You are on page 1of 21

Introduction to Rural Marketing

Why should we study rural marketing

Agricultures share in GDP is going down, but, India still lives in her villages

Urban markets are crowded and saturated

The understanding of rural is diffused and sometimes


confusing

Is rural marketing different from urban marketing ?

Defining Rural India


Organisation NSSO ( Census)

Definition

Limitations rural not defined

Population density < 400 / Sq Km 75 percent of the male working population is engaged in agriculture No Municipal corporation / board

Planning Commission

Towns upto 15,000 population are considered rural

Town characteristics not defined

Contd
LG Electronics NABARD All places other than the 7 metros All locations with a population upto 10, 000 considered rural Commercial establishments located in areas servicing less than 1000 population Only clarifies what are the cities Village & town characteristics not defined Population characteristics unknown

Sahara

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

Defining Rural Marketing


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. NGOs Marketing products produced in rural areas to urban areas Marketing products produced in rural areas in rural markets Corporate Rural Marketing 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 organisational goals.

Phases in Rural Marketing


Sr. No 1 Time Frame Phase One( Pre 1960s) Key Events & Trends
Marketing

rural products in rural and urban areas Agricultural inputs in rural areas Agricultural marketing Farming methods were primitive and mechanisation was low Markets unorganised

Contd
2 Phase Two ( 1960s to 1990s)
Green

Revolution Companies like Mahindra and Mahindra, Sri Ram Fertilisers and IFFCO emerge Rural products were also marketed through agencies like KVIC
Demand

Phase Three( 1990s to Present)

for consumables and durables rise Companies find growth in urban markets stagnating or falling

Scope of Rural Marketing


Keenly debated topic Definitions based on organisational/ institutional vision, mission & goals

Need for a comprehensive and modular understanding


Rural Marketing is a work in progress Multi disciplinary approach is necessary for sharper understanding

Domain of Rural Marketing


To

Rural

Urban

Rural From Urban

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

Scope of Rural Marketing


Domain of Rural Marketing Participants Dimensions of the transaction

Products/ services

Modalities

Norms

Outcomes

Rural to Rural
Rural to Urban Urban to Rural

Changes in Rural India


Diverse change levers in rural India The pull of the cities & towns migration and its side effects

Effect of government programmes


Civil society interventions Natural & manmade disasters Slow but sure change

Transitions In Rural India

Non food, cash crops Food Grain Crops Livestock & fisheries Manufacturing & services

On land activities
Farm Activities

Rural Employment Patterns( Male)


Sector Year 1987 ( % share in employment) 75 Year -2004 ( % share in employment) 67

Agriculture

Transport & Communication


Trade & Hotels

2
5

8
7

Construction

Manufacturing

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

Rural India Population Trends


1971 Total Population (in million) Rural Population (in million) As a proportion of total population Decadal Variation 548.2 1981 683.3 1991 848.3 2001 1026.9

524.0

628.8

741.6

76.7

74.3

72.2

19.8

16.7

15.2

Source: Census 2001

Contd

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


Key findings from 2001 census Population density 253/ sq kilometer and total number of villages is 638, 588

Villages having less than 500 population are falling


Villages having 2000 + population most prosperous What are the implications of these trends?

Contd

Size of villages/ habitations are changing Role & influence of towns is changing Social interaction is a mix of rural and urban

Lets look at some key trends in detail

Rural Income Trends


Annual Income ( at 1998-99 prices) <= 35,000 35,001- 70,000 Income Class 1989-90( % Households) 67.3 23.9 1998-99 ( % Households) 47.9 34.8 Low Low Middle

70,001 1,05,000
1,05,0011,40,000 > 1,40,000

Middle
Upper Middle High

7.1
1.2 0.5

10.4
3.9 3.0

Source: National Council for Applied Economic Research, 2000

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 programmes

ICT in Rural Markets


Category Infrastructure Provision Rural Services Government NIC Private N- Logue NGO/ PPP Simputer

Bhoomi( Karnataka) Agmarknet Universities E- Choupal EID Parry

Sewa

Agri Marketing Agri extension

Ozhwar Sandhiyes

Close of Session

Thank You

You might also like