Module 1

RURAL MARKETING

Rural Marketing • Definition: “The study of rural marketing

comprises all the operations and the agencies conducting them, involved in the movement of farm produced food, raw materials and their derivatives, such as textiles, from the formers to the final consumers and the effects of such operations on producers, middlemen and consumers” - Thomson

Rural Marketing

• Definition: Rural marketing can be seen as a function which manages all those activities involved in assessing, stimulating and converting the purchasing power into an effective demand for specific products& services, and moving them to the people in rural area to create satisfaction and a standard of living to them and thereby achieves the goals of the organization.

The Rural Marketing MixFrom/To Rural Urban

UrbanOrganized Branded consumables& Durables

Not concerned

Rural

Un-organized Farm& Non-Farm goods

Semi-Organized Handicrafts, Handloom textiles, leather products

Evolution of rural marketingConcept& scope

• Phase I: (Before mid 1960s)From/To Rural Urban

Urban

Agricultural inputs Fertilizers, seeds& pesticides Durables Tractors, harvesters, threshers, power tillers, pump sets, oil engines, electric motors

Not concerned

Rural

Artisans services and products bamboo baskets, ropes, window& door frames, household items by carpenters, blacksmiths, pot makers& cobblers

Agricultural products: food grains, cotton, oil, seeds, sugarcane etc

• Phase II (Mid 1960s-Mid 1990s)

From/To Rural Urban

Urban

Agricultural inputs Fertilizers, seeds& pesticides Durables Tractors, harvesters, threshers, power tillers, pump sets, oil engines, electric motors

Not concerned

Rural

Artisans services and products bamboo baskets, ropes, window& door frames, household items by carpenters, blacksmiths, pot makers& cobblers

Agricultural products: food grains, cotton, oil, seeds, sugarcane etc

Phase III (After Mid 1990s)

From/To Rural

UrbanHousehold goods: Consumables and durables

RuralArtisans services and products

Evolution of rural marketingPhase Origin Function

Major Products

Source market

Destination market

ISince Independence

Agricultural Marketing

Agricultural Produce Rural Urban

II Mid-Sixties

Marketing of Agricultural inputs

Agricultural inputs Urban Rural

III Mid-NinetiesRural Marketing

Consumables& durables for consumption and production

Urban& Rural Rural

Components of rural markets• Goods, commodity or service• Buyers• Sellers• Interaction between buyers& sellers • Demarcation of area place, region, country or global• The existence of price uniformity or competition

Classification of Rural Markets Consumer Market Industrial Market Services Market

ConstituentsIndividuals& Households

Agri& allied services, poultry farming, fishing, animal husbandry, cottage industries, health center, school, cooperatives, panchayat office etc

Individuals, House holds, Offices and production firms

Consumables

Food products, Toiletories, Cosmetics, Textiles and garments, Foot wear etc

Seeds, Fertilizers, Pesticides, Animal feed, Fishnet, Medicines, Petrol/Diesel etc

Repairs, Transport, Banking, Credit, Insurance, Healthcare, Education, Communication, Power etc

Durables

Watches, Bi-cycles, Radio, TV, Kitchen appliances, Furniture, Sewing machines, 2 wheelers etc

Tillers, Tractors, Pump sets, Generators, Harvesters', Boats etc

Aspect Transactional Development

ConceptConsumer Orientation, Marketing Concept

Society orientation, societal concept

RoleStimulating& conversational Marekting

Catalytic& transformation agent

Focus Product-market fit Social change

Key taskProduct innovations& communications

Social innovations& communicaitons

Nature of activity Commercial Socio-cultural, economic

Participants Corporate enterprise, Sellers

Government, voluntary agencies, corporate enterprises

Nature of Rural Marketing

Aspect Transactional Development

Offer Products& services

Development projects/schemes/programmes

Target group Buyers Beneficiaries& buyersCommunication Functional Developmental

Goal

Profits, Customer satisfaction& brand image

Market development, corporate image

Time-Frame Short-Medium Medium-Long

MotivationProfit-motive& business policy

Service policy& ideological/Public policy

Nature of Rural Marketing

Aspect Urban Rural

Market

Philosophy

Marketing& Societal concepts, Green marketing relationship marketing

Marketing& societal concepts, Development marketing and relationship marketing

Demand High Low

CompetitionAmong units in organised sector

Mostly from unorganised units

Economy Open Closed

Infrastructure Abundant& strong Poor& weak

Manufacturing High Low Mobility High Low

Rural Vs Urban

Aspect Urban Rural

Market

Consumers Location Concentrated Widely spreadLiteracy High Low

Per capita Income High LowExpenditure Planned, Even Seasonal (vary)

Needs High level Low LevelProtection Easily Available Rarely Available

Innovation adoption Faster SlowAttitude to modernization Ready for adaption& change Tradition bound

Family Structure Nuclear Joint Possession of household

assets High Low Occupation Trade, Industry& Services Agri

Attitude to Life Scientific FatalisticExposure High Low

Rural Vs Urban

Rural Vs Urban Sources of InfoAny media Word of mouth

Product

Awareness of needsHigh LowConceptKnown Less Known

PositionsingEasy DifficultUsage MethodEasily grasped Difficult to grasp

Quality PreferenceGood ModerateTimeliness of supplyTimely Untimely

After sales serviceAdequate InadequateAs a status symbolMostly yes Mostly noGuidance of usageNeeded Not needed

Features Important Less important

Price

SensitiveYes Very Much

Level DesiredMedium-High Low-Medium

Rural Vs Urban

Distribution

Channels

Wholesalers, Stockists, Retailers, Supermarkets, Speciality stores& Authorized show rooms

Village shops, Shandies, Haats

Transport Facilities Good Average

Distribution outlets More Fewer

Product Availability High Limited

Rural Vs Urban

Promotion

Advertising

Print, Audio-Visual, Media, Out doors, exhibitions etc

TV, Radio, Print media to some extent

Personal SellingDoor-to-door frequently Occasionally

Sales PromotionContests, Gifts, Price discounts

Gifts, Price discounts

PublicityGood oppurtunities Less

• Environment different– Concentration, infrastructure, population density,

• Social relations– Interactions, identification of individuals, Social

norms, Status, Caste• Employment& incomes seasonal

– Occupations, income frequency

Rural Vs UrbanMarket Differences

• Exposure to marketing stimuli– Product exposure, Ad exposure& brand

awareness, exposure to market researchers, multiple sources of info& learning, convenience of buying, retail outlets per 1000, market reach& availability of range of products

• Dependence on nature– Availability of natural resources, dependence for

employment& incomes

Rural Vs UrbanMarket Differences

• Marketers– Understanding, respectful& humble, patience,

courteous& concerned and social skills• Philosophy

– Development marketing• Marketing research

– Durables: income, family structure– Research instruments

Rural Vs UrbanMarketing Differences

• Consumer behavior– Value for money– Emphasis on functionality rather than frills– Collective decision making (opinion driven)

• Segmentation– Variables: 1)family size& income,2) landholding and

incomes (crop pattern, rainfall& farming method)• Product strategy

– Functional value not frills – Encountering fakes

Rural Vs UrbanMarketing Differences

• Price strategy– Price sensitive

• Distribution– Retailers, co-operatives, haats& melas

• Promotion– Close knit groups– Wall paintings, vans with audio-visual, puppetry,

street theatre etc

Rural Vs UrbanMarketing Differences

Value addition in rural market

• Offer small unit of packing• Reinforce quality through service initiatives

– Hero honda• Use local idioms to convey message in a meaningful context

– BBLIL (Brooke Bond and Lipton India Ltd)• Striking core values of brand

– Cavinkare: Meera, Chic for rural& Nyle for urban• Go rural& be rural

– Anacin• Innovative channels

– Reckit& colman uses NGO’s

Practical aspects of rural marketing

• Automobiles– TATA (display vans, test drives)– Hyundai (sales camps AP& Punjab)– Maruthi Suzuki (rural executives, sponsoring kabaddi tournaments&

tie-up with panchayat members and sales fairs)• Pharma

– Elder pharma (rural executives)• Banking

– SBI (probationary officers in rural area) • Retailing

– ITC choupal sagar – Hariyali Kisaan Bazaar (HKB)– Godrej aadhar (VAS: banking, pharmacy, postal service)

• Telecommunication– Airtel (Haats, rural airtel service centre, VAS)– BSNL (Bhoomi project; Tie-up with NFL)

• VAS: Daily mandi price, soil testing, farming techniques, dairy, weather forecasts in the local language

• Idea, TATA• Reliance (KRIBCO Reliance kisan -Krishak Bharthi Co-operative)

Practical aspects of rural marketing

• FMCG– DABUR (ASTRA – Advanced Sales Training for rural ascendance in local

languages); Amla hair oil– Coca-Cola (Parivarthan program to train rural retailers)