CHAPTER 23 (Rural Marketing)

8/7/2019 CHAPTER 23 (Rural Marketing)

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Marketing Management by Arun Kumar and N Meenakshi Vikas Publishing House Pvt. Ltd. 2006

CHAPTER 23RURAL MARKETING


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Necessity and nature of innovations for ruralmarkets

Planning the marketing mix for rural markets:

Nature of product and service decisions,including categories of products sold in rural

markets; pricing mechanisms and strategies;

Distribution planning and implementation;

Promotional elements

Understanding rural market research process

Learning Objectives (Contd.)


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Rural marketing is identifying and serving theneeds of consumers living in villages

Geographical location of villages vary

Primary source of rural income is agriculture Rural markets different from urban markets in

significant ways

Marketers should understand the livingconditions of rural consumers beforeattempting to sell to them

Learning Objectives (Contd.)


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JAJMANI SYSTEM

A self-sufficient economy system

Revolved around the farmers who owned land

Specialist castes who provided services tothe farmers and to each other

System under threat due to urbanization that

provided relief from exploitation

Village economy is in a transition stage


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SOURCES AND PATTERNS

OF INCOME Primary source is agriculture

No regular income throughout the year

Cash only at the time of harvest Marketers should notice of time of year when incomes

are due

Crop patterns vary, and time of cash surpluses from

harvests vary geographically

Cash crops and services leading to stable cash flows

throughout the year.


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TARGET SEGMENTS Distinct segments in rural markets

Rich farmers who own lot of land; Farmers

who own some land; Daily wage workers

Visible changes in last group due to

government policies and urbanization

Uncertainty whether village consumers willgrow richer or poorer

Rural economy and community is in a flux


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RURAL CONSUMER

BEHAVIOR Super rich rural population ostentatiouscustomers

Village a close community Average rural consumer very reluctant

purchaser

Difficult to sell expensive products and

services to rural consumer


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Rural consumers already have a settledway of life and marketers products

and services not really needed

Marketers products and services either

have to change lives of rural consumers in

significant ways, or be very inexpensive to

become acceptable to them

Rural Consumer Behavior (Contd.)


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INNOVATIONS FOR RURAL

MARKETS Have to innovate profusely

Companies products and services must fit in existing

life conditions Products must be designed differently for rural

markets

Most of the current products and services are not

saleable in rural markets

Products and services in the urban market should not

be the reference points for rural markets


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PRODUCT AND SERVICE

DECISIONS Consumer durable products

Lack reliable supply of electricityRural families reluctant to buy durableitems

Consumer durable products will be useddifferently

Consider such products to be luxury


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Fast moving consumer goods

Self sufficiency barrier to productpurchase

Substitutes available and in use

Products cannot be sold by ruralinvasion

Products adoption slow and educativeprocess

Companies need to be patient

Product and Service Decisions (Contd.)


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Services

Rural markets most attractive for

services

Big vacuum in the rural service

infrastructure

Changes in social structure hastening the

requirement of servicesProfessional services emerging

opportunity



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Farming equipments and products

Obvious requirement of farmingequipments

Changing rural scenario presents very

different opportunities from the pastHuge opportunity for companies in areasof farm mechanization

Small farmers a captive marketEnter profitable partnerships withfarmers



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Primary services

Huge market for services liketelecommunication, health, education,

transport, drinking water, housing,

electricity etc.Companies should take initiative to

provide these services

Profitable ventures not difficult to find

Inefficiency and ineffectiveness of the

government: Potential opportunities



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PRICING DECISIONS

Both edifices of self-sufficient economy and

closed community of villages crumbling

Do more than just offer products at lowprices

Most rural consumers do not have a steady

and regular source of income Money normally controlled by the eldest

male member


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Understand the revenue cycle and management

of cash of rural consumers

Not insist on cash payment after every

purchase. Extend credit till harvest time

Accept payment through other modes such as

grains

Companies understand the difficulties and

payment preferences of rural consumers and

encourage their rural retailers to adopt these

practices

Pricing Decisions (Contd.)


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DISTRIBUTION DECISIONS

Villages geographically scattered.

Predominant reliance on local markets

Buy their products as they get exhausted, not

for a whole month, unlike urban India

Product is only bought when it is required. If

not available, will use substitutes. Purchase

postponement common.


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Products should be available locally

Interested companies should promote acommon retailer in one village

Chosen retailer to stock practically

everything that the rural consumer of thevillage may require

Running a retail operation not expensive as

perceived Alternatives to rural retailing: Door to door

selling

Distribution Decisions (Contd.)


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PROMOTION DECISIONS

Rural consumers deferential to elders,

people in authority, and highly educated

people

Word-of-mouth promotion crucial in rural

markets

Companies should engender word-of-mouth

promotion


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Ensure that product reaches influentialpeople in the village

Celebrity endorsements can be very useful

Rural consumers are fanatic about listening

to and viewing news programs: Useful for

media planners

Rural consumers avid readers of newspapers

Promotion Decisions (Contd.)


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RESEARCHING RURAL

MARKETS Researcher has to live in the rural market for a

reasonably long period

Should possess sensibilities to notice the

lifestyle of rural consumers

Be one of them to understand them Else, rural consumers will suffer innate policies

and programs of urban marketers

CHAPTER 23 (Rural Marketing)

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