Description
rural markets and marketing ways employed in rural market. It includes characteristics of rural market, profile of rural consumer.
UNDERSTANDING THE RURAL MARKET
• CHALLENGES IN THE STUDY OF RURAL MARKETING
• Highly heterogeneous market • Lack of updated information about rural market • Myths about Rural Market among Urban students/Urban executives
RURAL ENVIRONMENT
• About two-third of the people, in the developing countries live in rural areas • Depend upon agriculture and related activities for their livelihood. • In urban areas the output from the farm i.e. food, fibre and other raw materials are processed and made available to the consumers.
RURAL ENVIRONMENT
• Rural environment is closely connected to nature as agricultural lands, forests, rivers, mountains etc where as urban environment is man made. • In rural areas the population is more homogeneous and social contacts are personal and relatively long lasting. In urban area, the relations are impersonal, casual and mostly short lived.
RURAL ENVIRONMENT
• Rural areas refer to country side that are thinly populated compared to thickly populated urban areas • Limited availability of services such as schools, banks, hospitals, sewerage, lighting, transport and telecommunication • Basic facilities- housing, health, education, water supply, roads are poor in rural areas
RURAL ENVIRONMENT
• Many people believe that rural areas are developing fast: Example: Mobile phones, two wheelers have become popular in rural areas • What is development without protected water supply, drainage, electricity, communication, education, health care and sanitation?
RURAL ENVIRONMENT
• Rural world • Majority of the people engaged in agriculture • The environment: Direct relation to nature • Fewer contacts with outside world, simplicity in relations, speaks through the hear • Migration of people from country to city
RURAL ENVIRONMENT
• Urban world • Non agricultural occupation • Isolation from nature and man made environment • Greater density of population • Impersonal, casual relations, superficial, standardised formal relations
URBAN WORLD
• Many of our growing cities are over crowded and lack basic amenities. • Example: The per capital net income of a Mumbaikar is Rs 65,000/- twice the country’s average as per Human Development Report (2009). • Mumbai is one of the world’s most densely populated cities. • Nearly one third of the population does not get adequate drinking water.
URBAN WORLD
• The sewerage serves only 50% of the population. . • Nearly 50% people stay in slums. • Study reveals that average vehicular speed on city road has fallen from 30 km/hr in 1962 to 15 km in 2007. • Public transport is woefully inadequate.
URBAN WORLD
• Population density has leapt from 27,000 persons in 2001 to about 48,000 in 2009.
• More than 4.5 million people per day travel using bus services and another 6.5 million use railway services. • During peak hours people are packed like sardines in railway compartments.
UNDERSTANDING THE RURAL MARKET
• RURAL ENVIRONMENT IS CHARACATERISED
BY
• • • • • •
Low Low Low Low Low Low
density of population infrastructural facilities literacy investment income savings
RURAL MARKET
• Census 2001:
•
Population not more than 5000
• Density of population not more than 400 per square kilometer and • At least 75% of the male working population engaged in agriculture
• Reserve Bank Of India: • Location with population up to 10,000 is treated as rural and 10,000 to 1,00,000 as semi-urban
1
RURAL MARKET
• NABARD:
• All locations irrespective of villages or towns, up to a population of 10,000 will be considered as
rural
• FMCG COMPANIES:
• Population up to 20,000 • CONSUMER DURABLE COMPANIES: • Population up to 50,000
3
13
RURAL MARKET
• A SIMPLE DEFINITION FROM MARKETERS VIEW:
“Any market that exists in an area
with less than 10,000 population, low density of population and without significant infrastructural facilities is a rural market”
RURAL MARKETING • Functional and product oriented concept:
• Flow of goods and services from urban to rural and vice-versa. • The flow of goods within the rural areas is also called rural marketing. • It is a two way process and includes three types of transactions • Urban to rural, Rural to urban and Rural to rural
RURAL MARKETING
• Socio-economic concept:
• Process of delivering better standard of living and quality of life to rural people. • Rural sales person is the carrier of developmental messages to less informed rural population rather than a mere order taker
RURAL MARKETING
• Examples:
• Oral care products and bathing soap usage only about 80% in rural areas. Targeting non users and creating awareness among non users • Traditional methods to Scientific methods of cultivation
FEATURES OF RURAL MARKET
• Large number of consumers: Total
population of the country 1027 million (Census 2001) and rural population 742 million (72%). Rural population in HP, Assam, Bihar and Orissa varies from 80 to 90% • Scattered markets: Six lakh villages and the population varies from village to village • Tiny<1000,Small <2000, Medium <5000 and Large >5000
FEATURES OF RURAL MARKET
• Rural income: Agriculture 53% and
Non-Agriculture 47%.
• Seasonal demand: Income from
agriculture depends upon climatic conditions and is highly seasonal. Consumer durable purchases are more during post harvest season and festivals
FEATURES OF RURAL MARKET
• Media reach in rural market: Print • Telephone facilities: Rural:18% (U >90%) and All India (45%): 2009 • Rural electrification: 80% of the
villages have electric connections and Kutir Jyoti programme plans to increase electrification of villages
14% (Urban 46%), TV 36%/50%(U 78%), Radio 18%, Cinema 16% (U31%)
FEATURES OF RURAL MARKET
• Transportation facilities: About
80% of the villages are connected by road, 50% of the villages are not accessible during rainy season. Bullock cart is used for transporting produce from village to the market elements of urban life. Interior villages are more traditional
• Distance: Villages near to towns have
PROFILE OF RURAL CONSUMER
• Rural consumers are diverse in terms of religion, education, income, social, cultural and linguistic factors. • Heterogeneity is an important feature of the rural population. • There are vide variations even in the same village. • There it t is impossible to develop a a single profile that represents the whole rural population accurately.
PROFILE OF RURAL CONSUMER
• •
• RURAL LITERACY
Awareness about products and decision making
capacity depend upon the level of education. Rural literacy is only 59% (U 80%, All India 65%) and this leads to Communication problems Need for rural specific promotion media and methods
•
PROFILE OF RURAL CONSUMER
• LOW AWARENESS ABOUT PRODUCTS • May not always ask for a specific brand but ask for Lal wala sabun dena or Paanch rupaiya waali chai dena. • They Identify products based on colour, design, visuals etc • The retailer sells those products that give him high returns.
PROFILE OF RURAL CONSUMER
• RURAL CONSUMES SPEND LESS ON NON FOOD ITEMS
• However there has been significant shift in consumption pattern of non food items such as transport, education, medical care and travel. • Expenses on non food items have gone up from 27% of rural spending (1973) to 45% (2005)
PROFILE OF RURAL CONSUMER
• Rural market is not the rich man’s market for classy products. • However, there is a small percentage of rich people, growing in numbers and also getting richer. • Rural demand is about lot of people consuming a little and not about a small number consuming a lot.
PROFILE OF RURAL CONSUMER
PRICE SENSITIVITY • About 65% of the rural population comes under Lower income group : They are cost conscious. One of the basic questions in the mind of the consumer “Is it worth purchasing the product for the price asked by the dealer”
PROFILE OF RURAL CONSUMER
• PRICE SENSITIVITY • They check and re-check the prices of products due to low awareness about the quality of the product and low purchasing power. • Once they are satisfied with a brand, they will continue to patronize the same. Example: Parle biscuit is preferred over local products
PROFILE OF RURAL CONSUMER
• BRAND LOYALTY • First mover advantage is high in rural areas. • A satisfied consumer will continue to patronize the same. • Satisfaction=Benefit-cost and price is the cost part of the equation • Example: Lal Saboon, Ladkawala paint, Billiwali cell, Desh ka namak, Zandu balm,Nirma washing powder
PROFILE OF RURAL CONSUMER
• TRADITIONAL LIFE • Governed by customs and traditions. • Life style is in tune with nature; Sunday is not a holiday in the village. • Women still prefer natural products like Shikakai, Green gram powder for hair wash. • Even rich people do not go branded shirts/shoes. • Rural youth is modern and wants to replicate the lifestyle of urban population
PROFILE OF RURAL CONSUMER
• • • • TRADITIONAL BELIEF TRADITIONAL OCCUPATION FAMILY VALUES Joint family system still continues in villages.. • Head of the family is the decision maker. • Selection of bride/groom is decided by elders • Changes are taking place with more education and income level going up.
PROFILE OF RURAL CONSUMER
• WORD OF MOUTH
Interpersonal communication plays a major role in the adoption of new products/services having social or economic risk in the purchases. The consumers are influenced by opinion leaders
Teacher, banker, village president, rural youth, mistry, progressive farmer( innovators and early adopters)
• OPINION LEADER
PROFILE OF RURAL CONSUMER
• FESTIVALS AND FUNCTIONS
Celebrated on a grand scale in villages
• USE OF LOCAL IDIOMS AND PHARASES
• Rajdoot motor cycle: Dharmendra and the phrase “ Jaandar sawari, shandar sawari” is still popular. Desh ka namak( Tata salt) aims at emotional bondding with the nation,
PROFILE OF RURAL CONSUMER
INFLUENCE OF BANKS • Banks have instilled saving habits in rural consumers. They are also able to avail loan facilities from banks. • POP MATERIALS Hangings, festoons, product packs have large influence in the buying process
PROFILE OF RURAL CONSUMERS
SHOPPING HABITS • Village pan shops: Tobacco products, Soda, • Village grocery shops: Grains, soap, biscuits • Weekly markets (Haats): Agri implements, dress materials, sweets, toys, baskets, cosmetic items • Mandi towns/Taluka/District headquarters Watches, cycles, read made garments, books, electrical items, jewellery, two wheelers, sewing machines, agri inputs etc
PROFILE OF RURAL CONSUMERS
• CONSUMER BEHAVIOUR
• • • • •
Example: Tea Consumed twice a day Weekly purchases Prefers strong brands Lower economic segment purchases loose tea, others packed tea • Use of bright colours in packaging is appealing
PROFILE OF RURAL CONSUMERS
• Shampoo
• The decision makers are the young wife, the daughter-in-law or daughter • The buyer is the head of the family or the elder son • The retailer influences the purchases • Elderly people prefers natural products • Many use soaps for hair wash • Some people belief that shampoo is harmful to skin and hair
PROFILE OF RURAL CONSUMERS
• Soft drinks • Consumption is a planned activity compared to impulse purchase of urban consumers • After purchasing household items, if they have some cash left, then they could buy a soft drink • Frequency once in a fortnight to once in a month. • Soft drinks are consumed in large quantities during festivals, marriages, going out to a movie or during visit to the towns/cities
doc_515721067.pptx
rural markets and marketing ways employed in rural market. It includes characteristics of rural market, profile of rural consumer.
UNDERSTANDING THE RURAL MARKET
• CHALLENGES IN THE STUDY OF RURAL MARKETING
• Highly heterogeneous market • Lack of updated information about rural market • Myths about Rural Market among Urban students/Urban executives
RURAL ENVIRONMENT
• About two-third of the people, in the developing countries live in rural areas • Depend upon agriculture and related activities for their livelihood. • In urban areas the output from the farm i.e. food, fibre and other raw materials are processed and made available to the consumers.
RURAL ENVIRONMENT
• Rural environment is closely connected to nature as agricultural lands, forests, rivers, mountains etc where as urban environment is man made. • In rural areas the population is more homogeneous and social contacts are personal and relatively long lasting. In urban area, the relations are impersonal, casual and mostly short lived.
RURAL ENVIRONMENT
• Rural areas refer to country side that are thinly populated compared to thickly populated urban areas • Limited availability of services such as schools, banks, hospitals, sewerage, lighting, transport and telecommunication • Basic facilities- housing, health, education, water supply, roads are poor in rural areas
RURAL ENVIRONMENT
• Many people believe that rural areas are developing fast: Example: Mobile phones, two wheelers have become popular in rural areas • What is development without protected water supply, drainage, electricity, communication, education, health care and sanitation?
RURAL ENVIRONMENT
• Rural world • Majority of the people engaged in agriculture • The environment: Direct relation to nature • Fewer contacts with outside world, simplicity in relations, speaks through the hear • Migration of people from country to city
RURAL ENVIRONMENT
• Urban world • Non agricultural occupation • Isolation from nature and man made environment • Greater density of population • Impersonal, casual relations, superficial, standardised formal relations
URBAN WORLD
• Many of our growing cities are over crowded and lack basic amenities. • Example: The per capital net income of a Mumbaikar is Rs 65,000/- twice the country’s average as per Human Development Report (2009). • Mumbai is one of the world’s most densely populated cities. • Nearly one third of the population does not get adequate drinking water.
URBAN WORLD
• The sewerage serves only 50% of the population. . • Nearly 50% people stay in slums. • Study reveals that average vehicular speed on city road has fallen from 30 km/hr in 1962 to 15 km in 2007. • Public transport is woefully inadequate.
URBAN WORLD
• Population density has leapt from 27,000 persons in 2001 to about 48,000 in 2009.
• More than 4.5 million people per day travel using bus services and another 6.5 million use railway services. • During peak hours people are packed like sardines in railway compartments.
UNDERSTANDING THE RURAL MARKET
• RURAL ENVIRONMENT IS CHARACATERISED
BY
• • • • • •
Low Low Low Low Low Low
density of population infrastructural facilities literacy investment income savings
RURAL MARKET
• Census 2001:
•
Population not more than 5000
• Density of population not more than 400 per square kilometer and • At least 75% of the male working population engaged in agriculture
• Reserve Bank Of India: • Location with population up to 10,000 is treated as rural and 10,000 to 1,00,000 as semi-urban
1
RURAL MARKET
• NABARD:
• All locations irrespective of villages or towns, up to a population of 10,000 will be considered as
rural
• FMCG COMPANIES:
• Population up to 20,000 • CONSUMER DURABLE COMPANIES: • Population up to 50,000
3
13
RURAL MARKET
• A SIMPLE DEFINITION FROM MARKETERS VIEW:
“Any market that exists in an area
with less than 10,000 population, low density of population and without significant infrastructural facilities is a rural market”
RURAL MARKETING • Functional and product oriented concept:
• Flow of goods and services from urban to rural and vice-versa. • The flow of goods within the rural areas is also called rural marketing. • It is a two way process and includes three types of transactions • Urban to rural, Rural to urban and Rural to rural
RURAL MARKETING
• Socio-economic concept:
• Process of delivering better standard of living and quality of life to rural people. • Rural sales person is the carrier of developmental messages to less informed rural population rather than a mere order taker
RURAL MARKETING
• Examples:
• Oral care products and bathing soap usage only about 80% in rural areas. Targeting non users and creating awareness among non users • Traditional methods to Scientific methods of cultivation
FEATURES OF RURAL MARKET
• Large number of consumers: Total
population of the country 1027 million (Census 2001) and rural population 742 million (72%). Rural population in HP, Assam, Bihar and Orissa varies from 80 to 90% • Scattered markets: Six lakh villages and the population varies from village to village • Tiny<1000,Small <2000, Medium <5000 and Large >5000
FEATURES OF RURAL MARKET
• Rural income: Agriculture 53% and
Non-Agriculture 47%.
• Seasonal demand: Income from
agriculture depends upon climatic conditions and is highly seasonal. Consumer durable purchases are more during post harvest season and festivals
FEATURES OF RURAL MARKET
• Media reach in rural market: Print • Telephone facilities: Rural:18% (U >90%) and All India (45%): 2009 • Rural electrification: 80% of the
villages have electric connections and Kutir Jyoti programme plans to increase electrification of villages
14% (Urban 46%), TV 36%/50%(U 78%), Radio 18%, Cinema 16% (U31%)
FEATURES OF RURAL MARKET
• Transportation facilities: About
80% of the villages are connected by road, 50% of the villages are not accessible during rainy season. Bullock cart is used for transporting produce from village to the market elements of urban life. Interior villages are more traditional
• Distance: Villages near to towns have
PROFILE OF RURAL CONSUMER
• Rural consumers are diverse in terms of religion, education, income, social, cultural and linguistic factors. • Heterogeneity is an important feature of the rural population. • There are vide variations even in the same village. • There it t is impossible to develop a a single profile that represents the whole rural population accurately.
PROFILE OF RURAL CONSUMER
• •
• RURAL LITERACY
Awareness about products and decision making
capacity depend upon the level of education. Rural literacy is only 59% (U 80%, All India 65%) and this leads to Communication problems Need for rural specific promotion media and methods
•
PROFILE OF RURAL CONSUMER
• LOW AWARENESS ABOUT PRODUCTS • May not always ask for a specific brand but ask for Lal wala sabun dena or Paanch rupaiya waali chai dena. • They Identify products based on colour, design, visuals etc • The retailer sells those products that give him high returns.
PROFILE OF RURAL CONSUMER
• RURAL CONSUMES SPEND LESS ON NON FOOD ITEMS
• However there has been significant shift in consumption pattern of non food items such as transport, education, medical care and travel. • Expenses on non food items have gone up from 27% of rural spending (1973) to 45% (2005)
PROFILE OF RURAL CONSUMER
• Rural market is not the rich man’s market for classy products. • However, there is a small percentage of rich people, growing in numbers and also getting richer. • Rural demand is about lot of people consuming a little and not about a small number consuming a lot.
PROFILE OF RURAL CONSUMER
PRICE SENSITIVITY • About 65% of the rural population comes under Lower income group : They are cost conscious. One of the basic questions in the mind of the consumer “Is it worth purchasing the product for the price asked by the dealer”
PROFILE OF RURAL CONSUMER
• PRICE SENSITIVITY • They check and re-check the prices of products due to low awareness about the quality of the product and low purchasing power. • Once they are satisfied with a brand, they will continue to patronize the same. Example: Parle biscuit is preferred over local products
PROFILE OF RURAL CONSUMER
• BRAND LOYALTY • First mover advantage is high in rural areas. • A satisfied consumer will continue to patronize the same. • Satisfaction=Benefit-cost and price is the cost part of the equation • Example: Lal Saboon, Ladkawala paint, Billiwali cell, Desh ka namak, Zandu balm,Nirma washing powder
PROFILE OF RURAL CONSUMER
• TRADITIONAL LIFE • Governed by customs and traditions. • Life style is in tune with nature; Sunday is not a holiday in the village. • Women still prefer natural products like Shikakai, Green gram powder for hair wash. • Even rich people do not go branded shirts/shoes. • Rural youth is modern and wants to replicate the lifestyle of urban population
PROFILE OF RURAL CONSUMER
• • • • TRADITIONAL BELIEF TRADITIONAL OCCUPATION FAMILY VALUES Joint family system still continues in villages.. • Head of the family is the decision maker. • Selection of bride/groom is decided by elders • Changes are taking place with more education and income level going up.
PROFILE OF RURAL CONSUMER
• WORD OF MOUTH
Interpersonal communication plays a major role in the adoption of new products/services having social or economic risk in the purchases. The consumers are influenced by opinion leaders
Teacher, banker, village president, rural youth, mistry, progressive farmer( innovators and early adopters)
• OPINION LEADER
PROFILE OF RURAL CONSUMER
• FESTIVALS AND FUNCTIONS
Celebrated on a grand scale in villages
• USE OF LOCAL IDIOMS AND PHARASES
• Rajdoot motor cycle: Dharmendra and the phrase “ Jaandar sawari, shandar sawari” is still popular. Desh ka namak( Tata salt) aims at emotional bondding with the nation,
PROFILE OF RURAL CONSUMER
INFLUENCE OF BANKS • Banks have instilled saving habits in rural consumers. They are also able to avail loan facilities from banks. • POP MATERIALS Hangings, festoons, product packs have large influence in the buying process
PROFILE OF RURAL CONSUMERS
SHOPPING HABITS • Village pan shops: Tobacco products, Soda, • Village grocery shops: Grains, soap, biscuits • Weekly markets (Haats): Agri implements, dress materials, sweets, toys, baskets, cosmetic items • Mandi towns/Taluka/District headquarters Watches, cycles, read made garments, books, electrical items, jewellery, two wheelers, sewing machines, agri inputs etc
PROFILE OF RURAL CONSUMERS
• CONSUMER BEHAVIOUR
• • • • •
Example: Tea Consumed twice a day Weekly purchases Prefers strong brands Lower economic segment purchases loose tea, others packed tea • Use of bright colours in packaging is appealing
PROFILE OF RURAL CONSUMERS
• Shampoo
• The decision makers are the young wife, the daughter-in-law or daughter • The buyer is the head of the family or the elder son • The retailer influences the purchases • Elderly people prefers natural products • Many use soaps for hair wash • Some people belief that shampoo is harmful to skin and hair
PROFILE OF RURAL CONSUMERS
• Soft drinks • Consumption is a planned activity compared to impulse purchase of urban consumers • After purchasing household items, if they have some cash left, then they could buy a soft drink • Frequency once in a fortnight to once in a month. • Soft drinks are consumed in large quantities during festivals, marriages, going out to a movie or during visit to the towns/cities
doc_515721067.pptx