Rural Marketing, VTU Syllabus Module 2

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Rural Marketing, VTU Syllabus Module 2

  1. 1. Rural Marketing Environment Module 2 Prof. Raghavendran Venugopal
  2. 2. RME: Introduction The rural market is transforming year after year, and it would be quite inappropriate to approach it with the mindset about its past image. RURAL INDIA, A Snap Shot:-  Villages are the heart of INDIA, 75% of Indias population(12.2% of world’s population), spread across 6,38,365 villages in INDIA.  90% is concentrated in the villages having population less than 2000.2 Prof. Raghavendran Venugopal
  3. 3. Rural Income Distribution  India’s 58% disposable income comes from its rural part, where 41% of the Middle class population are located.  Rural India contributions are high than the urban India contribution(55.6% from 74.6 crore rural population and 44.6% from 25.4 crore 2006-2007 % Consumer Annual 1995-1996 % urban Class Income people. Very Rich Above 2,15,000 0.3 0.9 Consuming Rs 45001- 13.5 25.0 Class Rs215k Climbers 22001 – 45k 31.6 49.0 Aspirants Rs16001-22k 31.2 14.0 Destitute Rs16k and 23.4 11.13 Prof. Raghavendran Venugopal below
  4. 4. RME: Income-wise distribution  Income-wise distribution of rural households Source: NCAER, The future of the new market Place. Income Group Rural (2001-02) in cr Households (2006-07) in cr Total No. % Total No. % High 0.26 0.07 26.9 0.52 0.12 23.1 Middle 12.04 7.73 64.2 16.70 10.32 61.8 Low 5.74 5.09 88.7 3.68 3.52 95.7 Total 18.04 12.09 71.4 20.90 13.96 66.74 Prof. Raghavendran Venugopal
  5. 5. RME: Constituents of rural market (as on 2001-02). Class Annual Number of Income People Very Rich Above 2,15k 40 lakh Consuming 45k-215k 11.5 crore Class Climbers 22k- 45k 33.1 cr Aspirants 16k-22k 17 cr Destitute <16k 12.4 cr5 Prof. Raghavendran Venugopal
  6. 6. Magnitude of poverty in Rural India  The rural population is normally perceived as a multitude of poor population with limited purchasing power.  Poverty is measured in terms of proportion of population living below the poverty line. Poverty alleviation programmes and rural development schemes. Various programmes aimed at reducing poverty in rural areas have been launched from time to time. They include like Gram Sadak Yojna, Providing Urban Amenities in Rural Areas (PURA), National Rural Employment guarantee act, Integrated Rural6 development programme (IRDP), Jawahar Rozar Prof. Raghavendran Venugopal Yojna (JRY)
  7. 7. Rural Consumption  The total value of the rural market at a whopping Rs1,23,000 crore, divided into these categories FMCG-Rs 65,000 Crore Durables- Rs 5000 Crore Tractors & Agri- Inputs Rs 45,000 Crore & Two & Four Wheeler Rs 8000 Crore. Per capita expenditure on education by urban is 4.5 times, health 2 times, rental 5 times. In Rural households, extra money earned goes to straight to consumption. Thus actual disposable income for consumption in Rural HH remains the same as Urban HH.7 Prof. Raghavendran Venugopal
  8. 8. Relationship between Agriculture, Rural Income and Consumption  The average growth in the agricultural sector in the last 5years has been mere 2%.  In 1988-93, 5.8% growth in FMCG Sector, Rural > Urban  In 1993-98, 1.94% in Agricultural growth, FMCG Sector was 12%. Share in Rural Share in Urban Income Income 1995-96 2004-05 1995-96 2004-05 Agriculture 43 32 4.4 3.7 Industry 19 22 42 358 Service Prof. Raghavendran Venugopal 38 47 53 61
  9. 9. Literacy in Rural India  It is improved from 39% to 56%, but still long way to go.  16.5 crore people are literate people compared to 16 crore people in urban India.  51% of rural population reported no formal education 16% in case of urban.  55% urban population at least secondary education as against 15%.  26% of urban households, the head was a graduate or a technical degree/diploma holder.9 Prof. Raghavendran Venugopal
  10. 10. Electricity availability in Rural India  In the year 2005, 56% households has a electricity connection.  Majority of household in rural India are not electrified.  90% rural house holds at Punjab & Goa, 25% in Jharkhand, where as Bihar rest at Bottom. 70% in Karnataka, TN, J&K, Haryana, Maharashtra, Kerala and MP.10 Prof. Raghavendran Venugopal
  11. 11. Development Indicators in Rural India  Ranked 138th position in HDR.  Infant mortality is 75/1000 being highest in World.  Access to potable water, health care, sanitation and shelter as far cry.  Kerala has highest HDI, which 80% higher than National average.  Ranked 103rd in gender disparity index in world.11 Prof. Raghavendran Venugopal
  12. 12. Nature and Characteristics of the rural market.  Large and Scattered Market  Heterogeneous Market  Income from Agriculture  Standard of Living  Infrastructural Facilities.12 Prof. Raghavendran Venugopal
  13. 13. End of Module 2 Prof. Raghavendran Venugopal13 Prof. Raghavendran Venugopal

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