Transcript Rural Urban Head`s Occupation

Session Objectives
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Introduction to definition of ‘Rural’
Introduction to significance of rural marketing
Introduction to myths and realities of rural marketing
Introduction to rural consumer
Introduction to evolution of rural marketing in India
Introduction to socio-economic-politico-cultural
environment of rural India.
Introduction to some success stories
Introduction to Rural Marketing
Environment
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Rural! Whazzat?
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Indian Census defines ‘RURAL’ as what is not ‘Urban’
RBI defines it as locations with population <=10,000,
locations with popn, 10K-100K are termed semi-urban
NABARD defines it as locations with popn. <=10K
PLANCOM defines it as locations with popn. <=15K
SAHARA defines it as locations with number of
shops/establishment <=1,000
LG Electronics defines all locations other than 7 metros
as rural/semi-urban
Introduction to Rural Marketing
Environment
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Rural India: Opportunities Galore!
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Nearly six lakh villages- 742 million rural consumers
Benevolent monsoon- 13 good years (barring 2002-2003)
FYP outlay for RD increased 600% from 8th to 10th plan
Institutional credit for agriculture up by 230% between 9798 & 2004-05
41 million KCC issued and cumu. credit of Rs. 97.7K
crores sanctioned
No. of consuming class households: rural=urban
42,000 rural supermarkets (Haats)
5.22 lakh VPTs out of 5.76 lakh villages
Introduction to Rural Marketing
Environment
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Rural Consumer- Who is (s)he?
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Different from ‘urban’…how?
Geography determines lives and lifestyles of villagers
Households’ male stamp on purchase decisions
Community decision making is common
‘Lumpy’ demand pattern
Informal credit drives consumption
Extensive opinion seeking
Local benchmarks and parameters for comparison
Conventional communication is a challenge
Introduction to Rural Marketing
Environment
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What/who influences rural consumer?
• Global connectivity through media (especially television)
and telecommunications
• Increased education
• Sarpanch/Pradhan
• Rural youth
• Migrants to cities/towns
• Persons living in the village but working in a regular white
collar job in nearby city/town
• Retired people who have worked in cities/towns
Introduction to Rural Marketing
Environment
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Fixing 4 Ps: What-so-grrreat?
• Product modification because of changed usage!
• Importance of feeder towns (20,000 +) for ‘reaching’ out
• ‘Out of village’ experience for ‘technically’ sophisticated
products
• Feeder town wholesaler Rur. retailers in 2000+ villages
• Face-to-Face, ‘below the line’, touch, feel and talk modes
at haats, melas and mandis
• Importance of LUPs of popular brands
• Proliferation of regional and local brands
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Environment
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Rural Markets: The journey so far
• Phase I (before 1960s): Mktg of rural products in rural and
urban areas and agricultural input in rural areas
• Phase II (1960s to 1990s): Green revolution changed the
face of rural India. Marketing of agri-inputs emerged
• Phase III (1990s to the present): Growth is rural markets
for household durables and consumables
• Transition has been caused by improvements in easier
accessibility, enhanced purchasing power, better reach of
media, etc.
Introduction to Rural Marketing
Environment
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Rural Demography
1971 1981 1991 2001
Total population (mill.)
548.2 683.3 848.3 1026.9
Rural Population (mill.)
RP to TP (%)
Decadal variation
524.0 628.8 741.6
80.1
76.7
74.3
72.2
19.8
16.7
15.2
Introduction to Rural Marketing
Environment
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Rural Education
Education Level
Rural
Urban
Below Primary
29.2
18.4
Primary but below Middle
31.6
23.9
Middle but below Matriculation
21.0
20.8
Matriculation but below graduate
15.5
26.1
Graduate and above
2.7
10.8
Census 1991
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Environment
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Rural Occupational Pattern
Head’s Occupation
Cultivator
Wage Earner
Salary Earner
Artisan
Petty shopkeeper
Businessman
Professional
Others
Urban
3.45
20.93
40.72
6.90
16.05
3.68
3.59
4.68
Introduction to Rural Marketing
Environment
Rural
40.86
35.28
11.28
3.41
4.97
0.46
0.73
3.01
All
29.99
31.12
19.84
4.42
8.19
1.40
1.56
3.48
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Physical environment in a village
• Villages are divided into abadi and cultivated land
• Most houses are ‘owner occupied’ and ‘kuccha’
• Caste plays an important role in deciding the habitat and
village layout
• Villages in 2000+ population are increasing very rapidly
• These villages have on n average 16 shops
• These comprise 17 % of total villages but hold 50% of
rural population and 60 % of rural wealth
• Many towns are overgrown villages..these are crucial as
feeder towns
Introduction to Rural Marketing
Environment
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Rural Money Management
• Over last 10 years, the higher income class has grown by
six times
• Middle and upper middle classes have also increased
significantly
• Rural spending in non-food items is increasing and now
approximately 40 % is spent on non-food items
• Banking services are availed by 42 million HH in villages
while it is 27 million in urban areas
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Environment
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Casting the Caste!
• Very specific to India- no equivalent elsewhere
• Different from ‘Varna Vyavastha’
• Ascription, rather than achievement is the basis of social
stratification
• The settlements of dominant castes are towards the centre
of the village while that of lower castes are towards
periphery
• Marketers have to be sensitive to the caste system and
associated practices in rural areas
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Environment
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Prying the PRI!
• Prior to democratisation, it was the sarpanch/pradhan of
the dominant caste who represented the village
• Villages with 5,000 popn. or a cluster of smaller villages
with 5,000 popn. form a panchayat
• The villages are divided into wards, each ward is
represented by a member and they choose sarpanch
• 73rd amendment introduced the 3-tier system with 5-yearly
elections and 33% reservation of seats for SC, ST and
women
• Implementation of schemes for economic development and
social justice in relation to 29 subjects
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Environment
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The colourful revolutions in the countryside
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Green Revolution: 1967 to 1978
White Revolution: 1965 to present
Blue Revolution: 1980 to present
Reinvention of NGOs as development
vehicles
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Environment
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Sizing it all up!
• One very common estimate (Francis Kanoi 2002) of the
size of rural market is Rs.123,000
crores
FMCG
Durables
Agri-inputs (incl. Tractors)
2/4 wheelers
Rs. 65,000 crore
Rs. 5,000 crores
Rs. 45,000 crores
Rs. 8,000 crores
Total
Rs. 1,23,000 crores
Francis Kanoi 2002
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Environment
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HLL’s Project Shakti
• Objective is to create income generating capabilities for
underprivileged rural women by providing a sustainable
micro-enterprise opportunity
• Improve rural living standards through health and hygiene
awareness
• Shaki Prachirini is a communicator appointed for a cluster
of villages.
• She is trained on matters relating to personal and
community health and hygiene
• Communication material is also provided to SP.
Introduction to Rural Marketing
Environment
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ITC’s E-Choupal
• ITC has set up a virtual bazars through the agi portals to
counter traders in mandi
• Soyabean, Coffee, Aquaculture products and wheat are
procured by ITC
• 4000 choupals cover 20,000 villages in four states,
providing a forum to buy, sell and seek advice
• ITC plans to spread it in many more states
• ITC has now set up Choupal Sagar(s), the superstore
chains catering to rural consumers’ requirements
• A whole bouquet of products and services are available
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Environment
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Rural Markets: Looking Ahead
• Companies will have to focus on 4 As along with 4 Ps.
These are Awareness, Acceptability, Affordability and
Availability
• Traditional media will need to be used to create awareness
in media dark markets
• Coinage pricing is here to stay and so is LUPs
• Companies will have to create economic activity to create
customer pull for their brands/products
• Number of poor HH is set to decline to half between 1997
and 2007 (NCAER).
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Environment
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