rural mktg intro

8/4/2019 Rural Mktg Intro

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"India's way is not Europe's. India is not Calcuttaand Bombay. India lives in her several hundreds

of villages

- Mahatma Gandhi


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Defining RURAL

Places far away from towns or cities Collins Cobuild Dictionary (2001)

A group of people who are traditionalist inoutlook, rooted in the land and who resist

change. Sociology

Census of India 2001 defines rural as that what is noturban. And urban is

All locations within municipality/corporation, NACs

Min 5000 population

At least 75% of male workforce engaged in non-agricultural activities.

Population density of over 400 per sq km.


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Defining RURAL

Towns upto 15,000 population are considered

rural.

Planning Commission

All locations with a population upto 10, 000

considered rural .

NABARD

All places other than the 7 metros.

LG ELECTRONICS


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Defining Rural Marketers view

A place with population of up to 20000.

FMCG & Agri input companies

Any town below population of 50000 isconsidered as rural market.

Durable goods companies

An area which usually begins where organizeddistribution and media reach ends.

Marketing parlance


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Rural Marketing

Mr. Pradeep Kashyap is known as the father of

rural marketing in India.

Rural Marketing is similar as simply

marketing.

Rural marketing differs only in term of buyers.

Target market consists of customers living in rural

areas. Thus, rural marketing is application of marketing

fundamentals (concepts, principles, processes,

theories, etc) to rural markets.


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Two way marketing process, directs the

flow of goods from urban to rural and vice-

versa.


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Rural Marketing - Defined

Definition: Rural marketing is a process ofdeveloping, pricing, promoting, and distributingrural specific goods and services leading to

desired exchange with rural customers to satisfytheir needs and wants, and also to achieveorganizational objectives.

Marketing products produced in rural areas to urban

areas & Marketing products produced in rural areasin rural markets.

NGOs


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Rural Marketing - Defined

It is a process which starts with a decisions to

produce saleable farm commodities involving all

the aspects of the market system or structure,

both functional and institutional, based on

technical & economic considerations and

includes the pre & post harvest operations,

assembling, grading, storage, transportation anddistribution.

National Commission on Agriculture


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Nature & Characteristics of Rural

Market

Large and scattered market : 6,38,365 villages spread over 32 lakhs square km

1,45,098 villages, or 23% of total villages in India, havepopulation less than 200

Another 21% have population between 200 to 500

13% villages have 50% rural population and possess60% of rural wealth.

Heterogeneous market: 20,000 ethnic group resides in rural India. 24 languages & 1642 dialects (boli)

Wide regional disparities & inequalities.


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Market

Rural income from Agriculture: 55% of rural income comes from agriculture

Lower Standard of Living:

Over 70% is employed in small scale agricultural andrelated occupation.

Poor Infrastructural Facility: Inadequate roads, warehouses, communication

systems, financial facilities

50% of villages are not connected by pucca road

46% of rural households depend on kerosene forlighting.


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Lower literacy levels:

Higher literacy rate in southern India as comparedto northern part.

The difference in literacy between the rural and urbanmarkets is much more among the female population thanthe male population. (Women: Rural - 47%, Urban 73%)

Superstitious/traditional outlook

Land use Pattern: 60% of cultivated land is used for food crops

Nearly 50% of the produce is retained forconsumption & balance for sale.


Market


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Market

Response to products-utility, durability and

value, suitability

Response to Price-Price sensitive Response to promotion-local promotions,

personal selling

Response to distribution-known retailers,familiar salesman


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Potential of Rural Market

According to research firm The Nielson Company,FMCG market in rural India is tipped to touch US$100 billion by 2025, demand driven by risingincome levels.

As per census report 03-04, rural per capitaconsumption expenditure grew by 11.5% per centwhile the urban expenditure grew by 9.6% .

The joint family system is being replaced by thenuclear family system

Cultivators( 40.86 %) and Wage Earners( 35.28 %)according to NCAER studies (2002)


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As per estimates, 5 lakhs rural people havegone abroad & sending remittance to theirfamilies.

HUL gets 50% of its sales turnover from ruralIndia.

LIC sells 50% of its policies in rural India

FMCGs have a market worth Rs64,800 crore inrural India

Soft drinks worth Rs1,800 crore are selling inrural India.


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Rising Rural Prosperity: the rural consuming class is increasing by about 3-4%

per annum which is roughly 1.2 million new consumersyearly.

In states like Punjab & Haryana, lot of rich farmersreside.

Favourable Govt. Policies: The govt. is spending a lot on rural areas thru different support

programmes to enhancing their standard of living

National Rural Employment Guarantee Act (NREGA) Rural Infra Development prog. Under Bharat Nirman

Sampoorna Gramin Rozgar Yojana

PMGSY (PM GRAM SADAK YOJANA)

INDIRA AWAS


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Some Facts about Rural India

Increasing rural consumption: As per NCAER report2002

Rural consumption is more than urban,

The sales of FMCGs from the rural areas accountingfor 35% and of durables for 59%.

Rural marketing efforts:

Innovative models are being developed to make thebranded products available to the rural consumers.

Increased penetration is one of the major reason fordevelopment of the rural markets


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Some Facts about Rural India

Increasing sales of branded products:

As per FICCI estimates 1/3 of premium luxury goodswere sold in rural markets in 2002

O & Ms rural communication head says brandedgoods comprises 65% sales in villages

Increased penetration of Electronic Media

Large population:

71 crores people living in rural India By 2006 rural consuming class was expected to 432

million.


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To summerise


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Rural India Population 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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Rural 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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Some Live Examples

of Rural Marketing

'Jaandar Sawari, Shaandar Sawari'


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rural mktg intro

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