Abstract on RURAL MARKETING - creativeworld9

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Wednesday, July 20, 2011


                       RURAL MARKETING


 The predominantly rural character of India’s national economy is
reflected in the very high proportion of INDIA population living in rural areas.  They were with more than 700 M people living in rural areas in some 5,80,000 villages, and about two – third of its workforce was engaged in agriculture and allied activities with a contribution of 29% of India’s  GDP.  India’s economy is predominantly rural in character.

                        India’s economy can be sourced from 2 sectors these Rural Urban sector. Rural is classified into two types again they are agricultural, Non-agro the non agro sector relating to Industry, Business and services.  Like hand crafts, Khadi, Hand loom etc.


 According to National  commission on Agriculture “R.M is a process which starts with a decision to produce a shall be form commodity and it involves  all the aspects of market structure, both functional and institutional, based on technical  and Economic  considerations  and includes pre and post Harvest operations assembling,Grading and distribution” .

Indian Rural Market Environment:

 In our country about 70% of the population lives in villages. There are states like UP, MP, Bihar and Orissa where rural population varies from 80 to 90%. Only 6,300 villages have a population of more than 500 or less .There are different factors which are taken impact on the R.M. These are shaped the total performance of R.M like population, occupational, literacy, location, irrigation, land distribution infrastructure population and communication.


            Segmentation primarily based on the product and company potentiality and depends on some more things.  But the general bases are Geographical, demographic, psychographic, socio-economic characteristics, exposure   to modernization and income levels.


                      The peculiarities of R.M. have forced the companies to rework this marketing stratiges developed for the urban markets.  It is not only the product but also the message, media channel and price that are tailored to meet the needs of the rural market effectively.  In this area different type s of strategies were focused. They are product, price, physical distribution, promotion strategies separately.


            Rural Industries are khadi and village industries, Handloom industry and Hand crafts.  The Khadi and village are classified as agro based , wood related ,textiles,  metal wares and house hold industries, in this point of discussion we need not to we need not take  more care towards marketing the products because of the availability and awareness of the customers as well as all facilities like  transportation. In these particular goods Rural Industries were contributing and producing satisfactory level to the urban area. 


                        This is the point to discuss the relationship between the urban settle and rural sector.  Majorly Royts were getting the total agro inputs from     urban area and same time this is the product which marked only at rural area like villages.  Such as seeds, Fertilizers, pesticides, Tractors etc.. Here consumer has been asked only one i.e. “cheat me in price but not in the goods I purchase “


                        The big question arises what are rural consumers really like? They are certain myths about rural markets and the rural consumers. The rural panel under mines may common marketing myths about rural areas.

 Myth I:  We’ll lose to loose. Rural consumer aren’t worth bothering abet since they by loose, un branded products rather them the braded variety.

Myth II: Only buy really cheep mass market brands.

Myth III: Rural consumer will take what’s given to them.

Myth IV: One family, one brand.


The predominantly rural character of India’s national economy is reflected in the very high proportion of its population living in rural areas. With more than 700 million people living in rural areas, I some 5,80,000 villages, and about two-thirds of its workforce was engaged in agriculture and allied activities with a contribution of 29% of India’s GDP, India’s economy is predominantly rural in character.
The Non-agricultural sub sector comprises agricultural and allied economic activities such as Crop Cultivation, Animal Husbandry, Dairying, Fisheries, Poultry and Forestry etc.
The nonagricultural sub sector consists of economic activities relating to Industry. Busines and Services. Industry here refers to cottage and village industries, khadi, handloom, handicrafts, etc.

Business refers to trading of general goods, small shops, petty trader’s etc., whereas services refer to Transportation, communication, banking, postal, Education etc.

The size and potential market of the rural sector could be measured in terms of the rural population, the population of livestock, the extent of land, forest and other natural resources.

According to population census of 1991, India’s rural population was 62.87 cores, which accounted for 74.3 percent of the country’s total population.
            Till recently the focus of marketers in India was the urban consumer and by large no specific affords were to reach the rural markets. But now it is felt that tempo of development accelerating in rural in India, coupled with increase in purchasing power, because of scientific agriculture, the changing life style and consumption pattern of villagers with increase in education, social mobility, improved means of transportation and communication and other penetration of mass media such s television and its various satellite channels have espoused rural India to the outside worlds hence their outlook to life has also changed. Because of all these factors, rural India is now attraction more and more marketers.


            According to the National  Commission on Agriculture-“Rural Marketing is a process which starts with a decision to produce a sellable form commodity and it involves all the aspects of market structure or system, both  functional and institutional,  based on technical and economic considerations, and includes pre and post harvest operations, assembling, grading, storage, transportation and distribution.”
            According to Thomsen-“the study of Rural Marketing, and the operations, and the agencies conducting them, involved in the movement of farm produced food, raw materials and their derivatives, such as textiles, from the farms to the final consumers, and the effects of such operations on producers, middlemen and consumers.”


Urban markets are increasingly becoming competitive and in many products, perhaps getting saturated.  Consider the case of toiletries, packaged tea, dry cell batteries and even electronics like entertainment products.  For most of them, the demand seems to have reached a saturation level.  All that one sees is brand switching behaviour.  No new demand seems to be coming in; this situation leads to search for new markets for growth and profit making.

   Rural markets are the new markets which are opening up for most of these packaged goods.  Companies that have expanded in these areas found that, they are able to ward off competition,

Generate a new demand and intern, and increase their sales or profits.  Many companies have already taken a lead in establishing their products in rural markets.  For example, the products of Hindustan lever limited (soaps, detergents, etc.,) are made available in rural market with a population of up to 2000 through stockiest wholesalers and retailers.  Bisleri mineral water is available in some rural markets.  Bournvita and horlicks are served in small restaurants in prosperous rural areas.  Marco’s parachute hair oil has already entered rural markets.

    Corporates turn to rural India for growth
coca-Cola India doubled the number of outlets in rural areas from 80,000 in2001 to 160,000 in 2003, which increased market penetration from 13 .It brought down the average price of its products from Rs 10 to Rs 5, thereby bridging the gap between soft drinks and other local options like tea, butter milk or lemon water.
It doubled the spend on Doordarshan, increased price compliance from 30 per cent to 50 per cent in rural markets and reduced overall costs by 40 per cent.
It also tapped local forms of entertainment like annual haats and fairs and made huge investments in infrastructure for distribution and marketing.
Result: the rural market accounts for 80 per cent of new Coke drinkers and 30 per cent of its volumes.
The rural market for Coca-Cola grew at 37 per cent over the last year, against a 24 per cent growth in urban areas. Per capita consumption in rural areas has doubled in the last two years.The launch of the Rs 5 pack has reaped rich dividends in terms of sales and the bottles are expected to account for 50 per cent of the company's sales in 2003.
Coca-Cola is just one example. A lot of fast-moving consumer goods and consumer electronic companies are aggressively targeting rural consumers.
The necessity arose because the growth rates of consumer products were slowing down not because the markets were getting saturated in terms of penetration as in the US, but because most consumer markets were getting cluttered.
While overall volumes continue to grow reasonably well, there are too many players eating into each other's market share.The companies, therefore, reduce prices in urban areas and invest heavily in sales promotion, intensifying the battle for market share.Operating margins come under pressure and new growth markets have to be explored. This is where the rural markets play an important role.
The rural market was tempting since it comprised 74 per cent of the country's population, 41 per cent of its middle class, 58 per cent of its disposable income and a large consuming class, Coca-Cola India CEO Sanjiv Gupta said.
Today, real growth is taking place in the rural-urban markets, or in the 13,113 villages with a population of more than 5,000.
Of these, 9,988 villages are in seven states -- Uttar Pradesh, Bihar, West Bengal, Maharashtra, Andhra Pradesh, Kerala and Tamil Nadu.
For manufacturers of consumer goods, these are the markets to look out for. While the 1980s saw a boom in Class I towns with the spread of television, the Class II towns showed strong growth in the 90s propelled by reforms.
According to the National Council for Applied Economic Research, the millennium belongs to the Class III and IV rural-urban towns.
It estimates that an average rural Indian household will have five major consumer appliances by 2006, almost double of what it had five years ago.
In order to efficiently and cost-effectively target the rural markets, the companies will have to cover many independent retailers since in these areas, the retailer influences purchase decisions and stock a single brand in a product category.
In such an environment, being first on the shelf and developing a privileged relationship with the retailer is a source of competitive advantage to consumer good companies.


 Rural area is the place where the corporate sectors have the chance to sustain their viability in the market.  It has the large percent of proportion in the market compare to the urban and population is more.

Abstract on RURAL MARKETING Reviewed by creativeworld9 on 9:51 AM Rating: 5                        RURAL MARKETING INTRODUCTION   The predominantly rural character of India’s national economy is reflec...

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