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
Organisatio
n
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. 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 Marketing
To
Rural Urban
From
Rural
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 -2004 ( % share in
employment)
Agriculture 75 67
Transport &
Communication
2 8
Trade & Hotels 5 7
Construction 4 7
Manufacturing 7 8
Source: NSSO data, Mckinsey Global Institute Study, 2004-05
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( 40.86 %) and Wage
Earners( 35.28 %) 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 2000 + 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. Rural Income Trends
Annual Income
( at 1998-99
prices)
Income Class 1989-90( %
Households)
1998-99 ( %
Households)
<= 35,000 Low 67.3 47.9
35,001- 70,000 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
