.9 ________ Middle (Rs.
Per month) Rural Urban Composition of rural per capita consumption expenditure Food Non-Food 1983 112 166 1983 66 34 1991 281 458 1991 63 37 2001 486 855 2001 59 41 Source: NSSO Source: NSSO .Changing Rural Consumers Expenditure Pattern Per capita consumption expenditure (Rs.
Technological Environment .
45000 Crore Rs. 1.Size of Rural Market Estimated Annual Size : Rural Market FMCG Durables Agri-inputs (incl. tractors) 2/4 Wheelers Total Source: Francis Kanoi 2002 Rs. 8000 Crore Rs. 5000 Crore Rs. 65000 Crore Rs.23.000 Crore .
II-The Rural Economy: .
47 Source: Human Development Report..26 0. viz.44 0.The Economic Scenario in Rural India Human Development Index (HDI) Year Rural Urban Total 1981 0.30 The HDI is a composite of variables capturing attainments in three dimensions of human development.38 2001 ------ ------ 0. educational and health. 2001 .34 0. 1991 0.51 0. economic.
2001 . of Persons (Million) 252 244 % of Persons Poverty line (Rs.) 89.The Changing Face of Rural Development Population below the poverty line (Rural) Period No.5 206 1983 1993-94 46 37 1999-2000 193 27 328 Source: Human Development Report.
0 36. Agriculture Rural Development 105 89 Eighth Plan (1992-97) 225 344 Ninth Plan (1997-2002) 372 890 Tenth Plan (2002-07) 589 1.7 23.7 26. 1951-2001 .5 Total 100.The Development Exercise: The Five-Year Plans Sectoral allocations during the five-year plans (Rs.0 100. Billion) Head of Development Seventh Plan (1985-90) 1.0 Source: National Account Statistics.0 100.6 Tertiary (Services) 28.2 39.9 Secondary (Manufacturing) 14.6 49.8 23.219 Source: Planning Commission 2002 Percentage share of the different sectors in GDP (at 1993-94 prices) Year 1950-51 1980-81 2001-02 Primary (Agri and Allied) 57. 2.
On-land activities 3. cash crops 2. Off-land allied activities like livestock and fisheries 3. including manufacturing and services. 1. Non-farm activities.Transition of the Rural Economy 1. Food grain crops 2. Farm activities . Non-food grain crops.
Handicrafts etc) Community & Social Service Forestry Mining & Quarrying Transport & Storage Fishing Construction Communication .The Rural Economic Structure Rural Economy Farm Sector (Agri & Allied) Non-Farm Sector (Formal & Informal Sector) Agriculture Rural Industries Rural Services Animal Husbandry (Dairy. Poultry) Agro Processing (Sugarcane. Goat. Oilseed etc) Retailing & Trading Horticulture Manufacturing (Handloom.
150 Top (30%) Rural 9./Annum) Population (Million) 3.110 Urban 8.260 223 86 297 114 223 86 742 285 Source: NSS 55th Round (1999-2000). Census 2001 .580 Middle (40%) Rural 5.Income Disparity Rural-Urban Income Comparison Sector Bottom (30%) Rural Average Consumption Expenditure (Rs.830 Urban 10.400 Urban 18.270 Urban 4.720 All Classes Rural 5.
72 78.54 74.32 76.58 Population more than 89.45 49.The Rural Infrastructure Road Connectivity Road Connectivity at the Village level (%) Population less than 1.000 1991-92 1994-95 1996-97 36.04 Source: National Human Development Report 2001 .52 37.18 Population between 1.82 91.000 and 1.500 72.
Telephone Services Telecom Density (Phone per 100) 2000 Urban Rural All 8.9 2005 26.2 1.7 2. 2005 .2 0.74 9.08 Increase 220% 148% 213% Source : Telecom Regulatory Authority of India Report.
Inadequate Inputs 10. 2. 4. 6. Slowdown of Rural Industrialization . Low priority to Agriculture Subsistence Orientation of Agriculture Failure of Land Reforms Low size of operational Landholdings Inadequate Food Supplies Sluggish Infrastructural Growth Disconnect between Research & Farmers 8.Why Agriculture Growth has been slow & tardy? 1. 7. 5. Insufficient Availability of Credit 9. 3.
. 4. 3. 7. 2. 8. Bridging the Gap Between Agri-Research & Farming. 5.Policy Interventions Required 1. Thrust on Land Reforms Strengthening the Panchayati Raj Institutions Financial Inclusion (Innovative Credit Delivery) Development of Rural Infrastructure Expansion of Kisan Credit Card Scheme Protection of Farmers from natural calamities Extensive use of ICT Higher Investment in Agriculture & Rural Development. 6. 9. 10. Focus on High Value Crops & Non-farm Incomes.
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