RURAL MARKETING

PARAMETERS
1. DEMOGRAPHY OF THE VILLAGE
2. OCCUPATION OF THE VILLAGE
3. EDUCATION AND HEALTH FACILITY IN THE VILLAGE

CONTENTS
Concept of Rural Marketing
Scope of Rural Marketing
Difficulties of distribution in Rural Marketing
Rural Products & Role of Cooperatives in Rural Marketing
Rural Vs. Urban Marketing
Case Study

Concept of Rural Marketing-
Rural Marketing is concerned with marketing of inputs (product/service) to the rural
and marketing of outputs from the rural markets to other geographical areas.
Therefore rural marketing is concerned with the flow of goods and services from
urban to rural and vice versa and within the rural area itself.

Definition:
T.P. Gopalaswamy observed: Rural marketing is a two-way marketing process. Its
content now encompasses inflow of products into rural areas for production and
consumption purposes and also outflow of products to urban areas. The national
Commission on agriculture defined Rural marketing as a process that starts with a
decision to produce a saleable farm commodity and it involves all the aspects of
marketing system and includes pre and post-harvest operations i.e. assembling ,
grading, storage, transportation and distribution.


Nature and characteristics of Rural Marketing
Agriculture is main source of income.
The income is seasonal in nature.
Though large, the rural market is geographically scattered.
It shows linguistic, religious and cultural diversities and economic disparities.
The market is undeveloped, as the people who constitute it still lack adequate
purchasing power.

SCOPE OF RURAL MARKETING-
Following Service areas have great potential in rural markets:
1. Population: According to 2011 Census rural population is 72% of total population
and it is scattered over a wide range of geographic area. That is 12% of the world
population which is not yet fully utilized.
2. Rising Rural Prosperity: Average income level has unproved due to modern farming
practices, contract farming industrialization, migration to urban areas etc. There has
been an overall increase in economic activities because during the planned rural
development heavy outlay of resources on irrigation, fertilizers, agricultural
equipments and agro processing industry has been made.
3. Growth in consumption: There is a growth in purchasing power of rural consumers.
But, the average per capita house hold expenditure is still low compared to urban
spending.
4. 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.
5. Life cycle advantage: The products which have attained the maturity stage in urban
market is still in growth stage in rural market.
6. Change in life style and Demands: Life style of rural consumer changed considerably.
There has been increase in demand for durables and non-durables like table fans,
radios, mopeds, soaps, etc. by rural consumers. This provides a ready market for the
producers. Rural market is expanding day after day.

Distribution Function and Difficulties of distribution in Rural Marketing-
The When & Where is the function of Distribution

What is a distribution channel?
A set of interdependent organizations (intermediaries) involved in the process of
making a product or service available for use or consumption by the consumer or
business letter.

Types of distribution channel
Mandis
Haats
Melas
Mobile Trading
NGOs
Cooperatives
SHGs
Intermediaries ( Middle men)
Wholesaler
Hub & Spoke
Typical Retail Store/ Village store
Hyper Market ( ITC- e-choupals, Hariyali Centre
Rural Distribution Challenges
Large number of small markets
Inadequate data on rural markets
Poor Infrastructure/ Connectivity
Dispersed population & trade
Low availability of suitable dealers
Inadequate banking/ credit facilities
Poor product display and visibility
Poor communication of offers and schemes



Role of Cooperatives in Rural Marketing-
What are cooperatives?
A co-operative is generally viewed as an autonomous association of persons united
voluntarily to meet their common social and economic needs and/or objectives.
Important types of co-operatives in India
Credit Co-operatives and Banks
Milk Co-operatives
Sugar Co-operatives
Natural Resources Management Co-operatives
Co-operative Spinning Mills and Weavers Co-operatives

Role of Co-operatives in India
Eliminating middleman.
Creation of employment.
Improve access to Markets and social services.
Increasing purchase power.
More accurate correlation of demand and supply as a result of greater certainty and
regularity of consumer market.
Contribution to stabilization of cost prices and income for benefit of members.
Equitable distribution of wealth and income.
Rural Products in Rural Marketing-
Rural Product
Anything that has a value in exchange
Product to be marketed with the requirement of the rural consumer should not be an
extension of urban offerings.
Product goes to
Urban to Rural: Marketers in rural areas. These includes pesticides, FMCG products,
consumer durables etc.
Rural to urban: There generally are middleman, agencies, co-operatives etc who sales fruits,
vegetables, grains, paddy, pulses etc.
Rural to rural: These includes selling of agriproducts, tools, carts and other goods to other
village in its proximity.

Scope of Urban Market/Products
1 . Solar Panels
2 . Irrigation techniques & tools
3 . Tractors, Sprayers, sprinklers,
Water pumps
4 . Telecommunications
5 . Radio services
6 . Water Conservative Soaps &
Detergents
7 . Inverters for electricity
8 . FMCG products
9 . Consumer Durables
Examples:
Philips developed FREE POWER RADIO the radio which do not require power &
battery also and runs for 30 minutes in one start .at a price of Rs. 995/- only.
Philips TV Vardaan for rural markets works on 90-270 volts.
Coca-cola provides low cost ice boxes that is in a tin box for the village outlets and a
thermacol box for seasonal outlets considering lack of electricity & the absence of
REFRIGERATOR in villages.
Bp energy sell smoke less biomass run stoves (OORJA) for rural market at a price of
Rs. 675/- only.
Bank of India introduced BHUMIHEEN credit cards for providing credit card facilities
to landless farmers.
Icici bank establishes biometric authentication ATMS in rural areas operated by
battery.




Rural VS Urban Marketing-

RURAL / URBAN CYCLE








Urban to rural - Major part of rural marketing. Includes transactions of urban
marketers who sell their goods and services in rural areas pesticides, fertilizers,
FMCG products, tractors, bicycles, consumer durables, etc.
Rural to urban - Basically falls under agricultural marketing. A rural producer seeks to
sell his produce in urban market like seeds, fruits and vegetables, forest produce,
spices, milk and related products, etc.


Reasons for Selecting Market





RURAL VS URBAN MARKETING:
1. Environment Differences
a) Small contiguous settlement units of
villages widely dispersed
a) High contiguous settlement units of
towns mostly concentrated
b) Low density of population per
square km
b) High density of population per
square km
c) Low physical connectivity c) High physical connectivity
RURAL
MARKET
URBAN
MARKET
Why Rural Market-
Size of the market
Largely Untapped
Better exposure- media
Income flow from urban
/abroad
Great success stories-
Coca cola chota coke
200ml for Rs 5/-


2. Exposure to Market Stimuli
a) Low product exposure and low
product exposure to branded
products
a) High product exposure and high
product exposure to branded
products
b) Low advertising exposures and low
brand awareness
b) High advertising exposures and high
brand awareness
c) Less convenient buying, low rate of
retail outlet, low market reach and
limited range of limited products
c) High convenient buying, high rate of
retail outlet, high market reach and
limited range of limited products

3. Dependence on Nature
a) High dependence on livelihood
or employment or income on
natural resources
a) Low dependence in employment or
income on natural resources
b) Abundance of natural resources b) Access in a functional purchasing
power
c) Highly dependent on resources
for catering a large number of
household needs
c) Most resources are purchased for
household consumption

4. Employment and Income
a) Agricultural based mostly small land
holdings per household and more
than 65% in small scale agricultural
occupation
a) Occupations mostly include
employment in Government,
Business, Industry and Service
Organization
b) Acute seasonability in Income
Receipts
b) Frequency of Income Receipts
predictable at regular intervals





5. Social Relation
a) Less number of interactions with
persons but more frequent between
same people
a) Large number of interactions with
persons but less frequent between
same people
b) Individuals better known and
identified
b) Individuals less known and
identified
c) Social norms more visible c) Social norms less visible
d) Status is ascribed by birth in a family d) Status is achieved
e) Caste influence direct and strong e) Caste influence indirect and of less
strength



1. How will you promote MATKA which is a rural product in urban market?

1. How co-operatives boosts rural economy?

2. What factors attracts rural customer most towards a product?

3. What marketing strategy you will use to promote a rural product?

4. Scope of Microfinance in Rural area?

5. How can any organization/ company target rural markets to get the growth for
their products?