RURAL MARKETING

Module 1
 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 Mix
From/To Rural Urban
Organized
Urban Branded Not concerned
consumables&
Durables
Un-organized Semi-Organized
Farm& Non- Handicrafts,
Rural Farm goods Handloom
textiles, leather
products
 Evolution of rural marketing
Concept& scope
• Phase I: (Before mid 1960s)
From/To Rural Urban
Agricultural inputs
Fertilizers, seeds& pesticides
Urban Durables Tractors, Not concerned
harvesters, threshers, power
tillers, pump sets, oil
engines, electric motors
Artisans services and Agricultural
products bamboo baskets, products:
ropes, window& door food grains, cotton,
Rural frames, household items by oil, seeds,
carpenters, blacksmiths, pot sugarcane etc
makers& cobblers
• Phase II (Mid 1960s-Mid 1990s)

From/To Rural Urban

Agricultural inputs
Fertilizers, seeds&
pesticides Durables
Urban Tractors, harvesters, Not concerned
threshers, power tillers,
pump sets, oil engines,
electric motors
Artisans services and Agricultural
products bamboo baskets, products:
ropes, window& door food grains,
Rural
frames, household items by cotton, oil, seeds,
carpenters, blacksmiths, sugarcane etc
pot makers& cobblers
Phase III (After Mid 1990s)

From/To Rural
Household
Urban goods:
Consumables
and durables
Artisans
Rural services and
products
 Evolution of rural marketing
Major Source Destination
Phase Origin Function Products market market

Since Agricultural Agricultural

I Independence Marketing Produce Rural Urban

Marketing of
Agricultural Agricultural
II Mid-Sixties inputs inputs Urban Rural

Consumables&
durables for
consumption
Rural and Urban&
III Mid-Nineties Marketing production 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
Agri& allied services,
poultry farming, fishing,
animal husbandry, cottage
industries, health center, Individuals, House
Individuals& school, cooperatives, holds, Offices and
Constituents Households panchayat office etc production firms

Food products, Seeds, Fertilizers,

Toiletories, Cosmetics, Pesticides, Animal feed,
Repairs, Transport,
Textiles and garments, Fishnet, Medicines,
Banking, Credit,
Consumables Foot wear etc Petrol/Diesel etc
Insurance, Healthcare,
Watches, Bi-cycles, Education,
Radio, TV, Kitchen Communication, Power
appliances, Furniture, Tillers, Tractors, Pump etc
Sewing machines, 2 sets, Generators,
Durables wheelers etc Harvesters', Boats etc
 Nature of Rural Marketing

Aspect Transactional Development

Consumer Orientation, Society orientation, societal
Concept Marketing Concept concept
Stimulating& conversational Catalytic& transformation
Role Marekting agent
Focus Product-market fit Social change
Product innovations& Social innovations&
Key task communications communicaitons
Nature of
activity Commercial Socio-cultural, economic
Government, voluntary
agencies, corporate
Participants Corporate enterprise, Sellers enterprises
 Nature of Rural Marketing

Aspect Transactional Development

Development
projects/schemes/progr
Offer Products& services ammes
Target group Buyers Beneficiaries& buyers
Communication Functional Developmental
Profits, Customer
satisfaction& brand Market development,
Goal image corporate image
Time-Frame Short-Medium Medium-Long
Profit-motive& Service policy&
Motivation business policy ideological/Public policy
 Rural Vs Urban
Aspect Urban Rural
Marketing&
M Marketing&
societal
concepts,
Societal concepts, Development
a Green marketing marketing and
relationship relationship
Philosophy marketing marketing
r Demand High Low
Mostly from
k Competition Among units in unorganised
organised sector units
Economy Open Closed
e Abundant&
Infrastructure strong Poor& weak
t Manufacturing
Mobility
High
High
Low
Low
 Rural Vs Urban
Aspect Urban Rural
Consumers
M Location Concentrated Widely spread
Literacy High Low
a Per capita Income High Low
Expenditure Planned, Even Seasonal (vary)
r Needs High level Low Level
Protection Easily Available Rarely Available
k Innovation adoption Faster Slow
Attitude to modernization Ready for adaption& change Tradition bound
e Family Structure Nuclear Joint
Possession of household assets High Low
t Occupation Trade, Industry& Services Agri
Attitude to Life Scientific Fatalistic
Exposure High Low
 Rural Vs Urban
Sources of InfoAny media Word of mouth
Awareness of needsHigh Low
ConceptKnown Less Known
P
PositionsingEasy Difficult
r Usage MethodEasily grasped Difficult to grasp
o
Quality PreferenceGood Moderate
d
Timeliness of supplyTimely Untimely
u
After sales serviceAdequate Inadequate
c
As a status symbolMostly yes Mostly no
t
Guidance of usageNeeded Not needed
FeaturesImportant Less important
P
r SensitiveYes Very Much
i
c
e Level DesiredMedium-High Low-Medium
 Rural Vs Urban
Wholesalers, Stockists,
D Retailers, Supermarkets, Village shops,
i u Speciality stores& Shandies,
s t Channels Authorized show rooms Haats
t i
Transport Facilities Good Average
r o
i n Distribution outlets More Fewer
b
Product Availability High Limited
 Rural Vs Urban
P
Print, Audio-Visual, TV, Radio, Print
r Media, Out doors, media to some
o Advertising exhibitions etc extent
m
o Door-to-door
Personal Selling frequently Occasionally
t
i Contests, Gifts, Gifts, Price
o Sales Promotion Price discounts discounts
n PublicityGood oppurtunities Less
 Rural Vs Urban
Market Differences
• Environment different
– Concentration, infrastructure, population density,
• Social relations
– Interactions, identification of individuals, Social
norms, Status, Caste
• Employment& incomes seasonal
– Occupations, income frequency
 Rural Vs Urban
Market 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 Urban
Marketing Differences
• Marketers
– Understanding, respectful& humble, patience,
courteous& concerned and social skills
• Philosophy
– Development marketing
• Marketing research
– Durables: income, family structure
– Research instruments
 Rural Vs Urban
Marketing 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 Urban
Marketing 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
 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)
 Practical aspects of rural marketing

• 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)
• FMCG
– DABUR (ASTRA – Advanced Sales Training for rural ascendance in local
languages); Amla hair oil
– Coca-Cola (Parivarthan program to train rural retailers)