Rural Marketing Intro XIMB

8/7/2019 Rural Marketing Intro XIMB

1/23

Introduction to RuralIntroduction to Rural

MarketingMarketingSessionSession II

Xavier Institute of Management,Xavier Institute of Management,BhubaneswarBhubaneswar


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Why should we do this course?Why should we do this course?

Agricultures share in GDP is going down, but, India stillAgricultures share in GDP is going down, but, India still

lives in her villageslives in her villages

Urban markets are crowded and saturatedUrban markets are crowded and saturated

The understanding of rural is diffused and sometimesThe understanding of rural is diffused and sometimes

confusingconfusing

Is rural marketing different from urban marketing ?Is rural marketing different from urban marketing ?


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Session CoverageSession Coverage

Rural IndiaRural India Some definitional issuesSome definitional issues

Phases/ stages in rural marketingPhases/ stages in rural marketing

Scope of rural marketingScope of rural marketing

How is rural India changing?How is rural India changing?

Schools of thoughtSchools of thought-- Approaches to Rural MarketsApproaches to Rural Markets

Strategic Issues & Directions in rural marketingStrategic Issues & Directions in rural marketing


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Defining Rural IndiaDefining Rural India

Organisation Definition Limitations

NSSO (

Census) Population density < 400 / Sq Km

75 percent of the male workingpopulation is engaged in agriculture

No Municipal corporation / board

rural not defined

PlanningCommission

Towns upto 15,000 population areconsidered rural

Towncharacteristics not

defined


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ContdContd

LG Electronics All places other than the7 metros

Only clarifies what arethe cities

NABARD All locations with a

population upto 10, 000considered rural

Village & town

characteristics notdefined

Sahara Commercial

establishments locatedin areas servicing lessthan 1000 population

Population

characteristics unknown

Source: The Rural Marketing Book- Text & Practice, Kashyap. P and Raut. S (2007)


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Defining Rural MarketingDefining Rural Marketing

National Commission onAgriculture

NGOs Corporate RuralMarketing Definition

Decisions to producesaleable farm

commodities involving

all the aspects of themarket system or

structure, bothfunctional and

institutional, based ontechnical & economic

considerations and

includes the pre & postharvest operations.

Marketing productsproduced in rural areas

to urban areas

Marketing products

produced in rural areasin rural markets

Function that managesall activities involved in

assessing, stimulating

and converting thepurchasing power of

rural consumers intoeffective demand for

specific products andservices to create

satisfaction & a better

standard of living forachieving organisational

goals.


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Phases in Rural MarketingPhases in Rural Marketing

Sr. No Time Frame Key Events & Trends

1 Phase One( Pre 1960s) Marketing rural

products in rural andurban areas

Agricultural inputs in

rural areas

Agriculturalmarketing

Farming methods wereprimitive andmechanisation was low

Markets unorganised


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ContdContd

2 Phase Two ( 1960s to 1990s) Green Revolution

Companies likeMahindra and Mahindra,

Sri Ram Fertilisers andIFFCO emerge

Rural products werealso marketed through

agencies like KVIC

3 Phase Three( 1990s to Present) Demand forconsumables and

durables rise

Companies find growthin urban marketsstagnating or falling


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Scope of Rural MarketingScope of Rural Marketing

Keenly debated topicKeenly debated topic

Definitions based on organisational/ institutional vision,Definitions based on organisational/ institutional vision,

mission & goalsmission & goals

Need for aNeed for a comprehensive and modularcomprehensive and modular understandingunderstanding

Rural Marketing is a work in progressRural Marketing is a work in progress

MultiMulti disciplinary approach is necessary for sharperdisciplinary approach is necessary for sharper

understandingunderstanding


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Domain of Rural MarketingDomain of Rural Marketing

To

Rural Urban

From

Rural

Urban

Source: M. Jha, Rural Marketing- Some Conceptual Issues, EPW, 1988


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Scope of Rural MarketingScope of Rural Marketing

Domain ofRural

Marketing

Dimensions of the transaction

Participants Products/

services

Modalities Norms Outcomes

Rural to

Rural

Rural to

Urban

Urban toRural


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Changes in Rural IndiaChanges 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


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Transitions In Rural IndiaTransitions In Rural India

Food Grain Crops

On land activities

Farm Activities

Non food, cash crops

Livestock & fisheries

Manufacturing &services


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Rural Employment Patterns( Male)Rural Employment Patterns( Male)

Sector Year 1987 ( % share inemployment)

Year -2004 ( % share inemployment)

Agriculture 75 67

Transport &Communication

2 8

Trade & Hotels 5 7

Construction 4 7

Manufacturing 7 8

Source: NSSO data, Mckinsey Global Institute Study, 2004-05


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Rural IndiaRural India Population TrendsPopulation Trends

1971 1981 1991 2001

Total

Population (in

million)

548.2 683.3 848.3 1026.9

Rural

Population (in

million)

524.0 628.8 741.6

As a proportion

of total

population

76.7 74.3 72.2

Decadal

Variation

19.8 16.7 15.2

Source: Census 2001


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ContdContd

The joint family system is being replaced by the nuclearThe joint family system is being replaced by the nuclear

family systemfamily system

The occupational pattern shows a predominance ofThe occupational pattern shows a predominance of

cultivators and wage earnerscultivators and wage earners

Cultivators( 40.86 %) and Wage Earners( 35.28 %)Cultivators( 40.86 %) and Wage Earners( 35.28 %)

according to NCAER studies (2002)according to NCAER studies (2002)


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ContdContd

Size of villages/ habitations are changingSize of villages/ habitations are changing

Role & influence of towns is changingRole & influence of towns is changing

Social interaction is a mix of rural and urbanSocial interaction is a mix of rural and urban

Lets look at some key trends in detailLets look at some key trends in detail


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Rural Income TrendsRural Income Trends

Annual Income (at 1998-99

prices)

Income Class 1989-90( %Households)

1998-99 ( %Households)

1,40,000 High 0.5 3.0

Source: National Council for Applied Economic Research, 2000


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Rural MarketingRural Marketing-- Schools of ThoughtSchools of Thought

Determinist SchoolDeterminist School

Activist SchoolActivist School

What is the right approach?What is the right approach?

Dependent on level of market development, stage in theDependent on level of market development, stage in the

PLC and access to resourcesPLC and access to resources

Amul & ITC prominent examplesAmul & ITC prominent examples

No waterNo water--tight compartmentalisationtight compartmentalisation


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Strategic Issues & Directions in RuralStrategic Issues & Directions in RuralMarketingMarketing

Evolutionary Vs revolutionary changes in rural marketsEvolutionary Vs revolutionary changes in rural markets

Role of state & market forcesRole of state & market forces

ICT based interventionsICT based interventions

Partnership innovationsPartnership innovations

Developmental role of rural marketingDevelopmental role of rural marketing

Scalability & replication of rural marketing programmesScalability & replication of rural marketing programmes


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ICT in Rural MarketsICT in Rural Markets

Category Government Private NGO/ PPP

Infrastructure

Provision

NIC N- Logue Simputer

Rural Services Bhoomi(

Karnataka)

Sewa

Agri Marketing Agmarknet E- Choupal OzhwarSandhiyes

Agri extension Universities EID Parry


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Close of SessionClose of Session

Thank YouThank You

Rural Marketing Intro XIMB

Documents

Transcript of Rural Marketing Intro XIMB