MBA IIIrd Semester Marketing Specialization Major Prof Shikhar

Topics to be covered (index)

Definition, Scope of Rural Marketing
Concepts, Components of Rural Markets Classification of Rural Markets Rural Vs Urban Markets Rural Marketing Environment : Population, occupation

Pattern, income generation, location of rural population Expenditure pattern, literacy level, land distribution, land use pattern, irrigation Development programs, infrastructure facilities, rural credit institutions, rural retail outlets, print media in rural areas Rural areas requirement, problems in rural marketing, rural demand, rural market index.

Definition

According to the National Commission on Agriculture

Rural Marketing is a process which starts with a decision to produce a saleable farm commodity and it involves all the aspects of market structure or system, both functional and institutional, based on technical and economic considerations, and includes pre and post harvest operations , assembling, grading, storage, transportation and distribution. According to Thomsen the study of Rural Marketing comprises of all the operations, and the agencies conducting them, involved in the movement of farm produced food, raw materials and their derivatives, such as textiles, from the farms to the final consumers, and the effects of such operations on producers, middlemen and consumers.

 Rural marketing has also been defined as the process

of developing, pricing, promoting, distributing ruralspecific goods and services leading to exchange between urban and rural markets, which satisfies consumer demand and also achieves organisational objectives.

Urban
1. 2. Agricultural products (Food grains etc.) Oil seeds, Cotton, Tobacco, Sugar, Cane etc. Handicrafts and Rural Industry Products 1. 2.

Rural
Small Agricultural Tools. Household earthen items, wooden items etc.

Rural

3.

1.

Urban

Not concerned

2.

3.

Consumables and consumer durables. Agricultural inputs like seeds, fertilizers, pesticides, tractors etc. Services like Health, education, Market information etc.

Census Record
Rural Population in India : 64.8% Rural nail polish market : Rs 270 million against Rs 81

million. Rural market for lipstick : Rs 250 million against Rs 131 million. Rural market for face cream : 1099 tonnes against 426 tonnes. Shampoo market ; 2257 tonnes against 718 tonnes. Mosquito Repellant Market : Rs 173 million against Rs 79 million.

Scope of Rural Marketing

The difference in rural and urban sector is due to vast difference in:

Income level Expenditure capacity Taste and preferences Educational level Social, Cultural and environmental Following Service areas have great potential in rural markets: 1. Agricultural consultancy: Rural customers require proper consultancy services about the best methods, timings and seasons, technology, tools, prices and best markets for selling their farming products.
2. Banking, microfinance and loan facilities:

The rural market has huge potential for banking services for providing following facilities at affordable prices: Agricultural loans Educational loans Housing loans Savings accounts and safe deposits Automobile loans Personal loans

3. Healthcare: The availability and location of these services is of great concern as most of the areas either do not have any or many rural and remote areas needs to be dependent on very few and distantly located Hospitals 4. Telecomm services: The governments policies for reduced tariffs, call rates, lesser mobile handset prices and private participation involvement has helped in increasing the level of competition, continuous improvement in technology and thus has resulted in the growth of the rural telecomm market 5. Automobiles Services: There has been a huge increase in the number of two wheeler, four wheeler and Agricultural tools and vehicles in past few decades because of reduction in prices and government support to the rural population. This has given rise to a new business for providing maintenance and repair services to rural consumers. 6. T.V. Channels Services: Due to the increased awareness, arenas of interest, leisure requirements, and number of entertainment options like televisions and computers due to reduced & affordable prices, the demand for entertainment services like T.V. entertainment channels have increased. Many companies have already gained profits by targeting rural markets which include Airtel (DISH TV), Reliance (BIG TV), and Tata (SKY). 7. Travel and reservation Services: The travel and reservation booking and organizing services for booking train, busses, taxies and tour consultancy has also been observed to create a huge demand in last few decades as more and more rural population need to mobilize for business and personal reasons. 8. Low Cost Hotels: Due to increased mobilization because of business and personal needs, there is also increased demand for hotel and lodging services to the travellers.

 9. Event Managements: The rural population are majorly involved in celebrating and organizing festivals, which require lighting arrangements, venue decoration, food, lodging, transportation, catering and event planning etc. for: i. Family gatherings, Marriages, engagements, birthday parties,etc. ii. Festivals like Diwali, Onam,Christmas, lohri, Eid, Dushera, Kannada Rajamahotsava, Navratri, Garba and Dandia mahotsava etc. 10. Beauty Parlours: As there has been major improvement in the quality of life style and increased awareness among the rural customers (especially females), there has been great demand observed for beauty products and services. This market is still dominated by unorganized and local players who lack adequate tools, methods, skills, process, technology and beauty products to meet the demand of rural population. 11. Affordable Movie theatres: Till now the entertainment service providers for movie theatres at affordable prices in rural markets are dominated by local and unorganized players who lack proper facilities and infrastructure as well as quality delivered. 12. Educational and Career consultancy: The rural markets lack adequate and quality educational services which are majorly catered by government agencies and bodies. But due to lack of proper infrastructure, expertise, knowledge, talent, funds and participation of the service provider, this sector is unable to meet the desired level of service expectation of the rural customer for career building.

Emerging Areas in Rural Marketing

Agri-Business Management
NGO Management Natural resource Management

Rural Infrastructure Management

Micro-finance Corporate Social Responsibility

Distinction between Rural and Urban Markets

Urban Market 1. City has a large population size growing at a fast growth rate due to immigration from rural areas for education and employment. The population density is high. Towns are smaller urban units. 2. The city settlement is compact though spread over a larger area. Land use is residential, commercial , industrial roads and streets, institutional and community facilities etc. Rural Market 1. Village is a human settlement with a small administrative unit. It comprises few hundred households and the population growth due to immigration is insignificant. Migration from village to city/town is to get better education and employment. 2. Village has land for human settlement and for cultivation. The settlements are predominantly clustered but in some areas households settle on respective cultivable land holdings.

3. Structure of houses is permanent and often rises to more than one storey. Housing on rental is highly prevalent.

3. Houses are largely semi-pucca or kachha. They are owner occupied.

4. Primary resource base is production and distribution of industrial goods and services.

4. Land is the primary resource for livelihoods. Other forms of resources are water bodies, forests , and mountains. Cows, buffaloes and poultry are kept for household need for milk, eggs and meat.

5. Occupations are diverse ranging from professionals, skilled, semi-skilled to unskilled workers. Higher education and training is required to build skills.

5. Predominant occupations are cultivation and agricultural labour.

6. Free from traditional outlook. More scientific approach to the issues.

6. Rigid, conservative in approach and custom bound. Society is guided by age old customs. No scientific outlook. 7. Media reach is very low. Marketers prefer Radio, loudspeaker on rickshaws to reach to the target customers.

7. Media reach is very high. Marketers generally prefer Televisions, internet and print media to be reached to the target customers.

Nature of the Rural Market

Large

and Scattered Market Consists of approximately 75 crore rural consumers who live in approximately 638365 villages spread over 32 lakh square km area. Covering such a large and widely scattered geographical market, raises the inventory and transportation costs. Heterogeneous Market As many as 20000 ethnic groups are present in rural India. There are 24 languages and 1624 dialects and the dialect varies every 100 km, making it extremely difficult to develop a uniform promotional message. Divisions based on caste, community and other factors also continue to exist.

 Income from Agriculture Nearly 55% of rural

income comes from the agriculture sector, hence rural prosperity is tied with agricultural prosperity to a great extent. Standard of Living Over 70% of the rural population is employed in small-scale agricultural and related occupations. This dependence on agriculture and natural factors has led to an acute seasonality and high chance element in income receipts in rural areas. Infrastructural Facilities Roads, warehouses, communication system and financial facilities are inadequate in rural areas. Roads do not connect nearly 50% villages in the country. Over 50% rural households have access to electricity as a main source of lighting but 46% still use kerosene for lighting.

Classification of Rural Market

Rural Economy

Farm Sector (Agri & Allied)

Non-farm sector (Formal & Informal sector)

Agriculture

Rural Industries Agro Processing (Sugarcane, Oilseed etc.) Manufacturing (Handloom, Handicrafts etc.) Mining, Construction

Rural Services Retailing & Trading Community & Social Service

Animal Husbandry

Horticulture

Communication

Forestry, Fishing

Classification of Economic Activity

Primary Sector Agriculture and allied services such

as livestock, fishing and forestry. Secondary sector Mining and manufacturing activities. Tertiary Sector Services such as transport, communication, trade, financial services and community services.

Transition
1. Food grain crops 2. On-land activities 3. Farm activities 1. Non-food grain crops, cash crops 2. Off-land activities like livestock and fisheries 3. Non-farm activities, includes manufacturing and services.

Mandis
Agricultural markets set up by state government to

procure agricultural products directly from farmers. Located in high production centres of different crops, these markets may be categorized as grain mandis, soya mandis, cotton mandis. Most agricultural areas with a Population of more than 10000 have mandis and caters to 136000 population. Displays the latest commodity prices. The price quote from the seller may vary depending on factors such as quantity, packaging, delivery terms, payment method etc.

Road Connectivity
Pradhan Mantri Gram Sadak Yojana It was launched

in December 2000 with the objective of providing connectivity through good all-weather roads to all unconnected habitations with a population of more than 500 persons, with an anticipated investment of Rs 60000 crore.

Mobile Postman Scheme

The scheme is designed to make a telephone available

at the doorstep of every rural household. Under the scheme, a mobile telephone will be provided to a postman. When the postman goes to a house to deliver a letter, he will carry a telephone with him. Since a postman reaches practically every house, the scheme will enable the telephone services to be made available practically to all citizens in his area.

Pradhan Mantri Gramodaya Yojana

This Yojana for the primary health sector is an

initiative to strengthen and revitalize the primary health infrastructure for the improved provisioning of basic minimum services in rural areas so as to improve the quality of life. The Planning Commission of India has allocated additional Central Assistance of Rs 2800 crore for six sectors, i.e. rural electrification, primary health, primary education, shelter, drinking water and nutrition.

Rural Electrification
Indian planners visualized the necessity of Electrical

Energy and included it in the Five Year Plans. A rural electrification programme was devised for increasing the infrastructural input for agricultural production programs. To implement the program effectively, the Rural Electric Corporation (REC) was set up. REC has been a catalyst for rural development. The Corporation has sanctioned financial assistance of Rs. 28,588 crore under 37335 rural electrification projects so far. About 3.05 lakh villages have been electrified through REC funded schemes. Over 78 lakh pumpsets stand energised with the corporations assistance.

Public Distribution System

Distribution of essential commodities to a large

number of people through a network of FPS (Fair Price Shops) on a regular basis (often referred to as ration shops). The commodities distributed are wheat, rice, sugar, edible oil and kerosene.

Haats
Haats (Periodic markets) play an important role in the

rural economy as well as in the social life of villagers. First point contact for villagers with the market. Means of distributing local products and exchanging agricultural surplus. Opportunity for buying daily necessities as well as farm supplies and equipment. A place for political, social and cultural contact.

Melas
Serve as the meeting ground for people from different

communities and religious groups, for livelihood and agricultural commodities, for crafts and craftsmen and for displaying various skills. Melas are gatherings of people away from their residences for entertainment and for the sale and purchase of goods and services at a particular time. Melas may be classified on the following basis: o Religious, cultural or commercial (commodity, cattle, exhibition) o Local, regional and national o One day, short duration or long duration.

Regional Rural Banks

Set up under an Act of Parliament in 1976 with the

objective of developing the rural economy through the promotion of agriculture, trade and commerce and industry and by extending credit to small and marginal farmers. Authorized capital of RRB is Rs. 5 crore.

Cooperative Banks
There is a three-tier pyramidal cooperative credit structure in the rural cooperative banking sector, with the State cooperative bank (SCB) at the state level District Central Cooperative Bank at the district level Primary Agricultural Cooperative Society at the village level, essentially to ensure flows of short-term credit for production purposes.

NABARD
NABARD

has been the primary government institution dedicated to developing systems and delivering institutional finance in rural for both the farm sector and the non-farm sector. It refinances assistance for financing farm mechanization, i.e. purchase of tractors, power tillers and also the accessories. It also provides agricultural credit through the Kisan Credit Card. This scheme aims at the provision of adequate and timely support from the banking system to the farmers for their cultivation needs, including the purchase of inputs in a flexible and cost-effective manner.

Innovations in the rural credit domains by NABARD

Self-help groups and micro finance Farmers clubs Rural Infrastructure Development Fund Watershed Development Tribal Development Women and Development District Rural Industries Project Rural Entrepreneurship Development Programme Rural marketing Revival of the Short term Rural Co-operative Structure Co-financing

DRDA (District Rural Development Agency)

It has been the principal organ over the years at the

district level for overseeing the implementation of various anti-poverty programs.

Employment Opportunities
With the objective of promoting self-employment

among the educated unemployed rural youth, government programs such as the Pradhan Mantri Rojgar yojana and the Integrated Rural Development Project, were developed. These programs aim to provide skill-based training and link access to bank credit(subsidized).

Sampoorna Grameen Rojgar Yojana

The Employment Assurance Scheme and the Jawahar

Gram Samridhi Yojana are two schemes under the programme. The EAS is meant to create additional employment opportunities during periods of acute shortage of wage employment through manual work for the rural poor living below the poverty line. The JGSY aims at the creation of need-based rural infrastructure at the village level.

Rural Housing
The Central government announced a National

Housing and Habitat Policy in 1998 aiming to provide Housing for All by facilitating the construction of 20 lakh additional housing units annually.

A Caselet
The life of a farmer, K.T. Srinivasa, has changed recently,

though the two dirt roads near his home about 40 miles from Indias high-tech capital of Bengaluru, his house without toilet facility, farm without tractor support and the way in which his family threshes rice by crushing it with a massive stone roller, have remained the same. How?
The change has been brought about by a cell phone. The

little, attractive gadget is helping him make decisions related to farming. When to plant and harvest, at what price to sell the produce and how and when to transport and sell-all these intriguing questions are now resolved intelligently. Idea Cellular, Mr. Srinivasas service provider, has effectively utilized its first mover advantages.

Contd.
Close to half the 800 people in the village, including Mr.

Srinivasa, have become its subscribers. Most of the villagers make voice calls as they dont know how to text message or download e-mails. On an average, rural Indians use their phones around 8.5 hours a month, up by 10 percent over the past year. The villagers are very amused with their new found connectivity with the world. They are now aware of the people and events affecting the rest of India and the world. They can answer quiz questions such as who is Americas President and why there is an economic slowdown. They have understood that recession is hurting their hi-tech neighbours in Bengaluru much more and that the Indian economy is able to absorb the shocks much better than other developed nations. After the global crises, says Mr. Srinivasa, the farmer, I think we are in better shape. This is an example of one of the many changes in the rural environment that we have had a profound impact on rural lives.

Study of Rural environment

Consumer decisions and actions can be properly

comprehend only when the force field in which they are operating is understood. Study of environmental factors is important for marketers to realize the developments and trends rather than know the static picture of the environment. Todays decisions are not only for current problems but also for future opportunities, performance nad results.

 Social Environment Population and households, education

entertainment and arts. Technological Environment Power and energy sources, postal services, telecommunications, information and communication technology, appropriate technology and innovations. Economic environment Occupations, land distribution, land use pattern, irrigation, asset holding, income, consumption, savings, disposable incomes, rural lifestyles and sales potential, rural credit institutions, rural retail outlets, micro financing and rural industry. Political Environment Development initiatives and administrative bodies.

Rural Environment and literacy levels, social groups, festivals and melas,

Marketing decisions and environment

1. Demand Estimation 2. Segmentation and target marketing

3. Product decision

4. Price decision 5. Place decision 6. Promotion decision

1. Demographics (size and distribution of population by age, gender, occupation, education, geographic areas, income, savings and investment. 2. Demographics, lifestyle indicators, purchase and usage of inventories. 3. Income, quality consciousness, brand awareness, preference of consumers and competition. 4. Disposable incomes, propensity to consume, competition, demand etc. 5. Availability of trade channels, physical distribution facilities, competition and location. 6. Media availability and costs, media habits of target customers, competition etc.

Population
Countrys population : 1027 million Share of rural population : 68 percent No. of households : 205.9 million (30% are in urban areas and

70% in rural areas.) Average family size in the country 5 members Rural Family size 5.08 Low income states: Assam, Bihar, Madhya Pradesh, Meghalaya, Orissa, Rajasthan, Uttar Pradesh, Chattisgarh, Uttaranchal and Jharkhand. Middle Income States : Andhra Pradesh, Himachal Pradesh, Karnataka, Kerala, Tamil Nadu and West Bengal High Income States : Goa, Gujarat, Haryana, Maharashtra, Punjab, Pondicherry, Chandigarh and Delhi

Distribution of Population

factors

rural

urban

All India

Population (mn)

732

295

1,027

households

144.5

61.4

205.9

household size ( number of members ) Number of earning members

5.08

4.81

5.00

1.43

1.34

1.40

factors

Distribution of population across states

LI states 493 91.7 5.38 9749 MI states 314 69.6 4.51 14543 HI states 220 44.3 4.97 18172 1027 205.6 5 13018

All India states

Estimated population Estimated households Average household size Per capita income

Share of rural population

80.7

68.2

54.5

71.2

Gender-wise Ratio
Sex Ratio for India is 933 females per 1000 males.
Women and men are almost in equal number in many of

the states. The male population is larger in Union Territories like Dadra and Nagar Haveli, Chandigarh, Andaman & Nicobar Islands, Delhi and many of the Northern States such as Bihar, Rajasthan, Gujarat, Haryana, Madhya Pradesh, Maharashtra, Nagaland and Punjab. In almost all the southern states, male and female population are almost in equal number except Kerala, where female population dominates the male population.

Demographic Environment
Though the rural proportion in population has come down

moderately over the years, there has been a considerable increase in absolute number of people living in rural areas. With the increased working population, the purchasing power of the rural population has gone up from 40% in 1991 to 45% in 2011. For marketers, the largest age group shapes the marketing environment. In the case of rural, it is school going children and young adults who define the consumption patterns of consumables and lifestyle products. The potential for marketers in the rural sector can be assessed by the fact that 48% of the rural population is below the age of 20.

Age groups 0-4 5-14 15-19 20-34 35-54 55+

Distribution of Population by Age groups

Rural 11.5 25.7 9.5 23.1 19.7 10.5 Urban 8.9 21.8 10.6 26.8 22.5 9.4

Education Level Below Primary

Education in India
Rural 31.7 29.5 16.9 18.4 3.5

Urban 18 22.9 16.3 29.6 13.2

Primary but below middle Middle but below Matriculation Matriculation but below Graduate Graduate and above

 Lower levels of education in the rural sector lead to little

Education and the level of demand or low demand for a range of products such as literary

books, magazines, notebooks, pens, pencils, drawing instruments, calculators, computers etc. But change is taking place because literacy rate in the rural sector has risen 23% over the last 20 years. This has contributed significantly to an improvement in the socio-economic status of the people. With this growth, the demand for educational products has increased.

Education and the level of demand

Rural Literacy 1991 2001 2011

% of literates

45

59

69

Distribution of households by Occupation of the Head

Heads Occupation Housewife Cultivator Wage Earner Salary Earner Professional Artisan Petty Shopkeeper Businessman Others Urban 0.84 3.45 20.93 40.72 3.59 6.90 16.05 3.68 3.85 Rural 1.01 40.86 35.28 11.28 0.73 3.41 4.97 0.46 1.98 All 0.96 29.99 31.12 19.84 1.56 4.42 8.19 1.4 2.52

Occupation Pattern
The occupational pattern of people in a segment naturally

affects their buying behavior. A daily wage earner has to account for variations in income, whereas a salary earner brings home an assured fixed amount and therefore can plan expenses in a better way. Three-fourths of rural household heads are either cultivators or wage earners, whereas three-fourths of urban household heads are salary earners, petty shopkeepers and wage earners. The cultivators disposable income is highly seasonal, with more disposable income available immediately after the harvesting season. This is therefore the time when he is more inclined to make purchases, especially of durables and highinvolvement products.

Occupation Pattern
Basic occupations that exist and help directly agro-related works are: Farm Labourer The farm labourer helps a village through his agricultural activity directly. The labourer works by tilling, weeding out, sowing, reaping, cleaning the produce, guarding the field at harvest time and many other odd jobs related to agriculture. Priest He reads horoscopes, arranges poojas, tells villagers regarding auspicious dates for marriages, house warming, sowing in addition to his duties in the temple. Blacksmith The agricultural implements are made and repaired by the village blacksmith. Carpenter

Contd.
Washerman Barber Shoe maker Potter

Milk man

Household Pattern (Family Rural households have grown by 26 million during the Structure) last decade. 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 in rural were joint families, in which a group of people lived under one roof, ate food from common chulha, held income and property in common and were related to each other by bonds of kinship. But with rise in population and resulting pressure on land and several other socio-economic factors, joint families are now breaking apart and moving towards nuclear family culture.

 With the increasing number of individualised joint

(families stay in the same house, but use separate kitchens) and nuclear families, the range and number of branded products coming into the family can increase.
Size of Household 1-2 members 3-4 members 5-6 members Rural 11.1 30.4 34.0 Urban 10.7 38.8 32.8

7 and above

24.5

17.7

Household size

Rural Housing Pattern

The types of houses in rural areas are a very strong

indicator of economic growth. Over the last twenty years, the trend in house types has changed dramatically from less permanent semipucca or kuccha to more permanent pucca types. Today, 40 percent of rural houses, i.e. 50 million are pucca, which is growing at a rate of almost 5% annually. Statistics indicate that the owners of such houses possess sufficient disposable income.

House Type

1981

1991

2001

Pucca

22

31

41

Semi-Pucca

37

36

36

Kuccha

41

33

23

Estimates of Incomes
Urban 1.34 Rural 1.43 51,922 No. of earners per household Income 95,827 (Rs/annum/househ old) Poverty Ratio 18.7

All India 1.4 65041

21.7

20.8

Per capita income

Population below poverty line

19,935
55.2

10,227
159.0

13018
214.2

Rural Income Dispersal

Consumer Class Annual Income 1995-96 2006-07 Very Rich Above Rs. 215000 0.3 0.9

Consuming Class

Rs. 45001-2,15000

13.5

25.0

Climbers

Rs. 22001 45000

31.6

49.0

Aspirants

Rs. 16001 22000

31.2

14.0

Destitutes

Rs. 16000 & below

23.4

11.1

Income Generation
By sale of agricultural produce By sale of animal produce By service Rendered by teacher, doctor or nurse.

By interest on investment
Government subsidies and grants By mortgage of properties and gold

By charities and donations

By labour and wages Labourers do jobs in construction

of roads, bridges and buildings.

 Income of Rural Sector is rising at a considerable rate.

Rural Income Pattern Percentage of Very Rich, Consuming Class, and Climbers

are rising whereas Aspirants and Destitutes are declining. The structure of Rural Income depicts the following trends: 1. On the income ladder, the top two slots are occupied by the non-farm sector, whereas the farmer is at the third place and wage earner is at the bottom. 2. The highest per capita income in rural comes from the formal segment of the non-farm sector at Rs. 19514 which is higher than the urban per capita income at Rs. 19407.

Rural Income Rs 7006 billion

Agriculture 53%

Non-agriculture 47%

Self employed 43%

Wage earner 10%

Formal 31%

Informal 16%

Rural population 742 million Proportion of rural employed 312 million

Agriculture 73%

Nonagriculture 27%

Self employed 40%

Wage earner 33%

Formal 15%

Informal 12%

Per Capita (Per Annum) Incomes Rural : Rs 9481

Agriculture Rs 6855

Non-agriculture Rs 16464

Self Employed Rs 10,150

Wage Earner Rs2860

Formal Rs 19514

Informal Rs 12595

 Overall, the rural per person spending of Rs. 5830 per

annum is a little above half of the urban spending of Rs. 10,260. The gap between rural and urban spending widens as we move from poor households to rich households. But as the total number of the rural population is three times larger than the urban, the overall spending in rural is much higher than in urban. The rural rich and middle classes present a great opportunity for marketers to sell their products.

Changing Consumption Patterns

Monthly per capita value of consumption 289 Percentage Food 59

Non-food

197

41

Monthly per capita consumption expenditure on non food items

Rural Amount
Pan+Tobacco 13.97

Percentage
7

Urban Amount
16.23

Percentage
4

Fuel and Light

Clothing & Bedding Footwear Education Medical Toiletries Sundry Consumer Services Conveyance Rentals

36.56
33.27 5.37 9.37 29.58 12.96 10 14.51 14.28 2.96

18
17 3 5 15 6 5 8 8 1

66.25
51.71 10.05 37.05 43.28 29.09 17.98 40.43 47.19 44.02

15
12 2 8 10 6 4 9 11 10

Durables
Entertainment

12.72
2.02

6
1

30.85
9.88

7
2

Rural Spending
Analysing the consumption patterns of non-food

items of rural consumers, we find that the major share of spending goes to clothing, medical services and fuel needs, whereas urban consumers spend much more on rentals, education and conveyance.

Khabar Lahariya A weekly Newspaper in Bundeli

A group of women from various sections of the society

from the interiors of Chitrakoot and Banda in UttarPradesh were in the news for winning the prestigious Chameli Devi Jain Award for Outstanding Women Media Person. The recognition was given to them for running a weekly newspaper in Bundeli (the local dialect of Bundelkhand) that provided infotainment for the people in the nearby villages. It was in the year 2008 that the Khabar Lahariya group registered themselves as an independent organization, Pahal drawing inspiration from Nirantar, an acclaimed centre for gender and education.

Contd.
The eight page newsletter focuses on issues of importance

to the masses, youth and women. Accordingly, it has sections presenting current affairs, national and international news, cases of violence against women, problems of Dalits, school education, marriage, health care and more. The teamwork of the women is impressive. They divide the research and writing works among themselves and work to contribute to the different items of the paper. They go all the way to the nearest city of Allahabad for printing. The women are tech-savvy too. The offices of KL have computers with broadband connections.

Three Major Revolutions in the Rural Technological Environment

Green Revolution in the Agricultural Sector Period from 1967 to 1978 heralded a technological thrust into rural areas aimed at improving food grain production in the country and hence achieving food self-sufficiency. Green Revolution generated some notable economic results: 1. Crop areas under high-yield varieties required fertilizers, pesticides, fungicides and other inputs. Farm equipments like tractors with farm implements, diesel pump sets etc. introduced mechanization into the farm sector for the first time. 2. The increase in farm production also introduced mechanized processing, spurring growth of the local manufacturing sector. The modernization and mechanization of the farm sector boosted farm productivity, triggered industrial growth, created jobs and initiated a change in the quality of life in villages.

White Revolution
Initiated by the government with the aim of achieving

self-sufficiency in the area of milk production. Cornerstone of the government dairy development policy was producing milk in rural areas through producer cooperatives and moving processed milk to urban-demand centres. Gave a boost to dairy development and initiated the process of establishing the much-needed linkages between rural producers and urban consumers. Formation of producers cooperatives has played a significant role in institutionalizing milk production and processing.

Contd.
Socio-economic and demographic factors such as

urbanization and changing food habits and lifestyles have also reinforced the growth in demand for dairy products (ice creams, chocolate, yoghurt, butter, flavoured milk etc.). Milk production has increased from 17 million tonnes in 1950-51 to 84.6 million tonnes in 2001-02. Most successful story in dairy development has been in Gujarat, Punjab, Haryana, Uttar Pradesh and Andhra pradesh.

The NGO Movement

Important in providing assistance at the grassroots level

assimilation of technological extensions in rural areas. Stepped in to create awareness, build skills, introduce technology and develop capacities for maintenance and sustainability. Government programmes implemented through NABARD, CAPART, KVIC and others are given shape by these organizations. Introduction of low-cost spindles, weaving machinery, technology for leather processing, food processing, natural resources management etc have been some contributions in bringing about change at the grassroots. NGOs have been also active in providing basic health and child care services, running homes for destitutes and the distressed and providing education and training opportunities.

Land Distribution
India has a large geographical land area of 3.288 million

square kms. Land Classification based on Use: Forest Land : Area covered by forest Uncultivable Land : The land which includes land with tree crops, cultivable waste or permanent pastures are not fit for cultivation. Land not available for Cultivation : Land area used for human dwelling, industry areas, transportation roads, military establishment roads, railways etc. Cultivable Land : Consists of area under cultivation or sown. This includes irrigated land.

Classification of Land based on Mountains : High lands above 7000 ft in altitude. This Topography

forms 10.7 percent in India. Hills : Weathered high lands upto an altitude of 7000 ft. They form 18.6 percent in India. Plateaus : Flat land with an elevation between 1000 ft and 3000ft. They constitute 27.7 percent in India. Plains : Flat land upto an elevation of 1000 ft. This forms 43 percent in India.

Land Use Pattern

Land Management is gaining importance because of

increasing demands on land and growth of the population. Forest area and cultivable land percentages have increased. Forest has increased from a level of 14% to 22%. Area sown has increased from 20% to 43%. Area not available for cultivation has reduced and Change of mindset of common man towards ecology, increasing greenery and that every square meter of land be used gainfully. Multi-storeyed buildings form part of the citys landscape.

Increase of Irrigated Land in India

In last four decades, the irrigated area has doubled. For centuries, Indian agriculture has depended on rains. The

special programmes launched by Government of India to increase the irrigation facilities along length and breadth of India have yielded results and reduced dependence on rain. There is considerable difference in irrigation patterns from state to state in India. States like Punjab and Haryana, where there are enough natural water resources have a good percentage of gross irrigated area to total crop area. If a farmer owns many patches scattered at distances, it makes the entire efforts in agriculture less remunerative. Mechanical farming or agricultural methods cannot be adopted for small land holdings.

Net Area Gross Net area Gross Area Gross Cropped Area and Irrigated Area
Sown Cropped Area Irrigated Irrigated

Irrigated as % of Cropped Area

1999-2000

142.9

185.7

48

63.2

34.0

2000-2001

142.2

186.6

53.4

71.4

38.3

2001-2002

142.8

189.5

55.1

73.3

38.7

2002-2003

142

190.8

54.6

76.4

39.7

Rural infrastructure
Road Connectivity Good road connectivity, particularly in rural areas, between sub-divisional towns and district headquarters is often the primary means of supplementing public efforts directed at providing basic health and educational services, as well as infrastructural support for production and trade and commerce at the local village level. It is particularly relevant in the Indian context where over 70% of the population continues to live in rural areas and where over 50% of villages with population of less than 1000 have yet to be connected by roads.

 Among the major states, Kerala has the highest road

length per hundred square kilometres (375 km in 1997).

Population less Population than 1000 between 1000 & 1500 1991-92 36.52% 72.32% Population more than 1500 89.82%

1997-98

37.45%

76.54%

91.72%

2005-06

49.18%

74.58%

78.04%

Road connectivity at the village level

Post Offices
India with its 1,55,279 post offices as on 31 March 2002

(138756 post offices are in rural areas) has a postal network that is the largest in the world. On an average, a post office serves an area of 21.17 km and a population of 6614 persons. For providing postal services, the whole country has been divided into 22 postal circles. Each circle is further divided into regions. A postmaster general who is the postal manager of the area heads each region. Post offices in the country are categorized as head, sub and branch post offices.

Radio
From six radio stations at the time of Independence, All

India Radio today has 208 radio stations. All Stations of All India Radio broadcast farm programmes and home programmes directed at rural audience. The thrust of the broadcast is on increasing production of agriproducts and various programmes adopted by the Government of India.

 DD-1 operates through a network of 1042 terrestrial

Television transmitters of varying powers reaching over 87% of the

population. Over the years, the viewership of Doordarshan as increased enormously, reaching 7.5 crore homes. Community television sets have been introduced under various schemes operated by Central and State Government.

 By 2004, over 80% of all villages had been connected

Telecom Services through 5.4 lakh Village Public Telephones. Similarly,

1.42 crore telephone connections had been given in rural areas. People who are unable to afford a telephone facility of their own can now have access to VPTs in rural areas in addition to Public Call Offices.

Rural Health Services

Sub-centres : The health Sub-Centre is the contact point

between the primary health care system and the community. The Staff at health Sub-Centres are assigned tasks related to interpersonal communication in order to bring about behavioral change in relation to maternal and child health, family welfare, nutrition, immunization, control of diarrhoea and control of communicable diseases. Primary health Centres : First contact point between the village community and a medical officer. These are established and maintained by the State Government under the Minimum Needs / Basic Minimum Services Programme. Manned by a medical officer and is supported by 14 paramedical and other staff. Activities include curative, preventive and promotive health care as well as family welfare services.

Contd.
Community Health Centres : Established and

maintained by the State Governments under the MNP/BMS programme. Four medical specialists, i.e. surgeon, physician, gynaecologist and paediatrician supported by 21 paramediacal and other staff. 30 indoor beds, with X-ray, labour room, operation theatre and laboratory facilities.

Print Media
The total number of newspapers and periodicals being

published in the year 2000 was 49,145. Newspapers were published in as many as 101 languages and dialects during 2000. The reach of newspapers in rural areas are very poor, only 15% of the copies of newspapers reach rural areas. Newspapers normally reach the feeder market or small towns and are read in shops or road side hotels. People sometimes buy newspapers in small towns and take back home, where it is read at home or at common gathering or social gathering.

Market Research is done by market research companies and experts in the field to provide data about consumption patterns, purchase preferences and rural market potential. Hindustan Thompson Associates Limited, a market research and advertising company in India studied the rural areas in India in year 1972. HTAL made its report in 1972 and developed overall indicators of rural market potential in India. These are known as Thompson Rural Market Index. HTAL compiled data of 335 districts based on 26 measurable scale variables. HTAL collated data regarding agricultural details of output in each district.

Indicators considered in developing TRMI are: Agricultural Laborers Gross Cropped Area Gross Irrigated Area Area under non food crops Pump sets Fertilizer consumption Tractors Rural Credit Rural Deposits Villages electrified

Contd.

 TRMI has become a useful guide in segmenting and

targeting rural markets. Based on TRMI data, the districts have been classified A,B,C,D and E classes. The classification is given:
Class of Markets A B C D E Index Range 60.00-100.00 40.00-59.99 30.00-39.99 20.00-29.99 Below 20 No. of districts 22 39 54 86 154 Percentage of Markets 17.80 20.5 20.4 23.00 18.30

 The TRMI data needs regular updating due to changes

Contd.

that are continuously taking place in rural India. This is particularly true due to globalisation and changes in government policies and WTO policy issues. TRMI give a comparative analysis for qualitative decision making in rural marketing areas.

 Unevenly Scattered Population The spread of population in about

4000 cities and towns is to the extent of 25% and the balance is in six lakh villages. Only 6300 villages have a population of more than 500. This makes the marketers go through a lot of difficulty to reach out to the rural masses effectively. Underdeveloped People and Underdeveloped Market Since 1947 a number of initiatives have been taken to improve the quality of life in rural areas. In 1947 the rank of India in terms of poverty, unemployment and level of development was 86 in the world but in 1991 it reached the level of 123. The situation has further worsened and the 1996 report on Human Development Index shows that India ranks 136th in 156 countries of the world. Lack of proper Physical Communication Facilities In India only 50% of the road length is provided with a proper surface. About 36% of the villages in the country do not have road connection and over 65% of our villages are without all-weather road. Thus the road grid makes distribution cost higher , as the road grid as a whole suffers from serious capacity constraints, delays, congestions, fuel wastage and higher vehicle operating costs, marketers face a lot of problems in distribution of products.

Problems in Rural marketing

Contd.
Low per capita incomes Share of rural income accounted for 55.6

percent with 74.6 percent of countrys population, thus reducing the demand of expensive products. Many Languages and Dialects In India, the number of languages and dialects vary widely from state to state , region to region. The number of languages spoken are only 16, the total number of dialects is estimated to be around 850. The messages to be delivered in the local languages and dialects is a big problem to the marketers. Low level of literacy This leads to the problem of communication for promotion purposes. In this case, print medium becomes less effective and the dependence on audio visual messages is more relevant in rural areas. Logistics Problems The rural markets have few selling points like retailers, co-operatives, haats and melas. Lack of infrastructure for storage and handling and limited transport facilities act as a constraint for marketing action. Low Exposure to Market Stimuli In rural areas, the rural people have low exposure to branded products, low product exposure, limited sources of information and learning which creates big challenge to the marketers to stimulate the rural consumers.

 Less Retail Outlets Due to less capital, the shops in the

Contd. villages have limited availability of stock and limited or a few

range of branded products to sell to rural people and these shops keep only fast moving items with a number of fake brands. Seasonal Demand As 70% of rural population depends on agriculture and most of them with small land holdings highly dependent of natural environment that is rain, if the rains and weather conditions are good and on time the farmers will get good harvest which leads to good income, otherwise, if there is shortage of water the demand may be minimal. Traditional Life Life in rural areas is still governed by customs and traditions and people do not easily adopt new practices. For eg. Even rich and educated class of farmers do not wear jeans or branded shoes in most of the rural areas.

Considering the importance of agriculture and rural majority the nine five year plans have made considerable progress in improving the agriculture sector and the rural farmer. The rural requirements vary from state to state and the priorities also change. Rural requirements are listed under: Improved seeds and fertilisers Increased means and methods of irrigation Multipurpose farming Use of modern farming equipments and methods Warehousing and preservation of agri-produce. Marketing development and remunerative prices for the produce Improvements in pest control and preservation of crops.

Rural Areas Requirement

Contd.
R & D work and benchmarking with the best agricultural practices,

yields in the world Training of Farmers Increased investments and credit facilities Small land holdings to be consolidated and improvements in tenancy. Animal heath and veterinary facilities. Literacy of farmers and families. Develop village agro-based industries/cottage and village industries Population control Crop insurance Health of farmers Environment friendly agriculture methods Water availability management Remunerative price for milk and milk products and Provision for subsidiary occupations and incomes