Rural marketing environemnt

1. RURAL MARKETING
ENVIRONMENT
Presented By:
Ashish Kajla
MBA General
13101022
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2. A Case
 The life of a farmer, K.T. Srinivasa, has changed
recently, though the two dirt roads near his home
about 40 miles from India’s high-tech capital of
Bengaluru, his house without toilet facility, farm
without tractor support and the way in which his
family threshes rice by crushing it with a massive
stone roller, have remained the same. How?
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3. The change has been brought about by a cell phone. The
little, attractive gadget is helping him make decisions related
to farming. When to plant and harvest, at what price to sell
the produce and how and when to transport and sell-all
these intriguing questions are now resolved intelligently.
Idea Cellular, Mr. Srinivasa’s service provider, has
effectively utilized its first mover advantages.
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4. Contd.
 Close to half the 800 people in the village, including
Mr. Srinivasa, have become its subscribers. Most of
the villagers make voice calls as they don’t know how
to text message or download e-mails.
 On an average, rural Indians use their phones
around 8.5 hours a month, up by 10 percent over the
past year.
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5.  The villagers are very amused with their new found
connectivity with the world.
 They are now aware of the people and events
affecting the rest of India and the world.
 They can answer quiz questions such as who is
America’s President and why there is an economic
slowdown.
 They have understood that recession is hurting their
hi-tech neighbors in Bengaluru much more and that
the Indian economy is able to absorb the shocks
much better than other developed nations.
 This is an example of one of the many changes in the
rural environment that we have had a profound
impact on rural lives.
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6. Need To Study The Rural Environment
 Consumer decisions and actions can be properly
comprehend only when the force field in which they
are operating is understood.
 Study of environmental factors is important for
marketers to realize the developments and trends
rather than know the static picture of the
environment.
 Today’s decisions are not only for current problems
but also for future opportunities, performance and
results.
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7. Rural Environment
 Social Environment – Population and
households, education and literacy levels, social
groups, festivals and melas, entertainment and arts.
 Technological Environment – Power and energy
sources, postal services, telecommunications,
information and communication technology,
appropriate technology and innovations.
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8. Rural Environment
 Economic environment – Occupations, land
distribution, land use pattern, irrigation, asset
holding, income, consumption, savings, disposable
incomes, rural lifestyles and sales potential, rural
credit institutions, rural retail outlets, micro
financing and rural industry.
 Political Environment – Development initiatives
and administrative bodies.
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9. 1. Demand Estimation
2. Segmentation and target
marketing
3. Product decision
4. Price decision
5. Place decision
6. Promotion decision
1. Demographics (size and
distribution of population by age,
gender, occupation, education,
geographic areas, income, savings
and investment.
2. Demographics, lifestyle indicators,
purchase and usage of inventories.
3. Income, quality consciousness,
brand awareness, preference of
consumers and competition.
4. Disposable incomes, propensity to
consume, competition, demand etc.
5. Availability of trade channels,
physical distribution facilities,
competition and location.
6. Media availability and costs, media
habits of target customers,
competition etc.
Marketing decisions and environment
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10. Demographic Environment
 Though the rural proportion in population has come
down moderately over the years, there has been a
considerable increase in absolute number of people living
in rural areas.
 With the increased working population, the purchasing
power of the rural population has gone up from 40% in
2001 to 45% in 2014.
 For marketers, the largest age group shapes the
marketing environment. In the case of rural, it is school
going children and young adults who define the
consumption patterns of consumables and lifestyle
products.
 The potential for marketers in the rural sector can be
assessed by the fact that 48% of the rural population is
below the age of 20.
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11. Education and the level of demand
 Lower levels of education in the rural sector lead to
little or low demand for a range of products such as
literary books, magazines, notebooks, pens, pencils,
drawing instruments, calculators, computers etc.
 But change is taking place because literacy rate in the
rural sector has risen 23% over the last 20 years.
This has contributed significantly to an improvement
in the socio-economic status of the people.
 With this growth, the demand for educational
products has increased.
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12. Distribution of households by Occupation of
the Head
Head’s
Occupation
Urban Rural
Housewife 0.84 1.01
Cultivator 3.45 40.86
Wage Earner 20.93 35.28
Salary Earner 40.72 11.28
Professional 3.59 0.73
Artisan 6.90 3.41
Petty Shopkeeper 16.05 4.97
Businessman 3.68 0.46
Others 3.85 1.98
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13. Occupation Pattern
 3/4th of rural household heads are either cultivators
or wage earners
 The cultivator’s disposable income is highly seasonal,
with more disposable income available immediately
after the harvesting season. This is therefore the time
when he is more inclined to make purchases,
especially of durables and high-involvement
products.
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14. Household Pattern (Family Structure)
 Rural households have grown by 26 million during
the last decade.
 The traditional households in rural were joint
families, in which a group of people lived under one
roof, ate food from common chulha, held income and
property in common and were related to each other
by bonds of kinship.
 But with rise in population and resulting pressure on
land and several other socio-economic factors, joint
families are now breaking apart and moving towards
nuclear family culture.
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15.  With the increasing number of ‘individualized joint’
(families stay in the same house, but use separate
kitchens) and nuclear families, the range and
number of branded products coming into the family
can increase.
Size of Household Rural Urban
1-2 members 11.1 10.7
3-4 members 30.4 38.8
5-6 members 34.0 32.8
7 and above 24.5 17.7
Household size
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16. Rural Housing Pattern
 The types of houses in rural areas are a very strong
indicator of economic growth.
 Over the last twenty years, the trend in house types
has changed dramatically from less permanent semi-
pucca or kuccha to more permanent pucca types.
Today, 40 percent of rural houses, i.e. 50 million are
pucca, which is growing at a rate of almost 5%
annually.
 Statistics indicate that the owners of such houses
possess sufficient disposable income.
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17. Estimates of Incomes
Urban Rural All India
No. of earners per
household
1.34 1.43 1.4
Income
(Rs/annum/house
hold)
95,827 51,922 65041
Poverty Ratio 18.7 21.7 20.8
Per capita income 19,935 10,227 13018
Population below
poverty line
55.2 159.0 214.2
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18. Rural Income Dispersal
Consumer Class Annual Income 1995-96 2006-07
Very Rich Above Rs. 215000 0.3 0.9
Consuming Class Rs. 45001-2,15000 13.5 25.0
Climbers Rs. 22001 –
45000
31.6 49.0
Aspirants Rs. 16001 – 22000 31.2 14.0
Destitutes Rs. 16000 & below 23.4 11.1
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19. Income Generation
 By sale of agricultural produce
 By sale of animal produce
 By service – Rendered by teacher, doctor or nurse.
 By interest on investment
 Government subsidies and grants
 By mortgage of properties and gold
 By charities and donations
 By labour and wages – Labourers do jobs in
construction of roads, bridges and buildings.
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20. Three Major Revolutions in the Rural
Technological Environment
Green Revolution in the Agricultural Sector
Period from 1967 to 1978 heralded a technological
thrust into rural areas aimed at improving food grain
production in the country and hence achieving food
self-sufficiency.
The modernization and mechanization of the farm
sector boosted farm productivity, triggered
industrial growth, created jobs and initiated a
change in the quality of life in villages.
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21. White Revolution
 Initiated by the government with the aim of
achieving self-sufficiency in the area of milk
production.
 Cornerstone of the government dairy development
policy was producing milk in rural areas through
producer cooperatives and moving processed milk to
urban-demand centers.
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22. The NGO Movement
 Government programmes implemented through
NABARD, CAPART, KVIC and others are given
shape by these organizations.
 Introduction of low-cost spindles, weaving
machinery, technology for leather processing, food
processing, natural resources management etc have
been some contributions in bringing about change at
the grassroots.
 NGO’s have been also active in providing basic
health and child care services, running homes for
destitutes and the distressed and providing
education and training opportunities.
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23. Problems in Rural marketing
 Unevenly Scattered Population
 Underdeveloped People and Underdeveloped Market
 Lack of proper Physical Communication Facilities
 Low per capita incomes
 Many Languages and Dialects
 Low level of literacy
 Logistics Problems
 Low Exposure to Market Stimuli
 Traditional Life
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24. Rural Areas Requirement
 Improved seeds and fertilizers
 Increased means and methods of irrigation
 Multipurpose farming
 Use of modern farming equipments and methods
 Warehousing and preservation of agri-produce.
 Marketing development and remunerative prices for
the produce
 Improvements in pest control and preservation of
crops.
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