Tag: Rural Market BMS Notes

Occupational pattern of rural people also has an impact on the nature of income generation, which will in turn affect the expenditure pattern. Purchase behavior of the rural consumers depends upon the nature of occupation and the consistency in the generation of income.

A major section of the rural population relies on agriculture and allied activities for occupation. So, the income in the hands of rural people is very much conditioned by the status of agriculture and other allied activities.

Agricultural and allied activities are the main occupation for the rural people. An allied activity includes Horticulture, Forestry, Fishery, Animal Husbandry (dairy, poultry, and goat), Floriculture etc., the everyday needs of the villagers are also met by many other types of occupations. In rural sector, agri-based occupation can be different types.

The occupations which can be generally seen in the villages are:

1. Farm laborer
2. Milkman
3. Washer man
4. Pot maker
5. Blacksmith
6. Barber
7. Carpenter
8. Cobbler
9. Priest
10. Weaver.

Other rural occupation which are non-agricultural and support agricultural requirements and the rural people in their daily life are:

1. Village doctor
2. Policemen
3. Traditional village nurse
4. Anganwadi workers
5. Teacher
6. Peon
7. Grocer
8. Mechanic
9. Cyber cafe owner
10. Venders
11. Agricultural experts
12. Electricians etc.

Census of 2001 reports that, this agri-based occupational trend is slowly changing and a gradual shift towards non-agri based work has been taken place. As per the NSSO Rounds Survey, for the year of 1999-2000, rural India’s Primary sector workforce accounts for 76.1%, Secondary sector 11.3%, Tertiary sector 12.5% and finally non-farm sector hits 23.8%, which is next to the Primary sector.

Rural housing

Rural electrification

Rural electrification is the process of bringing electrical power to rural and remote areas. Rural communities are suffering from colossal market failures as the national grids fall short of their demand for electricity. As of 2017, over 1 billion people worldwide lack household electric power; 14% of the global population. Electrification typically begins in cities and towns and gradually extends to rural areas; however, this process often runs into obstacles in developing nations. Expanding the national grid is expensive and countries consistently lack the capital to grow their current infrastructure. Additionally, amortizing capital costs to reduce the unit cost of each hook-up is harder to do in lightly populated areas (yielding higher per capita share of the expense). If countries are able to overcome these obstacles and reach nationwide electrification, rural communities will be able to reap considerable amounts of economic and social development.

Productivity and efficiency

In addition to improved education, rural electrification also allows for greater efficiency and productivity. Businesses will be able to keep their doors open for longer and generate additional revenues. Farmers will have access to streamlined modern techniques such as irrigation, crop processing, and food preservation. In 2014, rural communities in India gained more than US$21 million from increased economic activity driven by recent additions of electricity.

Job creation

When expanding the electrical grid, there is a demand for thousands of jobs ranging from business development to construction. Projects to spread electricity create a wealth of job opportunities and help to alleviate poverty. For example, India set a target of 175GW of clean energy to be installed by 2022 to increase electrification throughout the country. An estimated 300,000 jobs will need to be created in order to reach these lofty goals.

Roads for rural marketing

Rural Development is the process of improving the quality of life and economic well-being of people living in rural areas, often relatively isolated and sparsely populated areas.

The term rural development is becoming a buzz word all over the world. As most of the people on earth live in rural areas, development in true sense cannot be expected without addressing the basic necessities of this huge population. In the era of modern science and technology, large amount of population in rural areas are still deprived of adequate nutrition, good education, proper communication, and social justice. Therefore, rural development is gaining importance in both the developed and developing countries.

However, till today, there is no universally acceptable definition of rural development. As a concept, rural development is comprehensive and multidimensional. It means improving the quality of life of the people living in rural areas through agriculture and allied activities. As a phenomenon, rural development is the result of interactions between various physical, technological, economic, socio-cultural and institutional factors.

Rural Development has traditionally centered on the exploitation of land-intensive natural resources such as agriculture and forestry. However, changes in global production networks and increased urbanization have changed the character of rural areas. Increasingly tourism, niche manufacturers, and recreation have replaced resource extraction and agriculture as dominant economic drivers.

The need for rural communities to approach development from a wider perspective has created more focus on a broad range of development goals rather than merely creating incentive for agricultural or resource-based businesses. Education, entrepreneurship, physical infrastructure, and social infrastructure all play an important role in developing rural regions. Rural development is also characterized by its emphasis on locally produced economic development strategies. In contrast to urban regions, which have many similarities, rural areas are highly distinctive from one another. For this reason, there are a large variety of rural development approaches used globally.

Rural development is a comprehensive term. It essentially focuses on action for the development of areas outside the mainstream urban economic system.

Rural development is a complete term that concentrates on the action taken for the development of rural areas improve the village economy. However, few areas that demand more focused attention and new initiatives are.

• Public Health and Sanitation
• Women Empowerment
• Education
• Employment opportunity
• Infrastructure Development (e.g. electricity, irrigation, etc.)
• Facilities for agriculture extension and research
• Availability of Credit

The concept of rural development can be analysed as follows:

• It ensures the increased ability of the poor rural mass to have control over their environment and resources rather than being passive object of external control and manipulations.
• It is a process of building capacities of rural people. The capacity may be build up in all aspects of life which includes socio-economic, cultural, educational and political.
• It also ensures the participation of rural people in all developmental activities. There is an increasing concern all over the world that the poor, the needy, the unprivileged, the weaker section of the society should take active part in development process, so that, they can fully enjoy the benefits of development.

Basic Elements of Rural Development:

Self-Respect:

Every person and every nation seeks some basic form of self-respect, dignity and honour. Absence or denial of self-esteem indicates a lack of development initiatives.

Life-Sustenance:

In order to survive, people have certain basic needs. These basic necessities include food, shelter and clothing. Besides, health care facilities and security are also important needs. Providing these basic necessities to all the people is of vital importance for economic growth, which is a prerequisite for development.

Freedom:

Freedom not only refers to political or ideological freedom, but also freedom from ignorance and superstitions. Man should be free from all bondages and should live in harmony with nature.

Important approaches of rural development taken up in India:

• Community Development Programme:

The community development programme initiated in the year 1952 made an attempt to increase involvement of rural people in development process. It laid emphasis on building of infrastructure in rural areas with the active involvement of people through organizational set up of National Extension Services.

• Rural Development Projects and Programmes:

Rural development projects are micro level efforts to bring about desirable changes in rural areas. However, rural development programmes involve a large number of projects which are aligned to one another, so that; they affect various facts of rural economic and social life. Rural development programmes attempt to bring about changes in a wider areas affecting large number of people.

• Package Approach:

In order to increase agricultural production per se in the country, this approach was adopted. Popularly known as package programme, emphasis was given on application of all improved practices, such as seeds, fertilizers, irrigation, plant protection measures and use of improved agricultural implements. The programme like Intensive Agricultural District Programme (IADP), Intensive Agricultural Area Programme (IAAP), High Yielding Varieties Programme (HYVP) are good example of such approach.

• Target Approach:

The poor, unprivileged section of the society deprived of the benefits from package programme, were selected under this approach. The Small Farmers Development Agency (SFDA), Marginal Farmers and Agricultural Labourers (MFAL) were some of the programmes under this approach.

• Integrated Rural Development:

There is a fair amount of disagreement among the rural development experts in defining the concept of Integrated Rural Development. The rural economy and social structure in most of the developing countries is characterised by widespread poverty, poor health conditions, illiteracy, exploitation, inequitable distribution of land and other assets and lack of rural infrastructure and public utility. Therefore, the problem requires an approach that will take into account all these factors in devising a comprehensive strategy to foster development in rural areas.

• Area Approach:

In this approach, specific areas were targeted for development initiatives. The areas which needs specific attention for certain problems to tackle were selected in this approach. The Drought Prone Area Programme (DPAP), Command Area Development Programme (CADP) are some of the major initiatives under this approach.

• Grass Root Level Approach or Local Level Participation in Rural Development:

There is a paradigm shift of approach in rural development in recent times. The efforts are more people-centric and situation specific. It is because of the fact that the problem of the rural areas varies with the situation to situation and problems need to be solved locally using available resources. Hence, ensuring people’s participation in all development efforts is becoming a prerequisite for any rural development initiative.

Rural Development is a process of developing and utilizing natural and human resources, technologies, infrastructural facilities, institutions and organizations, government policies and programmes to encourage and speed up economic growth in rural areas, to create jobs and to improve the quality of rural life towards self-sustenance. Ultimate objective of rural development is improving the quality of life of rural poor and the rural weak.

The present strategy of rural development mainly focuses on poverty alleviation, better livelihood opportunities, provision of basic amenities and infrastructure facilities through innovative programmes of wage and self-employment. The above goals will be achieved by various programme support being implemented creating partnership with communities, non-governmental organizations, community based organizations, institutions and industrial establishments, while the Department of Rural Development will provide logistic support both on technical and administrative side for programme implementation. Other aspects that will ultimately lead to transformation of rural life are also being emphasized simultaneously.

The Government’s policy and programmes have laid emphasis on poverty alleviation, generation of employment and income opportunities and provision of infrastructure and basic facilities to meet the needs of rural poor. For realizing these objectives, self-employment and wage employment programmes continued to pervade in one form or other.

As a measure to strengthen the grass root level democracy, the Government is constantly endeavoring to empower Panchayat Raj Institutions in terms of functions, powers and finance. Gram sabha, NGOs, Self-Help Groups and PRIs have been accorded adequate role to make participatory democracy meaningful and effective.

The prime goal of rural development is to improve the quality of life of the rural people by alleviating poverty through the instrument of self-employment and wage employment programmes, by providing community infrastructure facilities such as drinking water, electricity, road connectivity, health facilities, rural housing and education and promoting decentralization of powers to strengthen the Panchayat Raj institutions.

The Department of Rural Development and Panchayat Raj is responsible for the implementation of various rural welfare schemes and also assists Panchayat Raj Institutions to discharge their duties and functions as effective Local Self-Government entities.

Some Policies

National Food Security Scheme:

On the pattern of MNREGS, the central government is trying hard to bring a bill in the monsoon session (2013) to provide guarantee for food to the poor people, although it has already issued an ordinance in this regard.

National Rural Livelihood Mission:

It is meant to eradicate poverty by 2014-15.

National Rural Health Mission:

It was launched to make basic health care facilities accessible to the rural people.

Rajiv Awas Yojana (RAY):

This programme was announced in June 2009 with an objective to make the country slum-free.

Jawaharlal Nehru National Urban Renewal Mission (JNNURM):

It was launched on 3rd December, 2005. The main objective of this scheme was fast track development of cities across the country. It was focused especially on developing efficient urban infrastructure service delivery mechanism, community participation and accountability of urban local bodies and other agencies towards citizen.

Indira Awas Yojana:

It is one of the six components of Bharat Nirman Yojana. It was introduced in 1985-86. It aims to help built or upgrade the households of people living under BPL.

Bharat Nirman Yojana:

It was launched in 2005 for building infra­structure and basic amenities in rural areas. It comprises of six components rural housing, irrigation, drinking water, rural roads, electrification and rural telephony.

Pradhan Mantri Adarsh Gram Sadak Yojana (PMAGSY):

It focuses on integrated development of 100 villages with a 50 per cent population of SCs.

Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS):

After independence, for the development of rural society, particularly to develop the socio-economic life of the rural poor, many schemes and programmes were launched from time to time but unfortunately the fruits of these programmes reached to a very low proportion of these people.

It was estimated about 70 per cent of rural population was still deprived of the basic necessities of life. For the purpose of extending the benefits to rural people, a new scheme was launched and legislation was enacted under the name ‘National Rural Employment Guarantee Act’ (NREGA).

Antyodaya Yojana:

The Hindi word ‘antyodaya’ is a combination of two words ant meaning end or bottom level and udaya meaning development. Thus, as a whole, it implies the development or welfare of a person standing at the end of the queue (lowest level), that is, the poorest of the poor.

This programme was initiated by the Government of Rajasthan on 2nd October, 1977 for special assistance to persons living below the poverty line (BPL). It was later on picked up by the then Janata government at the centre in 1978. The idea was to select five of the poorest families from each village every year and help them in their economic betterment.

20-Point Programme:

This has been a major programme of rural development encompassing various aspects of rural people. This programme is associated with former Prime Minister Indira Gandhi, who introduced it in July 1975 for reducing poverty and economic exploitation and for the uplift of weaker sections of society. She gave the slogan ‘Garibi Hatao’ during parliamentary elections.

The important goals of this programme were:

1. Welfare of the rural masses.
2. Increase in rural employment.
3. Minimum wages to landless labourers.
4. Uplift of the SC and ST people.
5. Growth of housing facilities.
6. New programmes of family planning.
7. Extension of primary health facilities.
8. Making primary education more effective.
9. Welfare of women and children.
10. Some other programmes drinking water facilities, public distribution system, increasing power production, etc.

Pradhan Mantri Awas Yojana

Pradhan Mantri Awas Yojana – Urban (PMAY-U), a flagship Mission of Government of India being implemented by Ministry of Housing and Urban Affairs (MoHUA), was launched on 25th June 2015. The Mission addresses urban housing shortage among the EWS/LIG and MIG categories including the slum dwellers by ensuring a pucca house to all eligible urban households by the year 2022, when Nation completes 75 years of its Independence.

The rural market has been growing steadily over the past few years and is now even bigger than the urban market. About 70 per cent of India’s population lives in villages. More than 800 million people live in villages of India. ‘Go rural’ is the marketer’s new slogan. Indian marketers as well as multina­tionals, such as Colgate-Palmolive, Godrej and Hindustan Lever have focused on rural markets.

Thus, looking at the opportunities, which rural markets offer to the marketers, it can be said that the future is very promising for those who can understand the dynamics of rural markets and exploit them to their best advantage.

About 68.84% of the consumers live in rural areas and more than half of the national income is generated from rural areas. Of the 121 crore Indians, 83.3 crore live in rural areas while 37.7 crore stay in urban areas, Our nation is distributed approximately in 6,30,000 villages which can be sorted in different parameters such as literary levels, accessibility, income level, penetration, distance from nearest town etc. It is only natural that rural India occupies an important position in the marketing strategies both in the narrower and broader spectrum.

Rural marketing in Indian economy can be classified under two broad categories. These are (a) the markets for consumer goods that comprise of both durable and non-durable goods, and (b) the markets for agricultural inputs that include fertilizers, pesticides, seeds, and so on. 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.

Trends

Brand conscious: The rural market in India is not separate entity in itself and it is highly influenced by the sociological and behavioural factors operating in the country. Spending on FMCG products especially in the rural areas is showing an increasing tendency.

Better credit facilities through banks: With co-operative banks taking the lead in the rural areas, every village has access to short, medium, long-term loans from these banks. The credit facilities extended by public sector banks through Kisan Credit Cards help the farmers to but seeds, fertilizers and every consumer goods on instalments.

IT penetration in rural India: Today’s rural children and youth will grow up in an environment where they have ‘information access’ to education opportunities, exam results, career counselling, job opportunities, government schemes and services, health and legal advice and services, worldwide news and information, land records, mandi prices, weather forecasts, bank loans, livelihood options. If television could change the language of brand communication in rural India, affordable Web connectivity through various types of communication hubs will surely impact the currency of information exchange.

Media: Mass Media has created increased demand for goods and services in rural areas. Smart marketers are employing the right mix of conventional and non-conventional media to create increased demand for products. The role cable television has been noteworthy in bringing about the change in rural people‟s mindset and influencing their lifestyles.

Government Incentives and polices: The government‟s stress on self-sufficiency resulted in various schemes like Operation Flood (White Revolution), Blue Revolution, Yellow Revolution, etc. resulted in the production of 15 million tons of milk per annum. The Indian Government launched a number of schemes like IRDP (Integrated Rural Development Programme) and REP (Rural Electrification Programme) in the 1970‟s, which gave a boost to the agrarian economy. This resulted in changes in people‟s habits and social life. REP gave impetus to the development of consumer durable industry.

Increased purchasing power: Rural purchasing power has grown faster than urban in the recent years. Rural Indian economy is highly supported by increasing disposable income, Government initiatives and schemes and favourable demographics. As a result, the rural segment of the Indian economy is growing at a pace of 8-10% per annum. Government spending in rural India has tripled over the last four years and is now translating into higher consumer spending. Therefore, rural consumers are consuming more premium and convenience oriented categories that are typical of their urban counterparts. “Policy measures like the waiver of agricultural loans around US$ 13.9 billion and the National Rural Employment Guarantee Scheme, which guarantees 100 days of employment to one member of every rural household (NREGS), the Bharat Nirman program with an outlay of US$ 34.84 billion for improving rural infrastructure etc helped the rural economy.

Increased level of education and employability of rural youth: Villagers realized their children education is the first priority. Most of the rural youth especially teenagers are well aware of products due to their school education and media exposure. Significant progress on literacy levels 90% of the villages have a primary school within a 1 km walk. Private school enrolment in rural India has enhanced by 5.5% points over past six years. The literacy rate has also gone up by 68.91% in rural India. This enhanced the employability of rural youth they are not sitting idle in villages they are motivated to go to nearby towns to find the jobs.

Smart phones penetrating into rural India: 320 million are rural mobile phone users i.e. roughly 38 per cent of the rural population, which includes children and senior citizens. The actual benefit of technology positively impacting rural economy will be seen when data communication is used effectively. Since the mobile phone and associated wireless technologies can be used to tackle one of the problems, namely, literacy, it would certainly have a cascading effect on the economic development. The telecom service providers concentrate on subscriber acquisition in the rural market, primarily for voice services, which has become commoditised due to intense competition in the sector, it is not the end. The low and ever-dwindling ARPU (Average Revenue per User, currently at around Rs 200 a month) can be offset by using mobile services not just for communication, but to more basic aspects of life such as education and healthcare.

Green revolution: The vision of Dr. Swami Nathan, the father of the green revolution to achieve self-sufficiency in food grain production in 1995, gave a major breakthrough in food grain production by the use of scientific methods in agriculture. At present, Rural India generates 299 million tons annually.The substantial attention accorded to agriculture during the successive five-year plans has helped in improving agricultural productivity. Adoption of new agronomic practices, selected mechanisation, multiple cropping, inclusion of cash crops and development of allied activities like dairy, fisheries and other commercial activities have helped in increasing disposable income of rural consumers.

Large population: The Indian rural market with its vast size and demand offers great opportunity to marketers. Our national is classified in around 450 districts & approx. 6, 30,000 villages. Indian rural market is huge in size because rural population accounts for almost 70% of Indian population as the recent Census 2011, 833 million live in rural India, 33% of rural population includes youth, number of households increased from 25 to 33 crore. The rural market is currently worth approximately USD$ 10 billion in consumer spending in the FMCG market annually. Food categories are currently driving the bulk of the additional USD$ 90 billion into the marketplace by 2025.

Delivering to the rural markets is a real challenge to many marketers. In fact, the whole dynamics of rural markets are so unique that one has to look at beyond traditional marketing mix with advanced mix containing the 4A‟s instead of the traditional 4P‟s of marketing:

• Acceptability develop what the consumer wants,
• Affordability, make an affordable product,
• Availability, product made available at villages
• Awareness; Don’t promote the brand, demonstrate the product.

Most of the marketers look at rural market as an extension of existing urban market hence they simply dump their existing product which is outdated in urban market into rural market. Hence marketers fail to penetrate into rural market in big way. Though rural consumers attracted towards urban life styles their dynamics are differ from urban consumers. Similarly, rural marketing strategies are also significantly different from the marketing strategies aimed at an urban consumer.

Common constraints

Hierarchy of Market:

Rural consumers have identified market places for different items of their requirements. Thus depending upon the purchase habit of rural people, the distribution network of different commodities has to be different.

Non-Availability of Dealers:

It is not possible to have direct outlets in each rural market; firms need to have service of dealers, which is not easily available.

Many Languages and Dialects:

The number of language and dialects vary widely from state to state, region to region and even from district to district. Though the recognized languages are only 16 the number of dialects is around 850.

Vastness and Uneven Growth:

India has about 5 lakhs villages, which are scattered over a wide range of geographical area, and also they are not uniform in size.

Warehousing Problems:

Central Warehousing Corporation and State Warehousing Corporation do not extend their services to the rural parts. The warehouses at mandi level are managed by co-operative societies who provide services to members only.

Communication Problems:

Communication infrastructure consisting of posts, telegraphs and telephones are inadequate.

Transport Problem:

Transportation infrastructure is very poor in rural India. Though India has the fourth largest railway system in the world, many villages remain outside the railway network. Many villages have only kaccha roads while many of rural interiors are totally unconnected by the roads. Because of this the physical distribution is difficult in rural areas.

Underdeveloped Societies and Populace: Majority of Indian rural societies are still underdeveloped they follow old customs, traditions and beliefs. The modern science and technology have made a less impact on their lives, the people in the rural areas are rigid and not ready to adopt the change in any spears. This is a major reason why scientific innovations are not entering the rural segments and they are not getting the expected outcomes.

Uneven Distribution of Villages: India is a vast country approximately raning form 3214 Km from North to South and 2933 Km from East to West. Rural market consist of 638365 villages as per 2011 censes, some villages are large and some of them are small and remote. Further, each village will have different culture, agricultural pattern followed by different climatic and geographical conditions. In this scenario it is difficult to frame a single policy of development of all rural areas ignoring their economic, geographical, cultural, and political backgrounds.

Poor Planning and Market Research: The concept of planning was almost absent in the rural markets, due to lack of marketing information facilities. Rural producers fail to produce to the goods as per the demand because of the above reason. Further, they will not search for markets, customers and consumers for their products and services. Due to which in spite of the quality and low price of rural products they were not able to market them and initiate marketing activities in the rural areas.

Solutions

1. The rural populace should be developed in all aspect’s strategies must be designed by the central government, respective state governments, local bodies and NGOs for the upliftment of the same.
2. Adequate infrastructural facilities like roads, bridges, ware houses, marketing yards, information centres etc., must be provided by in association with public and private partnership.
3. Communication networks like postal, telegraph, telecommunication, television, cinema, etc., need to be strengthened in the rural India. It can be done with the help of the technology and customized services designed to satisfied the communication requirements of rural masses
4. Banking and financial system need to be redesigned and reinforced as per the requirements of the rural societies. Private banking system, co-operative credit societies and other financial institutions should extend their operations to the rural areas and should provide all possible services
5. A program should be initiated to connect all rural areas with the highways, urban and semi urban centers throughout the country. A broad understanding must be developed on cultural patterns, climatic and geographical conditions pattern of living traditions, customs, values, and beliefs of the peoples with the help of research centers in that respective areas.
6. Training Programs must be designed to impart the knowledge in vocational and non-agricultural sectors to the rural people so that the dependency on agriculture can be reduced and the rural entrepreneurial activity and industries can be strengthened. This measure will definitely increase the average and per capita income of the rural house holds
7. Both central and state governments should provide a platform through which rural entrepreneurs can join together in a given area to comeback the problems of low production this would include standardizing their products, common marketing and sharing of revenues in proportion to the contribution by each member.
8. Interventions by government agencies are needed to do the market research and disseminate the findings to the rural marketers at an earliest so that they can be benefited with the competitive advantage. Further accurate market planning form the main ingredient in an effective marketing plan. Hence marketing palming must be done on scientific and statistical basis
9. Rural entrepreneurs should be trained in the areas and usage of computer and information technology. Customer data base must be maintained to build healthy business relations with the help of electronic and social media.
10. Local business clients, markets, customers and consumers must be identified. This will reduce the cost of logistics, transportation and price of the products.