• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
Rural marketing
 

Rural marketing

on

  • 589 views

RURAL MARKETING

RURAL MARKETING

Statistics

Views

Total Views
589
Views on SlideShare
589
Embed Views
0

Actions

Likes
0
Downloads
85
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Rural marketing Rural marketing Document Transcript

    • 1   http://www.miteshk.webs.com  UNIT: 1 RURAL MARKETING Definition:- Rural marketing can be defined as a function which manages all those activities in asserting, stimulating and converting the purchasing power of rural people into an effective demand for specific products and services and there by achieving the goals of the organisation. Rural areas:- Rural areas are large and isolated areas of an open country with low population density a country side refers to rural areas that are open. Q1. Explain the nature and scope of rural marketing? Ans: Meaning of Rural marketing:- Rural marketing is promotion of a company’s products in the rural markets by using strategies which differ from that of urban market. The rural market more price sensitive but it has preference quantity. Nature of Rural market:- 1. Large, diverse and scattered market:- Rural marketing in India is large, and scattered into a number of regions. There may be less number of shops available to market products. 2. Major income of rural consumers is from agriculture:- Rural prosperity is tied with agriculture prosperity. In the event of crop failure, the incomes of masses is directly affected. 3. Traditional outlook:- Villages develop slowly and have a traditional outlook. Change is a continuous process but rural people accept change gradually. This is gradually changing due to literacy especially in the youth who have begun to change the outlook in the villages. 4. Standard of living and rising disposable income of the rural customers:- It is known that majority of the rural population lives below poverty line and has low literacy rate, low savings etc. Today the rural customers spends money to get value and is aware of the happening around him. 5. Rising literary levels:- It is documented that approximately 45% of rural Indians are literate. Hence awareness has increase and the formats are well informed about the world around them. They are also educating themselves on the new technology for a better life style. 6. Diverse socio economic background:-
    • 2   http://www.miteshk.webs.com  Due to differences in geographical areas and uneven land fertility, rural people have different socio economic background, which ultimately affects the rural markets. 7. Infrastructure facilities:- The infrastructure facilities like warehouses, communications systems and financial facilities (or) inadequate in rural areas physical distribution is a challenge to marketers who has found innovative ways to market their products. Scope of marketing:- 1. Large population:- According to 2011 census, rural population is 72% of total population and it is scattered over a wide range of geographic area. 2. Rising rural prosperity:- Average income level has unproved due to modern farming practices, contract farming industrialisation, migration to urban areas etc. 3. Growth in consumption:- There is a growth in purchasing power of rural consumers. The average per capita house hold expenditure is 382 Rs 4. Change in life style:- Life style of rural consumer changed considerably. 5. Market growth rate higher than urban:- The growth rate of fast moving consumer goods [FMCG] market and durable market is high in rural areas. The rural market share is more than 50% for products like cooking oil, hair oil etc. 6. Life cycle advantage:- The products which have attain the maturity stage in urban market is still in growth stage in rural market. 7. Rural marketing is not expensive:- To promote consumer durable inside a state costs 1 croreRs while in urban areas it will costs in millions. Q2. What is rural market? Importance of rural marketing ? Ans:Meaning of rural market:- On account of green revolution, the rural areas are consuming a large quality of industrial and urban manufactured products. In this context a special marketing strategy namely rural marketing has emerged. But often rural marketing is confused with agricultural marketing – The letter denotes marketing of produce of rural areas to the urban consumers or industrial consumers, were as rural marketing involves delivering manufactured or processed inputs or services to rural producers of consumers. Importance of rural market:- 1. Large market:-
    • 3   http://www.miteshk.webs.com  Approximately 75% of Indian’s population resides around 6,38,365 villages of India spread over 32,00,000 Sq. kilometre 41% of Indian’s middle class resides in rural areas. The Indian rural consumer leaves in 6,00,000 villages across the country and they account for over 70% of population of the country. For several product categories, rural markets account for over 60% of the national demand. 2. Higher purchasing capacity:- According to “NCAER”[National Council for Applied Economic Research]. As per NCAER study there are many middle income and above households in the rural areas. As there are in the urban areas there are almost twice as many lower middle income households in rural areas as in the urban areas. Because of this purchasing power of power of rural people is on rise. 3. Market growth:- “Hariyali kissan bajar” was set up by sri ram consolidated limited to facilitates scale of agriculture inputs such as fertilizers, pesticides forming equipment, seeds etc. Shakti- though the state governments and NGO’S involved in microfinance women entrepreneurs in villages are identified to act as local distribution and sales point for HUL products. 4. ITC:- Itc’s internet enabled rural interface to help scale of agricultural outputs is presently operational in 6 states market is growing at a rate of 3-4% p.a. Q3. Define size of rural market and discuss? Ans: According to the census of India village with clear surveyed boundaries not having a municipality, corporation or board, with density of population not more than 400 Sq.km and with at least 75% of the male working population engaged in agriculture activities would quality as rural. According to this definition there are 6,38,000 villages in the country of these 0.5% has a population about 10,000 and 2% have population between 5,000 and 10,000 around 50% has a population less than 200. Interestingly, the FMCG and consumer durable companies, any territory that has more than 20,000 &50,000 population respectively in rural market so for them it is not rural India which is rural. According to the census of India 2001, there are more than 4000 towns in the country. It has classified them into 6 categories around 400 class-I to towns with 1,00,000 and above population, 498 class-II towns with 50,000-99,999 population, 1368 class-III towns with 20,000-50,000 population, 1560 class –IV towns with 10,000-19,999 population It is mainly the class-II & class-III towns that markets term as rural.
    • 4   http://www.miteshk.webs.com  Demographical details of Indian rural market • About 285 millions live in urban India where as 742 millions reside in rural areas. • The No. of middle income & high income households in rural India is expected to grow from 46 millions to 59 millions. • Size of rural market is estimated to be 42 millions household and rural market has been going at 5 times the growth of the urban market. • More government, rural development programs. • Increase in agricultural productivity leading to growth of rural disposable income. • Lowering of difference between taste of urban and rural customers. The Indian rural market with its vast size and demand offers great opportunity to marketers. Our national is classified in around 450 districts & approx. 6, 30,000 village which can be stored in different parameters such as literacy level, accessibility income levels, distance from nearest town etc. The rural market accounts for half of the total market for Tv sets, fans pressure cooker’s, bicycle’s, washing soap, tea salt & tooth powder, what is more, the rural market for FMCG product is growing much faster than the urban market. Q4. Explain the distinction between rural market & urban market? Ans: Definition:- Rural marketing is similar as simply marketing. Rural marketing differs only in terms of buyers here, target market consists of customers living in rural areas.Thus rural marketing is application of marketing fundamentals {concepts, principles, theories etc} to rural marketers. Rural marketing is a process of developing, pricing , promoting and distributing rural specific goods and services leading to desired exchange with rural customers to satisfy their needs and wants, and also to achieve organisational objectives. Differences between rural marketing & urban marketing:- Although rural marketing offer immense potential marketers used to recognise the fact that there are considerable differences in many aspects including the nature, characteristics, buying patterns & behaviours of rural consumer when compared with their urban counter parts. While the urban economy thrives mainly on secondary and territory activities such as manufacturing &service, the rural economy is driven mainly by primary activities such as agriculture, fishing & forestry. The consumer demand and consumption patterns also differ across rural and urban areas, in many products rural consumption now accounts for a large share then urban. In in washing soaps the rural share is over 60%. In popular both soaps it is more than 50% and in batteries it is more than 56% similarly is the case with packed tea & hair oil’s
    • 5   http://www.miteshk.webs.com  Aspect  Urban  Rural  Philosophy  Marketing &social concepts  & relationship market  Marketing & social concepts development  marketing  Demand  High  Low  Competition  Among units in organized  sector  Among unorganised sector  Consumers:‐  Location  Literacy  Income  Expenditure  Needs  Innovations    Concentrated  High  High  Planned &even  High level   Faster  Widely spread  Low  Low  Seasonal &variations  Low level   Slow  Product awareness   High  Low  Concept  Known  Less known  Positioning  Easy  Difficult  Usage method  Easy grasped   Difficult to grasp  Quality preference  Good  Moderate Price sensitive  Yes  Very much in rural  Distribution channels  Whole seller, retailers,  supermarkets, speciality  stores, authorised store  rooms   Village shops  Transport facility  Good  Moderate Product availability  High  Limited  Advertising  Print, audio, visual media,  outdoors, exhibitions etc  T.v, radio, print media to some extent  Personal selling  Door‐to‐door  Occasionally   Sales promotion  Contest, gifts, price discount Gifts & price discount  Publicity  Good opportunity Less opportunity
    • 6   http://www.miteshk.webs.com  Q5. What are the problems of rural marketing? Ans: The problems of rural marketing are continuing in spite of efforts to improve in a 9th five year plan. The position is improving but slowly the rural marketer has many challenges. But the vast & expanding markets call for good marketing strangers to create win situations to all parties in the chain of rural marketing. The problems of rural marketing are as follows:- Under developed people Under developed market Improper communication facilities Many languages Vastness & uneven spread Low per capita income Poor infrastructure facilities Seasonal demand Less distribution channel 1. Under developed people:- Rural society is found by tradition, old customs, practices etc. The impact of modern science & technology has made very less impact of the old beliefs are still continuing. 2. Under developed market:- Rural markets are not developing because of inadequate banking & credit facilities. Rural market needs banks to enable remittance, to transact on credit basis and to obtained credit support from the bank. At present every 48th village in India only has bank. 3. Poor or improper communication facilities:- Most villages even today largely depends on telegrams and phones for their communication needs print media and visual media[Television cinema] etc reaches only about 20% of rural Indians. 4. Many languages:- India is a country of many languages. Language becomes a barrier in effective communication in the marketing efforts. The languages vary from state to state, place to place, district to district there are now 18 schedule national languages. 5. Vastness & unevenly spread:- India is a vast time & major approximately 3214km from North to South &2933km from East to West. Rural market consists of approximately 75 cores rural consumers spread across approximately 6,38,365 villages. Despite the urban migration, the rural areas continue to be the place of living for a vast majority Indians.
    • 7   http://www.miteshk.webs.com  6. Low per capital income:- Most farmers has small lands and many villages are brought prone, this result in low per capita income. Low per capita incomeResults in low consumption pattern as compared to the urban population. The marketers faces challenges in rural marketing to decide about quantities, frequency of distributions, package size etc… due to the low per capita income of the rural people. 7. Poor infrastructure facilities:- Infrastructural facilities like roads, ware houses, powers etc… are inadequate in rural areas. Infrastructural cost are very high and impact adversely in the rural market activities. 8. Seasonal demand:- Rural economic is seasonal, rural people have two seasonal namely khariff&rabi. Villages have money mostly in this seasons. As village income are seasonal demands are also.
    • 8   http://www.miteshk.webs.com  UNIT: 2 RURAL MARKETING ENVIRONMENT Q1. Discuss about the rural marketing environment? Ans:- An environment is that which surrounds an organization. It was sum total of external factors and made up of tangible and intangible factors /both controllable and uncontrollable. Rural marketing is basically focused marketing activity of a organization. The environment out lines threats and opportunities of the market. The Rural marketing environment is complex and is changing continuously. The marketing organization should foresee and adopt strategies to change in requirements in the market. One which doesn’t change perishes. An adaptive organization can stand competition or have a modest growth. An organization which makes its effective marketing plans and its own strategies or a creative one will prosper and creates opportunities in the change in environment. Rural marketing environment changes will be in the area of a) Social changes b) Economic changes c) Ethical changes d) Political changes e) Physical changes f) Technological changes Figure 1THE MARKETING ENVIRONMENT Marketing  Organisation  Product & Packaging  Place Price Promotion Psychological Factors  Anthropological  Factors  Price Competition  Consumer  PoliticalPhysical Technological Ethical Sociological factors  SOCIAL ECONOMIC
    • 9   http://www.miteshk.webs.com  1.SOCIAL CHANGES:- The social factor consists of three factors, 1) Sociological factor:- Consumer society or the community is important. The consumer life style is influenced by the social setup. The social constitution and changes influence customer habits, taste, and lifestyles. 2) Anthropological factors:- The reasonable cultures and subcultures and living patterns influence advertising sales promotion, selling strategies and packing. The consumers in east India have different taste. 3) Psychological factors:- Consumer behavior attitudes personality and mental make ups are unique. The study of behavior is vital to evolve marketing mix. 2. Economic factors:- 1) Competition:- A good and healthy competition brings in good and overall improvement in economic activities. It also brings good quality, good quantity and price. 2) Consumers:- The consumer today is quite knowledgeable and choosy. His progress and well being should be the aim of any economic activity. 3) Price:- Pricing is a delicate issue where it should be market friendly, not too high or to little. The marketers has to keep in mind to get descent returns on investment and effects of producers and marketers. 4) Ethical forces:- Business minus ethical values brings degeneration. In the long run it brings problems. No standardization, exploitation and falsification are main ethical values in such organization. 5) Political forces:- The government polices towards trade and commerce, internal taxation and preferential treatments have a influence on the marketing strategies. The marketing environment has to meet the political frame work in which a government is made to work. 6) Physical forces:- The infrastructure availability for movement and storage of goods play an important role in the physical distribution of goods and reaching the consumers. Efficient and cheaper logistics helps the market in a big way. 7) Technological force:- The fast changing science and technology gives a cutting edge to the marketing of products. The changes warrant changes in marketing , inputs and
    • 10   http://www.miteshk.webs.com  strategies. Faster and efficient communication and transport systems have speeded up marketer. The capital is made to work faster and harder .So in the case with the marketer, He has to use these new marketing tools and facilities in designing and implementing his marketing strategies which are adaptive to the change in environment and ensure success. Q2) what are the factors influencing rural consumer behavior? ANS:- The various factors that affect buying behaviour of in rural India are: 1) Environment of the consumer:- the environment or the surroundings in which the consumer leaves has a very strong influence on the buyer behavior. E.g.:- electrification, water supply effects demand for durables. 2) Geographic influence:- the geographic location in which the rural consumer is located also speaks about the thought process of the consumer. For instance, villages in south India accept technology quicker than in other parts of india.Thus, HMT sells more winding watches in the north while they sell more quartz watches in the south. 3) Influence of occupation:- The land owners and service can buy more of category2 & category3 durables than agricultural laborers. 4) Place of purchase:- Company’s need to access the influence of retailer on both consumers at village shops. 5) Creative use of product:- The study of product and provides indicators to the company on the need for education and also for new product ideas. E.g.:- godrej hair dye being used as a pain to the color horns of ox. Washing machine being used for making lassie. 6) Brand preference and loyalty:- the people in rural market will not give preference for brand products but they give importance for loyalty of the product. 80% of the sale is branded items in 16 product category. Q3) what are the factors influencing Rural marketing operations? ANS: - All business operations revolve around understanding customer needs, desires likes and preference and offering products and services that will give desired satisfaction to the consumers. FACTORS INFLUENCING OR CONTRIBUTING CONSUMER BEHAVIOUR:- a) Environmental b) Cultural
    • 11   http://www.miteshk.webs.com  c) Social d) Personal e) Psychological a) Environmental :- I. Economic factors:- The agricultural and rural development has enabled our country to achieve self sufficiency in food production and we are now exporting a variety of agricultural commodities to foreign countries. Favorable monsoons during the last 10 years have let to increase in crop yields and rural income. In addition, diversification of a agriculture, development of village industries, migration of rural people into cities, remittance of money, family members settled abroad have increased income level and buying power of villagers. II. Political factors:- The government have taken initiative for economic development of rural areas and have invested heavily in agriculture, irrigation, electricity, khadi and village industries and infra structure facilities such as roads, communication, hospitals, school, and banking. The initiatives certainly let to rural prosperity and opportunities for the marketers. III. Technological development:- The rapid expansion of telecommunication facilities and mobile phone has provided opportunities for rural people to keep in touch with men and markets. Development of TV networks and reasonable channels has enabled the marketers to pass on message about product and services to rural people. In rural areas especially in large villagers and villagers near to towns and cities, children and youth have accused to information such as job opportunities, national news, weather conditions, bank loans etc..IT and internet are sure to spread up exchange of information in rural india though at a slower rate compare to urban market IV. Legal :- The government has come out with legislative measures to protect the interest of consumers some of the important ones are:- a. Money lenders:- The money lenders advance long term loans against security of land over period of time manipulate the records and seize the land. The government protects the assets of farmers from money lenders. b. Consumer protection act:- Consumer protection act provides protecting the rights and interest of consumers and we have a quasi judicial machinery operating at 3 levels i.e. district forum, state and national forum. V. Cultural factors:-
    • 12   http://www.miteshk.webs.com  a) Culture and sub culture :- Culture represents an overall heritage a distinctive form of environmental adaption by whole society of people culture is a system of shared beliefs and customs that influence the behavior of consumers. Traditional life, traditional occupation, traditional beliefs are the features of rural life. Culture provides people with a sense of identity and an acceptable behavior with in a society. Technological advances education and travel have considerable influence on culture and change the rural life style. Culture offers direction and guidance to the members of a society in all facets of life. It provides methods of satisfying physiological, personal and social needs. b) Sub culture:- It exists within the dominant culture, with its own set of values, beliefs and attitudes and behavior pattern. The pattern of behavior would vary between north and south even in rural areas. c) Social class:- Consumer behavior is determine by social class to which they belong and is determine by a combination of factors like education, occupation, income and assets. It is seen that over a period of 10years there has been considerable reduction in the per culture of destitute and increase in other social classes in rural areas. This is a positive indication of the growing rural market in our country. VI. Social factors:- a) Family:- Family is a group of persons related by blood, marriage or adoption who reside together. It is basic social group and consists of individual known as members. The 3rd generation family is very common in rural areas. The head of the family provides economic security to family members. The members of family play different roles such as influencer decider and purchaser is the buying process. Personal values, attitudes and buying habits have been shaped by family influences. Family life cycle also influences. b) Reference group:- It includes family and friends with whom an individual interacts on a face to face basis. Word of mouth communication is a process by which the messages are passed within group from one member to another member. The consumer develops positive opinion towards a product or service based on admiration (cricket players), aspiration (film stars) or empathy. The consumer thinks that if he uses it, it must be good if use it, I will be like him.
    • 13   http://www.miteshk.webs.com  VII. Personal factors:- a) Age and life cycle:- Life cycle of a person began with child birth, move to infancy, teenage, adult, middle age, old, and then ends with death. Under each stage buying behavior is different. b) Occupation:- About 500 millions of population depends upon agriculture for a living. Income from agriculture is a seasonal and therefore demand particularly consumer durables is high during post harvested period and festivals. Many farmers have diversified into fish culture and small scale industries in order to reduce their dependence on forming and to ensure regular income. This leads to increase the demand for consumer durables. c) Economic circumstance:-- Rural income is seasonal compare to an urban consumer who receives regular income regarding saving habits, traditionally rural people prefer to invest in jewelry and fixed deposits in banks and posts offices. A farmer would like to invest these funds for development of agriculture and buying lands. Another interesting observation is that for the same income level, a rural consumer has relatively high disposable income. d) Life style:- Life style studies how people spend their money and time in day to day activities. The life style dimensions are activities and demographic features such as age, gender, occupation, education, and income. Rural consumes prefer to spend, spare time, in activities. Such as visiting meals i.e. commodity and religious fairs, company’s can use such meeting places for product promotion. e) Personality and self concept:- Personality is a unique combination of different individual characteristics. We find that many individuals are similar in terms of one or more characteristics, but they are not alike in all characteristics. Personality is a combination of factors such as sociability, self confidence and dominance. Personality influences in many ways. VIII. Psychological factors:- a) Motivation:- When a buyer purchases a product or service, he has a reason. Motive is a strong felling, desire or emotion that makes the buyer to take decision to buy every human activity is a result of motivation. Each person is motivated by his needs and satisfaction of one need shows that rural consumers are satisfied by meeting the 2needs i.e. physical and security need, where as urban consumers would like to satisfy social and needs .
    • 14   http://www.miteshk.webs.com  Motives can be also classified as psychological and psychogenic motives. In rural areas there exits large population consisting of agricultural laborer, small and marginal farmers, petty traders who have very limited income and their needs are very basic i.e. food clothing and shelter. b) Perception:- All consumers are not alike; they see the world in their own special ways. For instance, all the members of the family have viewed a particular advertisement in different ways. This is because needs, wants, values attitudes and personal experience vary from person to person. Similarly, consumer’s perception means what he thinks about the product, producer or the brand. Consumer’s action, buying habits, consumption habits are based on perception and therefore the motor should have good understanding of perception of consumers. c) Learning:- It is a process of acquiring knowledge about products, product benefits, method of usage and maintenance and also disposal of the products considering low literacy, low awareness, the marketers have to educate the consumers through rural- specific promotion media and methods. d) Belies and attitudes:- In general attitude is a state of mind or feeling. Attitude indicates our feeling about a product, service, brand and shop whether we are positively or negatively disposed towards the object or class of objects. Consumer attitudes or composed of beliefs, feelings and behavior intentions towards a product, brand or store. Belief may be positive, negative or neutral. The belief that consumer hold need not be correct. Consumers also hold certain feelings towards product and these feelings are based on the beliefs. Examples:- 1) Many rural consumers belief that cool drinks are harmful and they prefer lime juice, butter milk etc.. Change of attitudes and beliefs is very low in the case of rural consumers. Once he is convinced, he will continue to use the product and become a loyal consumer. 2) Majority of lower and middle income group continue to use lifeboy and soap and about 70% of the sales of the life boy is in rural and semi urban areas. UNIT – 3, 4 AND 5 – COMING SOON
    • 15 http://www.miteshk.webs.com  RURAL MARKET SEGMENTATION Market segmentation means dividing heterogeneous market into homogeneous sub units into homogenous sub units here heterogeneous means consider the market as a whole and refers mass marketing. Homogeneous sub units means which have similar tastes and preferences but not the same tastes and preferences. Rural market segmentation is mainly based on demographic factors. The division is based on the premises the different people have different preferences. The following are the basic market preferences:- Homogeneous preferences where consumers have roughly the same preferences. Diffused preferences where consumers are scattered throughout the market by their preferences. Clustered preferences were consumers are found in distinct preference groups. Degree of segmentation:- The segmentation is considered as a process with two polar points from zero to complete, four distinct segment approaches are identifiable as follows o.s Zero Type Mass marketing Segment marketing Niche marketing Micro marketing Approach Considers all people as a bunch Identity’s people as a differing group Serves very few groups of people Focus on individuals are very small groups Mass marketing:- In the early period of the 20th century many companies practiced mass production and mass distribution as economics evolved as economy evolved and societies became civilised, consumer choice and requirements came into focus until now the rural market was considered as homogeneous mass as worse the Indian market till some 20 years ago. Some companies depend on mass marketing while many do not. Segment marketing:- The principle of segment marketing rests on the realisation that buyer’s differ in their needs, wants, demands and behaviours. The need for segment marketing arises when Consumer’s have become more diverse, sophistically and choosy. Competition has become tuff.
    • 16 http://www.miteshk.webs.com  Niche marketing:- A niche is very small group with a different set of traits, who seek a special combination of benefits. Niche marketing identifies special sub groups within larger segments and offers different products and services. Micro marketing:- Micro marketing involves tailoring products and programs to suet the taste of specific locations and individuals. It includes local marketing and individual marketing. Local marketing:- It involves in the programs to suit the taste of specific locations and wants of local group’s on a geographical bases. Individual marketing:- Individual market is customized marketing or one to one marketing. Tailoring unitshotels, tourist operators provide individualised services for example building contractors builds houses of flats to specific requirements of customers. Types of rural market segmentation:- Demographic factors:- Demographic factors are taken into detailed consideration for market segmentation of consumer goods and fast moving consumer goods (FMCG). In case of rural marketing i.e. to sell outside goods in rural areas, demography came into the picture. However the categories are much reduced. Some of the segmentations are as below. Occupational segmentation(or)sociological segmentation:- This segmentation is based on economy vice categorisation. This reflects the purchasing power of a farmer and therefore the purchase power of his family they are Artisans, farm labourers Small farmers Tenant farmers Medium level farmers Large farmers Very large farmers, zamindars Artisans and others This covers carpenters, blacksmiths, handy-crafts, people are unemployed. Tenant farmers Working on rented land to share the crops with owners of the land.
    • 17 http://www.miteshk.webs.com  Small farmers Who own small farms are jointly owned farms for getting food. Medium level farmers Who own small farms are jointly owned farms for getting food. Large farmers(or)rich farmers Who have large lands and all local leaders they spend types in urban areas and doing other occupation. Very large farmers, land lords(or)zamindars Zamindars, rich money lenders and business men who owned big size lands and maintain large size farm labour. Normally they spend time in nearby urban areas with politicians. From the above the small farmers and tenant farmers will struggle for basic needs but the medium level farmers struggle for comforts. But the large farmers will not struggle for basic needs and comforts. So the marketers target only large farmers and very large farmers for segmenting the market. Thomson rural market index(TRMI)segmentation Hindustan Thomson associates ltd developed a guide to market segmentation in 1972 and revised it in 1986. They collected data in 335 districts based on 26 variables finally they arrived on 10 selected variables having strong co-relation to rural market potential. Agricultural labourers Gross cropped area Gross irrigated area Area under non-food crops pump sets. Fertilisers consumption Tractors Rural credit Rural deposits & village electrified. Based on these factors, the districts are classified as A,B,C,D&E. Which are in order of high potential market to low potential market.
    • 18 http://www.miteshk.webs.com  LINQUEST This method is software developed by initiative media on data along the following parameters Demographic Agriculture Income. Literacy & Civic amends. As per the product to be launched, the marketer would be interested in certain parameters like literacy levels, income levels, bank deposits, accessibility (rail, road, and schools etc). in the software the marketer can give weighted average to different factors for Eg:- To launch new audio cassette recorders, parameters could be villages above 1000 population and monthly income 2000 and distance from nearest towns within 30kms.
    • 19 http://www.miteshk.webs.com  BRANDING:- Branding is a practise of giving specified name the specified name creates individuality in the product and it can be easily recognised from rival product the term brand is broadly applied to all identifying such as trade names, trademarks trade symbols etc… e.g.:- pepsi, lifeboy are brand names it is recognisable by sight but he’s not normally pronounceable. The rural consumer likes to stick to brands that give value for money Importance of branding 1. Branded product can be easily recognised by the customer in the retail shop it offers protection to the consumer as it identifies the firm behind the product. 2. Branding enables the firm assured control over market. It creates an exclusive market for the product. 3. If a firm has one or more lines of branded goods it can had a new item to its list easily & the new item can enjoy all the advantages of branding immediately. Characteristic of branding Attributes &benefits:- Brands of a product plays an important role to attract the rural customers because they mostly believe in the brands, just by seeing branded products they will purchase assuming that they will be satisfied by product. Values :- By seeing the brand the customers will consider the performance of the product and the safety of the product some customers felt that prestige while purchasing the branded products. Culture:- By seeing the brand the customer assumes the product is efficient and they also assumes high quality. Personality:- The person who is using that product
    • 20 http://www.miteshk.webs.com  Types of brands 1. Individual brand name Each product has a special and unique brand name the manufacturer has to promote each individual brand in the market separately this creates a practical difficulty in promotion otherwise it is best marketing strategy eg:- surf, cinthol, chik shampoo etc…. 2. Family brand name Family name is limited to one line of a product i.e. products which complete same cycles family brand name can help combined advertising and sales promotion however if one member of the family brand is rejected by the consumers or customers the prestige of all under the family brand may be adversely affected. The manufacturers have to take extraordinary care to guard against the danger family brand name enables creation of strong shelf. It helps to secure quick popularity it is preferable to have separate brands for each product for eg:-amul for milk products, pounds for cosmetics etc… 3. Umbrella brand name We may all products such as chemicals, engineering goods, automobiles etc. Manufactured by the Tata concerns will have the Tata as one umbrella brand such a device will also obtain low promotion cost and minimise however experience in any of the line of products, a solitary failure may be very dangerous to the rest of the products sold by a particular business house under umbrella brand. 4. Combination device Data house is using combination device each product has individual name to indicate the business house producing the product eg:- Tata Indica, side by side with the product image we have the image of the organisation also many companies use this device profitably. 5. Private or middleman’s brand Branding can be done by manufacturers or distributors such as wholesalers, large retailers. In India this practise is popular in the wooden, sport goods and searches other industries it helps small manufacturers who have to rely on the middlemen for marketing. It is also used by big manufacturers the manufacturer merely produce goods as per specifications and requirements of distributors and he need not worry about marketing. Manufacturers make both national and private or middleman brands. Consumers of the private or dealers brand.  
    • 21 http://www.miteshk.webs.com  Some  of  the  brand  names  that  have  created  lasting  impact  on  rural  consumers  are  as  follows:‐  Every day batteries:‐ Battery with cat as a symbol  Lifeboy  Asian paints mascot  Dabur chawan prakash  Parle  Parachute  Amul  Zandubalm  Tata salt  Nirma  Textile:‐ Chermas, Kumar shirts.  Q. Explain the brand awareness in rural marketing?  Ans: Rural product development:‐                                                                    The rural market is a fast growing one and has a huge  population  with  a  great  level  of  disposable  income  to  encase  this;  products  have  to  be  specifically  developed  to  meet  the  creeds  of  rural  market  sometimes  existing  products  might have to be modified to suit these markets too accordingly.                                                           Rural product development has a strong edifice on a great  deal of research like feasibility, studies, rural aspiration and soon. This paves way for a great  deal of infra structure and expertise in this area.  Rural branding:‐  Rural branding bears  quit different from urban branding. The first step  towards rural branding is to search and gain insight into the working of rural markets. Based  on  this  communication  campaigns  products  have  to  be  developed  with  a  lot  of  rural  sensitivity.  Rural market research:‐  rural market behave most differently from urban markets. While  many marketers have tried to market their products in rural areas. Just a hand full of sum  only has succeeded. A strong insight into rural consumer  behaviour and  sensitivity to their  values and beliefs is essential to upgrade the rural market research not just gathering data  but  analyzing  them  and  linking  the  findings  to  promoting  their  products.  Rural  communication  campaigns  communication  for  rural  markets  calls  for  a  different  kind  of  outlook. There must be a strong ascent on helping the target relate to message. The entire  communication  and  media  strategy  has  to  device  a  system  based  on  research  findings.  These have to be developed in the regional languages and set in the local culture for easier  acceptance  and  reach  to  the  customers.    Besides  mass  and  outdoor  media  rural 
    • 22 http://www.miteshk.webs.com  extravaganza  (cultures)  like  temple,  festival,  melas,  and  other  events  where  the  villagers  come together can be used for promotions.  Rural events: ‐   In the rural context, one of the best ways to capture the attention of the  audience  is  through  event  management.  Since  rural  areas  have  limited  venues  for  entertainment, conducting an event in rural areas can bring a good response..  Rural direct marketing campaigns: ‐  Direct  marketing  is  one  of  the  most  powerful  ways to meet the targets and build product awareness as well as promotion. The success of  any  direct  marketing  campaigns  depends  on  the  field  workers  and  their  sensitivity  and  emotional connectivity to rural markets.  Data  base  creation  and  management:‐  Marketing  branding  and  promotional  activities in rural context can be highly effective and thereafter have to create a database of  prospects.  This  data  is  essential  for  marketers  to  reach  their  target  accurately  and  helps  marketing plan and communication strategies.     
    • 23 http://www.miteshk.webs.com RURAL MARKET SEGMENTATIONRURAL MARKET SEGMENTATIONRURAL MARKET SEGMENTATIONRURAL MARKET SEGMENTATION Market segmentation means dividing heterogeneous market into homogeneous sub units into homogenous sub units here heterogeneous means consider the market as a whole and refers mass marketing. Homogeneous sub units means which have similar tastes and preferences but not the same tastes and preferences. Rural market segmentation is mainly based on demographic factors. The division is based on the premises the different people have different preferences. The following are the basic market preferences:- Homogeneous preferences where consumers have roughly the same preferences. Diffused preferences where consumers are scattered throughout the market by their preferences. Clustered preferences were consumers are found in distinct preference groups. Degree of segmentation:- The segmentation is considered as a process with two polar points from zero to complete, four distinct segment approaches are identifiable as follows o.s Zero Type Mass marketing Segment marketing Niche marketing Micro marketing Approach Considers all people as a bunch Identity’s people as a differing group Serves very few groups of people Focus on individuals are very small groups Mass marketing:- In the early period of the 20th century many companies practiced mass production and mass distribution as economics evolved as economy evolved and societies became civilised, consumer choice and requirements came into focus until now the rural market was considered as homogeneous mass as worse the Indian market till some 20 years ago. Some companies depend on mass marketing while many do not. Segment marketing:- The principle of segment marketing rests on the realisation that buyer’s differ in their needs, wants, demands and behaviours. The need for segment marketing arises when Consumer’s have become more diverse, sophistically and choosy. Competition has become tuff.
    • 24 http://www.miteshk.webs.com Niche marketing:- A niche is very small group with a different set of traits, who seek a special combination of benefits. Niche marketing identifies special sub groups within larger segments and offers different products and services. Micro marketing:- Micro marketing involves tailoring products and programs to suet the taste of specific locations and individuals. It includes local marketing and individual marketing. Local marketing:- It involves in the programs to suit the taste of specific locations and wants of local group’s on a geographical bases. Individual marketing:- Individual market is customized marketing or one to one marketing. Tailoring unitshotels, tourist operators provide individualised services for example building contractors builds houses of flats to specific requirements of customers. Types of rural market segmentation:- Demographic factors:- Demographic factors are taken into detailed consideration for market segmentation of consumer goods and fast moving consumer goods (FMCG). In case of rural marketing i.e. to sell outside goods in rural areas, demography came into the picture. However the categories are much reduced. Some of the segmentations are as below. Occupational segmentation(or)sociological segmentation:- This segmentation is based on economy vice categorisation. This reflects the purchasing power of a farmer and therefore the purchase power of his family they are Artisans, farm labourers Small farmers Tenant farmers Medium level farmers Large farmers Very large farmers, zamindars Artisans and others This covers carpenters, blacksmiths, handy-crafts, people are unemployed. Tenant farmers Working on rented land to share the crops with owners of the land.
    • 25 http://www.miteshk.webs.com Small farmers Who own small farms are jointly owned farms for getting food. Medium level farmers Who own small farms are jointly owned farms for getting food. Large farmers(or)rich farmers Who have large lands and all local leaders they spend types in urban areas and doing other occupation. Very large farmers, land lords(or)zamindars Zamindars, rich money lenders and business men who owned big size lands and maintain large size farm labour. Normally they spend time in nearby urban areas with politicians. From the above the small farmers and tenant farmers will struggle for basic needs but the medium level farmers struggle for comforts. But the large farmers will not struggle for basic needs and comforts. So the marketers target only large farmers and very large farmers for segmenting the market. Thomson rural market index(TRMI)segmentation Hindustan Thomson associates ltd developed a guide to market segmentation in 1972 and revised it in 1986. They collected data in 335 districts based on 26 variables finally they arrived on 10 selected variables having strong co-relation to rural market potential. Agricultural labourers Gross cropped area Gross irrigated area Area under non-food crops pump sets. Fertilisers consumption Tractors Rural credit Rural deposits & village electrified. Based on these factors, the districts are classified as A,B,C,D&E. Which are in order of high potential market to low potential market.
    • 26 http://www.miteshk.webs.com LINQUEST This method is software developed by initiative media on data along the following parameters Demographic Agriculture Income. Literacy & Civic amends. As per the product to be launched, the marketer would be interested in certain parameters like literacy levels, income levels, bank deposits, accessibility (rail, road, and schools etc). in the software the marketer can give weighted average to different factors for Eg:- To launch new audio cassette recorders, parameters could be villages above 1000 population and monthly income 2000 and distance from nearest towns within 30kms. BRANDING:- Branding is a practise of giving specified name the specified name creates individuality in the product and it can be easily recognised from rival product the term brand is broadly applied to all identifying such as trade names, trademarks trade symbols etc… e.g.:- pepsi, lifeboy are brand names it is recognisable by sight but he’s not normally pronounceable. The rural consumer likes to stick to brands that give value for money Importance of branding 1. Branded product can be easily recognised by the customer in the retail shop it offers protection to the consumer as it identifies the firm behind the product. 2. Branding enables the firm assured control over market. It creates an exclusive market for the product. 3. If a firm has one or more lines of branded goods it can had a new item to its list easily & the new item can enjoy all the advantages of branding immediately. Characteristic of branding Attributes &benefits:- Brands of a product plays an important role to attract the rural customers because they mostly believe in the brands, just by seeing branded products they will purchase assuming that they will be satisfied by product. Values :-
    • 27 http://www.miteshk.webs.com By seeing the brand the customers will consider the performance of the product and the safety of the product some customers felt that prestige while purchasing the branded products. Culture:- By seeing the brand the customer assumes the product is efficient and they also assumes high quality. Personality:- The person who is using that product Types of brands 1. Individual brand name Each product has a special and unique brand name the manufacturer has to promote each individual brand in the market separately this creates a practical difficulty in promotion otherwise it is best marketing strategy eg:- surf, cinthol, chik shampoo etc…. 2. Family brand name Family name is limited to one line of a product i.e. products which complete same cycles family brand name can help combined advertising and sales promotion however if one member of the family brand is rejected by the consumers or customers the prestige of all under the family brand may be adversely affected. The manufacturers have to take extraordinary care to guard against the danger family brand name enables creation of strong shelf. It helps to secure quick popularity it is preferable to have separate brands for each product for eg:-amul for milk products, pounds for cosmetics etc… 3. Umbrella brand name We may all products such as chemicals, engineering goods, automobiles etc. Manufactured by the Tata concerns will have the Tata as one umbrella brand such a device will also obtain low promotion cost and minimise however experience in any of the line of products, a solitary failure may be very dangerous to the rest of the products sold by a particular business house under umbrella brand. 4. Combination device Data house is using combination device each product has individual name to indicate the business house producing the product eg:- Tata Indica, side by side with the product image we have the image of the organisation also many companies use this device profitably. 5. Private or middleman’s brand Branding can be done by manufacturers or distributors such as wholesalers, large retailers. In India this practise is popular in the wooden, sport goods and searches other industries it helps small manufacturers who have to rely on the middlemen for
    • 28 http://www.miteshk.webs.com marketing. It is also used by big manufacturers the manufacturer merely produce goods as per specifications and requirements of distributors and he need not worry about marketing. Manufacturers make both national and private or middleman brands. Consumers of the private or dealers brand. `1 Some of the brand names that have created lasting impact on rural consumers are as follows:- Every day batteries:- Battery with cat as a symbol Lifeboy Asian paints mascot Dabur chawan prakash Parle Parachute Amul Zandubalm Tata salt Nirma Textile:- Chermas, Kumar shirts. Q. Explain the brand awareness in rural marketing? Ans: Rural product development:- The rural market is a fast growing one and has a huge population with a great level of disposable income to encase this; products have to be specifically developed to meet the creeds of rural market sometimes existing products might have to be modified to suit these markets too accordingly. Rural product development has a strong edifice on a great deal of research like feasibility, studies, rural aspiration and soon. This paves way for a great deal of infra structure and expertise in this area. Rural branding:- Rural branding bears quit different from urban branding. The first step towards rural branding is to search and gain insight into the working of rural markets. Based on this communication campaigns products have to be developed with a lot of rural sensitivity. Rural market research:- rural market behave most differently from urban markets. While many marketers have tried to market their products in rural areas. Just a hand full of sum only has succeeded. A strong insight into rural consumer behaviour and sensitivity to their values and beliefs is essential to upgrade the rural market research not just gathering data but analyzing them and linking the findings to promoting their products. Rural communication campaigns communication for rural markets calls for a different kind of outlook. There must be a strong ascent on
    • 29 http://www.miteshk.webs.com helping the target relate to message. The entire communication and media strategy has to device a system based on research findings. These have to be developed in the regional languages and set in the local culture for easier acceptance and reach to the customers. Besides mass and outdoor media rural extravaganza (cultures) like temple, festival, melas, and other events where the villagers come together can be used for promotions. Rural events: - In the rural context, one of the best ways to capture the attention of the audience is through event management. Since rural areas have limited venues for entertainment, conducting an event in rural areas can bring a good response.. Rural direct marketing campaigns: - Direct marketing is one of the most powerful ways to meet the targets and build product awareness as well as promotion. The success of any direct marketing campaigns depends on the field workers and their sensitivity and emotional connectivity to rural markets. Data base creation and management:- Marketing branding and promotional activities in rural context can be highly effective and thereafter have to create a database of prospects. This data is essential for marketers to reach their target accurately and helps marketing plan and communication strategies. Q) What is meant by Product? And explain it with different strategies in rural market? Ans: Product is the most tangible and important dingle component of the marketing program. Without product, there is nothing to distribute promote and to price. Product is a vehicle by which a company provides consumer satisfaction. A product is a bundle of benefits assembled in an identifiable form. In simple terms, products are anything that satisfies human wants. The product mix includes product quantity, features, benefits, design, style, colors, brand packaging, labeling, services and warranties. Product market strategies:- Markets have the following alternations to increase market share and profits Existing product New product Existing markets Market penetration Product development (or) product differentiation New markets Market development Diversification Market penetration:- It involves expansion of sales of existing products in existing markets by selling more to present customers or gaining new customers in existing market. The firm can market its present products to existing markets. This is done through more aggressive marketing mix.
    • 30 http://www.miteshk.webs.com Market development:- In Market development a present product is introduced to a new market or a segment . Market development is the creation of new market by discovering new application for existing goods. This is another alternative to expand market opportunity, prolong product life cycles, profitability and survival. Ex:- many companies are extending their activities to rural market to increase sales volume of products like mineral water, chocolate, mobile phones etc. Product development:- Product development occurs when a firm introduces new products to a market in which it is well established. Product development is the introduction of new products in present market. Ex:- New syntactic fibers are known for textile products. The firm may decide to create new products for existing market. Diversification:- Diversification occurs when a firm seeks to enter a new market with completely new product. The innovations are introduced for the first time in the new markets. The strategy is risky but the innovator can have speculator results. Product strategies in rural market:- product strategies used by company’s in rural markets are given below Sturdy products:- most of the rural consumers believe that heavier the item, higher the power and durability, they prefer tough and long lasting product. EX:- bullet motor cycle continuous to be popular in villages; royal Enfield sells about 65% of two wheelers in semi urban and rural areas; ambassador cars continuous to be popular in rural areas. Designing products:- The company’s can come out with new products or promote existing products to suit field conditions in rural areas. EX:- • L.G electronics came out with a unique product for rural market. It launched sampoorna Indias first T.V with a Devanagari script on screen display. • Voltas has introduced a refrigerator for rural areas direct cold technology keeps the refrigerator cold for several hours in case of long power cut. • Nokia’s basic model is dust resistant and has a mini torch light for using in rural areas. Small unit packing:- It has been used for money consumer products . Small units packing provide an opportunity for the consumers to try the product and help the company to reach consumers like daily wage earners. EX:-
    • 31 http://www.miteshk.webs.com • Ponds has gain market share over the past few years, focusing on rural market ant it has introduced 20grams talcum powder. • Cavin kare studied rural buyer behavior and introduced chik shampoo in small sachet of 4ml at a low price of 50ps. • Rasnna is now available in sachet pack priced at 1rupee each and one sachet will make 2 glasses of soft drink • Godrej Sara lee has single coiled sachet of goodnight coil for rural products Utility products:- The rural people are concerned with the utility of the items rather than appearance or show EX:- • Philips has introduced free power radio RL117 priced at 995/- for the first time in India. The radio requires no external battery’s or electricity for operation. • HMT watches are popular for utility value. Q) What is meant by pricing and explain factors influencing pricing? Sol:- Economists defines price as the exchange value of a product or service always expressed in terms of money. In simple terms price is the amount charged for the product or service. To the buyer price is a package of expectations and satisfaction. To the seller price is a source of revenue and main determinant of profit. Factors influencing pricing decisions:- 1.Objectives:- many companies have established marketing goals or objectives such as growth in sales, profits, market share and pricing plays a major role in achieving the objectives. 2.cost of production:-The most decisive factor in pricing is the cost of production. In the past, fixing of price was a sample affair: just add up all the costs incurred and divide the final figure by the number of units produced. The main defect with this approach is that it disregards the external factors, particularly demand and the value placed on goods by the ultimate consumer. Today on account of the various lines of production as well as distributing, the overhead costs finding the cost of production are not simple. 3)Demand:- in the consumer oriented marketing , the consumers influence the price. Every product has some utility for the buyer. It gives the buyer service,
    • 32 http://www.miteshk.webs.com satisfaction, pleasure; the consumer would continue to buy the product. Higher the demand for a product, lesser the need for giving additional discounts, credit, etc.. To the distributors and dealers. This leads to higher price realization. 4)Competition:- another factor that influence pricing is competition. No manufacture is free to fix his price without considering competition, unless he has a monopoly. To avoid competitive pricing, a firm may decide that its product may be sufficiently different from that of the others. This is achieved through methods of advertising, branding etc.. Sometimes a higher price may itself differentiate the product. This is known as prestige pricing. 5)Distribution channels:- Distribution channels also sometimes affect the price. There are many middlemen working in the channel of distribution between the manufacturer and the consumer. Each one of them has to be compensated for the services rendered. 6)Supply of the product:-if the supply is less than demand, then the price of the product will be more. 7)Availability of raw materials:- Availability of raw materials in domestic markets generally enable the firm to bring down cost of production. The firm can fix a low selling price. 8)If the brand is very popular among the consumers, then the manufacturer can charge a higher price for the product. 9)If the purchasing power of the consumer is high, then the company can charge a higher price for the product. 10) Promotion cost would normally increase the selling price as the company would like to recover the cost from the consumers. Q) What is meant by pricing and explain kinds of pricing? Sol:- Economists defines price as the exchange value of a product or service always expressed in terms of money. In simple terms price is the amount charged for the product or service. To the buyer price is a package of expectations and satisfaction. To the seller price is a source of revenue and main determinant of profit. Kinds of pricing:-
    • 33 http://www.miteshk.webs.com A firm may choose various kinds of pricing for their products:- 1) odd pricing:- odd price may be a price ending in odd number or a price just under a round number. Such a pricing is adopted generally by the seller of specialty or convenience goods. E.g.. Bata shoes are priced at399.95. Odd price may bring more sales. Under odd pricing, buyers may feel that it is a mark down price. 2) Psychological pricing:- it is stated that there are certain critical points at prices such as 1,2,4,5,10 are psychologically appearing to consumers. E.g.. Products such as shampoo, chocolates and biscuits are sold at certain price to attract customers. 3) Prestige pricing:- prestige pricing is one that is fixed at a higher price, when the producers near perfect substitute. Prestige pricing is adopted because many customers feel that high price means high quality. Moreover the customer heels a high status at a high price. 4) Consumers expectations:- such prices are fixed by consumers. Consumers are familiar with the rates and market condition and expect a particular price to be charged for certain products. 5) Geographical pricing:- the distance between the seller and the buyer is considered on Geographical pricing. When there is lot of distance between production center and consumption centre, the producer or marketer can adopt different prices in each area without creating any ill/will among customers. There are two ways of charging transit cost. a) F.O.B pricing( free on board):- F.O.B may be of two types… i) F.O.B origin and F.O.B destination:- in the first case, the buyers will have to incur the cost of transit a part from the price quoted and in the latter the price quoted is inclusive of transit charges. 6)Zone pricing:- price is equal in the same zone. Market for a product is divided into various zones. South zone, north zone etc.. In other words price are uniform with in a zone. 7) price lining:- price lining is formed more commonly among retailers than among wholesaler or producers. This system consists of selecting a limited number of prices at which the store will sell it goods. E.g. A buyer of shirt can go into a shop where shirts are retailed between 250/- t 500/-, it also helps the shopkeeper to plan his purchases..
    • 34 http://www.miteshk.webs.com 8)dual pricing:- when a manufacturer sells the same product at two different prices, it is dual pricing. Under the dual pricing a producer is required compulsory to sell a part of production to the govt or its authorized agency at substantially low price. The rest of the product may be sold in the open market at a price fixed by the producers. Eg. Sugar. 9)Negotiated pricing:- it is also known as variable pricing. This method is invaluably adopted by industrial suppliers. In certain cases, the product may be prepared on the basis of specification or designed by the buyer. In such cases the pricing has to be negotiated and then fixed.
    • 35 http://www.miteshk.webs.com DISTRIBUTION IN RURAL MARKET Introduction:- The rural consumers normally purchase their household requirements from village shops, haats and mandi towns. There are 60lakh outlets, both in urban and rural markets in India. Out of this, 36lakh retail outlets are spread over 6lakh villages and making the products available in the store shelves is a challenge for the marketer. Obstacles to reach the rural consumers:- 1. The distribution chain requires a large number of intermediaries and this increase the cost of distribution. 2. Non-availability of dealers. 3. Poor viability of retail outlets due to low business volume. 4. Inadequate banking facilities. 5. Only about 80% of the markets are connected by roads. 6. Interior village roads get flooded during monsoon. 7. Transport and communication facilities are generally poor in villages. 8. Credit requirement of channel members. Channels of distribution:- Marketing channel is the route taken by the title to the product as it moves from the producer to the ultimate consumer. Every marketing channel starts with the producer and ends with the consumer. It͛s a two-way communication. Consumers purchase goods through such channels and producers reach the consumers through marketing channels. The channel members consist of wholesalers and retailers who are middlemen in distribution and they perform all marketing functions.
    • 36 http://www.miteshk.webs.com 0 level 1 level 2 level 3 level 4 level Manufacturer consumer Manufacturer Retailer Consumer Manufacturer Distributor Retailer Consumer Manufacturer C&F agent Distributor Retailer Consumer Manufacturer C&F agent RuralDistributor wholesaler Retailer Consumer 1. Manufacturer- Consumer(Direct sale):- In this case, the stocks are directly supplied to the ultimate consumer avoiding middlemen and their commission. This benefits the consumer as well as the seller. Examples:- in many states, the government has encouraged farmers to sell vegetables directly to urban consumers by setting up ͞farmers market͟. These markets are known as Rythu Bazzars (Andhra Pradesh) and vivasayigal santhai (Tamilnadu). These markets are run by government and only farmers are allowed to sell the agricultural produce to the consumers in the market. The market works both in the morning and evening hours. The market committee in consultation with farmers fixes the rates for different commodities. The farmers come from about 25 villages surrounding the city and are allotted stalls by the market committee. The market committee also provides cold storage facilities for perishable commodities. 2. Manufacturer- Retailer-Consumer:- Here, the stocks are sold to the consumers through a network of retailers. Examples:- Mahindra and Mahindra tractors have appointed dealers in important rural markets. A dealer either covers one district or two ʹthree tehsils. The company arrange for supply of tractors to these retailers from their manufacturing unit. The dealer looks after sale and service of tractors.
    • 37 http://www.miteshk.webs.com 3.Manufacture-distributor-retailer-consumer:- The manufacturer appoints distributors in key rural markets and these distributors cater the needs of retailers in villages. This is a popular channel option used by manufactures. Examples:- Manufacturers of tea, coffee and branded oil, appoint distributors in district/ taluka headquarters and distributors service the retailers in villages. 4.Manufacturer-company-depot/C&F agent-Distributor-Retailer-Consumer:- In this case, the manufacturer moves the stocks to company depot/depot operated by a C&F agent and from these depots, stocks are supplied directly to distributors, who in turn service the retailers. Example:- Agro-chemical companies like Syngenta, are using two/three intermediaries to reach the farmers in remote villages. 5.Manufacturer-company-depot/C&F agent-Rural Distributor-Wholesaler- Retailer-Consumer:- The manufacturer opens his own depots or appoints C&F agents in state capital or in key cities in each state. The C&F agent, supply stocks to rural distributors. From the rural distributors, the stock move through wholesalers and retailers to reach the ultimate consumers. Examples:- Distribution of consumer products by companies like HUL, Dabur, Nirma, Parle, Marico in rural market. Physical distribution:- Physical distribution activities include order processing, handling of goods, packaging, ware housing, transportation, inventory control, banking and customer service. Considering the constraints in physical distribution of stocks in rural areas, many companies have come out with innovative solutions. 1) Company owned delivery vans:- The van may be owned by the company or distributor. The delivery van takes the product to the retail shops in village. The
    • 38 http://www.miteshk.webs.com distributors salesperson travels in the van and he delivers the stocks to the retailer and collects the money too. Examples:- Bharat petroleum has introduced rural marketing vehicle(RMV) way back in 1999 in Punjab. The vehicle moves from village to village and fills LPG cylinders on the spot to rural customers. 2. Hired vans:- In this case, the wholesaler uses a hired vehicle to cover the retailers in villages. Normally, the cost of operation of the hired vehicle is shared between the wholesaler and the company. Examples:- (a) HUL distributors use hired vehicle to reach the rural retailers. (b) Syngenta distributors use hired vehicles for delivery of pesticides as well as for collections. 3.bullock carts or camels:- these are used for covering remote villages with no motor able road. In certain parts of Kerala, A.P and Westbengal, boats also used to cover villages that are not connected by roads. 4. Syndicate van distribution:- In this case, the firms/distributors selling non-competitive consumer goods come together to service the rural retailers. The delivery van carries the product of both the companies. Example:- A firm manufacturing edible oils and another local firm dealing in biscuits, namkeen and Atta could jointly service rural retailers, through van operation. Conclusion:- The rural markets and the consumers are scattered over a wide geographical area. Considering low income of consumers, low density of population, poor condition of roads, it becomes a difficult and uneconomical to individually service all the villages. The marketers have to follow a selective approach, based on market potential in developing a network of distributors and retailers in rural markets.