Rural marketing- acc.

To National commission on agriculture, “rural marketing is a process which

starts with a decision to produce a saleable farm commodity and it involves all the aspects of market
structures and system, both technical & institutional based on technical & economical consideration
& includes pre and post harvest operations, assembling, grading, storage, transportation &
distribution”.

The model of RM represents the combination of transactional & developmental approaches : 1)RM
process is both a catalyst as well as an outcome of the general rural development process outcome.
Initiation and mgt of social & economic change in the rural sector is the core of the RM process. 2)
Innovation methods for social change for successful transformation of traditional society are vital.
Such a change narrows the rural urban divide.3)the growth of the RM can be a planned evolutionary
process based on strategies instruments of change rather than for short term opportunity for
commercial gain.4)the exposure of rural to a variety of marketing transactions during the change
process puts them in the role of beneficiaries than of just buyers of modern inputs & infrastructural
services.5)communication should serve to resolve social conflicts, encourage co operation &
strengthen competitive spirits during transactions.

Scope of RM- 1)urban to rural a)consumable b) Consumables c)consumer durables d) capital goods
2) rural to urban i) agricultural and allied products. ii) rural artisans iii) food iv) industrial RM- 3) rural
to rural- rural artisans ,services

Importance of RM- 1)urban to rural 2)rural to urban. A) Compulsions. B) Opportunities.

Rural vs urban marketing-

A)environmental differences-

Urban- 1)the urban marketing- the urban env is characterised by large, contiguous settlement units
of town or urban agglomerations, mostly concentrated. 2) highly infrastructural level such as road,
electricity etc. 3)high density of population per sq.km of space. 4) good physical connectivity, high
mobility

Rural- 1)small, contiguous settlement unit of villages widely dispersed. 2) low infrastructural levels.
3)low density of population 4) poor physical connectivity with other villages & towns, low mobility.

B)Social relations-

Urban (in an urban society social dynamics represent a more liberated system 1) large no of
interactions with persons. 2) individuals are less known & identify b/w members in the social system.
3) social norms are less visible. 4) cast influence( indirect) and less strength generally subjected to
economic influences.

Rural (the outlook of rural society is a combination of both traditional & modern,’isms’) 1)less no of
interpersonal interactions 2)individual better known as identified 3) social norms influencing
individuals are more visible. 4) caste influence direct & strong.
C)Exposure to marketing stimuli-

Urban ( urban markts are in a better position. They have better exposure to marketing stimuli) 1) high
prdct exposure & high exposure to branded prdcts. 2)high advertising exposure 3) high exposure to
marketing research & multiple sources of information.

Rural (a different and apathetic situation we find in rural markets) 1) low product exposure & low
exposure to branded products 2) low adv exposure,low comprehension of adv, low branded
awareness. 3) low exposure ro marketing researchers and ltd. Sources of information & learning.

D) dependence on nature-

Urban (in urban areas dependence on natural resources is less) 1) access is a function of purchasing
power 2) most resources to be purchased 3) low dependence on employment and incomes on
natural factors.

Rural- (the rural life is dependent on -) 1) abundance of natural resources and high dependence for
large no of household needs. 2) differential access to resources based on caste politics & money
power. 3) high dependence on employment and income on natural factors.

Rural market in Indian context- The rural market is a profitable proposition for the giant
multinationals for the following reasons: 1) rising rural prosperity- india is now seeking a dramatic
shift towards prosperity in rural households. The closest income class will shrink from more than
60% in 1994-95 to 20% in 2006-07. The higher the income classes will more than double. Thanks to
the development under the 5 year plans & other special prgms such as land reforms etc. 2) growth
in consumption- as a consequence of spread in rural prosperity in 1990s there was growth in
purchasing power in household expenditures is rs.382. 3)lifestyle changes- rural consumers
considered to prefer local, unbranded & low priced products. However, this is true only in certain
product categories. There is an up gradation from local or unbranded products to national brands &
from low priced brands to premium brands. With increasing literacy levels & media explosion, brand
consciousness is on an upswing exposing the rural population to the rich lifestyles of the urban
households. This has created awareness and a attraction for the premium products like Surf , Ariel
etc. 4) lifestyle adv- many products have achieved near maturity in the urban market while in the up
country, still in the growth phase. The reasons for the variations in the PLC stages maybe be
attributed to the different rates of diffusion – adoption process in the urban & rural marketing.
5)Rural marketing rates higher than urban – the growth rates of FMCG market & durables market is
higher in rural areas for many products. The rural market share will be more than 50% for many
products like cooking medium, tea, cigarettes etc. 6) rural marketing is not expensive- conventional
wisdom dictates that since rural consumers are mainly scattered, reaching them is costly. However
new research indicates that selling in rural area is not expensive. 7)remoteness is no longer a
problem- the rural distribution is not much developed for the reason,a) lack of proper infrastructure
b) marketers imagination & initiative (-) marketers have so far failed to analyse the rural side and
exploiting rural India’s traditional selling system that is haats and melas.
Understanding rural marketing env and its impact on rural marketing operations-

Environment means a set of conditions & given variables within which man or humans being
performs. Diff rural env are : 1) geographical env- the geo env is the vast rural india influences
directly or indirectly on RM. The diff. Factors relating to it are (i) climate (ii) Topography (iii)River
system (iv) soil condition (v) land distribution (vi) irrigation 2)economic env- a) income generation &
distribution b)expenditure patterns and habbits c) land ownership & distribution. d) land use pattern
e) economic development plans & programmes. F) rural credit and financial system (i) production
credit (ii) consumption credit. g) Occupation patterns. 3) demographic env- a) nature of population
b)ethnic distribution c)religious diversity d) distribution of population 4) socio cultural env. a)
customs and traditions b) family structure & familial relations. c) social interactions d) special
position of elders e) social entertainment & festival pattern 5) administrative environment a)nature
and influences of panchayats b)agricultural extension officer (AEO) 6) rural marketing behavioural
environment- a) purchase decision b) monetary and non monetary exchange c) dealers in retail
outlets.d) village haats. e) village mandis f) relationship marketing 7) infrastructural env. a) physical
b) institutional support.

Characteristics of rural consumer: 1) cultural char- a)culture b) sub-culture c)social milieu 2) other
consumer characterestics- a) age & life cycle stage b) occupation c) economic situation d) lifestyle e)
personality and self concept f) physiological factors

Attitudes of the rural consumer: 1) locality preference 2) Fatalism (believing in GOD) 3) little
ambition 4) overdependence 5) scepticism of anything essential. 6) Strong attachment to tradition 7)
guided by emotions rather than reasons 8) bound by supervision.

Behaviour of rural consumers: 1) socio- economic environment 2) influence of cultural env. 3)

Influence of geographical location 4) education/ literacy level. 5) Occupation 6) exposure to urban
lifestyle 7) exposure to media. #include model

Buying pattern of the rural consumer:

# model

There are 4 distinct types of buying behaviour based on 2 parameters- 1) degree of buyer
involvement 2) degree of difference among brands: A) complex buying behaviour B) dissonance
buying behaviour C) Habitual buying behaviour D) Variety seeking Buying behaviour

Rural Marketing Strategies: 1)rural market segmentation 2)

Product planning strategies: Theodor Levitt pointed out a product is not a mere inanimate physical
thing. Each product is a combination of tangible & intangible factors. To a buyer the product is a
complex group of value satisfaction, the total package of expectations & benefits. Product planning
for rural marketing is: 1) identity strategy a) commodity strat b) branding stat 2) customer value
strategies –a) mass product stat b) premium product. 3)innovation strategy- a) rural urban common
b) special for rural 4) quality strategy- a) improvement strat 5) packaging strategy – a) small
packaging b) combo packaging c) see through packaging 6) brand strategy a) brand extension b)
multi brand extension c) co branding strategy d) brand image strategy.
Pricing strategy- depending on the co’s business objectives and the influences of internal and
external factors, marketers can follow a particular pricing strategy as a blend of different strategies-
1) optional production pricing 2)captive production pricing 3) low point price 4)production bundle
pricing 5) penetration pricing 6)value pricing 7) special event pricing

Promotional strategy for rural market: factors for selecting media in the rural market
1)communication 2)cluster habit 3)leisurely life 4) impulsive and emotional habits. 5) hard instincts
6)rural pride 7)seasonality.

Logistics: problems of the distribution channels:- logistics is the sum total of all activities related to
the most cost effective movement of goods & supplies & the handling of all practical details of
service and delivery management. The factors in RM raise special difficulties in rural distribution. 1)
uneven distribution of population 2) blurred market segmentation 3)bad roads 4)poor electrification
5)poor storage 6) under developed retail facilities 7) support service is underdeveloped.

Distribution channels used in RM: 1) traditional channel: a) wholesaler b)retailer 2) new channels-
a)concentration on specific large villages b) rural co operative society c)public distribution system d)
petrol pumps e)agricultural input dealers f) Haats, mandis, jatras etc. g) mobile vans h) joint
distribution.