Abhay ppt
- 1. RURAL MARKETING SUBMITTED TO:- SUBMITTED BY:- ABHAY AGARWAL & Prof. MUKESH RANGA HARIKESH YADAV M.B.A. (Business Economics), 2011-13 Institute Of Business Management, Chhatrapati Shahu Ji Maharaj University, Kanpur, U.P. 11/20/2012 2:06:15 AM 1
- 2. A PRESENTATION IN THE SUBJECT OF “RURAL MARKETTING” 1. NATURE OF INDIAN RURAL MARKETS 2. MAJOR PROBLEMS OF INDIAN RURAL MARKETS 11/20/2012 2:06:15 AM 2
- 3. Nature of Indian Rural Markets •Large, Diverse and Scattered Market: Rural market in India is large, and scattered into a number of regions. There may be less number of shops available to market products. •Major Income of Rural consumers is from Agriculture: Rural Prosperity is tied with agriculture prosperity. In the event of a crop failure, the income of the rural masses is directly affected. •Standard of Living and rising disposable income of the rural customers: It is known that majority of the rural population lives below poverty line and has low literacy rate, low per capital income, societal backwardness, low savings, etc. But the new tax structure, good monsoon, government regulation on pricing has created disposable incomes. Today the rural customer spends money to get value and is aware of the happening around him. •Traditional Outlook: Villages develop slowly and have a traditional outlook. Change is a continuous process but most rural people accept change gradually. This is gradually changing due to literacy especially in the youth who have begun to change the outlook in the villages. •Rising literacy levels: It is documented that approximately 45% of rural Indians are literate. Hence awareness has increases and the farmers are well- informed about the world around them. They are also educating themselves on the new technology around them and aspiring for a better lifestyle. •Diverse socioeconomic background: Due to dispersion of geographical areas and uneven land fertility, rural people have disparate socioeconomic background, which ultimately affects the rural market. •Infrastructure Facilities: The infrastructure facilities like cemented roads, warehouses, communication system, and financial facilities are inadequate in rural 11/20/2012 2:06:15 AM areas. Hence physical distribution is a challenge to marketers who have found innovative ways to market their products. 3
- 4. Some Myths Regarding Indian Rural Markets Myth-1: Rural Market or Area Is a Homogeneous Mass: Reality: It’s a heterogeneous population. Various Tiers are present depending on the incomes like Big Landlords; Traders, Small farmers; Marginal farmers: Laborers, Artisans. State wise variations in rural demographics are present viz. Literacy (Kerala 90%, Bihar 44%) and Population below poverty line (Orissa 48%, Punjab6%). Myth-2: Disposable Income Is Low: Reality: Number of middle class HHs (annual income Rs 45,000- 2, 15,000) for rural sector is 27.4 million as compared to the figure of 29.5 million for urban sector. Rural incomes CAGR was 10.95% compared to 10.74% in urban between1970-71 and 1993-94. Myth-3: Individuals Decide About Purchases: Reality: Decision making process is collective. Purchase process- influencer, decider or buyer one who pays can all be different. So marketers must address brand message at severallevels. Rural youth brings brand knowledge to Households (HH). 11/20/2012 2:06:15 AM 4
- 5. The Major Problems of Indian Rural Markets •Underdeveloped People and Underdeveloped Markets: The number of people below poverty line has not decreased in any appreciable manner. Thus underdeveloped people and consequently underdeveloped market by and large characterize the rural markets. Vast majorities of the rural people are tradition bound, fatalistic and believe in old customs, traditions, habits, taboos and practices. •Lack of Proper Physical Communication Facilities: Nearly fifty percent of the villages in the country do not have all weather roads. Physical communication of these villages is highly expensive. Even today most villages in the eastern parts of the country are inaccessible during the monsoon. •Media for Rural Communication: Among the mass media at some point of time in the late 50′s and 60′s radio was considered to be a potential medium for communication to the rural people. Another mass media is television and cinemas. Statistics indicate that the rural areas account for hardly 2000 to 3500 mobile theatres, which is far less when compared to the number of villages. •Many Languages and Dialects: The number of languages and dialects vary widely from state to state, region to region and probably from district to district. The messages have to be delivered in the local languages and dialects. Even though the number of recognized languages is only 16, the dialects are estimated to be around 850. •Dispersed Market: Rural areas are scattered and it is next to impossible to ensure the availability of a brand all over the country. Seven Indian states account for 76% of the country’s rural retail outlets, the total number of which is placed at around 3.7 million. Advertising in such a highly heterogeneous market, which is widely spread, is very expensive. 11/20/2012 2:06:15 AM 5
- 6. •Low Per Capita Income: Even though about 33-35% of gross domestic product is generated in the rural areas it is shared by 74% of the population. Hence the per capita incomes are low compared to the urban areas. •Low Levels of Literacy: The literacy rate is low in rural areas as compared to urban areas. This again leads to problem of communication for promotion purposes. Print medium becomes ineffective and to an extent irrelevant in rural areas since its reach is poor and so is the level of literacy. •Prevalence of spurious brands and seasonal demand: For any branded product there are a multitude of ‘local variants’, which are cheaper, and, therefore, more desirable to villagers. •Different way of thinking: There is a vast difference in the lifestyles of the people. The kind of choices of brands that an urban customer enjoys is different from the choices available to the rural customer. The rural customer usually has 2 or 3 brands to choose from whereas the urban one has multiple choices. The difference is also in the way of thinking. The rural customer has a fairly simple thinking as compared to the urban counterpart. 11/20/2012 2:06:15 AM 6
- 7. THANK YOU 11/20/2012 2:06:15 AM 7