Rural Marketing...Final
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Transcript of Rural Marketing...Final
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Indian
Economy
Urban Rural
Agriculture Non agriculture
Industry Business Service
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` The Census defines urban India as - "All the
places that fall within the administrative limits of a
municipal corporation, municipality, etc orhave a
population of at least 5,000 and have at least 75per cent male working population in outside the
primary sector and have a population density of at
least 400 per square kilometer. Rural India, on the
oth
erh
and, comprises all places th
at are noturban!"
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o Rural Marketing involves reaching the rural customer,understanding their needs and wants, supply of goods and
services to meet their requirements, carrying out after
sales service that leads to customer satisfaction and
repeat purchase/sales.
o It is the process of developing, pricing, promoting,
distributing rural specific product and a service leading to
exchange between rural and urban market which satisfies
consumer demand and also achieves organizational
objectives.
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` Urban to Rural: It involves the selling of products andservices by urban marketers in rural areas. These include:
Pesticides, FMCG Products, Consumer durables, etc.
` Rural to Urban: A rural producer (involved in agriculture)
sells his produce in urban market. This may not be direct.There generally are middlemen, agencies, government co-
operatives, etc who sell fruits, vegetables, grains, pulses
and others.
` Rural to rural:These include selling of agricultural tools,cattle, carts and others to another village in its proximity.
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` Large, Diverse and Scattered Market
` Major Income of Rural consumers is from
Agriculture
` Standard ofLiving and rising disposable income ofthe rural customers
` Traditional Outlook
` Rising literacy levels (approx 45% of rural Indians are literate)
Diverse Socioeconomic background
Infrastructure Facilities
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` Standard of living
` Low literacy levels
` Low per capita income
` Transportation and warehousing` Ineffective distribution channels
` Languages and diversity in culture
` Lack of communication system
` Seasonal demand
` Dispersed markets
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`
Government sh
ould encourage private shopkeepers and cooperative.
` Due care in the recruitment and selection of sales people.
` Demonstration, short-feature films with disguised advertisement messages, direct
advertisement films and documentaries that combine knowledge and
advertisements will perform better rural marketing communication.
` Companies may also use audiovisual publicity vans, which may sell the products
with promotion campaign.` Companies can organize village fairs, dance and drama shows, group meetings to
convince the rural consumers about the products and services.
` For the rural markets, only those sales people should be preferred for selection
who is willing to work in rural areas like Sarpanch, Pradhan and other elderly
persons.
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` It is well known that Markets are created and not born.
` LIC started a scheme called Gram Vikas where the Sarpanch is
given a target to sell a minimum of 10 policy plans and thecommission so earned is spent on the development of their
respective villages.
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` A huge population 720 million people in 630,000villages across 3.2 million square miles.
` Amassive economy over 50% of Indias total GDP.
There are almost same number of middle to highincome households in rural areas (21.16 mn) as urbanIndia (23.22 mn).
` A booming economy with the consumer durables
market, for example, growing at 25% per year (vs 10%nationally).` A parallel economy with the same needs as
developed markets but a reduced ability to pay.
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` No celebrities will work
` No mass media coverage
-Due to lack of access to technology
Rural market lies in the bottom of the Pyramid. The 4 Aswork for them
` Availability
` Affordability
` Acceptability` Awareness
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` Agricultures share in GDP is going down, but, India still
lives in villages
` Urban markets are crowded and saturated
` The understanding of rural is diffused and sometimes
confusing
` Is rural marketing different from urban marketing ?
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Organisation Definition Limitations
NSSO (
Census) Population density < 400 / Sq Km
75 percent of the male working population
is engaged in agriculture
No Municipal corporation / board
rural not defined
Planning
Commission
Towns upto 15,000 population are
considered rural
Town characteristics
not defined
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LG Electronics All places other than the 7
metros
Only clarifies what are the
cities
NABARD All locations with a
population upto 10, 000
considered rural
Village & town
characteristics not
defined
Sahara Commercial
establishments located in
areas servicing less than
1000 population
Population characteristics
unknown
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National Commission on
Agriculture
NGOs Corporate Rural
Marketing Definition
Decisions to produce
saleable farm
commodities involving allthe aspects of the market
system or structure, both
functional and
institutional, based on
technical & economic
considerations and
includes the pre & postharvest operations.
Marketing products
produced in rural areas to
urban areas
Marketing products
produced in rural areas in
rural markets
Function that manages all
activities involved in
assessing, stimulatingand converting the
purchasing power of rural
consumers into effective
demand for specific
products and services to
create satisfaction & a
better standard of livingfor achieving
organisational goals.
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Sr. No Time Frame Key Events & Trends
1 Phase One( Pre 1960s) Marketing rural products
in rural and urban areas
Agricultural inputs in
rural areas
Agricultural marketing
Farming methods were
primitive and
mechanisation was low
Markets unorganised
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2 Phase Two ( 1960s to 1990s) Green Revolution
Companies like Mahindra
and Mahindra, Sri Ram
Fertilisers emerged
Rural products were also
marketed throughagencies like KVIC
3 Phase Three( 1990s to Present) Demand for consumables
and durables rise
Companies find growth
in urban marketsstagnating or falling
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` Diverse change levers in rural India
` The pull of the cities & towns migration and its side
effects.
` Effect of government programmes.
` Natural & manmade disasters
` Slow but sure change
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` 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)
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Food Grain Crops
On land activities
Farm Activities
Non food, cash crops
Livestock & fisheries
Manufacturing &services
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Sector Year 1987 ( % share in
employment)
Year -2004 ( % share in
employment)
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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1971 1981 1991 2001
TotalPopulation (in
million)
548.2 683.3 848.3 1026.9
RuralPopulation (in
million)
524.0 628.8 741.6
As a proportionof total
population
76.7 74.3 72.2
DecadalVariation
19.8 16.7 15.2
Source: Census 2001
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` Key findings from 2001 census
` Population density 253/ sq kilometer and total number of villages is
638, 588
` Villages having less than 500 population are falling
` Villages having 2000 + population most prosperous
` Size of villages/ habitations are changing
` Role & influence of towns is changing
` Social interaction is a mix of rural and urban
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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