Subject Code: IMT-72

Subject Name : Rural

Marketing

Objective: 1. To provide an understanding of the changing profile of the rural

consumer and its consumption pattern. 2. To provide conceptual skills in designing
product, price, distribution and promotional strategies for different classes of
product targeted at rural consumers. Contents : INTRODUCTION TO RURAL MARKETING
Definition of Rural Marketing; RURAL MARKET ENVIRONMENT Population; Occupation
Pattern; Income Generation; Location of Rural Population; Expenditure Pattern;
Literacy Level; Land Distribution; Land Use Pattern; Irrigation; Development
Programmes; Infrastructure Facilities; Rural Credit Institutions; Rural Retail
Outlets; Print Media in Rural Areas; Rural Areas Requirements; RURAL DEMAND AND
RURAL MARKET INDEX Thompson Rural Market Index; Indicators Considered for Rural
Market Index; PROBLEMS IN RURAL MARKETING Underdeveloped People and Underdeveloped
Market; Lack of Proper Physical Communication Facilities; Media for Rural
Communication; Many Languages and Dialects; Vastness and Uneven Spread; Low Per
Capita Incomes; Logistics; Storage; Handling and Transport; Market Organization and
Staff; Product Positioning; Hierarchy of Markets; Low Levels of Literacy; Seasonal
Demand; MARKETING OF AGRICULTURAL INPUTS Consumable Inputs; Durable Inputs;
Fertilizers; Product; Price; Distribution; Promotion; SWOT Analysis of Fertilizer
Market; Agro-chemicals; Product; Price; Distribution; Promotion; SWOT Analysis of
Agro-chemicals Market; Seeds; Cattle; Poultry and Aqua Feeds; Tractors and Power
Tillers; Irrigation Equipments; Other Farm Machinery; MARKETING OF CONSUMABLES AND
DURABLES Product; Price; Distribution; Distribution Strategy—Hindustan Lever;
Promotion; Product Redesign or Modification Needs; MARKETING OF AGRICULTURAL
PRODUCE AND RURAL AND COTTAGE INDUSTRY PRODUCTS Marketing of Agricultural Produce;
Regulated Markets; Formation of Cooperative Organizations; Contract Farming;
Agricultural Export Zones (AEZ); Marketing of Rural/Cottage; Industry/Artisan
Products; ROLE OF FINANCIAL INSTITUTIONS IN RURAL MARKETING Agricultural
Productivity and Need for Credit; Agricultural Credit Situation; Types of Credit;
Rural Credit Institutions; National Bank for Agriculture and Rural Development;
Commercial Banks; State Cooperative Banks (SCBs); State Cooperative Agricultural
and Rural Development Banks (SCARDBs); Regional Rural Banks (RRBs); Local Area
Banks; Flow of Institutional Credit to Agriculture; Kissan Credit Card Scheme;
Impact on Rural Market; ROLE OF COOPERATIVE INSTITUTIONS IN RURAL MARKETING
Cooperatives as Organizations; Structure of Cooperative Organizations; Types of
Cooperative Organizations; Share of Cooperatives in National Economy; Impact of
Cooperatives on Rural Marketing; Rural
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RURAL MARKETING STRATEGIES Rural Market Segmentation; Product Strategies; . Pricing
Strategies; Distribution Strategies; . Promotion Strategies; . Case Studies, Social
Marketing;

Notes:
a. b. c. d. Write answers in your own words as far as possible and refrain from
copying from the text books/handouts. Answers of Ist Set (Part-A), IInd Set (Part-
B), IIIrd Set (Part – C) and Set-IV (Case Study) must be sent together. Mail the
answer sheets alongwith the copy of assignments for evaluation & return. Only hand
written assignments shall be accepted. 5 Questions, each question carries 1 marks.
5 Questions, each question carries 1 marks. 5 Questions, each question carries 1
marks. Confine your answers to 150 to 200 Words. Two Case Studies : 5 Marks. Each
case study carries 2.5 marks.

A. First Set of Assignments: B. Second Set of Assignments: C. Third Set of

Assignments: D. Forth Set of Assignments:

ASSIGNMENTS
FIRST SET OF ASSIGNMENTS Marks Assignment-I = 5

PART– A
1. “Rural India is undergoing a massive transformation due to interest shown in the
rural markets by the public and private sector and even multinationals” Given this,
elaborate on some of the initiatives undertaken in the rural sector. 2. Define
Rural Marketing. Elaborate on “Rural marketing is a two-way process.” Support your
answer with illustration. 3. The unique characteristics of the rural market
environment are: a. Prevalence of superstitions and taboos b. Occupational pattern
related to agriculture c. Demand for cheaper and long-lasting products d. Review
the impact of each of these characteristics. 4. Infrastructural facilities in the
rural areas have undergone a major transformation over the years. Highlight some of
the key developments. 5. While rural market offers a vast untapped potential, it
also poses several problems and constraints in terms of reaching out to this
market. Highlight these key problems. SECOND SET OF ASSIGNMENTS Assignment-II = 5
Marks

PART– B
1. Elucidate the challenges faced in the marketing of fertilizers and agro-
chemicals 2. What are the various factors that must be borne in mind while
redesigning or re-modeling a product to suit the rural conditions? 3. The latest
trends in rural marketing are concepts such as Contract farming and Agricultural
Export Zones. Discuss. Rural
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4. Innovative promotions are a key factor for the tremendous growth of the rural
market. Justify. 5. Elucidate how the formation of various types of co-operative
societies has come to benefit the rural producers. THIRD SET OF ASSIGNMENTS
Assignment-III = 5 Marks

PART– C
1. Discuss the various rural credit institutions available in the country and their
objective and functions 2. Elucidate the three kinds of credit available to the
rural dwellers from the credit institutions. 3. How are cooperatives formed? How do
cooperatives help in promoting rural markets? 4. Discuss some innovative product
strategies implemented by marketers keeping the rural consumer’s need at the helm.
5. Discuss few strategies used by marketers for keeping the prices low so as to
match the rural purchasing power FOURTH SET OF ASSIGNMENTS Assignment-IV = 2.5 Each
Case Study

CASE STUDY - I
Rural channel in broadcasting All India Radio & Doordarshan are two classic
examples of institutions whose ‘mission statement’ has certainly not been met with.
‘Bahujana Hitya Bahujana Sukhya’ (the good & happiness of the majority) and ‘Satyam
Shivam Sundram’ (truth that is permanent & beautiful)are among the best mission
statements of any broadcasting organisations the world over. But sadly, these
statements have been totally ignored by policy makers & media planners in All India
Radio & Doordarshan. If the good & happiness of the majority is the aim, where are
the majority people residing in India? If 64% of India’s population lives in the
countryside spread over more than 6.15 lakh villages, far away from the urban
influence, it needs to be examined whether All India Radio is sensitised to the
information, entertainment & educational needs of this majority (bahujans). Also,
the real truth about Rural India is that every third person there lives below the
poverty line. Year round employment, easy access to safe drinking water, sanitary
toilets & electricity are still distant dreams. So, is Doordarshan portraying these
truths, though they are not ‘beautiful’, to promote introspection & public debate.
That Doordarshan is totally urbanised & commercialised is a known fact. Let us
therefore examine AIR’s role & responsibility since this is a cheaper medium within
people’s access. Less time: In the straight jacket programme pattern of AIR, the
time devoted to ‘rural programmes’ has never been more than 6% and sadly enough,
this has remained ‘static’ over the decades. Ten-minute farm new in the morning &
ten minutes of farm & home dialogue in the afternoon are the staple items for the
listeners by most of the 183 radio stations in the country. Poor propaganda of
development programmes: Successive governments have been implementing rural
development & poverty alleviation programmes including wage employment, self-
employment & integrated Rural
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development programmes for many years now. What role has the radio played in
creating awareness about the objectives of these programmes? By educating rural
listeners about their role, rights & responsibilities vis-à-vis rural development
programmes it could contribute to their better implementation. Gender
insensitivity: Media professionals are aware that the informational needs of women
are different. Furthermore, 65% of rural women are non-workers (Rural Development
Statistics, 1998, NIRD) and thus are available at home for listening to radio.
Though most AIR stations broadcast for more than ten hours daily, they do not find
it possible to set apart even 30 minutes of programming time for women. Neglect of
children: India’s population pyramid has a broad-base with children below 15 years
accounting for 38% of the total population (RDS, 1998, NIRD). We also proclaim that
children are the future hopes of the nation. But the tragedy is that the AIR cannot
boast of a single programme for children. Broadcast planners have remained under
the mistaken notion that it is enough to broadcast programmes for children during
the weekends. Indifferent entertainment: It is disquieting to note that even the
needs of the rural audiences are not given any weightage. Hari katha programmes in
Andhra Pradesh, Kathakali Padangal in Kerala and Nautanki in Uttar Pradesh & other
hindi speaking states – all go on air after 9:30 pm. By this time, most of the
village folk are fast asleep. What prevents radio from broadcasting them between
7:30 pm to 9:00 pm? National relays & cntral news bulletins are often cited as the
stumbling blocks. The argument put up by the broadcast planners in lieu of these
allegations, is that the Planning Commission has driven them to view every
programme from the angle of its revenue earning potential. However, this argument
does not cut much ice. On the contrary, it is observed that programmes for rural
audiences too have a lot of revenue earning potential. This is borne out by the
fact that advertisements about chemical fertilisers, pesticides, tractors, pump
sets, certified seeds etc. are crowded around regional news & farm news bulletins.
Serving different categories: Radio for decades, has retained programmes like
‘Anuranjani’ (classical music) which logs zero listening and ‘Sangeet Sarita’ whose
listenership is far too negligible compared to film music programmes. In defense of
these programmes, radio professional emphasis on their role to uphold cultural
traditions & their duty to the society. But they seem to forget that they are as
much duty bound to serve the rural masses who are in a majority as against patrons
of music & other fine arts who are an elite group & mostly urban-based. Need of the
hour: There is no justification for a public service broadcasting medium depending
on public funds, to ignore the interest of the vast majority of peole who need &
want its service. There is a wide-spread belief that with the advent of television
& more particularly the cable television, radio has almost disappeared from the
urban media scene in India. Questions 1. Do you agree with the view that there is a
need for a rural channel in broadcasting? Why or why not? 2. How far do you
appreciate the stand of AIR and its present programming policy? Rural
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3. What kind of programmes do you suggest for the rural audience?

CASE STUDY-II
The Mirage in Rural Markets With urban markets fast heading towards saturation,
consumer durable majors are heading towards the rural markets, currently showing a
marked increase in prosperity. Strange Experience: There have been many reports of
colour television companies finding their assessments of the rural market going
awry. With the rural areas being visibly poorer than urban centers the companies
expected these markets to go primarily for the lower end of their products.
Instead, these markets have tended to favour the expensive models and have had
little need for instalment schemes. The obvious explanation for this unexpected
result would be that the rural market is in fact richer than we thought. But
analysing this unexpected result in terms of income alone could be misleading.
Indeed, the result may also reflect a larger failure in understanding the Indian
rural market. The trends have been noticed in rural colour television sales may
well be the result of the factors other than income. Rural areas, and very small
towns, continue to see the dominance of the joint family. It is also not always
considered polite in rural society to prevent friendly neighbours from viewing
programmes regularly on your television set. There is thus a need for the larger
screen that most premium models provide. And the rural joint family would not have
much use for a monthly instalment finance scheme, as in an agrarian economy income
is generated primarily at harvest time. The explanation for the unexpected
marketing result may thus also lie in the social peculiarities of each rural
society. Ignoring this social dimension would have its costs for a company seeking
to penetrate the rural market. Television makers who decide that the fault lies in
their assessment of rural incomes alone would respond by flooding the rural market
with more expensive sets. But such a strategy would cater only to the rural elite.
There may well be a demand for a lower end television, even a black and white one,
with a large screen. An approach that merely segments markets according to
perceived income levels can thus miss potentially large rural markets. The Study:
Consumers in rural markets have begun showing an obvious preference for branded
goods vis-àvis non-branded goods of rural origin, according to a study conducted by
SRI. The study commissioned by the Consumer Electronics and Television
Manufacturers Association concludes that there is more conspicuous consumption of
consumer durables by almost all segments of rural consumers. The report also showed
that only one in three households had a radio, the penetration of television and
two-inone was even lower. A comparison of the education and income levels of
different clusters indicated that those who give higher priority to consumer
electronic products are the more educated and the affluent. Among other products,
the hand pump was the most owned durable in agricultural durables and there was
only a limited penetration of tractors. In the transportation category, the bicycle
was way ahead of two-wheelers and four-wheelers with a market penetration of 73%.
One in ten rural households do not own any of the above durables. While only 4% of
all television owners own a colour TV, more than one in three televisions were
gifts. Nearly one in ten televisions is a second hand TV. One in ten TVs is locally
assembled. As far as brand awareness is concerned, it was noticed that there was a
high unaided recall only for older well established brands such as Onida, Philips,
Texla, BPL and Videocon. Most respondents were aware of international brands only
after aiding. Questions 1. What conclusions would you make about the rural
consumer, after analysing the findings of this study? 2. On the basis of this
study, what recommendations would you give to the marketers of TV and other
consumer durables? Rural
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Rural Marketing. ...................................................... Page 6 of 6
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