Introduction to Rural Marketing. Why should we do this course? Agriculture’s share in GDP is going...

Introduction to Rural Introduction to Rural Marketing Marketing

Why should we do this Why should we do this course? course?

Agriculture’s share in GDP is going down, but, Agriculture’s share in GDP is going down, but,

India still lives in her villages India still lives in her villages

Urban markets are crowded and saturated Urban markets are crowded and saturated

The understanding of “rural” is diffused and The understanding of “rural” is diffused and

sometimes confusing sometimes confusing

Is “rural marketing” different from “urban Is “rural marketing” different from “urban

marketing” ?marketing” ?

Objectives of Rural MarketingObjectives of Rural Marketing Conceptual clarity about fundamental Rural Conceptual clarity about fundamental Rural

Marketing concepts: Rural and Rural Marketing concepts: Rural and Rural Marketing.Marketing.

Learn about evolution of Rural Marketing in Learn about evolution of Rural Marketing in IndiaIndia

Comprehend the Rural Marketing process as Comprehend the Rural Marketing process as Rural Marketing ModelRural Marketing Model

Comparative analysis of Rural vs. Urban Comparative analysis of Rural vs. Urban Marketing Marketing

Marketing strategiesMarketing strategies

Defining Rural India Defining Rural India

OrganisatiOrganisation on

Definition Definition Limitations Limitations

NSSO NSSO (Census) (Census)

Population density < 400 / Population density < 400 / Sq Km Sq Km 75 percent of the male 75 percent of the male working population is engaged working population is engaged in agriculture in agriculture No Municipal corporation / No Municipal corporation / board board

rural not rural not defined defined

Planning Planning CommisCommission sion

Towns upto 15,000 Towns upto 15,000 population are considered population are considered rural rural

Town Town characteristicharacteristics not cs not defined defined

Contd…Contd…

LG Electronics LG Electronics All places other All places other than the 7 than the 7 metros metros

Only clarifies Only clarifies what are the what are the cities cities

NABARD NABARD All locations with All locations with a population upto a population upto 10, 000 10, 000 considered “ considered “ rural” rural”

Village & town Village & town characteristics characteristics not defined not defined

Sahara Sahara Commercial Commercial establishments establishments located in areas located in areas servicing less servicing less than 1000 than 1000 population population

Population Population characteristics characteristics unknown unknown

Source: The Rural Marketing Book- Text & Practice, Kashyap. P and Raut. S ( 2007)

Rural MarketingRural Marketing

Planning and implementation of marketing Planning and implementation of marketing function for the rural areas.function for the rural areas.

It is a two way marketing process, which It is a two way marketing process, which

encompasses the performance of business encompasses the performance of business activities that direct the flow of goods from activities that direct the flow of goods from urban to rural areas (for manufactured urban to rural areas (for manufactured goods) and vice-versa (for agriculture goods) and vice-versa (for agriculture produce) and also within the rural areas produce) and also within the rural areas (Gopalaswamy, 2005).(Gopalaswamy, 2005).

Contd…Contd…

It is a distinct specialization of It is a distinct specialization of marketing discipline, which encompasses marketing discipline, which encompasses customized application of marketing tools customized application of marketing tools and strategies to understand the psyche of and strategies to understand the psyche of rural consumer in terms of needs, tailoring rural consumer in terms of needs, tailoring the products to meet such needs and the products to meet such needs and effectively delivering them to enable effectively delivering them to enable profitable exchange of goods and services profitable exchange of goods and services to and from the rural market.to and from the rural market.

Marketing perspective in Rural MarketMarketing perspective in Rural Market

Key ConceptsKey Concepts

Marketer : one who seeks response to Marketer : one who seeks response to an offer which he makes to a personan offer which he makes to a person

Consumer : a person who uses a Consumer : a person who uses a product to derive satisfactionproduct to derive satisfaction

Demand : willingness to buy, Demand : willingness to buy, supported by ability to pay. supported by ability to pay.

Contd…Contd… Competition :Competition :

existence of actual and potential existence of actual and potential rival companies, which manufacture perfect rival companies, which manufacture perfect or close substitute product offerings to or close substitute product offerings to attract consumers.attract consumers.

Generic – product vs. productGeneric – product vs. product Form – different products with similar Form – different products with similar

benefitsbenefits Industry – different companies with same Industry – different companies with same

productsproducts Brand- brand vs. brands of same product Brand- brand vs. brands of same product

TypesTypes ProductProduct

GenericGeneric

FormForm

IndustryIndustry

BrandBrand

All durables and consumablesAll durables and consumables

All vehicles, 4 wheelers and 2 All vehicles, 4 wheelers and 2 wheelerswheelers

Automobiles –passenger car Automobiles –passenger car

industryindustry

Maruti- 800 Maruti- 800

Goals of MarketingGoals of Marketing Profitability- Profitability- Revenue maximization, cost Revenue maximization, cost

minimizationminimization Growth – Growth – sales growth, sales growth,

product /market developmentproduct /market development

Market penetrationMarket penetration

DiversificationDiversification Market standing – Market standing – Innovation,Innovation,

leadership,leadership,

consumer satisfactionconsumer satisfaction Image- Image- Brand image, company imageBrand image, company image

Aspects to be considered to achieve the Aspects to be considered to achieve the goalsgoals

Organizational structure : Organizational structure : designed by designed by function, by territory, by market, by function, by territory, by market, by customer, by project or by matrixcustomer, by project or by matrix

Leadership skills : Leadership skills : provides vision and provides vision and secures creative follower ship and secures creative follower ship and integrated operationintegrated operation

Strategic management : Strategic management : Competition, Competition, market, product and consumer.market, product and consumer.

Organizational structureOrganizational structure

By functionBy function M.D

G.M

Product Finance H.R Marketing

Market researchMarketing planningAdvertising PromotionsSalesPublic relations


By TerritoryBy Territory M.D

G.M


Western RegionSouthern regionCentral regionEastern RegionNorthern region


By ProductBy Product M.D

G.M


Detergents/toiletriesChemicalsFoodsAnimal feed


By marketsBy markets M.D

G.M


Domestic Export

InstitutionHouseholdsGovernment


By customersBy customers M.D

G.M


Men wearWomen wearKids wear


By projectBy project M.D

G.M


Project AProject BProject C


By matrixBy matrix M.D

G.M


Project AProject BProject C

Advertising Marketresearch

Sales

Leadership skillsLeadership skills

In the quest of good leadershipIn the quest of good leadership

Leadership : Leadership : clear themeclear theme

Structure : Structure : suitable for operation and goalsuitable for operation and goal

Functional Functional efficiency : efficiency : peoples skilled and trainedpeoples skilled and trained

Coordination : Coordination : coordination and interactioncoordination and interaction

Strategic ManagementStrategic Management

Marketers are in four battle situationsMarketers are in four battle situations

Competition : Competition : gaining victory over gaining victory over competitive firmscompetitive firms

Market: Market: Operating through market life Operating through market life cyclecycle

Product : Product : evolving strategies through evolving strategies through product life cycleproduct life cycle

Consumer: Consumer: Tracking customers, value Tracking customers, value expectations and satisfactionsexpectations and satisfactions

Market life cycle :Market life cycle :

market crystallizationmarket crystallization –a latent –a latent market comes into light with consumer market comes into light with consumer preferencespreferences

market expansionmarket expansion- grows with first - grows with first entrant and late comersentrant and late comers

market fragmentationmarket fragmentation –attains –attains maturity due to intense competitionmaturity due to intense competition

market consolidationmarket consolidation

-during fragmentation one or two introduces -during fragmentation one or two introduces new product and will emerge as winners. new product and will emerge as winners. Markets get consolidated with few big players Markets get consolidated with few big players with stable market shares with stable market shares

market dissolutionmarket dissolution

- market dissolves as the existing technology - market dissolves as the existing technology and product becomes obsoleteand product becomes obsolete..

stagesstages StrategyStrategy

Introduction Introduction basic product, heavy salesbasic product, heavy salespromotion selective promotion selective

distributiondistribution

Growth Growth Product extension, warrantyProduct extension, warrantyoffer, penetration pricing,offer, penetration pricing,moderate sales promotionmoderate sales promotion

Product life cycleProduct life cycle

Contd…Contd…

Maturity Maturity Diversify brands, competitiveDiversify brands, competitivepricing, intensive pricing, intensive

distribution,distribution,moderate sales promotionmoderate sales promotion

Decline Decline Phase out weak items, lowerPhase out weak items, lower price, selective price, selective distribution,distribution, minimal sales promotion minimal sales promotion

Challenges to Indian MarketerChallenges to Indian Marketer

The gradual opening up of Indian economy to The gradual opening up of Indian economy to foreign companiesforeign companies

The increasing number of cross-border The increasing number of cross-border corporate alliancescorporate alliances

The growth of global brands in Indian MarketsThe growth of global brands in Indian Markets

The rapid dissemination of global life stylesThe rapid dissemination of global life styles

The emergence of attractive rural marketsThe emergence of attractive rural markets

Rural IndiaRural India

A Promising Market placeA Promising Market place

IndiaIndia

Urban28%

Rural72%

IndiaIndiaState 28

Uts 7

Districts 593

List of Tahsils/Talukas/CD Blocks 5464

Villages 638365

Urban Agglomerations (UAs) 384

Towns 5161

Total Population 1027015247

Male 531277078 51.70%

Female 495738169 48.30%

Population variation (1991-2001) 21.34

Rural 741660293 72.20%

Urban Pupolation 285354954 27.80%

Sex Ratio 933

Literacy

Total (%) 65.38

Male (%) 75.96

Female (%) 54.28

Change in Literacy Rate (1991-2001) 13.75

DefinitionsDefinitionsRural and Urban AreasRural and Urban Areas

The conceptual unit for urban areas is a The conceptual unit for urban areas is a 'town', whereas for the rural areas it is 'town', whereas for the rural areas it is a 'village.' The classification of an area a 'village.' The classification of an area as an urban unit in Census of India 2001 as an urban unit in Census of India 2001 is based on the following definition:is based on the following definition:

1. All places declared by the state 1. All places declared by the state government under a statute as a government under a statute as a municipality, corporation, cantonment municipality, corporation, cantonment board or notified town area committee, board or notified town area committee, etc.etc.

2. All other places which simultaneously 2. All other places which simultaneously satisfy or are expected to satisfy the satisfy or are expected to satisfy the following criteria: following criteria:

•A minimum population of 5,000A minimum population of 5,000•At least 75 per cent of the male At least 75 per cent of the male working population engaged in non-working population engaged in non-agricultural economic pursuits: and agricultural economic pursuits: and •A density of population of at least A density of population of at least 400 per square kilometer (1,000 per 400 per square kilometer (1,000 per square mile)square mile)

3. Any area, which is not covered by the 3. Any area, which is not covered by the definition of urban, is rural.definition of urban, is rural.

Demographic profileDemographic profile Rural India is generating more than half of Rural India is generating more than half of

national income.national income.

41% of Indian middle class homes and 58% of 41% of Indian middle class homes and 58% of

disposable income exist in rural India. disposable income exist in rural India.

Income contribution of 55.6% to the national Income contribution of 55.6% to the national

income by rural population of 74.6 crore is income by rural population of 74.6 crore is

higher than urban India’s with 25.4 crore higher than urban India’s with 25.4 crore

people contributing 44.6%.people contributing 44.6%.

ContdContd……

75% of the households in the country had an 75% of the households in the country had an

electricity connection. The majority of rural electricity connection. The majority of rural

households are not having electricity.households are not having electricity.

India’s infant mortality rate of 75 per thousand live India’s infant mortality rate of 75 per thousand live

births is one of the highest in the world. births is one of the highest in the world.

Access to potable water, health care, sanitation and Access to potable water, health care, sanitation and

shelter are a far cry, particularly in the rural sector.shelter are a far cry, particularly in the rural sector.

contd…contd…

Largely working as farmers or agricultural Largely working as farmers or agricultural workersworkers

Have limited education, may well be illiterateHave limited education, may well be illiterate

This leads to linear and simple thinking, abstract logic This leads to linear and simple thinking, abstract logic tends to go over their headstends to go over their heads

Either live in joint (extended) families or have Either live in joint (extended) families or have only recently formed nuclear families only recently formed nuclear families

The ground realities!The ground realities!

The Rural ConsumerThe Rural Consumer

Why rural?Why rural?

Rural consumers constitute about Rural consumers constitute about 72% of India’s population72% of India’s population

1. Huge business 1. Huge business opportunities…opportunities…

Marketers have, so far, concentrated Marketers have, so far, concentrated on the top-end consumeron the top-end consumer

Therefore, this segment is largely Therefore, this segment is largely dominated by proxy products and dominated by proxy products and local/regional/duplicate/fake brandslocal/regional/duplicate/fake brands

2. No single-national 2. No single-national competitorcompetitor

Who is the rural Who is the rural consumer?consumer?

Shopping behaviourShopping behaviour

Buy small quantities - more frequentlyBuy small quantities - more frequently Unit price is critical, particularly as many of them Unit price is critical, particularly as many of them

are daily-wage earnersare daily-wage earners

Look for ‘acceptable performanceLook for ‘acceptable performance’/ functional ’/ functional benefits / paisa vasool paradigm (good in relation to benefits / paisa vasool paradigm (good in relation to current product) at a reasonable pricecurrent product) at a reasonable price

““Tran creation” of packaging criticalTran creation” of packaging critical

Flash price of pack wherever feasibleFlash price of pack wherever feasible

Shopping behaviourShopping behaviour In their own way, good at arriving at a cost In their own way, good at arriving at a cost

per doseper dose (or cost per month) equation: even if (or cost per month) equation: even if not expressed mathematicallynot expressed mathematically More sensitive and alert to ‘value’More sensitive and alert to ‘value’

Make high-volume purchases at weekly Make high-volume purchases at weekly village marketsvillage markets HaatsHaats

Build personal acquaintance with Build personal acquaintance with neighbourhood retailerneighbourhood retailer Often trust the retailer who does influence brand Often trust the retailer who does influence brand

choice choice Frequently get ‘credit’ from the retailerFrequently get ‘credit’ from the retailer


Word-of-mouth, very important and Word-of-mouth, very important and crediblecredible

Mass drivenMass drivenBuy products that are perceived to be Buy products that are perceived to be

popular: the ‘bandwagon’ effectpopular: the ‘bandwagon’ effect

Try to minimise their risk: tend to be Try to minimise their risk: tend to be stronger creatures of habitstronger creatures of habit


High awareness of range of consumer High awareness of range of consumer brands - brands - but propensity to actually purchase but propensity to actually purchase premium performance brands is lowpremium performance brands is low

Still influenced by popular idols/role Still influenced by popular idols/role models such as movie stars, famous models such as movie stars, famous sportsmen, etcsportsmen, etc

Adhere to prevailing social norms: the Adhere to prevailing social norms: the community they live in is very important community they live in is very important and their behaviour is usually consistent and their behaviour is usually consistent with the community’s shared beliefs and with the community’s shared beliefs and normsnorms

Enjoy social gatherings: women’s Enjoy social gatherings: women’s associations, celebrations, events, etcassociations, celebrations, events, etc

CollectivismCollectivism(As opposed to individualistic)(As opposed to individualistic)

CollectivismCollectivism(As opposed to individualistic)(As opposed to individualistic)

Spend a lot of their free time chatting Spend a lot of their free time chatting and gossiping with neighbors: and gossiping with neighbors: both as a both as a source of entertainment and informationsource of entertainment and information

Tend to be suspicious about people Tend to be suspicious about people outside the communityoutside the community

Follow opinion leaders: Follow opinion leaders: school teachers, school teachers, priests, religious leaders, urbanized relatives, priests, religious leaders, urbanized relatives, local politicians, the village headlocal politicians, the village head

Other beliefsOther beliefs

Strong belief in ‘fate’ and ‘luck’, Strong belief in ‘fate’ and ‘luck’, religion and Godreligion and God

Active participation in religious Active participation in religious activities activities

““Cleanliness is next to Godliness”Cleanliness is next to Godliness”

Rural IndiaRural India

Myths & RealityMyths & Reality

MythMyth

One family, one brand - there's one One family, one brand - there's one brand for the whole household.brand for the whole household.

Rural consumers aren't worth bothering Rural consumers aren't worth bothering about since they buy loose, unbranded about since they buy loose, unbranded products rather than the branded variety. products rather than the branded variety. In branded they buy only inexpensive In branded they buy only inexpensive brands.brands.

RealityReality

The ORG study shows a high preference The ORG study shows a high preference for branded products. In 18 categories, for branded products. In 18 categories, branded consumption accounts for 80% branded consumption accounts for 80% of sales. of sales.

eg: toilet soaps, washing powders, analgesics, eg: toilet soaps, washing powders, analgesics, safety razor blades, toothpastes, shampoos, safety razor blades, toothpastes, shampoos, batteries, rubs and balms, skin creams, batteries, rubs and balms, skin creams, toothpowders, toothbrushes, antiseptic creams, toothpowders, toothbrushes, antiseptic creams, antiseptic liquids, digestives, mosquito repellants, antiseptic liquids, digestives, mosquito repellants, shaving preparations, tube lights.shaving preparations, tube lights.

RealityReality

Penetration of premium products is Penetration of premium products is being reported, even to the lowest socio-being reported, even to the lowest socio-economic classification. Although the economic classification. Although the percentages may be very small, given the percentages may be very small, given the large universe, the actual figures may be large universe, the actual figures may be quite significant.quite significant.

RealityReality

In many categories, multiple-brand In many categories, multiple-brand usage is a fact. Rural households are usage is a fact. Rural households are not completely homogeneous.not completely homogeneous.

Unchanged Unchanged characteristics of rural characteristics of rural

consumersconsumers

Continued existence of an oppressive Continued existence of an oppressive and rigid caste system, particularly in and rigid caste system, particularly in rural areasrural areas

High illiteracy levels: often incapable High illiteracy levels: often incapable of reading or pronouncing a brand of reading or pronouncing a brand name name

E.g. Lifebuoy is referred to as ‘the red E.g. Lifebuoy is referred to as ‘the red soap’soap’

Phases in Rural MarketingPhases in Rural Marketing

Phase One( Pre 1960’s) : Phase One( Pre 1960’s) :

Marketing rural products in rural and urban Marketing rural products in rural and urban

areas areas

Agricultural inputs in rural areas Agricultural inputs in rural areas

““Agricultural marketing”Agricultural marketing”

Farming methods were primitive and Farming methods were primitive and

mechanization was lowmechanization was low

Markets unorganizedMarkets unorganized

Phase Two ( 1960s to 1990s)Phase Two ( 1960s to 1990s)

Green RevolutionGreen Revolution

Companies like Mahindra and Mahindra, Sri Companies like Mahindra and Mahindra, Sri

Ram Fertilizers , Escorts and IFFCO emergeRam Fertilizers , Escorts and IFFCO emerge

Rural products were also marketed through Rural products were also marketed through

agencies like KVICagencies like KVIC

Phase Three( 1990s to Present)Phase Three( 1990s to Present)

Demand for consumables and durables riseDemand for consumables and durables rise

Companies find growth in urban markets Companies find growth in urban markets

stagnating or falling stagnating or falling

Phased Evolution of Rural Marketing Phased Evolution of Rural Marketing

PhaPhasese Time periodTime period PurposePurpose Major Major

ProductsProductsSource Source MarketMarket

TargeTarget t

MarkeMarkett

II

Since Since independence independence

but before but before Green Green

RevolutionRevolution

Agricultural Agricultural MarketingMarketing

Agricultural Agricultural produceproduce RuralRural UrbanUrban

IIII

Green Green Revolution to Revolution to

Pre-Pre-liberalisation liberalisation

periodperiod

Marketing Marketing of of

Agri-inputsAgri-inputs

Agricultural Agricultural inputsinputs UrbanUrban RuralRural

IIIIII

Post-Post-liberalisation liberalisation period in 20period in 20thth

century century

Rural Rural MarketingMarketing

ConsumableConsumables & durables s & durables

for for consumption consumption & production& production

Urban Urban &&

RuralRuralRuralRural

IVIV 2121stst century centuryDevelopmeDevelopme

ntal ntal MarketingMarketing

All Products All Products and Servicesand Services

Urban Urban & Rural& Rural

Urban Urban & &

RuralRural

Scope of Rural Marketing Scope of Rural Marketing

Keenly debated topic Keenly debated topic

Definitions based on organisational/ institutional Definitions based on organisational/ institutional

vision, mission & goals vision, mission & goals

Need for a comprehensive and modular Need for a comprehensive and modular

understanding understanding

Rural Marketing is a “ work in progress” Rural Marketing is a “ work in progress”

Multi – disciplinary approach is necessary for Multi – disciplinary approach is necessary for

sharper understanding sharper understanding

Transitions In Rural India Transitions In Rural India

• Food Grain Crops

• On land activities

• Farm Activities

•Non –food, cash crops

•Livestock & fisheries

•Manufacturing & services

Rural Employment PatternsRural Employment Patterns

Sector Sector Year – 1987 ( % share in Year – 1987 ( % share in employment)employment)

Year -2004 ( % share Year -2004 ( % share in employment)in employment)

Agriculture Agriculture 75 75 67 67

Transport & Transport & CommunicatioCommunicatio

nn

22 88

Trade & Trade & Hotels Hotels

55 7 7

Construction Construction 44 77

ManufacturinManufacturing g

77 8 8

Source: NSSO data, Mckinsey Global Institute Study, 2004-05

Rural India – Population TrendsRural India – Population Trends

19711971 19811981 19911991 20012001

Total Total Population Population (in million) (in million)

548.2548.2 683.3683.3 848.3848.3 1026.91026.9

Rural Rural Population Population (in million)(in million)

524.0524.0 628.8628.8 741.6741.6

As a As a proportion proportion

of total of total population population

76.776.7 74.374.3 72.272.2

Decadal Decadal Variation Variation

19.819.8 16.716.7 15.215.2

Source: Census 2001Source: Census 2001

Rural Income Trends Rural Income Trends

Annual Income ( Annual Income ( at 1998-99 at 1998-99

prices)prices)

Income Class Income Class 1998-99 1998-99 ( % ( %

Households) Households)

2006-07 2006-07 ( % ( %

Households) Households)

<= 35,000 <= 35,000 LowLow 4848 24 24

35,001- 70,000 35,001- 70,000 Low Middle Low Middle 3535 4646

70,001 – 70,001 – 1,05,0001,05,000

Middle Middle 1010 18 18

1,05,001- 1,05,001- 1,40,0001,40,000

Upper Middle Upper Middle 44 6 6

> 1,40,000> 1,40,000 High High 3 3 6 6

Source: National Council for Applied Economic Research, 2006-07

Transactional Vs. Development MarketingTransactional Vs. Development Marketing

S.No. Aspect Transactional Development

1. Concept Consumer Society orientation orientation,

2 Role Stimulating & Catalytic & conversional transformation

marketing agent

3. Focus Product-market fit Social change

4. Key-task Product innovations & Social innovations communications communication

5. Nature Commercial Socio-cultural

S.No. AspectS.No. Aspect TransactionalTransactional Development Development

6.6. Offer Offer Products & services Products & services Development Development projects/schemes/ projects/schemes/

programsprograms

7. Target group 7. Target group Buyers Buyers Beneficiaries Beneficiaries & buyers& buyers

8. Communication Functional 8. Communication Functional Developmental Developmental

9. Goal 9. Goal Profits Profits Market development Market development Customer satisfaction Customer satisfaction Corporate Corporate

ImageImage Brand imageBrand image

10. Time-Frame 10. Time-Frame Short-medium Short-medium Medium-Long Medium-Long

11. Motivation 11. Motivation Profit-motive Profit-motive Service-motive Service-motive Business policy Business policy Ideological/ Ideological/ Public policyPublic policy

Rural Marketing ModelRural Marketing Model

Research

Segment rural market

Study lifestyle ofrural population of different segments region

Develop profile of rural consumers of different market segments

Define and prioritize their needs in general

terms

A

Develop specific need profile for a product category in that region

Select target markets

Develop/Modify Marketing Mix

Implementation

Control

A

Factors Differentiating Rural Marketing Factors Differentiating Rural Marketing from Urban Marketing from Urban Marketing

SSr.r.

List of FactorsList of Factors

1.1. Infrastructure Availability:Infrastructure Availability: electricity supply, media electricity supply, media reach, availability of finance facility, education level, reach, availability of finance facility, education level, roads, connectivity, presence of organized markets; in roads, connectivity, presence of organized markets; in rural market is very different from that of urban rural market is very different from that of urban markets. markets.

2.2. Income Streams:Income Streams: The pattern of income generation in The pattern of income generation in rural areas based on agriculture is seasonal and highly rural areas based on agriculture is seasonal and highly unreliable unlike the fixed monthly income in the unreliable unlike the fixed monthly income in the urban areas. This creates a consumption pattern, urban areas. This creates a consumption pattern, which is different from urban one.which is different from urban one.

3.3. Lifestyle:Lifestyle: The lifestyle and daily routine of consumers The lifestyle and daily routine of consumers in two markets is markedly different. This creates in two markets is markedly different. This creates significantly different profile of consumers for the significantly different profile of consumers for the same product in these two markets.same product in these two markets.


SSr.r.


4.4. Context:Context: Because of variation of infrastructure and Because of variation of infrastructure and income streams, the context in which an individual income streams, the context in which an individual exists in rural areas is very different from the one in exists in rural areas is very different from the one in urban areas. This creates difference in nature and urban areas. This creates difference in nature and priorities of needs in two markets.priorities of needs in two markets.

5.5. Socio-cultural Background:Socio-cultural Background: Value system and thus Value system and thus perception toward goods /services and consumption is perception toward goods /services and consumption is different in two markets different in two markets

6.6. Accessibility:Accessibility: The cost and logistics of accessing The cost and logistics of accessing consumers in a highly widespread and heterogeneous consumers in a highly widespread and heterogeneous rural market are very different from those involved in rural market are very different from those involved in reaching urban consumers, concentrated in good reaching urban consumers, concentrated in good number in single location. Thus, demanding two number in single location. Thus, demanding two different types of approaches.different types of approaches.


SrSr..


7.7. Media Reach & Habits:Media Reach & Habits: The reach of media vehicles The reach of media vehicles and the media habits are very different in rural and and the media habits are very different in rural and urban markets. Requiring very different type of urban markets. Requiring very different type of promotional strategy in these two markets.promotional strategy in these two markets.

8.8. Nature of Competition:Nature of Competition: The nature and intensity of The nature and intensity of competition amongst the brands is very different in competition amongst the brands is very different in the two markets.the two markets.

9.9. Consumer Behaviour:Consumer Behaviour: The response of consumers to The response of consumers to marketing stimuli is very different in two markets. marketing stimuli is very different in two markets. Rural consumer’s behaviour is quite different from Rural consumer’s behaviour is quite different from that of urban buyer’s behaviour.that of urban buyer’s behaviour.

DISTINCTION BETWEEN RURAL AND URBAN

SocietiesRural Society Urban Society

CultureConservative approach Progressive & reasonable

Traditional outlook Scientific outlook

Social perceptionsFamily controls the society Economy & economic

institutions controls

OccupationDepend on nature Depend on man madeconditionsJobs hereditary & custom oriented Modern & result oriented

SpecializationNo specialization urban is full of specialtiesNo division of labour , division of labour

Mobility in SocietyNo change in occupation, religion, place all will change

Social toleranceSocial changes not tolerated changes frequentlyChanges very slow very fastFamily is dominant Individuality is dominantJoint family is norm Single family is normIndividuals depend economically on family Individuals live by themselves

Social relationshipRural society based on these aspects are cooperation & Relationship absent

Social changeNo competition Large competitionTraditional values no traditional values

Social uniformityDue to castes occupations are fixed jobs will change

irrespective of caste

Status of womenNo independent status mostly independentConsidered sub servant & given equal statuslow status

Social stratificationSociety divided on traditional divided on basis of system economic social political

Density of populationDensity of populationSmall population Small population densely populateddensely populated

Size of societySize of societySmall with one occupation Small with one occupation large with many large with many

occupationoccupation

Social disorganizationSocial disorganizationAgencies to control society Agencies to control society no agencyno agency

Diagnosis of the failuresDiagnosis of the failures

in order to identify the gaps to be bridged in order to identify the gaps to be bridged by government & development agenciesby government & development agencies

Low priority to agricultureLow priority to agriculture : :

Importance to agriculture in total economy has Importance to agriculture in total economy has declined but it still maintain first with other sectors declined but it still maintain first with other sectors like manufacturing, transport, banking and like manufacturing, transport, banking and administration.administration.

Subsistence orientation of agricultureSubsistence orientation of agriculture

Increasing input cost made agriculture less and Increasing input cost made agriculture less and less profit. This lead to inefficient use of land & less profit. This lead to inefficient use of land & water resources. Hence farmers have low incomes water resources. Hence farmers have low incomes & suffer from unemployment & under employment.& suffer from unemployment & under employment.

Contd…Contd…

Failure of land reforms: Failure of land reforms:

Land reforms both in the form of redistribution of Land reforms both in the form of redistribution of land in favor of the poor and tenancy reforms are land in favor of the poor and tenancy reforms are largely failures, except in Kerala and West Bengal.largely failures, except in Kerala and West Bengal.

Shrinking of operational land due to splitting of Shrinking of operational land due to splitting of families.families.

Inadequate food supplies:Inadequate food supplies:

Although India is self-sufficient in food grains at the Although India is self-sufficient in food grains at the national level, it continues to be inadequate at the national level, it continues to be inadequate at the household level.household level.

Contd…Contd…

Slow down of rural Industrialization:Slow down of rural Industrialization:

Even though Government took enough steps to Even though Government took enough steps to improve cottage industries, the allocation of fund improve cottage industries, the allocation of fund to village industries is not sufficient.to village industries is not sufficient.

Slow growth of infrastructure:Slow growth of infrastructure:

About 40% of villages are without proper roads, 1.8 About 40% of villages are without proper roads, 1.8 lakhs villages do not have primary schools, lack lakhs villages do not have primary schools, lack of waters and health centersof waters and health centers

contd…contd…

Inadequate inputs :Inadequate inputs :

The research and extension systems are very weak The research and extension systems are very weak and suffer from lack of adequate funds and and suffer from lack of adequate funds and organizational weaknesses. There is no direct link organizational weaknesses. There is no direct link between scientists, extension personnel and between scientists, extension personnel and farmers.farmers.

Information about the technology and marketing of Information about the technology and marketing of farmers are yet to reach the farmers.farmers are yet to reach the farmers.

Policy InterventionsPolicy Interventions

Agriculture needs proper attentionAgriculture needs proper attention

Focus has been more on cropping system Focus has been more on cropping system research than farming system researchresearch than farming system research

There should be effective linkage between There should be effective linkage between agricultural research system, administration agricultural research system, administration and farmers to develop and transfer and farmers to develop and transfer technologies suited to local conditions.technologies suited to local conditions.

contd…contd…

Higher investment in farm operations and Higher investment in farm operations and related rural infrastructure is necessary related rural infrastructure is necessary condition for speedier farm growth.condition for speedier farm growth.

A shift in policy to focus on production, A shift in policy to focus on production, especially in dry landsespecially in dry lands

Credit and insurance systems need to be Credit and insurance systems need to be revitalized to respond to the changing revitalized to respond to the changing needsneeds

Introduction to Rural Marketing. Why should we do this course? Agriculture’s share in GDP is going...

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Transcript of Introduction to Rural Marketing. Why should we do this course? Agriculture’s share in GDP is going...