Session I - Rural Marketing

23
Introduction to Introduction to Rural Marketing Rural Marketing Session – I Session – I

Transcript of Session I - Rural Marketing

Page 1: Session I - Rural Marketing

Introduction to Rural Introduction to Rural Marketing Marketing

Session – I Session – I

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

Agriculture’s share in GDP is going down, but, Agriculture’s share in GDP is going down, but,

India still lives in her villages India still lives in her villages

Urban markets are crowded and saturated Urban markets are crowded and saturated

The understanding of “rural” is diffused and The understanding of “rural” is diffused and

sometimes confusing sometimes confusing

Is “rural marketing” different from “urban Is “rural marketing” different from “urban

marketing” ?marketing” ?

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Session Coverage Session Coverage

Rural India – Some definitional issues Rural India – Some definitional issues

Phases/ stages in rural marketingPhases/ stages in rural marketing

Scope of rural marketing Scope of rural marketing

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

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

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

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Defining Rural India Defining Rural India

OrganisatioOrganisation n

Definition Definition Limitations Limitations

NSSO NSSO ( Census) ( Census)

Population density < 400 / Sq Km Population density < 400 / Sq Km 75 percent of the male working 75 percent of the male working population is engaged in agriculture population is engaged in agriculture No Municipal corporation / board No Municipal corporation / board

rural not rural not defined defined

Planning Planning CommissioCommission n

Towns upto 15,000 population are Towns upto 15,000 population are considered rural considered rural

Town Town characteristics characteristics not defined not defined

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Cont’d Cont’d

LG Electronics LG Electronics All places other than All places other than the 7 metros the 7 metros

Only clarifies what Only clarifies what are the cities are the cities

NABARD NABARD All locations with a All locations with a population upto 10, population upto 10, 000 considered “ 000 considered “ rural” rural”

Village & town Village & town characteristics not characteristics not defined defined

Sahara Sahara Commercial Commercial establishments establishments located in areas located in areas servicing less than servicing less than 1000 population 1000 population

Population Population characteristics characteristics unknown unknown

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

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Defining Rural Marketing Defining Rural Marketing

National Commission National Commission on Agriculture on Agriculture

NGOs NGOs Corporate Rural Corporate Rural Marketing Definition Marketing Definition

Decisions to produce Decisions to produce saleable farm saleable farm commodities commodities

involving all the involving all the aspects of the market aspects of the market system or structure, system or structure, both functional and both functional and institutional, based institutional, based

on technical & on technical & economic economic

considerations and considerations and includes the pre & includes the pre &

post harvest post harvest operations. operations.

Marketing products Marketing products produced in rural produced in rural

areas to urban areas areas to urban areas

Marketing products Marketing products produced in rural produced in rural

areas in rural markets areas in rural markets

Function that Function that manages all activities manages all activities involved in assessing, involved in assessing,

stimulating and stimulating and converting the converting the

purchasing power of purchasing power of rural consumers into rural consumers into effective demand for effective demand for specific products and specific products and

services to create services to create satisfaction & a satisfaction & a

better standard of better standard of living for achieving living for achieving organisational goals.organisational goals.

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Phases in Rural Marketing Phases in Rural Marketing

Sr. No Sr. No Time FrameTime Frame Key Events & Trends Key Events & Trends

1 1 Phase One( Pre 1960’s) Phase One( Pre 1960’s) Marketing rural Marketing rural products in rural and products in rural and urban areas urban areas Agricultural inputs Agricultural inputs in rural areas in rural areas ““Agricultural Agricultural marketing”marketing”Farming methods Farming methods were primitive and were primitive and mechanisation was mechanisation was lowlowMarkets Markets unorganised unorganised

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Cont’d Cont’d

22 Phase Two ( 1960s to 1990s) Phase Two ( 1960s to 1990s) Green RevolutionGreen RevolutionCompanies like Companies like Mahindra and Mahindra and Mahindra, Sri Ram Mahindra, Sri Ram Fertilisers and IFFCO Fertilisers and IFFCO emergeemergeRural products were Rural products were also marketed also marketed through agencies like through agencies like KVIC KVIC

3 3 Phase Three( 1990s to Present)Phase Three( 1990s to Present) Demand for Demand for consumables and consumables and durables risedurables riseCompanies find Companies find growth in urban growth in urban markets stagnating or markets stagnating or falling falling

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Scope of Rural Marketing Scope of Rural Marketing

Keenly debated topic Keenly debated topic

Definitions based on organisational/ institutional Definitions based on organisational/ institutional

vision, mission & goals vision, mission & goals

Need for a Need for a comprehensive and modularcomprehensive and modular

understanding understanding

Rural Marketing is a “ work in progress” Rural Marketing is a “ work in progress”

Multi – disciplinary approach is necessary for Multi – disciplinary approach is necessary for

sharper understanding sharper understanding

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Domain of Rural Marketing Domain 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 Marketing Scope of Rural Marketing

Domain Domain of Rural of Rural MarketinMarketingg

Dimensions of the transactionDimensions of the transaction

Participants Participants ProductsProducts/ /

services services

Modalities Modalities Norms Norms Outcomes Outcomes

Rural to Rural to Rural Rural

Rural to Rural to Urban Urban

Urban to Urban to Rural Rural

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Changes in Rural India 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

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Transitions In Rural India Transitions 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 Rural Employment Patterns( Male)Patterns( Male)

Sector Sector Year – 1987 ( % share in Year – 1987 ( % share in employment)employment)

Year -2004 ( % share Year -2004 ( % share in employment)in employment)

Agriculture Agriculture 75 75 67 67

Transport & Transport & CommunicatioCommunicatio

nn

22 88

Trade & Trade & Hotels Hotels

55 7 7

Construction Construction 44 77

ManufacturinManufacturing g

77 8 8

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

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Rural India – Population TrendsRural India – Population Trends

19711971 19811981 19911991 20012001

Total Total Population Population (in million) (in million)

548.2548.2 683.3683.3 848.3848.3 1026.91026.9

Rural Rural Population Population (in million)(in million)

524.0524.0 628.8628.8 741.6741.6

As a As a proportion proportion

of total of total population population

76.776.7 74.374.3 72.272.2

Decadal Decadal Variation Variation

19.819.8 16.716.7 15.215.2

Source: Census 2001Source: Census 2001

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Cont’d Cont’d

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

nuclear family system nuclear family system

The occupational pattern shows a predominance The occupational pattern shows a predominance

of cultivators and wage earners of cultivators 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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Rural Settlement & Habitation Rural Settlement & Habitation TrendsTrends

Key findings from 2001 census Key findings from 2001 census

Population density 253/ sq kilometer and total Population density 253/ sq kilometer and total

number of villages is 638, 588 number of villages is 638, 588

Villages having less than 500 population are falling Villages having less than 500 population are falling

Villages having 2000 + population most Villages having 2000 + population most

prosperousprosperous

What are the implications of these trends?What are the implications of these trends?

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Cont’d Cont’d

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

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

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

Let’s look at some key trends in detailLet’s look at some key trends in detail

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Rural Income Trends Rural Income Trends

Annual Income ( Annual Income ( at 1998-99 at 1998-99

prices)prices)

Income Class Income Class 1989-90( % 1989-90( % Households) Households)

1998-99 ( % 1998-99 ( % Households) Households)

<= 35,000 <= 35,000 LowLow 67.367.3 47.9 47.9

35,001- 70,000 35,001- 70,000 Low Middle Low Middle 23.923.9 34.834.8

70,001 – 70,001 – 1,05,0001,05,000

Middle Middle 7.1 7.1 10.4 10.4

1,05,001- 1,05,001- 1,40,0001,40,000

Upper Middle Upper Middle 1.21.2 3.9 3.9

> 1,40,000> 1,40,000 High High 0.5 0.5 3.0 3.0

Source: National Council for Applied Economic Research, 2000

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Rural Marketing- Schools of Rural Marketing- Schools of Thought Thought

Determinist School Determinist School

Activist School Activist School

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

Dependent on level of market development, Dependent on level of market development,

stage in the PLC and access to resources stage in the PLC and access to resources

Amul & ITC prominent examples Amul & ITC prominent examples

No water-tight compartmentalisationNo water-tight compartmentalisation

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Strategic Issues & Directions in Strategic Issues & Directions in Rural Marketing Rural Marketing

Evolutionary Vs revolutionary changes in rural Evolutionary Vs revolutionary changes in rural

marketsmarkets

Role of state & market forces Role of state & market forces

ICT based interventions ICT based interventions

Partnership innovations Partnership innovations

Developmental role of rural marketing Developmental role of rural marketing

Scalability & replication of rural marketing Scalability & replication of rural marketing

programmes programmes

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ICT in Rural Markets ICT in Rural Markets

Category Category GovernmentGovernment Private Private NGO/ PPP NGO/ PPP

Infrastructure Infrastructure Provision Provision

NIC NIC N- Logue N- Logue Simputer Simputer

Rural Services Rural Services Bhoomi( KarnatBhoomi( Karnataka) aka)

Sewa Sewa

Agri Marketing Agri Marketing Agmarknet Agmarknet E- Choupal E- Choupal Ozhwar Ozhwar Sandhiyes Sandhiyes

Agri extension Agri extension Universities Universities EID ParryEID Parry

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Close of Session Close of Session

Thank You Thank You