1. Introduction to Rural
Marketing
Session – I
Xavier Institute of Management,
Bhubaneswar
2. Why should we do this course?
Agriculture’s 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” ?
3. Session Coverage
Rural India – Some definitional issues
Phases/ stages in rural marketing
Scope of rural marketing
How is rural India changing?
Schools of thought- Approaches to Rural Markets
Strategic Issues & Directions in rural marketing
4. Defining Rural India
Organisation Definition Limitations
NSSO rural not defined
( Census) Population density < 400 / Sq Km
75 percent of the male working
population is engaged in agriculture
No Municipal corporation / board
Planning Towns upto 15,000 population are Town characteristics
Commission considered rural not defined
5. Cont’d
LG Electronics All places other than the Only clarifies what are
7 metros the cities
NABARD All locations with a Village & town
population upto 10, 000 characteristics not
considered “ rural” defined
Sahara Commercial Population
establishments located characteristics unknown
in areas servicing less
than 1000 population
Source: The Rural Marketing Book- Text & Practice, Kashyap. P and Raut. S
( 2007)
6. Defining Rural Marketing
National Commission on NGOs Corporate Rural
Agriculture Marketing Definition
Decisions to produce Marketing products Function that manages
saleable farm produced in rural areas all activities involved in
commodities involving to urban areas assessing, stimulating
all the aspects of the and converting the
market system or purchasing power of
Marketing products
structure, both rural consumers into
produced in rural areas
functional and effective demand for
in rural markets
institutional, based on specific products and
technical & economic services to create
considerations and satisfaction & a better
includes the pre & post standard of living for
harvest operations. achieving organisational
goals.
7. Phases in Rural Marketing
Sr. No Time Frame Key Events & Trends
1 Phase One( Pre 1960’s) 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
8. Cont’d
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
3 Phase Three( 1990s to Present) Demand for
consumables and
durables rise
Companies find growth
in urban markets
stagnating or falling
9. 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
10. Domain of Rural Marketing
To
Rural Urban
Rural
From
Urban
Source: M. Jha, Rural Marketing- Some Conceptual Issues, EPW, 1988
11. Scope of Rural Marketing
Domain of Dimensions of the transaction
Rural
Marketing
Participants Products/ Modalities Norms Outcomes
services
Rural to
Rural
Rural to
Urban
Urban to
Rural
12. 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
13. Transitions In Rural India
•Non –food, cash crops
• Food Grain Crops
•Livestock & fisheries
• On land activities
•Manufacturing &
• Farm Activities services
14. Rural Employment Patterns( Male)
Sector Year – 1987 ( % share in Year -2004 ( % share in
employment) employment)
Agriculture 75 67
Transport & 2 8
Communication
Trade & Hotels 5 7
Construction 4 7
Manufacturing 7 8
Source: NSSO data, Mckinsey Global Institute Study, 2004-05
15. Rural India – Population Trends
1971 1981 1991 2001
Total 548.2 683.3 848.3 1026.9
Population (in
million)
Rural 524.0 628.8 741.6
Population (in
million)
As a proportion 76.7 74.3 72.2
of total
population
Decadal 19.8 16.7 15.2
Variation
Source: Census 2001
16. Cont’d
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)
17. 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?
18. Cont’d
Size of villages/ habitations are changing
Role & influence of towns is changing
Social interaction is a mix of rural and urban
Let’s look at some key trends in detail
19. Rural Income Trends
Annual Income Income Class 1989-90( % 1998-99 ( %
( at 1998-99 Households) Households)
prices)
<= 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- Upper Middle 1.2 3.9
1,40,000
> 1,40,000 High 0.5 3.0
Source: National Council for Applied Economic Research, 2000
20. Rural Marketing- Schools of Thought
Determinist School
Activist School
What is the right approach?
Dependent on level of market development, stage in the
PLC and access to resources
Amul & ITC prominent examples
No water-tight compartmentalisation
21. 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
22. ICT in Rural Markets
Category Government Private NGO/ PPP
Infrastructure NIC N- Logue Simputer
Provision
Rural Services Bhoomi( Karnatak Sewa
a)
Agri Marketing Agmarknet E- Choupal Ozhwar
Sandhiyes
Agri extension Universities EID Parry