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 andsometimes confusing Is “rural marketing” different from “urbanmarketing” ?
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 RuralMarkets Strategic Issues & Directions in ruralmarketing
Defining Rural IndiaOrganisationDefinition LimitationsNSSO( Census) Population density < 400 / Sq Km 75 percent of the male workingpopulation is engaged in agricultureNo Municipal corporation / board rural not definedPlanningCommission Towns upto 15,000 population areconsidered ruralTowncharacteristics notdefined
Cont’dLG Electronics All places other thanthe 7 metrosOnly clarifies what arethe citiesNABARD All locations with apopulation upto 10, 000considered “ rural”Village & towncharacteristics notdefinedSahara Commercialestablishments locatedin areas servicing lessthan 1000 populationPopulationcharacteristics unknownSource: The Rural Marketing Book- Text & Practice, Kashyap. P and Raut.S ( 2007)
Defining Rural MarketingNational Commissionon AgricultureNGOs Corporate RuralMarketing DefinitionDecisions to producesaleable farmcommodities involvingall the aspects of themarket system orstructure, bothfunctional andinstitutional, based ontechnical & economicconsiderations andincludes the pre & postharvest operations.Marketing productsproduced in rural areasto urban areasMarketing productsproduced in rural areasin rural marketsFunction that managesall activities involved inassessing, stimulatingand converting thepurchasing power ofrural consumers intoeffective demand forspecific products andservices to createsatisfaction & a betterstandard of living forachievingorganisational goals.
Phases in Rural MarketingSr. No Time Frame Key Events & Trends1 Phase One( Pre 1960’s) Marketing ruralproducts in rural andurban areasAgricultural inputs inrural areas“Agriculturalmarketing”Farming methodswere primitive andmechanisation was lowMarkets unorganised
Cont’d2 Phase Two ( 1960s to 1990s) Green RevolutionCompanies likeMahindra andMahindra, Sri RamFertilisers and IFFCOemergeRural products werealso marketed throughagencies like KVIC3 Phase Three( 1990s to Present) Demand forconsumables anddurables riseCompanies findgrowth in urban marketsstagnating or falling
Scope of Rural Marketing Keenly debated topic Definitions based on organisational/institutional vision, mission & goals Need for a comprehensive and modularunderstanding Rural Marketing is a “ work in progress” Multi – disciplinary approach is necessary forsharper understanding
Domain of Rural MarketingToRural UrbanFromRuralUrbanSource: M. Jha, Rural Marketing- Some Conceptual Issues, EPW,1988
Scope of Rural MarketingDomain ofRuralMarketingDimensions of the transactionParticipants Products/servicesModalities Norms OutcomesRural toRuralRural toUrbanUrban toRural
Changes in Rural India Diverse change levers in rural India The “ pull of the cities & towns” – migrationand its side effects Effect of government programmes Civil society interventions Natural & manmade disasters Slow but sure change
Transitions In Rural India• Food Grain Crops• On land activities• Farm Activities•Non –food, cash crops•Livestock & fisheries•Manufacturing &services
Rural India – Population Trends1971 1981 1991 2001TotalPopulation (inmillion)548.2 683.3 848.3 1026.9RuralPopulation (inmillion)524.0 628.8 741.6As a proportionof totalpopulation76.7 74.3 72.2DecadalVariation19.8 16.7 15.2Source: Census 2001
Cont’d The joint family system is being replaced bythe nuclear family system The occupational pattern shows apredominance of cultivators and wage earners Cultivators( 40.86 %) and WageEarners( 35.28 %) according to NCAERstudies (2002)
Rural Settlement & HabitationTrends Key findings from 2001 census Population density 253/ sq kilometer and totalnumber of villages is 638, 588 Villages having less than 500 population arefalling Villages having 2000 + population mostprosperous What are the implications of these trends?
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
Rural Income TrendsAnnual Income( at 1998-99prices)Income Class 1989-90( %Households)1998-99 ( %Households)<= 35,000 Low 67.3 47.935,001- 70,000 Low Middle 23.9 34.870,001 –1,05,000Middle 7.1 10.41,05,001-1,40,000Upper Middle 1.2 3.9> 1,40,000 High 0.5 3.0Source: National Council for Applied Economic Research, 2000
Rural Marketing- Schools ofThought 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
Strategic Issues & Directions in RuralMarketing Evolutionary Vs revolutionary changes in ruralmarkets Role of state & market forces ICT based interventions Partnership innovations Developmental role of rural marketing Scalability & replication of rural marketingprogrammes