session i - rural marketing-1

8/13/2019 Session i - Rural Marketing-1

http://slidepdf.com/reader/full/session-i-rural-marketing-1 1/21

Introduction to Rural

Marketing



Why should we study ruralmarketing

Agriculture’s share in GDP is going down, but, India still

lives in her villages

Urban markets are crowded and saturatedThe understanding of “rural” is diffused and sometimes

confusing

Is “rural marketing” different from “urban marketing” ?



Defining Rural IndiaOrganisation Definition Limitations

NSSO (Census) Population density < 400 / Sq Km

75 percent of the male workingpopulation is engaged in agriculture

No Municipal corporation / board

rural not defined

PlanningCommission

Towns upto 15,000 population areconsidered rural

Towncharacteristics notdefined



Cont’dLG Electronics All places other than the

7 metrosOnly clarifies what arethe cities

NABARD All locations with apopulation upto 10, 000considered “ rural”

Village & towncharacteristics notdefined

Sahara Commercialestablishments locatedin areas servicing lessthan 1000 population

Populationcharacteristics unknown

Source: The Rural Marketing Book- Text & Practice, Kashyap. P and Raut. S (2007)



Defining Rural MarketingNational Commission on

AgricultureNGOs Corporate Rural

Marketing Definition

Decisions to producesaleable farm

commodities involving

all the aspects of themarket system orstructure, bothfunctional and

institutional, based ontechnical & economic

considerations and

includes the pre & postharvest operations.

Marketing productsproduced in rural areas

to urban areas

Marketing productsproduced in rural areas

in rural markets

Function that managesall activities involved inassessing, stimulating

and converting thepurchasing power ofrural consumers intoeffective demand forspecific products and

services to createsatisfaction & a better

standard of living forachieving organisational

goals.



Phases in Rural MarketingSr. No Time Frame Key Events & Trends

1 Phase One( Pre 1960’s) Marketing ruralproducts in rural andurban areas Agricultural inputs in

rural areas “Agricultural

marketing” Farming methods were

primitive andmechanisation was low

Markets unorganised



Cont’d2 Phase Two ( 1960s to 1990s) Green Revolution

Companies likeMahindra and Mahindra,Sri Ram Fertilisers andIFFCO emerge

Rural products werealso marketed throughagencies like KVIC

3 Phase Three( 1990s to Present) Demand forconsumables anddurables rise

Companies find growthin urban marketsstagnating or falling



Scope of Rural Marketing

Keenly debated topic

Definitions based on organisational/ institutional vision,

mission & goalsNeed for a comprehensive and modular understanding

Rural Marketing is a “ work in progress”

Multi – disciplinary approach is necessary for sharper

understanding



Domain of Rural MarketingTo

Rural Urban

From

Rural

Urban

Source: M. Jha, Rural Marketing- Some Conceptual Issues, EPW, 1988



Scope of Rural MarketingDomain ofRuralMarketing

Dimensions of the transaction

Participants Products/services

Modalities Norms Outcomes

Rural toRural

Rural to

Urban

Urban toRural



Changes in Rural India

Diverse change levers in rural India

The “ pull of the cities & towns” – migration and its side

effectsEffect of government programmes

Civil society interventions

Natural & manmade disasters

Slow but sure change



Transitions In Rural India

• Food Grain Crops

• On land activities

• Farm Activities

•Non – food, cash crops

•Livestock & fisheries

•Manufacturing &services



Rural Employment Patterns( Male)

Sector Year – 1987 ( % share inemployment)

Year -2004 ( % share inemployment)

Agriculture 75 67

Transport &Communication

2 8

Trade & Hotels 5 7

Construction 4 7

Manufacturing 7 8

Source: NSSO data, Mckinsey Global Institute Study, 2004-05



Rural India – Population Trends

1971 1981 1991 2001

TotalPopulation (in

million)

548.2 683.3 848.3 1026.9

RuralPopulation (in

million)

524.0 628.8 741.6

As a proportionof total

population

76.7 74.3 72.2

DecadalVariation

19.8 16.7 15.2

Source: Census 2001



Cont’d

The joint family system is being replaced by the nuclear

family system

The occupational pattern shows a predominance ofcultivators and wage earners

Cultivators( 40.86 %) and Wage Earners( 35.28 %)

according to NCAER studies (2002)



Rural Settlement & Habitation Trends

Key findings from 2001 census

Population density 253/ sq kilometer and total number of

villages is 638, 588Villages having less than 500 population are falling

Villages having 2000 + population most prosperous

What are the implications of these trends?



Cont’d

Size of villages/ habitations are changing

Role & influence of towns is changing

Social interaction is a mix of rural and urbanLet’s look at some key trends in detail



Rural Income Trends Annual Income (

at 1998-99prices)

Income Class 1989-90( %Households)

1998-99 ( %Households)

<= 35,000 Low 67.3 47.9

35,001- 70,000 Low Middle 23.9 34.8

70,001 – 1,05,000 Middle 7.1 10.4

1,05,001-

1,40,000

Upper Middle 1.2 3.9

> 1,40,000 High 0.5 3.0

Source: National Council for Applied Economic Research, 2000



Strategic Issues & Directions in RuralMarketing

Evolutionary Vs revolutionary changes in rural markets

Role of state & market forces

ICT based interventionsPartnership innovations

Developmental role of rural marketing

Scalability & replication of rural marketing programmes



ICT in Rural MarketsCategory Government Private NGO/ PPP

InfrastructureProvision

NIC N- Logue Simputer

Rural Services Bhoomi(

Karnataka)

Sewa

Agri Marketing Agmarknet E- Choupal OzhwarSandhiyes

Agri extension Universities EID Parry



Close of Session

Thank You

session i - rural marketing-1

Documents