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LOGO
RURAL
MARKETING UNIT I
- KIRUBA DANIEL J
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Contents
DEFINITION
EVOLUTION
SIZE
NATURE
INFRASTRUCTURE
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Rural Vs Urban in India
Living ConditionEconomyEducation
Water & ElectricityCost of LivingEnvironment
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Definition
Rural Marketing can be defined as thenction that manages all activities involved in
ssessing, stimulating and converting theurchasing power of rural consumers into anf
ective demand for specific products and servicesnd moving these products and services to theeople in the rural areas to create satisfaction and aetter standard of living and thereby achieverganisational goals
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Evolution of Rural Marketing
Phase : I (Before 1960s)
Synonymous with Agricultural MarketingProducts : Food grains, Sugar & CottonInputs were limited (fertilizers, pesticide etc.)Unorganised
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Evolution of Rural Marketing
Phase : II (1960s 1990s)Green Revolution & White RevolutionMarketing of Agricultural InputsVillage Economy boostedPromotion of village industries
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Evolution of Rural Marketing
Phase : III (1990s - present )Potential of Rural market came into lightFMCG, durables, Agri-inputs, 2/4 wheelersGovernment plans
Organised
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Size of Rural Markets
Estimated annual size : Rural MarketFMCG ` 65000croreDurables ` 5000croreAgri-inputs ` 45000crore2/4 wheelers ` 8000croreTotal ` 1,23,000crore
FMCG Market Durables Market
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Nature of Rural Market
The number of middle income and high income households inrural Indian is expected to grow from 46 million to 59 million.
Growing @ 5 times the pace of the urban mkt.
Low literacy rate
Increasing agricultural productivity
Lowering of difference between taste of urban and ruralcustomers
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Profile of Rural consumers
The rural consumer is very conscious about getting value for money.
He understands symbols and colors better, and looks for endorsement by
local leaders or icons.
He doesn't like to pay extra for benefits he cannot use.
He has his daily routine, and there is no sense of urgency in his lifestyle.
He has a very high involvement in any product purchased, especiallywhen he decides to buy high-end products, which cost a few hundreds or thousands of rupees.
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Profile of Rural consumers
Traditional back ground
Perception
Less exposure
Money value
Attitude
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KIRUBA DANIEL J
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Rural Market Structure
I.
Demographic Environment- purchasing power has gone up by 2%
Education & Level of Demand Household Pattern Rural Housing Pattern Occupational Pattern
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Rural Market Structure
II. Physical Environment Rural & Urban Life
III. Economic Environment
IV. Social & Cultural Environment Village Community Caste System
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Rural Market Structure
V. Political Environment Panchayat Raj Institutions
VI. Technological Environment Green Revolution White Revolution The NGO Movement
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Opportunities in Rural Markets
"The future lies with those companieswho see the poor as their customers."
- C. K. Prahalad
Addressing Indian CEOs, Jan 2000.
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Opportunities in Rural Markets
Estimated annual size : Rural MarketFMCG 65000croreDurables 5000croreAgri-inputs 45000crore2/4 wheelers 8000croreTotal 1,23,000crore
FMCG Market Durables Market
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Opportunities in Rural MarketsInfrastructure is improving rapidly
In 50 years only, 40% villages have been connected byroad, in next 10 years another 30% would be connected.
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Opportunities in Rural Markets
More than 90% villages are electrified, though only 44%rural homes have electric connections.
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Opportunities in Rural Markets
Rural telephone density has gone up by 300%in the last 10 years; every 1000+ pop isconnected by STD.
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Opportunities in Rural Markets
Number of "pucca" houses doubled from 22% to41% and "kuccha" houses halved (41% to23%).
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Opportunities in Rural Markets
Percentage of BPL families declined from 46% to27%.
-Global poverty line is $1.25 per day
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Opportunities in Rural Markets
Rural literacy level improved from 36% to 59%.
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Opportunities in Rural Markets
Durables Urban Rural CTV 30.4 4.8Refrigerator 33.5 3.5
FMCGs Urban Rural
Shampoo 66.3 35.2
Toothpaste 82.2 44.9
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Opportunities in Rural Markets
Marketers can make effective use of thelarge available infrastructure -
Post Offices 1,38,000
Haats (periodic markets) 42,000Melas (exhibitions) 25,000Mandis (agri markets) 7,000Public Distribution Shops 3,80,000Bank Branches 32,000
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Opportunities in Rural Markets
Proliferation of large format Rural RetailStores, which have been successful also
DSCL Haryali Stores TATA / Rallis Kisan Kendras
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Myths & Reality
yth 1: Rural Market is a Homogeneous Mass
eality: It's a heterogeneous population.
rious Tiers are present depending on the incomes like Bigndlords; Traders; Small Farmers; Marginal Farmers: Labourers;
rtisans. State wise variations in rural demographics are presentz. literacy (Kerala 90%, Bihar 44%) and population below povertye (Orissa 48%, Punjab 6%).
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Myths & Reality
Myth 2: Disposable Income is Low
Reality: Number of middle class HHs for rural sector is 27.4
million as compared to the figure of 29.5 million for urbansector.
Rural incomes CAGR was 10.95% compared to 10.74% inurban between 1970-71 and 1993-94.
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Myths & Reality
Myth 3: Individuals Decide About Purchases
Reality: Decision making process is collective.
Purchase process - influencer, decider, buyer, one who pays- can all be different. So marketers must address brandmessage at several levels. Rural youth brings brand
knowledge to Households (HH).
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Challenges
The main problems in rural marketing are: -
Understanding the Rural Consumer Poor Infrastructure Physical Distribution Channel Management Promotion and Marketing Communication
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Rural Market Infrastructure
Transport & Communication Road connectivity Post offices Radio Television Press & Print Media Telecom services
Mobile Services Electrification
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Rural Market Infrastructure
Social Infrastructure Health Education Public Distribution
Agri Infrastructure Mandis
Agricultural Cooperatives
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Rural Market Infrastructure
Marketing Infrastructure Haats Melas Shops
Commercial Infrastructure Regional Rural banks Scheduled Commercial Banks Cooperative Banks
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KIRUBA DANIEL. JLecturer, MBA dept.,Sri Venkateswara Institute of InformationTechnology & Management,Ettimadai, Coimbatore
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LOGO
Thank You !
