35399204 rural marketing intro

8/8/2019 35399204 Rural Marketing Intro

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Rural Marketing

Group 1Gowri

Deepti

PrasenjitJishnu

Geo

Arabinda

Viral


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The Call of Rural India


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Rural Markets - Promising Venture

Indian Rural Market : Fortune at the Bottom of thePyramid

a)742 million rural customersb)42,000 rural supermarket

c) Investment in savings instrument- 6.7mhouseholds

d)Estimated annual size of rural markets FMCG Rs 65000cr

Durables Rs 5000cr

Agri-inputs(tractors also) Rs 45000cr

2/4 wheeler Vehicles Rs 8000cr


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Growth Story

Liberalization of the economy arrival of well known

FMCGs with greater distribution capabilities

High growth in rural area in 1990s due to consecutively

good monsoons

600% increase in the Five year plan outlay for rural

developmental activities

230% increase in flow of institutional credit in 1997-98

and 2004-05


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41 m Kisan Credit Cards issued- Rs. 97000cr

Increase in crop area, production and yield,

facilities like fertilizers, electricity, quality seeds

Increased reach of Technological developmentslike cell phones etc.

Growth Story


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Popular myths

Rural people dont buy brands

Rural customers buy cheap products

Rural market is homogenous


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4 As ofRural Marketing

Availability

Strong distribution Network,

e.g. HLL, LG- widespread channels

Coca Cola- Hub and spoke model

Affordability- Godrej (Cinthol, Fair glow etc.)

Acceptability LG TV Sampoorna

Awareness


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Challenges

Eleventh Five Year Plan: Special Focus onAgri & Rural

To achieve 9 % growth projections - 4 % Farmgrowth is a must for self sufficiency, foodsecurity and for 2nd Green Revolution

Deficit Areas for development ofRuralEconomy

1. Investment and Credit Deficit

2. Infrastructure Deficit

3. Market Economy Deficit

4. Knowledge Deficit


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Rural Distribution

Marketers need to understand where rural

consumers buy their goods and products

90% of durables purchased from

20000+population towns


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Rural Communication

Strong Need To Build Reassurance And

Trust About Product Quality, Service

Support And Company Credentials In The

Mind Of Consumers

Best Medium - Face To Face InteractiveCommunication


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Desire

Conviction

Interest

AICDA MODEL

Awareness

Action


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Developing Rural Markets Through

Information Technology

e-Choupal by ITC

Inagriline by EID

Parry

Dairy portal byAmul

STD revolution


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Rural Marketing Environment


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Definition

Rural Vs Urban

1951 Urban Population was 17.2 %

2001 Urban Population was 27.8 %


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Census Definition

Rural Village:

Basic Unit for rural areas is the revenue village

Rural Town:

Minimum Population >= 5000

Population Density >= 400 per Sq.KM

75% of the male population engaged in non-agri

activity


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RBI Definition

Rural

Location with population up to 10,000

Semi Urban

Location with population between 10,000 and

1,00,000

Urban More then 1,00,000


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NABARD Definition

All Location with population up to 10,000 is RURAL

Urban India

All the places that fall within the administrative limits of amunicipal corporation, municipality, cantonment board or

have a population of at least 5,000 and have at least 75per cent male working population in outside the primarysector and have a population density of at least 400 persquare kilometres


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Corporate Houses

Sahara Shops and CommercialEstablishments Up To 10,000


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Evaluation of Rural Marketing

Phase I (Before 1960)

Agricultural Marketing

Food Grains and Goods Like Cotton, Jute Unorganized Market

Phase II (1960 - 1990)

Green Revolution

Agricultural Input Emergence of Mahindra, Escorts, Eicher, Sriram Fertilizers

and IFFCO

Khadi and Village industries Commission (KVIC)

Shilpa Melas


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Evaluation of Rural Marketing

Phase III (1990 Onwards)

Last 2 Phase

Potential of IRM was not visible

Infrastructure and Accessibility

Urban Focus

Extension of Urban Market

LPG


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Definition of Rural Marketing

RM Is The Function That Manages All

Activities Involved In Assessing,

Stimulating And Converting The PurchasePower Of Rural Consumer Into An

Effective Demand For Specific Product

And Services And Moving A Better Standard Of Living And Thereby Achieving

Organisational Goals.


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Rural Market Structure


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Rural Environment

Demographic Environment

Physical Environment

Economic Environment

Political Environment

Technological Environment


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Demographic

EnvironmentPopulation

1971 1981 1991 2001

Total Population.

(Million)

548.2 683.3 848.3 1026.9

Rural Population.

(Million)

- 524.0 628.8 741.6

Rural Proportion toTotal Popn. (%)

80.1 76.7 74.3 72.2

Source: Census 2001


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Rural proportion in population has come

down.

Absolute numbers of people living in ruralareas have increased.

Working population has increased.

Purchasing power of the rural populationhas gone up from 40% in 1991 to 42% in

2001.


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Distribution of Population by Age Groups

Age groups RURAL (%) U RBAN (%)

0 4 13 1105 14 26 23

15 19 09 10

20 34 23 28

35 54 19 20

55+ 10 08

Total 100 100

Source: Census 2001


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Largest age group shapes marketing

environment.

School going children and young adultsform the largest consumers of consumable

and lifestyle products.

Age group between 20 and 35 forms onefourth of Indias consumption base.

48% of the rural population is below the

age of 20.


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Education

Rural Literacy 1981 1991 2001

% of literates 36 45 59

Census 2001


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Level of literacy influences the effectiveness of

communication and demand for educational

products.

Literacy rate has increased by 23% over last 20

years.

Improvements in socio economic status of thepeople.

Product and brand awareness improved and

purchase decisions became more matured.


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Household Pattern (Family

Structure)

1991 2001

Rural Urban Total Rural Urban Total

Households

(million)112 40 152 138 54 192

Family size

(number)5.55 5.32 5.36 5.31


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Rural households have grown by 26

million during the last decade.

Increase in population created pressure onland and socio economic factors.

Average family size decreased.

Joint families broke apart to create nuclearfamilies.

Range and number of branded products

coming in increased.


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Caste System

Marketers need to be sensitive to the

caste systems and practices.

While developing an advertisement or

brand communication or promotion plan

marketers need to ensure relevance of

character and messages.


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Cultural Differentials

Society across the country is highly

differentiated.

Presence of different regions and sub regions.

Presence of different religious, caste and

linguistic groups.

No strict geographic boundaries for identifyingdifferentials.

Socio cultural behaviour mapped as distinct

socio cultural regions and used for STP


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Occupational Pattern

Demographic profile affects buying behavior.

Difference in buying behavior between salary

earner and wage earner.

Three fourths of rural household heads are either

cultivators or wage earners.

Daily wage earner has to account for variations in

income. Salary earner has an assured income.

Cultivators disposable income is highly seasonal


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Settlements patterns

1.Scattered ,2.Clustered ,3. Combination of both

Characteristics of Rural HouseholdsHouses are owner occupied (Farmers)

Pattern is according to

1.Kinship 2.Caste

3.Religious group


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Classification of Village and Town

based on population

Rural Market (per sq km) Town

class

< 200 1lakh andabove

201-500 50,000-99,999

501-1000 20,000-49,999

...5000

.


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Economic environment

Shift in lower income group to higher

income group.

Per capita consumption expenditureincreased 4 times over 20 years.

Saving pattern 42 million in rural to 27

million in urban.


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Socio cultural Environment

Socio - Cultural Region (SCR)

A yard stick for segmentation and

targeting.

Urban and Rural socio-economic

variables.

Settlement patternOccupation

Realms of activity


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Village Community

Pre Independence

Post Independence

It is self sufficient in terms of agriculture,economic infrastructure and political systems.

Post independence it has undergone changesunder the democratic system.

The elderly council (The Panchayat) is elected inthe democratic system.

Villages are well communicated.

Migration to cities for jobs and batter life.


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Caste System

Brahmins

Kshatriyas

Vaishyas

Shudras

Zamindari


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Political Environment

Panchayati Raj system under the 77th

amendment.

The Gram Sabha. (The generalAssembly)

Decide developmental works.

Suggest remedial measures.

Scrutinize the decisions of panchyat.

Review the annual financial statement of gram

panchyats.


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Technological

Environment

Green revolution 1967-78 High yield verities.

Increased farm production.

Modernization of methodology and equipments used.

White Revolution

In terms of improvement of livestock and the

milk production. Cooperatives like AMUL.

Companies like Godrej Agrovet.


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NGOs

Independent

Self Help Groups (SHG) Interest Groups (IGs)

Government:

NABARD, KVIC, etc Help in providing vocational training, job

opportunities, independent businessopportunities, and basic Community Health

services.


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Constitution of Rural Market

Evolution of rural market

Shift in consumer needs(1980-1990)

Steady reforms in economy(1990 onwards)

Consumer Market

Households and Individuals

Consumables-Food products, cosmetics, FMCG, garments Durables- watches, bicycles, TV, Radio, 2 wheelers etc.


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Institutional Market

Agriculture, Poultry, Health centers, Schools

Fisheries, cottage industries Consumables- pesticides, fertilizers, seeds, fuel

Durables- Tractor, Pump set, Genset, Harvestors etc.

Service Market Individuals, Households and Production firms Services- Banking, Insurance, Credit, Healthcare, Tuition,

ICT, Power etc.


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Size of Market

Rs. 123000 Cr, including FMCG, Durables

and Agri products


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Nature of Rural Market

Developmental or Transactional.????

Agri product companies Extended support, Education and Training

HPCLs Community kitchens Popularizing the concept at affordable prices

HLLs Project Shakti Empower rural women for income generating

capabilities A word of caution

Short term commercial goals to be avoided

Create Mutual benefit opportunities


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Win -Win Situation

NGOs and Corporate India

SEWA Self Employed Womens

Association, Gujarat based NGO

ITC Agri commodity retailer


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Thank You

35399204 rural marketing intro

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