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Ruralmarketing PDF
Ruralmarketing PDF
Rural areas:Rural areas are large and isolated areas of an open country with low population density a country side refers to rural areas that are open.
Nature of Rural market:1. Large, diverse and scattered market:Rural marketing in India is large, and scattered into a number of regions. There may be less number of shops available to market products. 2. Major income of rural consumers is from agriculture:Rural prosperity is tied with agriculture prosperity. In the event of crop failure, the incomes of masses is directly affected. 3. Traditional outlook:Villages develop slowly and have a traditional outlook. Change is a continuous process but rural people accept change gradually. This is gradually changing due to literacy especially in the youth who have begun to change the outlook in the villages. 4. Standard of living and rising disposable income of the rural customers:It is known that majority of the rural population lives below poverty line and has low literacy rate, low savings etc. Today the rural customers spends money to get value and is aware of the happening around him. 5. Rising literary levels:It is documented that approximately 45% of rural Indians are literate. Hence awareness has increase and the formats are well informed about the world around them. They are also educating themselves on the new technology for a better life style. 6. Diverse socio economic background:http://www.miteshk.webs.com
Due to differences in geographical areas and uneven land fertility, rural people have different socio economic background, which ultimately affects the rural markets. 7. Infrastructure facilities:The infrastructure facilities like warehouses, communications systems and financial facilities (or) inadequate in rural areas physical distribution is a challenge to marketers who has found innovative ways to market their products.
Scope of marketing:1. Large population:According to 2011 census, rural population is 72% of total population and it is scattered over a wide range of geographic area. 2. Rising rural prosperity:Average income level has unproved due to modern farming practices, contract farming industrialisation, migration to urban areas etc. 3. Growth in consumption:There is a growth in purchasing power of rural consumers. The average per capita house hold expenditure is 382 Rs 4. Change in life style:Life style of rural consumer changed considerably. 5. 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. 6. Life cycle advantage:The products which have attain the maturity stage in urban market is still in growth stage in rural market. 7. Rural marketing is not expensive:To promote consumer durable inside a state costs 1 croreRs while in urban areas it will costs in millions.
Q2. What is rural market? Importance of rural marketing ? Ans:Meaning of rural market:On account of green revolution, the rural areas are consuming a large quality of industrial and urban manufactured products. In this context a special marketing strategy namely rural marketing has emerged. But often rural marketing is confused with agricultural marketing The letter denotes marketing of produce of rural areas to the urban consumers or industrial consumers, were as rural marketing involves delivering manufactured or processed inputs or services to rural producers of consumers.
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Approximately 75% of Indians population resides around 6,38,365 villages of India spread over 32,00,000 Sq. kilometre 41% of Indians middle class resides in rural areas. The Indian rural consumer leaves in 6,00,000 villages across the country and they account for over 70% of population of the country. For several product categories, rural markets account for over 60% of the national demand. 2. Higher purchasing capacity:According to NCAER[National Council for Applied Economic Research]. As per NCAER study there are many middle income and above households in the rural areas. As there are in the urban areas there are almost twice as many lower middle income households in rural areas as in the urban areas. Because of this purchasing power of power of rural people is on rise. 3. Market growth:Hariyali kissan bajar was set up by sri ram consolidated limited to facilitates scale of agriculture inputs such as fertilizers, pesticides forming equipment, seeds etc. Shakti- though the state governments and NGOS involved in microfinance women entrepreneurs in villages are identified to act as local distribution and sales point for HUL products. 4. ITC:Itcs internet enabled rural interface to help scale of agricultural outputs is presently operational in 6 states market is growing at a rate of 3-4% p.a.
Q3. Define size of rural market and discuss? Ans: According to the census of India village with clear surveyed boundaries not having a
municipality, corporation or board, with density of population not more than 400 Sq.km and with at least 75% of the male working population engaged in agriculture activities would quality as rural. According to this definition there are 6,38,000 villages in the country of these 0.5% has a population about 10,000 and 2% have population between 5,000 and 10,000 around 50% has a population less than 200. Interestingly, the FMCG and consumer durable companies, any territory that has more than 20,000 &50,000 population respectively in rural market so for them it is not rural India which is rural. According to the census of India 2001, there are more than 4000 towns in the country. It has classified them into 6 categories around 400 class-I to towns with 1,00,000 and above population, 498 class-II towns with 50,000-99,999 population, 1368 class-III towns with 20,000-50,000 population, 1560 class IV towns with 10,000-19,999 population It is mainly the class-II & class-III towns that markets term as rural.
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The Indian rural market with its vast size and demand offers great opportunity to marketers. Our national is classified in around 450 districts & approx. 6, 30,000 village which can be stored in different parameters such as literacy level, accessibility income levels, distance from nearest town etc. The rural market accounts for half of the total market for Tv sets, fans pressure cookers, bicycles, washing soap, tea salt & tooth powder, what is more, the rural market for FMCG product is growing much faster than the urban market.
Q4. Explain the distinction between rural market & urban market? Ans: Definition:Rural marketing is similar as simply marketing. Rural marketing differs only in terms of buyers here, target market consists of customers living in rural areas.Thus rural marketing is application of marketing fundamentals {concepts, principles, theories etc} to rural marketers. Rural marketing is a process of developing, pricing , promoting and distributing rural specific goods and services leading to desired exchange with rural customers to satisfy their needs and wants, and also to achieve organisational objectives.
Differences between rural marketing & urban marketing:Although rural marketing offer immense potential marketers used to recognise the fact that there are considerable differences in many aspects including the nature, characteristics, buying patterns & behaviours of rural consumer when compared with their urban counter parts. While the urban economy thrives mainly on secondary and territory activities such as manufacturing &service, the rural economy is driven mainly by primary activities such as agriculture, fishing & forestry. The consumer demand and consumption patterns also differ across rural and urban areas, in many products rural consumption now accounts for a large share then urban. In in washing soaps the rural share is over 60%. In popular both soaps it is more than 50% and in batteries it is more than 56% similarly is the case with packed tea & hair oils
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5 Aspect Philosophy Demand Competition Urban Marketing&socialconcepts &relationshipmarket High Amongunitsinorganized sector Concentrated High High Planned&even Highlevel Faster High Known Easy Easygrasped Good Yes Wholeseller,retailers, supermarkets,speciality stores,authorisedstore rooms Good High Rural Marketing&socialconceptsdevelopment marketing Low Amongunorganisedsector
Consumers: Location Literacy Income Expenditure Needs Innovations Productawareness Concept Positioning Usagemethod Qualitypreference Pricesensitive Distributionchannels
Widelyspread Low Low Seasonal&variations Lowlevel Slow Low Lessknown Difficult Difficulttograsp Moderate Verymuchinrural Villageshops
Transportfacility Productavailability
Moderate Limited
Advertising
Print,audio,visualmedia, outdoors,exhibitionsetc
T.v,radio,printmediatosomeextent
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Q5. What are the problems of rural marketing? Ans: The problems of rural marketing are continuing in spite of efforts to improve in a 9th
five year plan. The position is improving but slowly the rural marketer has many challenges. But the vast & expanding markets call for good marketing strangers to create win situations to all parties in the chain of rural marketing. The problems of rural marketing are as follows: Under developed people Under developed market Improper communication facilities Many languages Vastness & uneven spread Low per capita income Poor infrastructure facilities Seasonal demand Less distribution channel
1. Under developed people:Rural society is found by tradition, old customs, practices etc. The impact of modern science & technology has made very less impact of the old beliefs are still continuing. 2. Under developed market:Rural markets are not developing because of inadequate banking & credit facilities. Rural market needs banks to enable remittance, to transact on credit basis and to obtained credit support from the bank. At present every 48th village in India only has bank. 3. Poor or improper communication facilities:Most villages even today largely depends on telegrams and phones for their communication needs print media and visual media[Television cinema] etc reaches only about 20% of rural Indians. 4. Many languages:India is a country of many languages. Language becomes a barrier in effective communication in the marketing efforts. The languages vary from state to state, place to place, district to district there are now 18 schedule national languages. 5. Vastness & unevenly spread:India is a vast time & major approximately 3214km from North to South &2933km from East to West. Rural market consists of approximately 75 cores rural consumers spread across approximately 6,38,365 villages. Despite the urban migration, the rural areas continue to be the place of living for a vast majority Indians.
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6. Low per capital income:Most farmers has small lands and many villages are brought prone, this result in low per capita income. Low per capita incomeResults in low consumption pattern as compared to the urban population. The marketers faces challenges in rural marketing to decide about quantities, frequency of distributions, package size etc due to the low per capita income of the rural people. 7. Poor infrastructure facilities:Infrastructural facilities like roads, ware houses, powers etc are inadequate in rural areas. Infrastructural cost are very high and impact adversely in the rural market activities. 8. Seasonal demand:Rural economic is seasonal, rural people have two seasonal namely khariff&rabi. Villages have money mostly in this seasons. As village income are seasonal demands are also.
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SOCIAL Sociologicalfactors
Psychological Factors Price
ECONOMIC
Competition
Product&Packaging
Anthropological Factors Consumer Marketing Organisation
Price
Promotion
Technological Place
Ethical
Physical
Political
Consumer society or the community is important. The consumer life style is influenced by the social setup. The social constitution and changes influence customer habits, taste, and lifestyles. 2) Anthropological factors:The reasonable cultures and subcultures and living patterns influence advertising sales promotion, selling strategies and packing. The consumers in east India have different taste.
3) Psychological factors:Consumer behavior attitudes personality and mental make ups are unique. The study of behavior is vital to evolve marketing mix. 2. Economic factors:1) Competition:A good and healthy competition brings in good and overall improvement in economic activities. It also brings good quality, good quantity and price. Consumers:The consumer today is quite knowledgeable and choosy. His progress and well being should be the aim of any economic activity. Price:Pricing is a delicate issue where it should be market friendly, not too high or to little. The marketers has to keep in mind to get descent returns on investment and effects of producers and marketers. Ethical forces:Business minus ethical values brings degeneration. In the long run it brings problems. No standardization, exploitation and falsification are main ethical values in such organization. Political forces:The government polices towards trade and commerce, internal taxation and preferential treatments have a influence on the marketing strategies. The marketing environment has to meet the political frame work in which a government is made to work. Physical forces:The infrastructure availability for movement and storage of goods play an important role in the physical distribution of goods and reaching the consumers. Efficient and cheaper logistics helps the market in a big way. Technological force:The fast changing science and technology gives a cutting edge to the marketing of products. The changes warrant changes in marketing , inputs and
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strategies. Faster and efficient communication and transport systems have speeded up marketer. The capital is made to work faster and harder .So in the case with the marketer, He has to use these new marketing tools and facilities in designing and implementing his marketing strategies which are adaptive to the change in environment and ensure success.
Q2) what are the factors influencing rural consumer behavior? ANS:- The various factors that affect buying behaviour of in rural India are: 1) Environment of the consumer:- the environment or the surroundings in which the consumer leaves has a very strong influence on the buyer behavior. E.g.:electrification, water supply effects demand for durables. 2) Geographic influence:- the geographic location in which the rural consumer is located also speaks about the thought process of the consumer. For instance, villages in south India accept technology quicker than in other parts of india.Thus, HMT sells more winding watches in the north while they sell more quartz watches in the south.
3) Influence of occupation:- The land owners and service can buy more of category2 & category3 durables than agricultural laborers. 4) Place of purchase:Companys need to access the influence of retailer on both consumers at village shops.
5) Creative use of product:- The study of product and provides indicators to the company on the need for education and also for new product ideas. E.g.:- godrej hair dye being used as a pain to the color horns of ox. Washing machine being used for making lassie. 6) Brand preference and loyalty:- the people in rural market will not give preference for brand products but they give importance for loyalty of the product. 80% of the sale is branded items in 16 product category. Q3) what are the factors influencing Rural marketing operations? ANS: - All business operations revolve around understanding customer needs, desires likes and preference and offering products and services that will give desired satisfaction to the consumers. FACTORS INFLUENCING OR CONTRIBUTING CONSUMER BEHAVIOUR:a) Environmental b) Cultural
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c) Social d) Personal e) Psychological a) Environmental :I. Economic factors:The agricultural and rural development has enabled our country to achieve self sufficiency in food production and we are now exporting a variety of agricultural commodities to foreign countries. Favorable monsoons during the last 10 years have let to increase in crop yields and rural income. In addition, diversification of a agriculture, development of village industries, migration of rural people into cities, remittance of money, family members settled abroad have increased income level and buying power of villagers. II. Political factors:The government have taken initiative for economic development of rural areas and have invested heavily in agriculture, irrigation, electricity, khadi and village industries and infra structure facilities such as roads, communication, hospitals, school, and banking. The initiatives certainly let to rural prosperity and opportunities for the marketers. III. Technological development:The rapid expansion of telecommunication facilities and mobile phone has provided opportunities for rural people to keep in touch with men and markets. Development of TV networks and reasonable channels has enabled the marketers to pass on message about product and services to rural people. In rural areas especially in large villagers and villagers near to towns and cities, children and youth have accused to information such as job opportunities, national news, weather conditions, bank loans etc..IT and internet are sure to spread up exchange of information in rural india though at a slower rate compare to urban market Legal :The government has come out with legislative measures to protect the interest of consumers some of the important ones are:-
IV.
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Money lenders:The money lenders advance long term loans against security of land over period of time manipulate the records and seize the land. The government protects the assets of farmers from money lenders.
b.
Consumer protection act:Consumer protection act provides protecting the rights and interest of consumers and we have a quasi judicial machinery operating at 3 levels i.e. district forum, state and national forum. V. Cultural factors:-
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a) Culture and sub culture :Culture represents an overall heritage a distinctive form of environmental adaption by whole society of people culture is a system of shared beliefs and customs that influence the behavior of consumers. Traditional life, traditional occupation, traditional beliefs are the features of rural life. Culture provides people with a sense of identity and an acceptable behavior with in a society. Technological advances education and travel have considerable influence on culture and change the rural life style. Culture offers direction and guidance to the members of a society in all facets of life. It provides methods of satisfying physiological, personal and social needs. b) Sub culture:It exists within the dominant culture, with its own set of values, beliefs and attitudes and behavior pattern. The pattern of behavior would vary between north and south even in rural areas.
c) Social class:Consumer behavior is determine by social class to which they belong and is determine by a combination of factors like education, occupation, income and assets. It is seen that over a period of 10years there has been considerable reduction in the per culture of destitute and increase in other social classes in rural areas. This is a positive indication of the growing rural market in our country. VI. Social factors:a) Family:Family is a group of persons related by blood, marriage or adoption who reside together. It is basic social group and consists of individual known as members. The 3rd generation family is very common in rural areas. The head of the family provides economic security to family members. The members of family play different roles such as influencer decider and purchaser is the buying process. Personal values, attitudes and buying habits have been shaped by family influences. Family life cycle also influences. b) Reference group:It includes family and friends with whom an individual interacts on a face to face basis. Word of mouth communication is a process by which the messages are passed within group from one member to another member. The consumer develops positive opinion towards a product or service based on admiration (cricket players), aspiration (film stars) or empathy. The consumer thinks that if he uses it, it must be good if use it, I will be like him.
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VII. a)
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Personal factors:Age and life cycle:Life cycle of a person began with child birth, move to infancy, teenage, adult, middle age, old, and then ends with death. Under each stage buying behavior is different. Occupation:About 500 millions of population depends upon agriculture for a living. Income from agriculture is a seasonal and therefore demand particularly consumer durables is high during post harvested period and festivals. Many farmers have diversified into fish culture and small scale industries in order to reduce their dependence on forming and to ensure regular income. This leads to increase the demand for consumer durables. Economic circumstance:-Rural income is seasonal compare to an urban consumer who receives regular income regarding saving habits, traditionally rural people prefer to invest in jewelry and fixed deposits in banks and posts offices. A farmer would like to invest these funds for development of agriculture and buying lands. Another interesting observation is that for the same income level, a rural consumer has relatively high disposable income. Life style:Life style studies how people spend their money and time in day to day activities. The life style dimensions are activities and demographic features such as age, gender, occupation, education, and income. Rural consumes prefer to spend, spare time, in activities. Such as visiting meals i.e. commodity and religious fairs, companys can use such meeting places for product promotion. Personality and self concept:Personality is a unique combination of different individual characteristics. We find that many individuals are similar in terms of one or more characteristics, but they are not alike in all characteristics. Personality is a combination of factors such as sociability, self confidence and dominance. Personality influences in many ways. Psychological factors:Motivation:When a buyer purchases a product or service, he has a reason. Motive is a strong felling, desire or emotion that makes the buyer to take decision to buy every human activity is a result of motivation. Each person is motivated by his needs and satisfaction of one need shows that rural consumers are satisfied by meeting the 2needs i.e. physical and security need, where as urban consumers would like to satisfy social and needs .
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Motives can be also classified as psychological and psychogenic motives. In rural areas there exits large population consisting of agricultural laborer, small and marginal farmers, petty traders who have very limited income and their needs are very basic i.e. food clothing and shelter. b) Perception:All consumers are not alike; they see the world in their own special ways. For instance, all the members of the family have viewed a particular advertisement in different ways. This is because needs, wants, values attitudes and personal experience vary from person to person. Similarly, consumers perception means what he thinks about the product, producer or the brand. Consumers action, buying habits, consumption habits are based on perception and therefore the motor should have good understanding of perception of consumers. c) Learning:It is a process of acquiring knowledge about products, product benefits, method of usage and maintenance and also disposal of the products considering low literacy, low awareness, the marketers have to educate the consumers through rural- specific promotion media and methods. d) Belies and attitudes:In general attitude is a state of mind or feeling. Attitude indicates our feeling about a product, service, brand and shop whether we are positively or negatively disposed towards the object or class of objects. Consumer attitudes or composed of beliefs, feelings and behavior intentions towards a product, brand or store. Belief may be positive, negative or neutral. The belief that consumer hold need not be correct. Consumers also hold certain feelings towards product and these feelings are based on the beliefs. Examples:1) Many rural consumers belief that cool drinks are harmful and they prefer lime juice, butter milk etc.. Change of attitudes and beliefs is very low in the case of rural consumers. Once he is convinced, he will continue to use the product and become a loyal consumer. 2) Majority of lower and middle income group continue to use lifeboy and soap and about 70% of the sales of the life boy is in rural and semi urban areas.
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Degree of segmentation:The segmentation is considered as a process with two polar points from zero to complete, four distinct segment approaches are identifiable as follows o.s Type Zero Mass marketing Segment marketing all Identitys people as a differing group Niche marketing Serves very few groups of people Micro marketing Focus individuals are very groups on small
Mass marketing:In the early period of the 20th century many companies practiced mass production and mass distribution as economics evolved as economy evolved and societies became civilised, consumer choice and requirements came into focus until now the rural market was considered as homogeneous mass as worse the Indian market till some 20 years ago. Some companies depend on mass marketing while many do not.
Segment marketing:The principle of segment marketing rests on the realisation that buyers differ in their needs, wants, demands and behaviours. The need for segment marketing arises when Consumers have become more diverse, sophistically and choosy. Competition has become tuff.
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Niche marketing:A niche is very small group with a different set of traits, who seek a special combination of benefits. Niche marketing identifies special sub groups within larger segments and offers different products and services.
Micro marketing:Micro marketing involves tailoring products and programs to suet the taste of specific locations and individuals. It includes local marketing and individual marketing. Local marketing:- It involves in the programs to suit the taste of specific locations and wants of local groups on a geographical bases. Individual marketing:- Individual market is customized marketing or one to one marketing. Tailoring unitshotels, tourist operators provide individualised services for example building contractors builds houses of flats to specific requirements of customers.
Types of rural market segmentation:Demographic factors:Demographic factors are taken into detailed consideration for market segmentation of consumer goods and fast moving consumer goods (FMCG). In case of rural marketing i.e. to sell outside goods in rural areas, demography came into the picture. However the categories are much reduced. Some of the segmentations are as below.
Occupational segmentation(or)sociological segmentation:This segmentation is based on economy vice categorisation. This reflects the purchasing power of a farmer and therefore the purchase power of his family they are Artisans, farm labourers Small farmers Tenant farmers Medium level farmers Large farmers Very large farmers, zamindars
Tenant farmers
Working on rented land to share the crops with owners of the land.
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Small farmers
Who own small farms are jointly owned farms for getting food.