Introduction to Rural Marketing

Session I

Why should we do this course? 

Agriculture s share in GDP is going down, but, India still lives in her villages 

Urban markets are crowded and saturated The understanding of rural is diffused and sometimes confusing 

Is rural marketing different from urban marketing ?

Approaches to Rural Markets thoughtStrategic Issues & Directions in rural marketing .Session Coverage       Rural India Some definitional issues Phases/ stages in rural marketing Scope of rural marketing How is rural India changing? Schools of thought.

000 population are considered rural Town characteristics not defined .Defining Rural India Organisation NSSO ( Census)  Definition  Limitations rural not defined Population density < 400 / Sq Km  75 percent of the male working population is engaged in agriculture No Municipal corporation / board Planning Commission  Towns upto 15.

Cont d LG Electronics NABARD All places other than the 7 metros All locations with a population upto 10. S ( 2007) .Text & Practice. P and Raut. 000 considered rural Commercial establishments located in areas servicing less than 1000 population Only clarifies what are the cities Village & town characteristics not defined Population characteristics unknown Sahara Source: The Rural Marketing Book. Kashyap.

. NGOs Marketing products produced in rural areas to urban areas Marketing products produced in rural areas in rural markets Corporate Rural Marketing Definition Function that manages all activities involved in assessing. stimulating and converting the purchasing power of rural consumers into effective demand for specific products and services to create satisfaction & a better standard of living for achieving organisational goals.Defining Rural Marketing National Commission on Agriculture Decisions to produce saleable farm commodities involving all the aspects of the market system or structure. based on technical & economic considerations and includes the pre & post harvest operations. both functional and institutional.

Phases in Rural Marketing Sr. No 1 Time Frame Phase One( Pre 1960 s) Key Events & Trends rural products in rural and urban areas Agricultural inputs in rural areas  Agricultural marketing Farming methods were primitive and mechanisation was low Markets unorganised Marketing .

Cont d 2 Phase Two ( 1960s to 1990s) Revolution Companies like Mahindra and Mahindra. Sri Ram Fertilisers and IFFCO emerge Rural products were also marketed through agencies like KVIC for consumables and durables rise Companies find growth in urban markets stagnating or falling Demand Green 3 Phase Three( 1990s to Present) .

Scope of Rural Marketing   Keenly debated topic Definitions based on organisational/ institutional vision. mission & goals    Need for a comprehensive and modular understanding Rural Marketing is a Multi work in progress disciplinary approach is necessary for sharper understanding .

EPW.Some Conceptual Issues. Jha. Rural Marketing.Domain of Rural Marketing To Rural Urban Rural From Urban Source: M. 1988 .

Scope of Rural Marketing Domain of Rural Marketing Participants Dimensions of the transaction Products/ services Modalities Norms Outcomes Rural to Rural Rural to Urban Urban to Rural .

Changes in Rural India   Diverse change levers in rural India The pull of the cities & towns migration and its side effects     Effect of government programmes Civil society interventions Natural & manmade disasters Slow but sure change .

cash crops Food Grain Crops On land activities Farm Activities Livestock & fisheries Manufacturing & services .Transitions In Rural India Non food.

2004-05 . Mckinsey Global Institute Study.Rural Employment Patterns( Male) Sector Year 1987 ( % share in employment) 75 2 5 Year -2004 ( % share in employment) 67 8 7 Agriculture Transport & Communication Trade & Hotels Construction 4 7 Manufacturing 7 8 Source: NSSO data.

3 72.7 74.3 1991 848.8 741.Rural India 1971 Total Population (in million) Rural Population (in million) As a proportion of total population Decadal Variation 548.0 628.9 524.2 Population Trends 1981 683.7 15.6 76.2 19.2 .8 Source: Census 2001 16.3 2001 1026.

Cont d  The joint family system is being replaced by the nuclear family system  The occupational pattern shows a predominance of cultivators and wage earners  Cultivators( 40.86 %) and Wage Earners( 35.28 %) according to NCAER studies (2002) .

588    Villages having less than 500 population are falling Villages having 2000 + population most prosperous What are the implications of these trends? .Rural Settlement & Habitation Trends   Key findings from 2001 census Population density 253/ sq kilometer and total number of villages is 638.

Cont d     Size of villages/ habitations are changing Role & influence of towns is changing Social interaction is a mix of rural and urban Let s look at some key trends in detail .

9 1.9 34.000 Income Class 1989-90( % 1989Households) 67.05.00135.70. 2000 .40.1 1.4 3.001 1.Rural Income Trends Annual Income ( at 1998-99 1998prices) <= 35.001.5 3.000 Middle Upper Middle 7.3 23.8 Low Low Middle 70.000 > 1.000 35.0011.05.9 19981998-99 ( % Households) 47.000 High 0.40.0 Source: National Council for Applied Economic Research.05.2 10.0011.

Schools of Thought Marketing    Determinist School Activist School What is the right approach? Dependent on level of market development. stage in the PLC and access to resources   Amul & ITC prominent examples No water-tight compartmentalisation water- .Rural Marketing.

Strategic Issues & Directions in Rural Marketing       Evolutionary Vs revolutionary changes in rural markets Role of state & market forces ICT based interventions Partnership innovations Developmental role of rural marketing Scalability & replication of rural marketing programmes .

Choupal Sewa Agri Marketing Ozhwar Sandhiyes Agri extension Universities EID Parry .ICT in Rural Markets Category Infrastructure Provision Rural Services Government NIC Private N.Logue NGO/ PPP Simputer Bhoomi( Karnataka) Agmarknet E.

Close of Session Thank You .

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