Unit – 5 | unit 5 rural marketing

Unit – 5

Rural Marketing

Q1) Explain rural marketing.

A1)

Rural marketing is now a two-way marketing process. There is inflow of products into rural markets for production or consumption and there is also outflow of products to urban areas.

The growth in the rural markets is perhaps the most significant feature of the marketing environment of India in recent time. The growth implies at once a great marketing opportunity as well as a great marketing challenge. Today, the rural market of the country accounts for a large share of the expenditure on manufactured on manufactured and branded consumer goods.

It is a two-way marketing process wherein the transaction can be:

1. Urban to rural – It involves the selling of products and services by urban marketers in rural areas. These include pesticides, FMCG products, consumer durables, etc.

2. Rural to urban – Here, a rural producer sells his produce in the urban market. This may not be direct. There generally are middlemen, agencies, government cooperatives, etc., who sell fruits, vegetables, grains, pulses and others.

3. Rural to rural – These include selling of agricultural tools, cattle, carts and others to another village in its proximity.

Rural marketing involves the process of developing, pricing, promoting, distributing rural specific product and a service leading to exchange between rural and urban market which satisfies consumer demand and also achieves organizational objectives.

Q2) Explain characteristics of rural market.

A2)

Rural marketing is now a two-way marketing process. There is inflow of products into rural markets for production or consumption and there is also outflow of products to urban areas.

It is a two-way marketing process wherein the transaction can be:

1. Urban to rural – It involves the selling of products and services by urban marketers in rural areas. These include pesticides, FMCG products, consumer durables, etc.

3. Rural to rural – These include selling of agricultural tools, cattle, carts and others to another village in its proximity.

Distinguishing characteristics of rural markets

Rural markets may be considered as the nerve centres of the economic, social and cultural activities of the rural life of the country. It is scattered and widespread into many villages and unlike the urban market not confined to a handful of metros, cosmopolitan cities and towns. The demand for products including consumer non-durables and durables are seasonal and therefore uneven in a year.

i. Large, diverse and scattered market – The rural market in India is large and scattered into a number of regions. There may be less number of shops available to market products.

Ii. Major income of rural consumers- agriculture – Rural prosperity is tied with agricultural prosperity. In the event of a crop failure, the income of the rural masses is directly affected.

Iii. Standard of living and rising disposable income of the rural customers – It is known that a majority of the rural population lives below the poverty line and has a low literacy rate, low per capital income, societal backwardness, low savings etc., but the new tax structure, good monsoon, government regulation on pricing has created disposable incomes. Today the rural customer spends money to get value and is aware of the happening around him.

Iv. Traditional outlook – Villages develop slowly and have traditional outlook. Change is a continuous process but most rural people accept change gradually. This is gradually changing due to literacy, especially in the youth who have begged to change the outlook in the villages.

v. Rising literacy levels – It is documented that approximately 45 per cent of the rural Indians are literate. Hence, awareness has increased and the farmers are well- informed about the world around them. They are also educating themselves on the new technology around them and aspiring for a better lifestyle.

Vi. Diverse socio-economic background – Due to dispersion of geographical areas and uneven land fertility, rural people have disparate socio-economic background, which ultimately affects the rural market.

Vii. Infrastructure facilities – The infrastructure facilities like cemented roads, warehouses, communication system and financial facilities are inadequate in rural areas. Hence, physical distribution is a challenge to marketers who have found innovative ways to market their products.

Q3) Explain rural consumers.

A3)

Rural consumer

Rural consumer go to their nearest cities when they have to buy products like television, tractor, etc. for most villages, the nearest cities can be as far as 50kms away. Most of these cities are district towns. Rural consumers go to the local market which is normally around 5 – 10 km from their villages to buy the daily household requirements like sugar, tea, etc.

Characteristics

Reference group – typically, in a rural area the reference groups are primary health workers, doctors, teachers and panchayat members, the village trader or the grocer, commonly called ‘Baniya’ or ‘Mahajan’ are an important influence in the decision making of rural customer.
Occupation – consumption patterns differ according to income levels. Typically, in a rural area the principle occupation is farming, trading, crafts, plumbing, electric works, primary health workers and teachers.
Media habits – rural people are fond of music and folklore. In rural areas a popular form of entertainment is tamasha and nautanki.
Rural electrification – the main objective is to provide electricity for agricultural operations and for small industries in the rural area.
Other variables – culture, language, religion, caste and social custom are some other important variables for profiling a rural customers

Q4) Explain rural markets.

A4)

Rural areas of the country or countryside are areas that are not urbanized, though when large areas are described country towns and smaller cities will be included. They have a low population density, and typically much of the land is devoted to agriculture.

Components of rural markets

For the market to exist, certain conditions must be satisfied. These conditions should be both necessary and sufficient. They may also be termed as the components of a market.

1. Existence of a good commodity for transactions (physical existence is, however, not necessary)

2. Existence of buyers and sellers

3. Business relationship or intercourse between buyers and sellers; and

4. Demarcation of area such as place, region, country or the whole world. The existence of perfect completion or a uniform price is not necessary.

Classification of rural markets

This can be classified as follows:

a) CONSUMER MARKET:

Constituents: Individuals and Households.

Products : Consumables, Food- Products, Toiletries, Cosmetics, Textiles and Garments, Footwear etc.

Durables : Watches, Bicycles, Radio, T.V, Kitchen Appliances Furniture, Sewing Machines, Two Wheeler etc.

b) INDUSTRIAL MARKET:

Constituents : Agricultural and allied activities, poultry farming, fishing, Animalhusbandry, Cottage Industries, Health center, School, Co-operatives, Panchayat office etc.

Products : Consumables, seeds, Fertilizers, Pesticides, Animal feed, Fishnets, VMedicines, Petroll diesel etc.

Durables : Tillers, Tractors, Pump sets, Generators, Harvesters, Boat etc.

c) SERVICES MARKET

Constituents : Individuals, Households, offices and Production firms.

Services : Repairs, Transport, Banking credit, Insurance, Healthcare, Education, communications, Power etc

Q5) Explain marketing mix in rural markets.

A5)

Marketing mix comprises of various controllable elements like product, price, promotion and place. Success of any business enterprise depends on marketing mix and these four elements are like powerful weapons in the hand marketers.

Product Mix

Product is a powerful tool of an organization’s success. The products must be acceptable to rural consumers in all significant aspects. The firm must produce products according to the needs and future demands of rural buyers. The product features like size, shape, color, weight, qualities, brand name, packaging, labeling, services, and other relevant aspect must be fit with needs, demands and capacity of buyers.

Product must undergo necessary changes and improvements to sustain its suitability over time. The effectiveness of other decisions like pricing, promotion and place also depends on the product.

Price Mix

Price is the central element of marketing mix, particularly, for rural markets. Rural consumers are most price sensitive and price plays more decisive role in buying decisions.

Pricing policies and its strategies must be formulated with care and caution. Price level, discounts and rebates, then credit and installment faculties are important considerations while setting prices for rural specific products.

Normally, the low-priced products always attract the rural buyers, but rarely some rural customers are quality and status conscious.

Promotion Mix

Rural markets are delicately powerful to cater to the rural masses. The promotion strategies and distribution strategies and Ad makers have learned to leverage the benefits of improved infrastructure and media reach.

Most of the companies advertise their products and services on television and they are sure it reaches the target audience, because a large section of the rural India is now glued to TV sets. Marketers have to decide on promotional tools such as advertisement, sales promotion, personal selling and publicity and public relations.

The method of promotion needs to meet the expectations of the market. Vehicle campaigns, edutainment films, generating word of mouth publicity through opinion leaders, colorful wall posters, etc. — all these techniques have proved effective in reaching out to the rural masses.

Place Mix

Rural market faces critical issues of distribution. A marketer has to strengthen the distribution strategies. Distributing small and medium sized packets through poor roads, over long distances, into the remote areas of rural market and getting the stockiest to do it accordingly.

Both physical distribution and distribution channel should be decided carefully to ensure easy accessibility of products for rural consumers. Choosing the right mode of transportation, locating warehouses at strategic points, maintaining adequate inventory, sufficient number of retail outlets at different regions, and deploying specially trained sales force are some of the critical decisions in rural distribution.

Q6) Explain social marketing.

A6)

Social marketing is the application of commercial marketing principles to achieve a social good. It began as a formal discipline in the 1970s, when Philip Kotler and Gerald zaltman published “social marketing- an approach to planned social change” in the journal of marketing.

They observed that the same marketing principles that were used by commercial marketers to sell products and services could also be used to sell ideas, attitudes and behaviour for the betterment of human life.

The main goal of social marketing is not to make financial gains, but to bring about behavioural change for societal benefit. It includes promoting the use of seatbelts while driving, promoting regular health checkups, persuading people to get their children vaccinated, asking people to give up tobacco use, etc.

Amitabh Bachchan campaigning for polio eradication, zeenat aman encouraging the patients to get treatment, boxer Virender Singh telling people to donate blood, etc. are examples of social marketing.

Social Marketing Process:

1. Preparation:

In the preparation phase, the foundation for the social marketing process should be laid. It is essential to have an understanding of the problem, the audience to be targeted and the environment in which the programme will operate. There should be an agreement among the stakeholders about the planning process, project goals, the resources required, the communication media to be used, etc.

2. Define the Problem and the Goal:

The problem should be defined from the social perspective. The potential causes of the problem should be studies and the desired outcome should be outlined. Other similar campaigns should be analysed to gain an understanding about the specific problem and how the anticipated results can be obtained.

3. Understand the Customer by Gaining an Insight:

It is important to identify the target segment for the social marketing programme. By analysing the customer’s current behaviour, beliefs and lifestyle, an insight about his personality can be gained. The customer should be informed about the benefits he could gain by bringing about a change in his behaviour.

Steps should be taken to minimize the effects of the probable barriers that might prevent him from changing. Specific behavioural objectives for each target market should be set keeping in view their uniqueness.

4. Develop Strategy:

A vision for the future should be created. The potential involvements with the customers have to be decided in advance. The objectives should be prioritized on basis of their importance and the most important one should be accomplished first.

The sequence of the customer’s journey from current behaviour to visualized behaviour also needs to be planned. Compelling campaign logic should be in place, it can be formulated by interacting with the public.

An agreement should be reached with all the stakeholders regarding the core elements of the strategy—the messages, language, symbols, communication networks, etc.

5. Implement:

The strategy so developed has to be put into action. The timeline for accomplishment of tasks should be fixed. The planned interventions should be pre-tested to check if any changes need to be made.

The marketer should carry out the involvements and interactions with the target group and encourage them to change their behaviour and beliefs for the long-term benefits of the society as a whole.

6. Review:

The progress that is being made as a result of these social marketing efforts should be measured. The organization should learn from each step and amend the policies wherever required. The experience should be shared with other organizations having similar objectives. The ultimate purpose of social marketing is to bring about societal benefits.

The impact of the social marketing can be seen in the positive changes that have resulted because of such endeavors, like reduction in tobacco consumption, fall in infant mortality rate, increase in number of girls attending schools, etc.

Q7) Explain online marketing.

A7)

The use of Internet and Web technologies in business – commonly known as “ebusiness” – has changed how marketers implement and enhance their business processes and interact with their environments. In order to develop a successful e-business model understanding the customer needs in the light of the new environment is very essential.

Electronic business, commonly referred to as “e-business”, or an internet business is generally referred as buying and selling of goods or services through internet. However this definition just reflects one aspect of e-business i.e., trading. E-business in a broader perspective involves the use of information and communication technologies to facilitate and support processes and activities of business. Processes and activities of business includes buying, selling, customer services, advertising and promotion, supply chain management, processing orders electronically and cooperating with stakeholders of business and much more. Therefore ebusiness is the conduct of business on the Internet, not only buying and selling but also servicing customers and collaborating with business partners.

Importance of e-Marketing:

a. When implemented correctly, the return on investment (ROI) from e-Marketing can far exceed that of traditional marketing strategies.

b. Whether a “bricks and mortar” business or a concern operating purely online, the Internet is a force that cannot be ignored. It can be a means to reach literally millions of people every year. It’s at the forefront of a redefinition of way businesses interact with their customers.

Q8) Explain direct marketing.

A8)

Direct marketing is the method of selling goods and services directly to the customers rather than through retailers. Firms involved in direct marketing communicate directly with the target customers with specific promotional techniques. It helps the business to build better customer relations because the business connects to the prospective customers directly.

It is basically about building loyalty in existing customers and prospecting new ones. Direct marketing is superior to other forms of mass marketing as direct marketing allows the firm to reach particular target markets.

Mass media advertising may reach a larger audience, but it is possible that a major portion of that audience is not even interested in the product. Direct marketing scores an advantage here—only those people are contacted who would be genuinely interested in the product.

Features of Direct Marketing:

(i) Only the audience that is most appropriate for the firm’s products or services is targeted.

(ii) Higher efficiency because marketing efforts are directed only towards those who are likely to use the products.

(iii) Flexibility in choice of marketing methods to be adopted.

(iv) It is easier to fix accountability as compared to other methods.

Q9) Explain service marketing.

A9)

Services are intangible economic activities that fulfill certain needs of a customer. Some services are purely intangible in nature while some are associated with tangible goods. Production and delivery of services is simultaneous, i.e., services cannot be stored and are consumed at the point of sale. They cannot be seen or touched, but only experienced.

Examples of services are banking, insurance, hair dressing, catering, medical services, etc. Services are very different from products and as such they need different strategies to be successfully marketed.

Unique Features of Services:

i. Intangible:

Services are non-physical. They cannot be held, seen, touched or tasted. They have no ownership and cannot be stored. The degree of intangibility varies from service to service. Some services like teaching have almost nil tangible components whereas others like catering, dress-making or medical services are associated with tangible products like food, clothing or medicine.

Ii. Variable:

No two instances of service exposure are same. Even if the same service provider is providing the service to different clients, some differences, however minute are prone to be there. It is more difficult to standardize services than it is to standardize products. The quality of service also depends upon the place and time it was delivered on.

Iii. Inseparable:

Services are inseparable from their providers. They are produced, delivered and consumed simultaneously. A particular doctor’s service has no existence separate from him or the skills of a hair dresser cannot be isolated from her.

Iv. Perishable:

A service ceases to exist the second it has been consumed. The experience of classroom teaching ends for the student the moment the teacher closes her notes; the lecture delivered at that point of time can never be repeated. It is highly perishable. Service capacity loses its usefulness if not utilised in time. An empty seat on a moving bus denotes wasted service capacity. Its utility cannot be reclaimed.

Q10) Explain green marketing.

A10)

Green marketing is the marketing of products in an environmental friendly way. It combines the satisfaction of consumer’s wants and needs with the conservation and protection of the natural environment.

Green companies may produce goods that are environmentally friendly or adopt a production method that is least damaging to natural resources. Green marketing is also known as sustainable marketing.

The four elements of the marketing mix, i.e. product, price, place and promotion are combined to market products that are environmentally superior to available substitutes. The ecological benefits of green marketing may be in forms of reduced waste, decreased emissions of toxins, better energy efficiency, etc.

Importance of Green Marketing:

a. Green Marketing is inevitable in a market where resources are scarce and demands are infinite.

b. Green marketing will prove to be indispensable and advantageous, cost-wise too, in the long run.

c. People are concerned about the environment and are changing their behaviour pattern so as to be less hostile towards it.

d. Most of the consumers, both individual and industrial, are becoming more concerned about environment-friendly products.

e. As a result, green marketing has emerged, which aims at marketing sustainable and socially-responsible products and services.

Q11) Explain rural consumer and rural markets.

A11)