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RURAL MARKETING

RURAL MARKETING. UNDERSTANDING RURAL MARKET. DEFINITION- no official definition of what constitutes a rural area URBAN AREA- has been defined as per Census “all places with a municipality, corporation, cantonment or a notified area as town” and

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RURAL MARKETING

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  1. RURAL MARKETING

  2. UNDERSTANDING RURAL MARKET • DEFINITION- • no official definition of what constitutes a rural area • URBAN AREA- • has been defined as per Census “all places with a municipality, corporation, cantonment or a notified area as town” and • all other places satisfying one of the criteria • Minimum population of 5000 • At least 75 percent male population working in non agricultural pursuits • Density of population of at least 400 persons per sq km

  3. Rural marketing • Any marketing activity in which one dominant participant is from a rural area • Continuum – Rural…….. Rurban……..Urban • Rurban – overlap between urban & rural • Physical features closure to urban and proximity to large urban centres but deep rural sociological moorings • Flow of goods, services and ideas from one area to other

  4. IMPORTANCE OF RURAL MARKETING • Decreasing growth trend in urban areas • Increase in income • Exposure to TV • Changing consumption patterns and preferences • 2002 report- • FMCG- Rs.6500 billion • Consumer durables- 500 billion • Agriculture inputs – Rs. 4500 billion • Automobile- Rs. 800 billion • Size and growth rate – two most attractive reasons

  5. CHARACTERISTIC OF RURAL MARKETING • Literacy levels • Family structure • Occupational pattersm • Spatial distribution of household settlements • Social customs and norms

  6. DEMOGRAPHIC CHARACTERISTICS • 6,39,00 villages – population 743 million (72%) • Most villages of <500 do not have any shops • Complexity of distribution and logistics

  7. RURAL ECONOMY • in 1989-90 –<35000 pa (1998-99 prices) - 67 % & > 70000 - 7 % • In 1998-99 - <47% & 27% • Rural people have higher level of disposable income at the same income level (cost of living) • Consumption patterns changing • Shift in expenditure pattern • Rural income is seasonal in nature – uncontrollable factors • Distribution of wage in small installments • Seasonal demands

  8. SOCIAL & CULTURAL FACTORS • Social hierarchy, traditions, customs, social norms • Caste system- social status – individual & social behaviour • Household settlements – LIG/ MIG/ HIG in urban areas v/s harijanbasti/ thakurgali • Social interaction & norms • Water/ grazing land • Access to common facilities • Violation leads to social tensions • Traditions rigidly followed • Influential people- Sarpanch/ teachers/ priests/ caste leaders – purchase decision/ credible source of information/ opinion leaders

  9. CONSUMER BEHAVIOUR • Social norms/ traditions/ customs/ caste- greater influence • Seasonality – agricultural production/ daily wage earners • Purchases mostly on daily basis/ once in 2-3 days • Exhibitions/ road shows • Opinions of leaders • Word of mouth has more significance • Risk of buying tends to be higher- greater involvement in purchase process- more detailed information search behaviour • Wider consultation- dependence on other people is higher

  10. Increasing exposure to mass media and IT- dependence on traditional reference group is decreasing • Role of self help groups/ government agencies in development activities • More loyal- brand switching has greater perceived risks • Interpretation of colours, names, symbols, social activities • Status symbol in acquisition of certain gadgets

  11. MARKETING INFRASTRUCTURE IN RURAL AREAS • Inaccessibility – 68% of markets remain untapped • Accessing a large number of small villages is uneconomical- low density- low reach • Low density of shops/ limited storage facilities, need for a large number of intermediaries • Alternative means of reach – haats/ mandis/ melas • Complexities of communication- number of languages/ dialects/ literacy levels/ variations in media reach and media vehicles • DD/ print media

  12. SEGMENTING RURAL MARKETS • SOCIOECONOMIC CLASS – depending upon • chief wage earner • Type of house they live • SEC R1/ R2 / R3 R4 • Land lords/ Rich farmers/ medium sized land owners/ agriculture labour • RURAL MARKET RATING BY MICA- comprehensive classification of 459 districts based on 42 socio economic indicators • Linear combination of 6 variables • Development Index points

  13. VARIABLES FOR MICA ratings • Total number of cultivators • Total cropped area • Total irrigated area • Fertiliser consumption • Bank credit • Value of agricultural output

  14. MARKETING MIX DECISIONS

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