Rural Marketing - Session 1 (Intro)

8/8/2019 Rural Marketing - Session 1 (Intro)

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RURAL MARKETING


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Why should we do this

course? Agricultures share in GDP is going down, but, India

stilllives inhervillages

Urban markets are crowdedand saturated

The understanding ofruralis diffusedand

sometimes confusing

Is rural marketingdifferentfrom urban marketing

?


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The real voyage of discovery consists not inseeking new landscapes, but in having neweyes.

Marcel Proust


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EVOLUTION

Gone are the days whenrural consumerswent toanearby city to buy branded stuff

Todayrural markets are criticalfor everymarketer-be ita branded shampoooranautomobile

Televisionhas playedanimportantrole Ruralis growing twice as fastas urban

markets


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India Diversity 17 % of the worlds

populationin 2% ofits landmass

24 languages 1642Dialects

All majorreligions 20000ethnic groups

6, 38,691villages and5,164 towns.

70 % ofpopulation stillRuralandagrarian.

India - Not Just One Country


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Rural Markethas arrived 742 million people Ruralis bigger thanurban

FMCG's 53%

Durables 59% sSource: NCAER,2002

Estimatedannual size of the rural market FMCG Rs 65,000 Crore Durables Rs 5,000 Crore Agri-inputs (incl. tractors) Rs 45,000 Crore

2 / 4 wheelers Rs 8,000 Crore Total Rs 1,23,000 Crore

Source: Francis Kanoi, 2002


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Phases ofRural MarketingPhase Time Period Nature Major Products Source

marketTargetmarket

I Independence toGreen Revolution

Agri Mktg. Agri. Produce Rural Urban

II Green Revolution toPre Liberalisation

Mktg. ofagriinputs

Agri Inputs Urban Rural

III Post Liberalisation in

20th Century

Rural Mktg. Consumable and

durables forconsumptionandproduction

Urban &

Rural

Rural

IV 21stCentury DevelopmentMktg.

All Products andServices

Urban &Rural

Urban &Rural


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Indian Rural MarketSome facts about Indian Rural Market

1. Indiahas 72% of total populationin theruralareas.

2. The rural marketis notfullydeveloped & it

has verylow literacyrate.3. Butithas very good potentialkeeping in

mind the numberofpeople residing there.


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Why Indian Rural Market is

Growing? The income level & the distributionofincome is

becoming equal & balanced. So the people in the

ruralareas have the same opportunityofgrowthasthe people ofurbanareas have.

Good supportfrom the private as wellas thegovernmentagencies is providedfor thedevelopmentof the ruralarea people. Institutions

like ICICI, IFCI, SIDBI etc. have introduced manyschemes whichare resulting into the developmentof these people.


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Why Indian Rural Marketis

Growing? The scope in the urbanareais restricteddue

to the dominance of the big and multinational

company. So, many small scale industriescame in the ruralareas resulting into thedevelopmentof the ruralarea.

Increasing exposures to the outer world

through the developmentofmediaresultintothe change in the mindset.


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The Rural Economy


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The Rural Economic StructureRural Economy

Farm Sector(Agri & Allied)

Non-farm sector(formalandinformal sector)

RuralindustriesAgriculture Rural Services

Animal Husbandry(dairy, goat, poultry)

Horticulture

Forestry

Fishing

Agro Processing(Sugarcane,oilseed etc.)

Manufacturing(Handlooms, Handicrafts,etc.)

Mining & Quarrying

Construction

Retailing & Trading

Community & Social Service

Transport & Storage

Communication


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Rural Employment Patterns(

Male)Sector Year 1987 ( % share in

employment)Year -2004 ( % share

in employment)

Agriculture 75

Transport &Communicatio

n

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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Rural India Population Trends

1971 1981 1991 2001

Total

Population (inmillion)

548.2 683.3 848.3 1026.9

RuralPopulation (in

million)

524.0 628.8 741.6

As a

proportion oftotal

population

76.7 74.3 72.2

DecadalVariation

19.8 16.7 15.2

Source: Census 2001


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Contd The jointfamily system is being replaced by the

nuclearfamily system

The occupational pattern shows a predominance of

cultivators and wage earners

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


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Rural Income TrendsAnnual Income (

at 1998-99prices)

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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Understand & Feel We believe,Farmeris the face

ofRural Markets As such to successfully explore

Rural Markets, we must

understand typicalneeds of theFarmer Having done so, we must work-

outa solution which whenpresented, makes the Farmerfeel empowered

The Mantrais Doitinfieldand

notin Boardrooms


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Whatis Rural Marketing Planning andimplementationof

marketing functionfor the ruralareas.Itis a two-way marketing processwhich encompasses the discharge ofbusiness activities thatdirect the flow of

goods from urban toruralandviceverca


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Characteristics ofRural Marketing

Large & scattered market

Heterogeneous market Income from agriculture

Standardofliving

Infrastructure facilities


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Challenges in Rural Marketing Distribution

Understanding the psyche of the rural consumer

Limitedknowledge Communication

Cost per contact

State offakes and spurious products

Budgetallocations

Urbanorientationand bias

Lackofright competence &

Commitmentatfrontline level


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Opportunities in Rural Marketing Rising rural prosperity

Lesserdependence onagriculture and

monsoon

Increasing rural consumption

Rural marketing efforts

Increasing sale ofbranded products Large population


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Rural Marketing- Schools of

Thought

Determinist School

Activist School Whatis the rightapproach?

Dependentonlevelofmarketdevelopment, stage in

the PLC andaccess toresources

Amul & ITC prominent examples


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Strategic Issues & Directions in

Rural Marketing

Evolutionary Vs revolutionary changes inrural

markets

Role ofstate & marketforces

ICT basedinterventions

Partnership innovations

Developmentalrole ofrural marketing

Scalability & replicationofrural marketing

programmes


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ICT in Rural MarketsCategory Government Private NGO/ PPP

InfrastructureProvision

NIC N- Logue Simputer

Rural Services Bhoomi(Karnataka)

Sewa

Agri Marketing Agmarknet E- Choupal OzhwarSandhiyes

Agri extension Universities EIDParry


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Urban & Rural Markets

Comparative Analysis


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What should be keptin mind to

get success in Rural Market? The 4A Approach :

Availability

Affordability

Acceptability

Awareness


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CONCLUSION

Looking at the challenges and the opportunities

which rural markets offer to the marketers ,it can besaid that the future is very promising for those who

can understand the dynamics of rural markets and

exploit them to their best advantage.


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The future lies with those companieswhosee poorastheircustomers

-C.K. Prahlad to Indian CEOs, Jan 2000

To getrich,sell topoor

- Pradeep Kashyap


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Take Awayfrom the Lecture


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THANK YOU

Rural Marketing - Session 1 (Intro)

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Transcript of Rural Marketing - Session 1 (Intro)