SUBMITTTED BYABHILASH VISWANATHANREG NO: 09095101S2 MBAICM POOJAPPURA

SUBMITTED TO:SIVAPRAKASH CS

ROLE OF MARKETING IN RURAL DEVELOPMENT

SUBMITTTED BYABHILASH VISWANATHANREG NO: 09095101S2 MBAICM POOJAPPURA

SUBMITTED TO:SIVAPRAKASH CS

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Role of Marketing in Rural Development “Assessing, stimulating and converting the purchasing power of rural consumer into an effective demand for specific products and services.”

The Rural Market Scenario:

The rural markets offered a huge potential to the business houses because of their enormous spread and rising consumer demands. Around the world, over 4 billion people survived in rural areas that came to more than 60 percent of the total population. In India also, the ratio of rural to urban population was slightly higher than the world's ratio with 70 % of them living in rural areas. They domiciled in nearly 6,27,000 villages spread over 3.2 million sq. km. This growing affluence along with good monsoon and the increased agriculture output, increased the total disposable income of rural consumers to 58 percent with two-third of middle income households being in the rural market. About 40 percent of the graduates coming out of Indian Universities were from rural areas. As they are eager to earn more and live better, their aspirations are similar to the urban youth. It is predicted by industry analysts that by 2009 – 10, the urban households are projected to grow by 4 percent while rural households are expected to grow by 11 percent. If the rural income rose by 1%, then the buying power would correspondingly increase by about Rs. 10,000 crore. The colour televisions, refrigerators, air-conditioners and microwaves have become a household sight in villages and small townships that was long thought of as a luxury and domain of urbanites.

However, rural India had its own set of problems like illiteracy, early childhood marriages, lack of access to birth control measures, poverty etc., that were interdependent on each other. There are also large numbers of daily wage earners and most of the people depended on vagaries of monsoon. Inadequate infrastructure like non-availability of gas supply, frequent power cuts, improper sanitary conditions, inaccessible areas were the other common sight of rural areas.

In most of the rural areas in different parts of the country, there is considerable awareness on various latest products that are available in the market. This has been possible due to the penetration of cable and satellite channels that have brought down the world at the finger tips of the common man. The media influenced the mindset of the rural consumer to such an extent that people who had money started purchasing the products unmindful of the costs, just to satisfy their needs as well as their ego. But, the growth of rural market could be attributed to many other reasons that in one way increased the sales as well as the profits of the companies. Some of the important causes for the growth of rural markets are –

* The rise in disposable income of the rural families* Rural population involved themselves in business other than agriculture* Increase white-collar jobs in nearby towns* Commercialization of agriculture* Saturation of the urban markets* Media penetration in rural areas (particularly satellite channels)* Economic liberalization

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* Revolution in the Information Technology* Women empowerment* Improving infrastructure

India’s Rural Population

72.2%, male: 381,668,992, female: 360,948,755 (2001 Census)

PHASES OF RURAL MARKETING

PHASE I (before mid 1960's) • Considered as a synonymous with "Agricultural Marketing". • Referred to marketing of 118 rural products in Rural and Urban areas and agricultural

inputs in rural markets.

PHASE II (mid 1960's-mid 1990's) • Better irrigation facilities, soil testing, use of high yield variety seeds, fertilizers,

pesticides and employment of machinery like power tillers, harvesters • Two separate areas of activity had emerged- the new "marketing of agricultural inputs "

and the conventional "agricultural marketing". • Formation of agencies like Khadi and Village Industries Commission, Girijan CooperatIve

Societies and Apco Fabrics

PHASE III (After mid 1990's) • India's Industrial Sector had gained strength and maturity. • The market has grown for household consumables and durables. • Development programs run by Central and State Governments.

CLASSIFICATION OF RURAL MARKETCONSUMER MARKET

Constituents: Products : Durables :

IndividualsHouseholds

• Consumables, • Food- Products, • Toiletries, • Cosmetics, etc

• Watches,• Bicycles,• Radio,• T.V,• Kitchen

Appliances • Furniture etc.

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INDUSTRIAL MARKETConstituents : Products : Durables :

Agricultural and allied activities, Poultry farming,Fishing, Animal husbandry, Cottage Industries,Panchayat office etc.

• Consumables, • seeds,• Fertilizers, • Pesticides, • Petroll diesel etc.

• Tillers, • Tractors, • Pump sets, Generators, Boat etc

SERVICES MARKETConstituents: Services :

• Individuals, • Households, • Offices • Production firms.

• Repairs, • Transport, • Banking credit, • Insurance, • Education, • Communications etc

Environment Differences

• Small settlement units of villages widely dispersed. • Low Infrastructure level (such as road, electricity etc.) • Low Density of population per square kilometer of space • Poor physical connectivity with other villages and towns, Low mobility.

The concept of Rural Marketing in India Economy has always played an influential role in the lives of people. In India, leaving out a few metropolitan cities, all the districts and industrial townships are connected with rural markets.

The concept of rural marketing in India is often been found to form ambiguity in the minds of people who think rural marketing is all about agricultural marketing. However, rural marketing determines the carrying out of business activities bringing in the flow of goods from urban sectors to the rural regions of the country as well as the marketing of various products manufactured by the non-agricultural workers from rural to urban areas. To be precise, Rural Marketing in India Economy covers two broad sections, namely:

Selling of agricultural items in the urban areas Selling of manufactured products in the rural regions

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RURAL MARKETING IN INDIA

Indian Marketers on rural marketing have two understanding

(i) The urban metro products and marketing products can be implemented in rural markets with some or no change.

(ii) The rural marketing required the separate skills and techniques from its urban counterpart. The Marketers have following facilities to make them believe in accepting the truth that rural markets are different in so many terms.

o The rural market in India has the opportunity for growth.o Low priced products can be more successful in rural markets because the low

purchasing, purchasing powers in rural markets.o Rural consumers have mostly homogeneous group with similar needs, economic

conditions and problems.o The rural markets can be worked with the different media environment as

opposed to press, film, radio and other urban centric media exposure.

Some of the important features or characteristics of Rural Marketing in India Economy are being listed below:

With the initiation of various rural development programmes there have been an upsurge of employment opportunities for the rural poor. One of the biggest cause behind the steady growth of rural market is that it is not exploited and also yet to be explored.

The rural market in India is vast and scattered and offers a plethora of opportunities in comparison to the urban sector. It covers the maximum population and regions and thereby, the maximum number of consumers.

The social status of the rural regions is precarious as the income level and literacy is extremely low along with the range of traditional values and superstitious beliefs that have always been a major impediment in the progression of this sector.

The steps taken by the Government of India to initiate proper irrigation, infrastructural developments, prevention of flood, grants for fertilizers, and various schemes to cut down the poverty line have improved the condition of the rural masses.

Promotion of brands in rural markets requires the special measures. Due to the social and backward condition the personal selling efforts have a challenging role to play in this regard. The word of mouth is an important message carrier in rural areas. Infect the opinion leaders are the most influencing part of promotion strategy of rural promotion efforts. The experience of agricultural input industry can act as a guideline for the marketing efforts of consumer durable and non-durable companies. Relevance of Mass Media is also a very important factor.

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The Indian established Industries have the advantages, which MNC don't enjoy in this regard. The strong Indian brands have strong brand equity, consumer demand-pull and efficient and dedicated dealer network which have been created over a period of time. The rural market has a grip of strong country shops, which affect the sale of various products in rural market. The companies are trying to trigger growth in rural areas. They are identifying the fact that rural people are now in the better position with disposable income. The low rate finance availability has also increased the affordability of purchasing the costly products by the rural people. Marketer should understand the price sensitivity of a consumer in a rural area.

REALITIES BEFORE THE MARKETERS

The Indian established Industries have the advantages, which MNC don't enjoy in this regard. The strong Indian brands have strong brand equity, consumer demand-pull and efficient and dedicated dealer network which have been created over a period of time. The rural market has a grip of strong country shops, which affect the sale of various products in rural market.

The companies are trying to trigger growth in rural areas. They are identifying the fact that rural people are now in the better position with disposable income. The low rate finance availability has also increased the affordability of purchasing the costly products by the rural people. Marketer should understand the price sensitivity of a consumer in a rural area. The small sachet packs are the examples of price sensitivity. Colgate has done this experiment with launching of sachet packs for rural markets.

STRATEGIES

COMMUNICATING AND CHANGING QUALITY PERCEPTION PROPER COMMUNICATION IN INDIAN LANGUAGE TARGET CHANGING PERCEPTION UNDERSTANDING CULTURAL AND SOCIAL VALUES PROVIDING WHAT CUSTOMER WANT PROMOTING PRODUCTS WITH INDIAN MODELS AND ACTORS ASSOCIATING THEMSELVES WITH INDIA PROMOTING INDIAN SPORTS TEAM TALKING ABOUT A NORMAL INDIAN DEVELOPING RURAL-SPECIFIC PRODUCTS GIVING INDIAN WORDS FOR BRANDS ACQUIRING INDIAN BRANDS EFFECTIVE MEDIA COMMUNICATION ADOPTING LOCALISED WAY OF DISTRIBUTING ASSOCIATING THEMSELVES WITH INDIAN CELEBRITIES MELAS PAINTINGS

            Rural development means to the process of improving living conditions, providing minimum needs, increasing productivity and employment opportunities and developing potentials of rural resources through integration of spatial, functional and temporal aspects .

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Rural development is a strategy to improves the economic and social life of a specific group of people, the rural poor, including small and marginal farmers, tenants and the landless.

The concept of rural development was first used in India by the planners. It is the very process of the planning to implement rural development programmes through and appropriate strategy to realize the desired results.

OBJECTIVE OF RURAL DEVELOPMENT

The rural development has the following main objectives

Providing certain social goods and services in terms of social and economic infrastructure.

Increasing the income of every rural family and to see that those who are below the poverty line are enable to come above that line in coming years.

Creation of additional employment opportunities is rural areas. It is essentially concerned with the improvement of the living standards of low income

population living in rural areas on a self-sustaining basis through transforming the socio-spatial structure of their productive activities.

Improvement of services of rural masses in the process. Improvement of know-how which is to be implemented to the rural people to infuse in

them a sense of pragmatism in the process of development.

INDIA’S STRATEGY OF RURAL DEVELOPMENT

Development of rural areas has always been one of the paramount concerns of the various India’s fives years plains. In this regard, several rural development programmes were launched in India, especially to provide job opportunities to raise their income. Hence these programmes enabled rural poors to improve their standard of living. These programmes are designed for getting following two objectives.

1. Creation of socio – economic infrastructure, necessary for rapid development of rural areas

These programmes is supposed to provide to villages certain economic and social infrastructure, ensuring facilities like roads, electricity, transport, drinking water, medical care and primary school etc. such type of facilities are basic requirements of development of a particular regions. These are also essential for the successful implementation of poverty elimination programmes.

2. Increasing income of individual rural people, by providing productive job –

For The Implementation Of This Objective, Programmes Like – Integrated Rural Development, Development of Women and Children Development Programmes, Drought Prone Area Programme, National Rural Employment Programme, Desert Development Programmes, Rural Landless Employment Guarantee Programme and Training of Rural Youth for self Employment are in operation. IRDP aims at lifting the beneficiary family above the poverty line by providing them with financial assistance

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(partly by way-of loan and partly by way of subsidy) to enable them to acquire productive and income generating assets. The NREP has been designed to provide wage employment opportunities, particularly to that segment of the rural poor, who are without assets, has launched to supplement the IRDP as a part of the wider strategy of rural development. The RLEGP is designed to provide short term job for one hundred days to one member of a landless family in rural areas.

CONCLUSION

Gandhiji believed that India's future lay in her villages and rural markets will have a significant part in India's economy. Indian rural market is undoubtedly complex but there are some simple truths that we need to accept. The rural consumers are very value-conscious. They may or may not have purchasing power, but they can make a difference to the company's growth if concentrated. Gone were the days when a rural consumer had to go to a nearby town or city to buy a branded product. The growing power of the rural consumer is an opportunity for the companies to flock to the rural markets. With the technological innovations, infrastructure development and enrichment of human capital in rural areas, backed by policy support by the government recognizes agriculture as one of powerful growth engine.

Rural development is more than ever before linked to entrepreneurship. Institutions and individuals promoting rural development now see entrepreneurship as a strategic development intervention that could accelerate the rural development process. Furthermore, institutions and individuals seem to agree on the urgent need to promote rural enterprises: development agencies see rural entrepreneurship as an enormous employment potential; politicians see it as the key strategy to prevent rural unrest; farmers see it as an instrument for improving farm earnings; and women see it as an employment possibility near their homes which provides autonomy, independence and a reduced need for social support. To all these groups, however, entrepreneurship stands as a vehicle to improve the quality of life for individuals, families and communities and to sustain a healthy economy and environment.