Rural Marketing

 Definition
 Evolution
 Profile of rural consumers
 Size and nature of rural markets
 Rural market infrastructure
 Marketing opportunities and challenges
Defining “Rural”
• Government agencies like IRDA (Insurance
Regulatory and Development Agency) and
NCAER (National Council for applied
Economic Research) define Rural:
• As village with a population <5000 with 75% male
population engage in agriculture activities
Defining “Rural”
• Census definition:
• Towns are actually rural areas but satisfy The
following criteria:
• Minimum Population>=5000
• 75% of the male population engaged in Non –
agri activity
Defining “Rural”
• RBI definition:
• Location with population up to 10000 Considered
Rural
• Semi Urban 10000 to 100000
• NABARD (National Bank for Agriculture and
Rural Development)
• All locations upto a population of 10000 will be
considered Rural
Defining “Rural”
• Sahara:
• All locations having shops/establishments
servicing population less than 10000
• LG Electronics:
• All cities other than major metros
Defining “Rural Marketing”
• Corporate definition:
• Function that manages all activities involved in
assessing, stimulating and converting the
purchasing power of rural consumers into
effective demand for specific products and
services to create satisfaction & a better
standard of living for achieving organizational
goals
Defining “Rural Marketing”
• Definition by National Commission on
Agriculture:
• Decisions to produce saleable farm commodities
involving all the aspects of the market system or
structure, both functional and institutional, based
on technical & economic considerations and
includes the pre & post harvest operations
Defining “Rural Marketing”
• Definition by NGOs:
• Marketing products produced in rural areas to
urban areas
• Marketing products produced in rural areas in rural
markets
Phases in Rural Marketing
• Phase 1 (pre-1960s)
• Marketing rural products in rural and urban areas
• Agricultural inputs in rural areas
• Agricultural marketing
• Farming methods were primitive and
mechanization was low
• Markets unorganized
Phases in Rural Marketing
• Phase 2 (1960s to 1990s)
• Green Revolution
• Companies like Mahindra and Mahindra, Sri Ram
Fertilizers and IFFCO emerge
• Rural products were also marketed through
agencies like KVIC
Phases in Rural Marketing
• Phase 3 (1990s to present)
• Demand for consumables and durables rise
• Companies find growth in urban markets
stagnating or falling
• Impact of digital technology and social media
 Scope of Rural Marketing
Domain of
Rural
Dimensions of the transaction
Marketing

Participants Products/ Modalities Norms Outcomes

services

Rural to
Rural

Rural to
Urban

Urban to
Rural
 Changes in Rural India
• The “ pull of the cities & towns” – migration and its
side effects

• Effect of government programs

• Civil society interventions

• Natural & manmade disasters

• Slow but sure change

 Transitions In Rural India
•Non –food, cash crops
• Food Grain Crops
•Livestock & fisheries
• On land activities
•Manufacturing &
• Farm Activities services
Rural India – Population Trends
• The joint family system is being replaced by the
nuclear family system

• The occupational pattern shows a predominance of

cultivators and wage earners

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

according to NCAER studies (2002)
Rural Settlement & Habitation
Trends
• Population density 253/ sq kilometer and total
number of villages is 638,588

• Size of villages/ habitations are changing

• Villages having <500 population are falling

• Villages 2000 + population most prosperous

• Social interaction is a mix of rural and urban

 Rural Marketing- Schools of
Thought
• Determinist School

• Activist School

• Dependent on level of market development, stage in the

PLC and access to resources

• Amul & ITC prominent examples

 Strategic Issues & Directions in
Rural Marketing
• Evolutionary Vs revolutionary changes in rural markets

• Role of state & market forces

• ICT based interventions

• Partnership innovations

• Developmental role of rural marketing

• Scalability & replication of rural marketing programs

 ICT in Rural Markets
Category Government Private NGO/ PPP

Infrastructure NIC N- Logue Simputer

Provision

Rural Services Bhoomi Sewa

(Karnataka)

Agri Marketing Agmarknet E- Choupal Ozhwar

Sandhiyes

Agri extension Universities EID Parry

Opportunities in Rural
Marketing
• Size of the market
• Largely untapped
• Saturating urban market
• Rise in disposable incomes (including income flow
from urban and abroad)
• Better media exposure
• Success stories:
• HUL: >50% Colgate: >50% LG: >50%
• Asian Paints: >60% Hero Honda: 40%
 Encouraging Indicators for
Rural Market Growth
 Scientific methods – major impetus to Production of
food grains
 Export on the rise – Increase in agriculture and
handicrafts
 Initiatives taken by banks for more branches and
Kisan credit card to buy seeds, fertilizers, consumer
goods on installment basis
 Reputed Companies helping in changing lifestyles –
HUL, Britannia, Dabur, LG, Honda, Videocon
 Media creating an impact-creating awareness levels
 Encouraging Indicators for
Rural Market Growth
 Government Policies :
 White Revolution – Milk products
 Yellow Revolution (poultry and edible oils)
 Blue Revolution – Aqua culture
 Employment Schemes:
 JRY(Jawahar Rojgar Yojna)
 PMRY
 Small Industries Training
 Rural Electrification, Health and Sanitation, Primary
Education etc
 Encouraging Indicators for
Rural Market Growth
 Credit card for farmers
 Waiver of Loans
 Initiatives by leading organization in
spreading awareness
 HUL’s Shakti
 ITC’s e-Choupal
 Rural Marketing Challenges
 Low per capita income and disposal income
 More non-fixed income earners
 Majority – depends on Agricultural Income
 Acute dependence on monsoon
 Consumption linked to harvest

 Lack of infrastructure: power, roads, communication

 Low literacy
 Many languages
 Geographic spread
Rural Marketing Challenges
 Low Income and Literacy Levels
>Massive Geographic Spread:
• Urban population concentrated 3200 cities town
• Rural scattered over 630000 villages
>Reference Group:
• Doctors and Health Workers
• Teachers
• Panchayat Members
• Rural Bank Managers
• Company district managers
 Rural marketing Challenges
 Occupation:
 Principal Farming
 Trading
 Handicrafts
 Cattle & Poultry Farming
 Media Habits: Fond of music, TV, video films
 Generally have a lot of reservation/inhibition
rigid in their behaviour