Rural Marketing Environment

Dr. Neeraj Dixit

Associate Professor
IESMCRC
 Defining Rural Marketing
• Rural Marketing is a two way marketing process that includes
the flow of goods and services from rural to urban areas and
the flow of goods and services from urban to rural areas, as
well as the flow of goods and services within rural areas.
• Rural Marketing can be defined as a function that manages
all activities involved in assessing, stimulating and converting
the purchasing power of rural consumers into an effective
demand for specific products & services and moving these
products and services to the people in rural areas to create
satisfaction and a better standard of living and thereby
achieving organizational goals.
 Demographic Environment
1971 1981 1991 2001

Total 548.2 683.3 848.3 1026.9

Population(million
)
Rural 524.0 628.8 741.6
Population(million
)
Rural Population 80.1 76.7 74.3 72.2
to total
population(%)
Decadal Variation 19.8 16.7 15.2
 Demographic Environment
Distribution of Population by age groups(1991)
Age groups Rural Urban

00-4 13 11

05-14 26 23

14-19 9 10

20-34 23 28

35-54 19 20

55+ 10 8

Total 100 100

 Education & Level of Demand
• Lower levels of Education in the rural sector
leads to little or low demand for a range of
products such as literary books, magazines,
notebooks, pens/pencils, drawing
instruments, calculators, digital diaries,
computers etc.
• But the scene is changing-Picture abhi baaki
hai
 Family Structure
• Rural households have grown by 26 million
during the last decade. Interestingly during the
same period, the average size of the rural
family has decreased due to movement of
more families from the joint to the nuclear
structure.
• The traditional households were joint families.
Now trend is towards nuclear families or
kitchen is separate.
 Family Structure
Particular 1991 2001
s

Rural Urban Total Rural Urban Total

Househol 112 40 152 138 54 192

ds(million)

Family 5.55 5.32 5.36 5.31

Size(numb
er)
 Rural Housing Pattern
House type 1981 1991 2001

Pucca 22 31 41

Semi Pucca 37 36 36

Kuccha 41 33 23

Total 100 100 100

 Occupational Pattern
Distribution of Households by occupation of the head, 1999-2000
Head’s Occupation Distribution of Households(%)
Urban Rural All
Housewife 0.84 1.01 0.96
Cultivator 3.45 40.86 29.99
Wage earner 20.93 35.28 31.12
Salary earner 40.72 11.28 19.84
Professional 3.59 0.73 1.56
Artisan 6.90 3.41 4.42
Petty Shopkeeper 16.05 4.97 8.19
Businessman 3.68 0.46 1.40
Others 3.85 1.98 2.52
Total 100 100 100
 Physical Environment-Settlements
Distribution of Towns & Villages

1991 2001

No. of Towns 3,697 5,161

No. of inhabited villages 580,779 593,154

Total No. of villages 634,321 638,588

 Physical Environment-Settlements
Inhabited Villages classified by population size, 1991 & 2001

Villages in Size group(1991) Villages in size group(2001)

Number % Number %

Less than 200 103,952 17.9 92,541 15.6

201-500 141,143 24.3 127,054 21.4

501-1000 144,998 25.0 144,817 24.4

1,001-2000 114,395 19.7 129,662 21.9

2001-5000 62,915 10.8 80,313 13.5

5000+ 13,376 2.3 18,758 3.2

Total 580,779 100 593,154 100

 Economic Environment
Distribution of Rural Households by Income

Annual Income(Rs.) Income Class 1989-90%( HHs) 1998-99(%HHs)

at 1998-99 prices
<=35,000 Low 67.3 47.9

35001-70000 Low middle 23.9 34.8

70001-105000 Middle 7.1 10.4

105001-140111 Upper middle 1.2 3.9

>140000 high 0.5 3.0

Total 100 100

 Economic Environment-Annual Per
capita Income, 1999-2000
Annual Per Capita Income (1999-2000) in Rs.

All India Highest Lowest

Urban 19,407 34,509(Chandigarh) 12,257(UP)

Rural 9,481 27,256(Chandigarh) 5,704(orissa)

Urban & Rural 12,128 33,408(Chandigarh) 7,123(orissa)

 Social & Cultural Environment
• Marketers use SCR’s (Socio-cultural regions) as yardstick for
market segmentation and targeting.
• Within each SCR there is a spectrum of rural and urban
communities on the continuum of socio-economic variables.
• Caste system in India- The Khap Panchayats
• Pachayats & Gram Sabha
• There is a 3 tier panchayati raj system in India- Village, Block
& district level
• The NGO Movement-NGO’s helped by NABARD,
CAPART,KVIC etc.
 Technological Environment
• Green Revolution 1967-1978- Demand for agricultural inputs
increased. Better irrigation facilities, use of fertilizers, pesticides,
high yield variety seeds coupled with application of implements
like tractors, power tillers, harvesters, diesel pump sets and
sprinklers resulted in the exponential growth of agricultural
production, changed the very content of Rural markets.
• White Revolution- 84.6 million tons in 2001-02
• Success Stories in states like Gujrat, Punjab, Haryana, Western UP
& Lately Andra Pradesh.
• Changing food habits have led to growth of dairy products like, ice
cream, chocolate, yogurt, butter, flavored milk, butter milk, lassi
etc.
 Innovative Partnership
• A partnership between SEWA, Gujrat based NGO & ITC is an example in
this regard. In this partnership, SEWA is providing direct access to a vast
network of farmers spanning 14 districts as a source of consolidated
quality produce at competitive prices, bypassing a long chain of
middlemen. In return SEWA farmers are getting an assured market with
better prices for their produce, thus escaping exploitation from
middlemen.
• In 2003, ITC purchased 250 tonnes of sesame seed from SEWA which
procured it from 1,450 small and marginal farmers. Farmers got a price of
Rs. 24/kg to Rs. 34/kg which had been only Rs. 18/kg in the last season.
• Due to this sucessful pilot programme ITC has set a target of over 1000
tons of sesame seed in the 2004 season, including new commodities such
as amla, cumin seed & groundnut.
 Latest News
• Punjab Farmers are being invited by various
Africa Countries like Ethiopia, Uganda for
farming( Indian Express dated 11-07-10 )
• UNDP HDR report says that poverty is
increasing in India and there are 42 crores
people who are poor. The definition of poor is
earning less than Rs. 50 per day.( Navbharat
Times- 13-07-10 )