1. Introduction to Rural Marketing
Session – I
Xavier Institute of Management, Bhubaneswar

2. Why should we do this course?
Agriculture’s share in GDP is going down, but, India still lives in her villages
Urban markets are crowded and saturated
The understanding of “rural” is diffused and sometimes confusing
Is “rural marketing” different from “urban marketing” ?

3. Session Coverage Rural India – Some definitional issues
Phases/ stages in rural marketing
Scope of rural marketing
How is rural India changing?
Schools of thought- Approaches to Rural Markets
Strategic Issues & Directions in rural marketing

4. Defining Rural India Organisation Definition Limitations
NSSO ( Census)
Population density < 400 / Sq Km
75 percent of the male working population is engaged in agriculture
No Municipal corporation / board
rural not defined
Planning Commission
Towns upto 15,000 population are considered rural
Town characteristics not defined

5. Cont’d LG Electronics All places other than the 7 metros
Only clarifies what are the cities
NABARD
All locations with a population upto 10, 000 considered “ rural”
Village & town characteristics not defined
Sahara
Commercial establishments located in areas servicing less than 1000 population
Population characteristics unknown
Source: The Rural Marketing Book- Text & Practice, Kashyap. P and Raut. S ( 2007)

6. Defining Rural Marketing
National Commission on Agriculture
NGOs
Corporate Rural Marketing Definition
Decisions to produce saleable farm commodities involving all the aspects of the market system or structure, both functional and institutional, based on technical & economic considerations and includes the pre & post harvest operations.
Marketing products produced in rural areas to urban areas
Marketing products produced in rural areas in rural markets
Function that manages all activities involved in assessing, stimulating and converting the purchasing power of rural consumers into effective demand for specific products and services to create satisfaction & a better standard of living for achieving organisational goals.

7. Phases in Rural Marketing
Sr. No
Time Frame
Key Events & Trends 1
Phase One( Pre 1960’s)
Marketing rural products in rural and urban areas
Agricultural inputs in rural areas
“Agricultural marketing”
Farming methods were primitive and mechanisation was low
Markets unorganised

8. Phase Three( 1990s to Present)
Cont’d 2
Phase Two ( 1960s to 1990s)
Green Revolution
Companies like Mahindra and Mahindra, Sri Ram Fertilisers and IFFCO emerge
Rural products were also marketed through agencies like KVIC 3
Phase Three( 1990s to Present)
Demand for consumables and durables rise
Companies find growth in urban markets stagnating or falling

9. Scope of Rural Marketing
Keenly debated topic
Definitions based on organisational/ institutional vision, mission & goals
Need for a comprehensive and modular understanding
Rural Marketing is a “ work in progress”
Multi – disciplinary approach is necessary for sharper understanding

10. Domain of Rural MarketingTo
Rural
Urban
Rural
From
Urban
Source: M. Jha, Rural Marketing- Some Conceptual Issues, EPW, 1988

11. Scope of Rural Marketing
Domain of Rural Marketing
Dimensions of the transaction
Participants
Products/ services
Modalities
Norms
Outcomes
Rural to Rural
Rural to Urban
Urban to Rural

12. Changes in Rural India Diverse change levers in rural India
The “ pull of the cities & towns” – migration and its side effects
Effect of government programmes
Civil society interventions
Natural & manmade disasters
Slow but sure change

13. Transitions In Rural India
Food Grain Crops
On land activities
Farm Activities
Non –food, cash crops
Livestock & fisheries
Manufacturing &
services

14. Rural Employment Patterns( Male)
Sector
Year – 1987 ( % share in employment)
Year ( % share in employment)
Agriculture 75 67
Transport & Communication 2 8
Trade & Hotels 5 7
Construction 4
Manufacturing
Source: NSSO data, Mckinsey Global Institute Study,

15. Rural India – Population Trends
1971
1981
1991
2001
Total Population (in million)
548.2
683.3
848.3
1026.9
Rural Population (in million)
524.0
628.8
741.6
As a proportion of total population
76.7
74.3
72.2
Decadal Variation
19.8
16.7
15.2
Source: Census 2001

16. Cont’d
The joint family system is being replaced by the nuclear family system
The occupational pattern shows a predominance of cultivators and wage earners
Cultivators( %) and Wage Earners( %) according to NCAER studies (2002)

17. Rural Settlement & Habitation Trends
Key findings from 2001 census
Population density 253/ sq kilometer and total number of villages is 638, 588
Villages having less than 500 population are falling
Villages having population most prosperous
What are the implications of these trends?

18. Cont’d Size of villages/ habitations are changing
Role & influence of towns is changing
Social interaction is a mix of rural and urban
Let’s look at some key trends in detail

19. Annual Income ( at 1998-99 prices)
Rural Income Trends
Annual Income ( at prices)
Income Class
( % Households)
( % Households)
<= 35,000
Low
67.3
47.9
35, ,000
Low Middle
23.9
34.8
70,001 – 1,05,000
Middle
7.1
10.4
1,05,001- 1,40,000
Upper Middle
1.2
3.9
> 1,40,000
High
0.5
3.0
Source: National Council for Applied Economic Research, 2000

20. Rural Marketing- Schools of Thought
Determinist School
Activist School
What is the right approach?
Dependent on level of market development, stage in the PLC and access to resources
Amul & ITC prominent examples
No water-tight compartmentalisation

21. Strategic Issues & Directions in Rural Marketing
Evolutionary Vs revolutionary changes in rural markets
Role of state & market forces
ICT based interventions
Partnership innovations
Developmental role of rural marketing
Scalability & replication of rural marketing programmes

22. Infrastructure Provision
ICT in Rural Markets
Category
Government
Private
NGO/ PPP
Infrastructure Provision
NIC
N- Logue
Simputer
Rural Services
Bhoomi( Karnataka)
Sewa
Agri Marketing
Agmarknet
E- Choupal
Ozhwar Sandhiyes
Agri extension
Universities
EID Parry

23. Close of Session
Thank You