THOMPSON RURAL

MARKET INDEX

Dr. Bhupinder P S Chahal

Thompson rural market

index

A successful attempt in the direction of assessing the

potential of rural markets has been made by Hindustan
Thompson Associates limited.
They made the first attempt in 1972. since most of the
data are available at district level, they collected these
data for 334 districts. They identified 11 factors and
assigned a weightage to each other. However, this was
not considered to be satisfactory approach.
Hence another attempt was made in the year 1986.
During the second attempt, they considered 26 factors
for constructing the rural marketing index, in this
attempt they considered 383 districts.

Hindustan Thompson Associates

have developed the Thompson rural
market index based on 26
variables , including area of the
concerned district , demographic
pattern occupational pattern ,
agriculture related data , rural
electrification data and commercial
bank data .
The index is majorly used in
segmentation of the rural market.

Indicators considered for rural market

index

Area of the district in sq km

Demographics
Population
Males
Females
Density per sq km
Number of villages
Percentage distribution of villages
Literate rural numbers
Percentage of literacy
Literate : males
Literate : females

Occupational pattern
Cultivators
Agricultural laborers
Non Agricultural laborers

Indicators considered for rural market

index

Agricultural related data

Gross cropped area in hectares
Gross irrigated area in hectares
Area under non food crops in hectares
Average size of operational holdings in hectares

Agricultural inputs data

Pump sets and tube wells
Fertilizer consumption in metric tonnes
Number of tractors

Rural electrification data

Percentage of villages electrified

Commercial banks data :

Number of rural branches
Deposits in lakh of rupees
Advances in lakh of rupees

Thompson rural market

index

After collecting the data, statistical correlation analysis was

conducted with 10 selected variables related to agriculture.
Following are those variables.
1. Agricultural labourers
2. Gross cropped area
3. Gross irrigated area
4. Area under non-food crops
5. Pump sets
6. Fertilizer consumption
7. Tractors
8. Rural credit
9. Rural deposit
10.Villages Electrified

Thompson rural market

index

Based on the statistical analysis the

districts have been classified as A B C D
and
markets.
ClassE
ofclass
Index
Range
No. of
Percentage of
Markets

A
B
C
D

60 TO
100
40 TO
59.9
30 TO
39.9
20 TO
29.9

Districts

Market

22

17.80

39

20.50

54

20.40

86

23.00

Thompson rural market

index

INDEX says that:

40% of the districts have high potential
(A&B)
20% of the districts have medium
potential (C)
40% of the districts need more time to
develop(D&E)
This Index can be used for evolving
strategies for marketing agricultural
inputs and consumable and durable
items.