RURAL MARKETING

- KIRUBA DANIEL J

UNIT I

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Contents

DEFINITION EVOLUTION SIZE NATURE INFRASTRUCTURE

Rural

Vs

Urban in India

Living Condition Economy Education Water & Electricity Cost of Living Environment

Definition

Rural Marketing can be defined as the unction that manages all activities involved in ssessing, stimulating and converting the urchasing power of rural consumers into an ffective demand for specific products and services nd moving these products and services to the eople in the rural areas to create satisfaction and a etter standard of living and thereby achieve rganisational goals

Evolution of Rural Marketing

Phase : I (Before 1960s)

Synonymous with Agricultural Marketing Products : Food grains, Sugar & Cotton Inputs were limited (fertilizers, pesticide etc.) Unorganised

Evolution of Rural Marketing

Phase : II (1960s 1990s) Green Revolution & White Revolution Marketing of Agricultural Inputs Village Economy boosted Promotion of village industries

Evolution of Rural Marketing

Phase : III (1990s - present) Potential of Rural market came into light FMCG, durables, Agri-inputs, 2/4 wheelers Government plans Organised

Size of Rural Markets

Estimated annual size : Rural Market FMCG `65000crore Durables Agri-inputs 2/4 wheelers

`5000crore `45000crore `8000crore `1,23,000crore

FMCG Market Durables Market

Total

Nature of Rural Market

The number of middle income and high income households in rural Indian is expected to grow from 46 million to 59 million. Growing @ 5 times the pace of the urban mkt. Low literacy rate Increasing agricultural productivity Lowering of difference between taste of urban and rural customers

Profile of Rural consumers

The rural consumer is very conscious about getting value for money.

He understands symbols and colors better, and looks for endorsement by local leaders or icons.

He doesn't like to pay extra for benefits he cannot use.

He has his daily routine, and there is no sense of urgency in his lifestyle.

He has a very high involvement in any product purchased, especially when he decides to buy high-end products, which cost a few hundreds or thousands of rupees.

Profile of Rural consumers

Traditional back ground

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Perception Less exposure Money value Attitude

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KIRUBA DANIEL J

Rural Market Structure

I.

Demographic Environment - purchasing power has gone up by 2%

Education & Level of Demand Household Pattern Rural Housing Pattern Occupational Pattern

Rural Market Structure

II.

Physical Environment
Rural & Urban Life

III. Economic Environment

IV. Social & Cultural Environment

Village Community Caste System

Rural Market Structure

V. Political Environment

Panchayat Raj Institutions

VI. Technological Environment

Green Revolution White Revolution The NGO Movement

Opportunities in Rural Markets

"The future lies with those companies

who see the poor as their customers."
- C. K. Prahalad
Addressing Indian CEOs, Jan 2000.

Opportunities in Rural Markets

Estimated annual size : Rural Market FMCG 65000crore Durables Agri-inputs 2/4 wheelers

5000crore 45000crore 8000crore 1,23,000crore

FMCG Market Durables Market

Total

Opportunities in Rural Markets

Infrastructure is improving rapidly

In 50 years only, 40% villages have been connected by road, in next 10 years another 30% would be connected.

Opportunities in Rural Markets

More than 90% villages are electrified, though only 44% rural homes have electric connections.

Opportunities in Rural Markets

Rural telephone density has gone up by 300% in the last 10 years; every 1000+ pop is connected by STD.

Opportunities in Rural Markets

Number of "pucca" houses doubled from 22% to 41% and "kuccha" houses halved (41% to 23%).

Opportunities in Rural Markets

Percentage of BPL families declined from 46% to 27%.

-Global poverty line is $1.25 per day

Opportunities in Rural Markets

Rural literacy level improved from 36% to 59%.

Opportunities in Rural Markets

Durables Urban CTV 30.4 Refrigerator 33.5 Rural 4.8 3.5

FMCGs

Urban 66.3 82.2

Rural 35.2 44.9

Shampoo Toothpaste

Opportunities in Rural Markets Marketers can make effective use of the large available infrastructure Post Offices 1,38,000 Haats (periodic markets) 42,000 Melas (exhibitions) 25,000 Mandis (agri markets) 7,000 Public Distribution Shops 3,80,000 Bank Branches 32,000

Opportunities in Rural Markets

Proliferation of large format Rural Retail Stores, which have been successful also

DSCL Haryali Stores TATA / Rallis Kisan Kendras

KIRUBA DANIEL J

Myths & Reality

Myth 1: Rural Market is a Homogeneous Mass

Reality: It's a heterogeneous population.

arious Tiers are present depending on the incomes like Big andlords; Traders; Small Farmers; Marginal Farmers: Labourers; rtisans. State wise variations in rural demographics are present iz. literacy (Kerala 90%, Bihar 44%) and population below poverty ne (Orissa 48%, Punjab 6%).

Myths & Reality

Myth 2: Disposable Income is Low

Reality: Number of middle class HHs for rural sector is 27.4 million as compared to the figure of 29.5 million for urban sector.

Rural incomes CAGR was 10.95% compared to 10.74% in urban between 1970-71 and 1993-94.

Myths & Reality

Myth 3: Individuals Decide About Purchases

Reality: Decision making process is collective.

Purchase process - influencer, decider, buyer, one who pays - can all be different. So marketers must address brand message at several levels. Rural youth brings brand knowledge to Households (HH).

Challenges

The main problems in rural marketing are:

Understanding the Rural Consumer Poor Infrastructure Physical Distribution Channel Management Promotion and Marketing Communication

Rural Market Infrastructure

Transport & Communication

Road connectivity Post offices Radio Television Press & Print Media Telecom services Mobile Services Electrification

Rural Market Infrastructure

Social Infrastructure

Health Education Public Distribution

Agri Infrastructure

Mandis Agricultural Cooperatives

Rural Market Infrastructure

Marketing Infrastructure

Haats Melas Shops

Commercial Infrastructure

Regional Rural banks Scheduled Commercial Banks Cooperative Banks

KIRUBA DANIEL. J
Lecturer, MBA dept., Sri Venkateswara Institute of Information Technology & Management, Ettimadai, Coimbatore jkirubadaniel@gmail.com

Thank You !

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