Rural Marketing - An Introduction

Rur al Mar keting – An

MARKET, MARKETING, AND MARKETING MANAGEMENT

MARKET traditionally is a place where buyers and sellers gather to exchange their goods. 

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MARKETING “a social and managerial process by which individuals and groups obtain what they need and want through creating,, offering and exchanging products of value with others”. 

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MARKETING MANAGEMENT the process of planning and executing the conception, the pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and 

RURAL, RURAL MARKET, AND RURAL MARKETING

RURAL

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places far away from towns or cities.

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RURAL MARKET

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CENSUS OF INDIA 2001 - A place where the population is not more than 5000, the density of population is not more than 400 per square kilometer and atleast 75% of the male population is engaged in agriculture.

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NABARD - All locations irrespective of villages or towns, upto a population of 10,000 will be considered as rural.

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Marketers’ View – Any market that exists in an area with less than 10,000 population, low density of

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RURAL MARKETING 

Rural marketing involves the process of developing, pricing, promoting, distributing rural specific product and a service leading to exchange between rural and urban market which satisfies consumer demand and also achieves organizational objectives.

RURAL MARKETING FROM / TO

RURAL

URBAN

URBAN

AGRICULTURAL INPUTS CONSUMABLES CONSUMER DURABLES

NOT CONCERNED

RURAL

Production carried out AGRICULTURAL in Villages and the PRODUCE products are used in villages

RURAL MARKETING is a two-way marketing

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process wherein the transactions can be:

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• Urban to Rural: A major part of rural marketing falls into this category. It involves the selling of products and services by urban marketers in rural areas. These include: Pesticides, FMCG Products, Consumer durables, etc. 

• Rural to Urban: Transactions in this category basically fall under agricultural marketing where a rural producer seeks to sell his produce in an urban market. An agent or a middleman plays a crucial role in the marketing process. The following are some of the important items sold from the rural to urban areas: seeds, fruits and vegetables, milk and related products, forest produce, spices, etc. 

• Rural to Rural: This includes the activities that take place between two villages in close

EVOLUTION Of RURAL MARKETING

PHASE

ORIGIN

I

Before Mid-1960 (from independence Agricultural to green revolution) Marketing

II

IV

FUNCTION

MAJOR PRODUCTS

SOURCE MARKET

DESTINATION MARKET

Agricultural Produce

Rural

Urban

Urban

Rural

Mid- Sixties (Green revolution to PreMarketing Of Agricultural liberalization period) Agricultural Inputs Inputs

Mid- Nineties (Postliberalization period Rural Marketing on 20th century)

Consumables And Durables For Urban & RuralRural Consumption & Production

21st century

All products & services

Developmental marketing

Urban & RuralUrban & Rural

 Nature of Rural Market • Large, Diverse and Scattered Market • Major Income of Rural consumers is from Agriculture • Standard of Living and rising disposable income of the rural customers • Traditional Outlook • Rising literacy levels • Diverse socioeconomic

MYTHS • Myth 1: Rural Market is a Homogeneous Mass 

Reality: It's a heterogeneous population. Various Tiers are present depending on the incomes like Big Landlords; Traders; Small Farmers; Marginal Farmers: Labourers; Artisans. State wise variations in rural demographics are present viz. literacy and population below poverty line. 

• Myth 2: Disposable Income is Low 

Reality:Number of middle class HHs (annual income Rs. 45,000 - 2,15,000) for rural sector

• Myth 3: Individuals Decide About Purchases 

Reality: Decision making process is collective. Purchase process influencer, decider, buyer, one who pays - can all be different. So marketers must address brand message at several levels. Rural youth brings brand knowledge to Households (HH). •

Roadblocks of Indian Rural Markets • Standard of living: The number of people below the poverty line is more in rural markets. Thus the market is also underdeveloped and marketing strategies have to be different from those used in urban marketing. 

• Low literacy levels: The low literacy levels in rural areas leads to a problem of communication. Print media has less utility compared to the other media of communication. 

• Low per capita income: Agriculture is the main source of income and hence spending capacity depends upon the

• Transportation and warehousing: Transportation is one of the biggest challenges in rural markets. As far as road transportation is concerned, about 50% of Indian villages are connected by roads. However, the rest of the rural markets do not even have a proper road linkage which makes physical distribution a tough task. Many villages are located in hilly terrains that make it difficult to connect them through roads. Most marketers use tractors or bullock carts in rural areas to distribute their products. Warehousing is another major problem in rural areas, as there is hardly any organized agency to look after the storage issue. The services rendered by

• Ineffective distribution channels: The distribution chain is not very well organized and requires a large number of intermediaries, which in turn increases the cost and creates administrative problems. Due to lack of proper infrastructure, manufacturers are reluctant to open outlets in these areas. They are mainly dependent on dealers, who are not easily available for rural areas. This is a challenge to the marketers. 

• Many languages and diversity in culture: Factors like cultural congruence, different behaviour and language of the respective areas make

• Lack of communication system: Quick communication is the need of the hour for smooth conduct of business, but it continues to be a far cry in rural areas due to lack of communication facilities like telegraph and telecommunication systems etc. The literacy rate in the rural areas is rather low and consumer’s behaviour in these areas is traditional, which may be a problem for effective communication. 

• Spurious brands: Cost is an important factor that determines purchasing decision in rural areas. A lot of spurious brands or look-alikes are available, providing a low cost option to the rural customer. Many a time the rural

• Seasonal demand: Demand may be seasonal due to dependency on agricultural income. Harvest season might see an increase in disposable income and hence more purchasing power. 

• Dispersed markets: Rural population is highly dispersed and requires a lot of marketing efforts in terms of distribution and communication.

Examples • One very fine example can be quoted of Escorts where they focused on deeper penetration. They did not rely on TV or press advertisements, but rather concentrated on focused approach depending on geographical and market parameters like fares, melas, etc. Looking at the 'kuchha' roads of village, they positioned their bike as tough vehicle. Their advertisements showed Dharmendra riding Escort with the punch line 'Jandar Sawari, Shandar Sawari'. Thus, they achieved whopping sales of 95000 vehicles annually. 

• HLL started 'Operation Bharat' to tap the rural markets. Under this operation, it passed out

• ITC is setting up e-Choupals, which offers the farmers all the information, products and services they need to enhance farm productivity, improve farm-gate price realization and cut transaction costs. Farmers can access latest local and global information on weather, scientific farming practices as well as market prices at the village itself through this web portal - all in Hindi. It also facilitates supply of high quality farm inputs as well as purchase of commodities at their doorstep. 

• BPCL introduced Rural Marketing Vehicle (RMV) as their strategy for rural marketing. It moves from village to village and fills cylinders on the spot for the rural customers. BPCL considered low-income of