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Intro to rural mktg environment n features of rural MDI.

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Presentation on theme: "Intro to rural mktg environment n features of rural MDI."— Presentation transcript:

1 Intro to rural mktg environment n features of rural economy @ MDI

2 Definition of rural Census definition of urban: (a)all places with a Municipality, Corporation or Cantonment or Notified Town Area (b)all other places which satisfy the following criteria: (i) a minimum population of 5,000. (ii) at least 75% of the male working population was non-agricultural. (iii) a density of population of at least 400 sq. Km. (i.e. 1000 per sq. Mile)

3 So what is ‘rural’? What is not urban is rural (as per census) Different industries have evolved their own definitions for focusing their interventions. Rural ‘character’ rather than population is important Concept of ‘Feeder town’!! 20K plus population- 2300 such towns. If you reach them you have reached 50-60 percent of rural consumers

4 Challenge to fix.. Four As of rural marketing: 1.Awareness, 2.Acceptablity, 3.Affordability, 4.Accessibility.

5 Six myths about rural consumers 1.Rural consumer does not buy brands. 2.Rural consumer buys cheap/inexpensive products. 3.Rural market of India is homogeneous. 4.Sarpanch- the village chief is the main influencer of purchase 5.Rural consumer is gullible and can be influenced to purchase by use of mass media 6.Rural people do not understand their well- being and it is impossible to make them see reason

6 Products sale in Indian Rural Market More than half of Hindustan Levers’ sale are in rural areas There are 42000 Haats Life Insurance Corporation (LIC) sells more than half of its policies in rural areas Mobile telephones in rural areas:???? Internet access in rural areas: Kisan Credit cards:??

7 Rural consumer Husband takes most buying decisions..women coming into their own in the last ten years or so. Community plays a role in one’s purchase decision Influencers: Sarpanch, Teacher, Youth n kids Motivation to purchase may be different from an urban consumer Perceives and processes ‘time’ differently. The choice of place and occasion of purchase and use is critical and so on…

8 Products and Price milieu Products Things that we take for granted in urban areas may not be present in rural areas Value drivers are different than for urban consumer Price: Price of trial, Price of regular use, price of purchase and price of ownership Success of LUPs (Low Unit packs)

9 Distribution Landscape 90 percent of consumer durables are purchased from 20K+ towns- compare products, seeks assurance and product knowledge from ‘perceived’ company representatives Such towns are 2300 in number For FMCG too the 20K+ feeder towns are significant- these supply to distributor who each supplies to 50 odd locations each with 2K population. There are 100K such villages and they account for 60 percent of rural consumption. Emergence of Large format retail store like ITC’s Chaupal Sagar, Hariyali Kisan Bazar and Godrej Adhar.

10 Rural communication Consumer is less exposed & evolved. We need to keep reviewing our assumptions, He feels inhibited. Need to draw him out. Build reassurance. Best done through face-to-face below the line media like haats, melas and mandis.

11 IT and Telecom in Indian villages PCO/telephony in villages has speeded up flow of information & eased retailer’s job. Experiments like ITC e-choupal, Gyandoot, Drishti, n-logue..etc. currently on 550K villages have village telephone Over 30000 villages have internet connectivity through wireline. Many more have wireless connectivity

12 Key determinants of rural demand Age profile, Education, Household pattern, Housing pattern (p15), Occupation pattern (page 16)- seasonal, unpredictable income, settlements (p16)

13 Urban Vs Rural Can we turn to Page 20 of the textbook

14 Village community Caste, Panchayat, Changes NGO movement Technology- in agriculture, in communication, Tele- everything!

15 Transition of rural economy 1.Farm to Non farm, 2.Land to off-land, 3.Food grain to non food grain

16 Land and Water Importance of land and water in rural India: Economic, security, power, prestige and social standing. Problem of land fragmentation- 62 percent are marginal landholdings average area is 0.39 hectare.

17 How they earn and spend? Rural Income and consumption (Page 37-39) Rural consumption pattern- moving away from food and groceries (Page 41-42)

18 Rural Connectivity Road connectivity- PMGSY Post offices- More than 150,000 total and 140,000 in rural- largest in the world Radio & Television- Reach, Ownership and use. Press and Print- very poor. Telecom n mobile Health- CHC, PHC, Sub-centre, ANM, VLHW Mandis- Agricultural markets- most area with pop> 10k have mandis and each mandi caters to 136K pop. Haats and Melas- Page 49-50 Shops

19 Banking and Insurance Banks- reach of commercial banks low. Coop banks are more but in bad shape.NABARD Moneylenders exist. Microfinance creating an impact. Schemes- Indira Awas, NREGP, SGSY –p 53 Insurance- What kinds? LIC and Govt companies rule.

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