rural market challenges

CHALLENGES OF INDIAN RURAL MARKET

Presented to-Prof. Arpita Srivastava

Presented by-Seema Singh B-08-44Divya Vijay B-08-17

What is RuralGovernment agencies like IRDA (Insurance Regulatory And Development Agency and NCAER(National Council for applied Economic Research) define Rural as villages with a population <5000 with 75% male population engaged in agriculture etc”

Census - Towns are actually rural areas but satisfy.The following criteria Minimum Population< = 5000 75% of the male population engaged in Non –agri activity

NABARD - All locations upto a population of 1000 Will be considered Rural

What is Rural Marketing• rural marketing is promotion of a company's

products in the rural market by using strategies which differs from that of urban market, the rural market is more price sensitive but it has preference for quality. Wiki.answer.com

• rural marketing is concerned with the flow of goods and services from urban to rural arid vice-versa. -world-agriculture.com

Rural Marketing Objective

Objective – Right product at the right price to the right people

at the right time. Exchange between rural and Urban is a

Factor . Could be Urban to Rural: Rural to Urban, Rural to Rural.

Reasons for Going Rural

Size of the market

Largely Untapped

Too crowded Urban Market

Income from other than agriculture

Income flow from urban /abroad

Better exposure - media

PROBLEMS

IN

RURAL

MARKETING

Low per capita income

Low disposable income

Inadequate fixed income(daily wages)

Majority – depends on AgriculturalIncomeAcute dependence on monsoon

Infrastructure problemsRoads, power

Low awareness

Communication- difficult & expensive

Too many languages

Other challenges

PovertyUnemploymentIlliteracyIndebtednessHigh suicide ratesRural communication

Challenges in Agricultural marketing

Transportation and distributionCommunicationScattered villagesWarehousing facilitiesInadequate credit facilitiesSegmentation

Continue..

Middle menLow productivitySeller’s market

Risk in rural marketing..

Natural causes

Man made causes

Reduction value

Natural causes like..

Destructive windHeavy rain-floodsSpoilage pestsFireEarthquake

They are taken to be the act of God

Man made causes like..

Thefts

Strikes

These may be due to social, govt. or market-related reasons

Reduction in value of commodities is due to..

Price variation due to changing consumer preferencePrice variation due to delaysChanges in supply positionChanges in market environmentLow productivitySub-standard grading and packing

Storage..

Storage is done mainly to protect spoilage and pilferage and in some cases, it is done to sell on getting a better price.

In some products , the storage helps to improve quality of products like banana, mango and rice due to ripening and seasoning.

Risk in Rural Storage..

Price risk

Quality risk

Quantity risk

Transportation problems of rural products

Transport Uses

Transshipment Problem

Urban & Rural Markets Key Differences

Per capita Income

Disposable Income

Literacy levels

Infrastructure

Communication

Geographical Spread

Customer has many choices

Key

Challenges

4A

Awareness

Affordability

Availability

Acceptability

Rural India is problem-ridden, but this is one of the phases of the growth process. Every developing country has to through the same. Thus, India should move ahead with development programs, but supplement the same with support from the private sector. This would lead to more equitable and inclusive development.

Sources...

• Marketing Mastermind, Icfai university press (March 2008)

• Rural Marketing Book (R.V Badi & N.V Badi)

• Rural Marketing Book – Pradeep Kashap & Siddhartha Rau