Session I - Rural Marketing
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Transcript of Session I - Rural Marketing
Introduction to Rural Introduction to Rural Marketing Marketing
Session – I Session – I
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” ?
Session Coverage Session Coverage
Rural India – Some definitional issues Rural India – Some definitional issues
Phases/ stages in rural marketingPhases/ stages in rural marketing
Scope of rural marketing Scope of rural marketing
How is rural India changing?How is rural India changing?
Schools of thought- Approaches to Rural Markets Schools of thought- Approaches to Rural Markets
Strategic Issues & Directions in rural marketing Strategic Issues & Directions in rural marketing
Defining Rural India Defining Rural India
OrganisatioOrganisation n
Definition Definition Limitations Limitations
NSSO NSSO ( Census) ( Census)
Population density < 400 / Sq Km Population density < 400 / Sq Km 75 percent of the male working 75 percent of the male working population is engaged in agriculture population is engaged in agriculture No Municipal corporation / board No Municipal corporation / board
rural not rural not defined defined
Planning Planning CommissioCommission n
Towns upto 15,000 population are Towns upto 15,000 population are considered rural considered rural
Town Town characteristics characteristics not defined not defined
Cont’d Cont’d
LG Electronics LG Electronics All places other than All places other than the 7 metros the 7 metros
Only clarifies what Only clarifies what are the cities are the cities
NABARD NABARD All locations with a All locations with a population upto 10, population upto 10, 000 considered “ 000 considered “ rural” rural”
Village & town Village & town characteristics not characteristics not defined defined
Sahara Sahara Commercial Commercial establishments establishments located in areas located in areas servicing less than servicing less than 1000 population 1000 population
Population Population characteristics characteristics unknown unknown
Source: The Rural Marketing Book- Text & Practice, Kashyap. P and Raut. S ( 2007)
Defining Rural Marketing Defining Rural Marketing
National Commission National Commission on Agriculture on Agriculture
NGOs NGOs Corporate Rural Corporate Rural Marketing Definition Marketing Definition
Decisions to produce Decisions to produce saleable farm saleable farm commodities commodities
involving all the involving all the aspects of the market aspects of the market system or structure, system or structure, both functional and both functional and institutional, based institutional, based
on technical & on technical & economic economic
considerations and considerations and includes the pre & includes the pre &
post harvest post harvest operations. operations.
Marketing products Marketing products produced in rural produced in rural
areas to urban areas areas to urban areas
Marketing products Marketing products produced in rural produced in rural
areas in rural markets areas in rural markets
Function that Function that manages all activities manages all activities involved in assessing, involved in assessing,
stimulating and stimulating and converting the converting the
purchasing power of purchasing power of rural consumers into rural consumers into effective demand for effective demand for specific products and specific products and
services to create services to create satisfaction & a satisfaction & a
better standard of better standard of living for achieving living for achieving organisational goals.organisational goals.
Phases in Rural Marketing Phases in Rural Marketing
Sr. No Sr. No Time FrameTime Frame Key Events & Trends Key Events & Trends
1 1 Phase One( Pre 1960’s) Phase One( Pre 1960’s) Marketing rural Marketing rural products in rural and products in rural and urban areas urban areas Agricultural inputs Agricultural inputs in rural areas in rural areas ““Agricultural Agricultural marketing”marketing”Farming methods Farming methods were primitive and were primitive and mechanisation was mechanisation was lowlowMarkets Markets unorganised unorganised
Cont’d Cont’d
22 Phase Two ( 1960s to 1990s) Phase Two ( 1960s to 1990s) Green RevolutionGreen RevolutionCompanies like Companies like Mahindra and Mahindra and Mahindra, Sri Ram Mahindra, Sri Ram Fertilisers and IFFCO Fertilisers and IFFCO emergeemergeRural products were Rural products were also marketed also marketed through agencies like through agencies like KVIC KVIC
3 3 Phase Three( 1990s to Present)Phase Three( 1990s to Present) Demand for Demand for consumables and consumables and durables risedurables riseCompanies find Companies find growth in urban growth in urban markets stagnating or markets stagnating or falling falling
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 Need for a comprehensive and modularcomprehensive 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
Domain of Rural Marketing Domain of Rural Marketing
To
Rural Urban
From
Rural
Urban
Source: M. Jha, Rural Marketing- Some Conceptual Issues, EPW, 1988
Scope of Rural Marketing Scope of Rural Marketing
Domain Domain of Rural of Rural MarketinMarketingg
Dimensions of the transactionDimensions of the transaction
Participants Participants ProductsProducts/ /
services services
Modalities Modalities Norms Norms Outcomes Outcomes
Rural to Rural to Rural Rural
Rural to Rural to Urban Urban
Urban to Urban to Rural Rural
Changes in Rural India Changes in Rural India
Diverse change levers in rural India
The “ pull of the cities & towns” – migration and
its side effects
Effect of government programmes
Civil society interventions
Natural & manmade disasters
Slow but sure change
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 Rural Employment Patterns( Male)Patterns( Male)
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
Cont’d Cont’d
The joint family system is being replaced by the The joint family system is being replaced by the
nuclear family system nuclear family system
The occupational pattern shows a predominance The occupational pattern shows a predominance
of cultivators and wage earners of cultivators and wage earners
Cultivators( 40.86 %) and Wage Earners( 35.28 Cultivators( 40.86 %) and Wage Earners( 35.28
%) according to NCAER studies (2002) %) according to NCAER studies (2002)
Rural Settlement & Habitation Rural Settlement & Habitation TrendsTrends
Key findings from 2001 census Key findings from 2001 census
Population density 253/ sq kilometer and total Population density 253/ sq kilometer and total
number of villages is 638, 588 number of villages is 638, 588
Villages having less than 500 population are falling Villages having less than 500 population are falling
Villages having 2000 + population most Villages having 2000 + population most
prosperousprosperous
What are the implications of these trends?What are the implications of these trends?
Cont’d Cont’d
Size of villages/ habitations are changing Size of villages/ habitations are changing
Role & influence of towns is changing Role & influence of towns is changing
Social interaction is a mix of rural and urban Social interaction is a mix of rural and urban
Let’s look at some key trends in detailLet’s look at some key trends in detail
Rural Income Trends Rural Income Trends
Annual Income ( Annual Income ( at 1998-99 at 1998-99
prices)prices)
Income Class Income Class 1989-90( % 1989-90( % Households) Households)
1998-99 ( % 1998-99 ( % Households) Households)
<= 35,000 <= 35,000 LowLow 67.367.3 47.9 47.9
35,001- 70,000 35,001- 70,000 Low Middle Low Middle 23.923.9 34.834.8
70,001 – 70,001 – 1,05,0001,05,000
Middle Middle 7.1 7.1 10.4 10.4
1,05,001- 1,05,001- 1,40,0001,40,000
Upper Middle Upper Middle 1.21.2 3.9 3.9
> 1,40,000> 1,40,000 High High 0.5 0.5 3.0 3.0
Source: National Council for Applied Economic Research, 2000
Rural Marketing- Schools of Rural Marketing- Schools of Thought Thought
Determinist School Determinist School
Activist School Activist School
What is the right approach?What is the right approach?
Dependent on level of market development, Dependent on level of market development,
stage in the PLC and access to resources stage in the PLC and access to resources
Amul & ITC prominent examples Amul & ITC prominent examples
No water-tight compartmentalisationNo water-tight compartmentalisation
Strategic Issues & Directions in Strategic Issues & Directions in Rural Marketing Rural Marketing
Evolutionary Vs revolutionary changes in rural Evolutionary Vs revolutionary changes in rural
marketsmarkets
Role of state & market forces Role of state & market forces
ICT based interventions ICT based interventions
Partnership innovations Partnership innovations
Developmental role of rural marketing Developmental role of rural marketing
Scalability & replication of rural marketing Scalability & replication of rural marketing
programmes programmes
ICT in Rural Markets ICT in Rural Markets
Category Category GovernmentGovernment Private Private NGO/ PPP NGO/ PPP
Infrastructure Infrastructure Provision Provision
NIC NIC N- Logue N- Logue Simputer Simputer
Rural Services Rural Services Bhoomi( KarnatBhoomi( Karnataka) aka)
Sewa Sewa
Agri Marketing Agri Marketing Agmarknet Agmarknet E- Choupal E- Choupal Ozhwar Ozhwar Sandhiyes Sandhiyes
Agri extension Agri extension Universities Universities EID ParryEID Parry
Close of Session Close of Session
Thank You Thank You