CRM Chap 1 4th Sem

7/30/2019 CRM Chap 1 4th Sem

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Cooperatives and Rural Markets


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Rural Markets - Syllabus


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Unit 3

Definition and Scope of Rural Markets

Rural Vs Urban Markets

Rural Marketing Environment

Rural Consumer Profile Consumer Behaviour

Rural Marketing Mix

Rural Market Segmentation

Targeting and Positioning

Marketing of Consumer Durables

Rural Sales Force Management


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Unit 4

Agricultural Produce Marketing Importance

Problems

Lines of Improvement

Regulated Markets

Quality Orientation

Standardisation and Grading

Role of financial institutions in Agricultural marketing Innovative Marketing Techniques and Recent Trend in Rural Markets

Impact of Globalisation on Indian Markets E-Coupals

Commodity Markets and importance


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What is Rural?

Government agencies like IRDA (Insurance Regulatory

And Development Agency and NCAER (National Council

for applied Economic Research) define Rural as villages

with a population


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According to Planning Commission :

Towns up to population of 15,000 are considered rural

According to NABARD/RBI: All locations with a population up to 10, 000 are considered

rural


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What is Rural Marketing?

Developing of the market in the area which is

defined as Rural

Process of developing, pricing, promoting,distributing rural specific goods and services leading

to exchange between urban and rural markets, which

satisfies consumer demand and achieves

organisational objectives


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Aspects covered by rural marketing

1. Marketing of agricultural products from rural tourban areas

2. Marketing of manufactured goods and services

in rural areas

Hence rural marketing is, Marketing of-

1. Urban products in rural areas

2. Rural products in urban areas

3. Marketing within rural areas (rural to rural)


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Eg: Bamboo baskets, ropes,

small agricultural tools,

household earthen utensils

etc

Dependent on artisans likeblacksmiths, carpenters and

cobblers

Agricultural products-

Foodgrains, cotton,

sugarcane

Finished products-

Wooden toys, brassware,handloom textiles, safety

matches, toilet soaps

Agricultural inputs

Fertilisers, pesticides, seeds,

tractors

Multiple types of FMCG and

consumer durables

__

To

Rural Urban

From

Rural

Urban


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Why Rural Markets?

Growing urbanisation

Higher purchasing power

Infrastructural facilities

Role of women in decision making

Relevance of opinion leaders

Media exposure

Rise of alert buyers

Saturated urban markets


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Reasons for growth in rural markets

Increase in population, Increase in income

Increased productivity of agriculture- Use of scientific methods,technology

Government investment in rural development (Jawahar Rojgar Yojna,

Small Industries Training, Rural Electrification, Spending on Health andSanitation, Primary Education), initiatives like Green & White revolution(Dairy), tax exemption in backward areas etc

Initiatives by banks for more branches and Kisan credit card to buy seeds,fertilizers, consumer goods on installment basis

Changing lifestyles/attraction of higher standards of living by firms likeHUL, Britania ,Dabur, LG, Honda, Videocon, ITC etc.

Evolution of new cadre of entrepreneurs in rural areas

Higher rural literacy rate Almost 59%


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Revenue generated by rural markets

for-

HUL- 50%

Colgate- 50 %

LG- 50 %

Asian Paints- 60 %

Dabur- 40 %

Videocon- 40 %

Cadburys- 25 %

Hero Honda- 40 %


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Class Activity

Rural Markets Vs Urban Markets


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URBAN MARKET RURAL MARKET

Mostly concentrated Widely spread and scattered

High infrastructural level Low infrastructural level

High density of population per sq km Low density of population per sq km

Good physical connectivity and high mobility Poor physical connectivity and low mobility

Incomes are more stable and permanent People work in less certain environment

Occupations are government employment,

business, industry etc.

Mostly agricultural occupation

Income received at regular income Acute seasonality in income receipts

Social norms are less visible Social norms influencing individuals

Caste influence indirect and less visible Caste influence direct and strong

High exposure to variety of products Low exposure to variety of products

High brand awareness Low brand awareness

High exposure to multiple sources of

information

Low exposure to and limited sources of

information

More convenient buying, more retail outlets Less convenient buying, less retail outlets


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Rural Marketing

Environment


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Growing Population

=Growing markets?


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Who is the consumer?

Consumables & Lifestyle products: School

going children & young adults

20-35 yrs = 1/4thIndias consumption base

48% of the rural Indias population is below 20.

Improvement in literacy rates= mature

decisions, more brand awareness & hence

brand consciousness


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Characteristics of rural markets

48% of rural population is below age of 20

Rural literacy levels: 36% in 1981; 45% in 1991; 59% in 2001

Large and scattered market: Rural population is 72% of total population and it

is scattered over a wide range of geographical area

Diverse socio-economic background

Changing demand pattern: Demand pattern of rural customer is fast changingdue to increasing in income and credit facilities offered by banks like Kisan

credit card

Major income comes from agriculture: About 60% of the rural income is from

agriculture and hence the demand for consumer goods is high duringharvestin season


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Saving habits: Rural consumer is now having saving habits due to the effortsof co-operative and commercial banks

Traditional outlook: Rural customer values old customs and traditions

Low standard of living compared to urban

Poor infrastructure facilities: Facilities like roads, warehouses, communicationsystem, etc. are inadequate in rural areas. Hence physical distributionbecomes costly

Media reach: The reach of print media is 10% followed by TV 31%, radio 31%and cinema 33%.

Communication: Around 6 lakhs villages are still without telephone facilities.

Electrification: About 88% of villages have been electrified


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Annual Income Income Class 1989-90( %Households)

1998-99 ( %

Households)

1,40,000 High 0.5 3.0

Source: National Council for Applied Economic Research (NCAER), 2000

Rural Income Trends


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Classification of Rural Consumer by

Income

Affluent Group: This group is very small and can afford luxury products.

E.g. Chilly merchants in Gunthur, Andhra Pradesh and wheat farmers in

Punjab.

Middle Class: This class is about 30 crores in size and is expanding. E.g.

Jute farmers in West Bengal and sugarcane farmers in UP.

Poor: This class is about 25 crores in size. Their purchasing power is very

low. E.g. Poor farmers of jawar and bajra of Bihar and Orissa.


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Profile of Rural Consumer

Educational profile

Occupation

Low income levels Opinion leaders

Media habits

Increase in brand consciousness Value for money


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Rural consumer behavior

What is Consumer Behaviour?

Human behaviour that go to make purchase

decisions. Its the reaction of individuals in

obtaining and using goods and services of aparticular type.

Definition:

Is the process whereby individuals decidewhether, what, when, how and from whom to

purchase goods and services.


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Characteristics of Rural Consumer that

affect the buying process Age and life cycle stage Occupation

Purchasing power (small packs & prices, installments &discounts and free gifts)

Lifestyle ( Poor, Aspirants, climbers, consuming class, veryrich)

Personality & self Concept

Psychological factor Perception

Cognition Beliefs & attitudes

Motivation


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Rural consumers Buying behaviour

Socio-Cultural factors

Culture

Social class

Groups

Family

Role & status

Sociability (interactions between one another)


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Continued..

Technological factors

Economic factors

Political Factors


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Buying decision process

NeedRecognition

InformationSearch

Evaluation ofAlternatives

PurchaseDecision

Post PurchaseBehaviour

Documents

CRM Chap 1 4th Sem