STRATEGIC ALTERNATIVES IN RURALMARKETING

Dr. L. K. Vaswani KIIT School of Rural Management (KSRM) KIIT University, Bhubaneswar

FICCI Rural Marketing Summit 2007

New Delhi, 9-10th May 2007
KIIT School of Rural Management (KSRM)

RURAL MARKETING TASK ENVIRONMENT Nearly 44% of total villages have population less than 500 (fragmentation). Only 33% of total villages only are connected by pucca roads (accessibility). McKinsey four-fold classification of 593 rural districts:
67 were classified as urban cousins, 118 as those close to rural economic centres 160 as able districts with basic minimum infrastructure 248 districts as deprived
KIIT School of Rural Management (KSRM)

RURAL MARKETING TASK ENVIRONMENT

Poverty ratio at the national level was 27.8 and 22.0 percent (NSS 61st Round data for 2004-05) based on two different criteria. SCs and STs constitute 24.43 percent of the countrys population and continue to be socioeconomically backward. Share of agriculture in total employment down to 54.19 percent in 2004-05 from 61.67 percent in 1993-94. With the declining share of agriculture to 18.5 percent in GDP, the scope for absorbing substantial labour force appears limited.
KIIT School of Rural Management (KSRM)

RURAL MARKETING SCHOOLS OF THOUGHT Economic vs. Development Perspective Schools of Thought in Development Perspective Determinist School: Marketing responds to environmental stimuli and plays passive role in development Activist School: Marketing as a stimulus in economic development
KIIT School of Rural Management (KSRM)

RECONCEPTUALISING RURAL MARKETING As per activist school of thought marketing plays an active role in development. Conceptualising rural marketing as an instrument to deliver standard of living rather than a process of exchange. New business models to associate rural people in production-distribution chain to profit and improve their incomes with a goal to

Create customers.
KIIT School of Rural Management (KSRM)

MARKETING- CURRENT AND EMERGING PERSPECTIVE Mainstream marketing twin perspective customer behaviour and strategic marketing. Emerging perspective create and distribute values among the market parties. In other words, win-win behaviour between market parties, i.e., buyers and sellers.
KIIT School of Rural Management (KSRM)

PROPOSED RURAL MARKETING PERSPECTIVE

Proposed dual perspective of rural marketing : rural producers empowerment and strategic marketing. Enhancing rural producer productivity from marketing exchange to rationalise their gains through productivity enhancing systems.
KIIT School of Rural Management (KSRM)

PROPOSED RURAL MARKETING PERSPECTIVE

As products of rural industries lose out in wider marketplace Strategic marketing perspective is necessary to improve productivity, cut costs and improve profitability of rural enterprises To promote farm and non-farm products with comparative/competitive advantage Combine global and local characteristics which are consistent with consumer preferences in local markets
KIIT School of Rural Management (KSRM)

REDEFINING RURAL MARKETING DOMAIN

Rural Buyer-Seller (Producer) Matrix

Seller Rural I RS-RB Intra-Rural (All Products) III RS-UB Farm & Non-Farm products Urban II US-RB ConsumerGoods/Services Agro-Inputs/Farm Implements & Machinery IV US-UB Intra-Urban (All Products)

Rural
Buyer

KIIT School of Rural Management (KSRM)

Urban

CATEGORIES OF VILLAGE INDUSTRIES

Minerals based - pottery, lime stone Textiles (excluding Khadi) - readymade garments, leather, bandages Agro and Food Polymer and Chemical based - cottage soap, rubber, detergent, essential oils Engineering and Non-Conventional Energy carpentry, blacksmithy, aluminium Forest Based - hand made paper, cane and bamboo, herbal products, honey, gums & resins Services
KIIT School of Rural Management (KSRM)

TYPE OF RURAL MARKETING EXCHANGE RELATIONSHIP AND PROMISING MODELS

Type of Market Exchange Relationship RS RB RS UB (Farm) RS UB (Non-Farm) US RB (Agro inputs) US RB (Goods/Services)
KIIT School of Rural Management (KSRM)

Promising Models
-Gandhigram Rural Trust -Amul/Contract Farming/ - ITCs e-Choupal /Reliance -KVIC /SHGs/ RBH

Rural Service Centres Rural Malls / Project Shakti

INDIAN RETAIL:ON THE FAST TRACK KPMG-FICCI SURVEY 2006

KIIT School of Rural Management (KSRM)

TYPOLOGIES OF MARKET INSTITUTIONS AND TRANSANCTIONS

Seller Rural I( RS-RB) Rural
Buyer
Rural Haats /Rural Retail

Urban II(US-RB)
Consumer Goods/Services Rural Haats /Rural Retail/ Malls/ HLL Project Shakti Agro-Inputs/Farm Equipments Rural Service Centres/ Rural Haats / Retail / Malls

III(RS-UB)
Farm products Rural Haats/ APMCs/Contract Farming/Reliance/ ITC e-Choupal Non-Farm products Rural Haats /Exibitions/ RBHs/Domestic Trade/Exporters

IV(US-UB)

KIIT School of Rural Management (KSRM)

Urban

RURAL MALLCUMHAAT:
A Retail Format for Broad Based Rural Economic Growth RURAL MALL RURAL HAAT

Organisational Support/ Professional Management Market Access Higher Productivity of Market Transactions

Cover all types of market exchange relationships Consumer Gravitation Higher footfalls New product opportunities

KIIT School of Rural Management (KSRM)

SUMMARY
Rural Marketing in development paradigm goal as creating customers Dual perspective: - Rural Producers Empowerment and Strategic Marketing. Promising Exchange Models require upscaling and replicability. Broad basing rural retailing to cover all exchange relationships through Rural Mallcum-Haat.
KIIT School of Rural Management (KSRM)

KIIT School of Rural Management (KSRM)