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Chapter: Business Science : Rural Marketing : An Overview of Rural Marketing

Mechanisms of Rural Marketing

Green Revolution in the Agricultural Sector: Period from 1967 to 1978 heralded a technological thrust into rural areas aimed at improving food grain production in the country and hence achieving food self-sufficiency.

Mechanisms of Rural Marketing


Development programs


Green Revolution in the Agricultural Sector


Period from 1967 to 1978 heralded a technological thrust into rural areas aimed at improving food grain production in the country and hence achieving food self-sufficiency.


Green Revolution generated some notable economic results:


1.     Crop areas under high-yield varieties required fertilizers, pesticides, fungicides and other inputs. Farm equipments like tractors with farm implements, diesel pump sets etc. introduced mechanization into the farm sector for the first time.


2.     The increase in farm production also introduced mechanized processing, spurring growth of the local manufacturing sector.


The modernization and mechanization of the farm sector boosted farm productivity, triggered industrial growth, created jobs and initiated a change in the quality of life in villages.


White Revolution


Ø   Initiated by the government with the aim of achieving self-sufficiency in the area of milk production.


Ø   Cornerstone of the government dairy development policy was producing milk in rural areas through producer cooperatives and moving processed milk to urban-demand centres.


Ø   Gave a boost to dairy development and initiated the process of establishing the much-needed linkages between rural producers and urban consumers.


Ø   Formation of producer‘s cooperatives ha institutionalizing milk production and processing.


Ø   Socio-economic and demographic factors such as urbanization and changing food habits and lifestyles have also reinforced the growth in demand for dairy products (ice creams, chocolate, yoghurt, butter, flavoured milk etc.).


Ø   Milk production has increased from 17 million tonnes in 1950-51 to 84.6 million tonnes in 2001-02.


Ø   Most successful story in dairy development has been in Gujarat, Punjab, Haryana, Uttar Pradesh and Andhra pradesh.

The NGO Movement


Ø   Important in providing assistance at the grassroots level assimilation of technological extensions in rural areas.


Ø   Stepped in to create awareness, build skills, introduce technology and develop capacities for maintenance and sustainability.


Ø   Government programmes implemented through NABARD, CAPART, KVIC and others are given shape by these organizations.


Ø   Introduction of low-cost spindles, weaving machinery, technology for leather processing, food processing, natural resources management etc have been some contributions in bringing about change at the grassroots.


Ø   NGO‘shave been also active in providing basic health and child care services, running


homes for destitute and the distressed and providing education and training opportunities.


Infrastructure facilities


Road Connectivity


Good road connectivity, particularly in rural areas, between sub-divisional towns and district headquarters is often the primary means of supplementing public efforts directed at providing basic health and educational services, as well as infrastructural support for production and trade and commerce at the local village level.


It is particularly relevant in the Indian context where over 70% of the population continues to live in rural areas and where over 50% of villages with population of less than 1000 have yet to be connected by roads.


Among the major states, Kerala has the highest road length per hundred square kilometres (375 km in 1997).


Road connectivity at the village level


Post Offices


India with its 1,55,279 post offices as on 31 March 2002 (138756 post offices are in rural areas) has a postal network that is the largest in the world. On an average, a post office serves an area of 21.17 km and a population of 6614 persons.


For providing postal services, the whole country has been divided into 22 postal circles. Each circle is further divided into regions. A postmaster general who is the postal manager of the area heads each region.

Post offices in the country are categorized as head, sub and branch post offices.


Rural Health Services


Sub-centers: The health Sub-Centre is the contact point between the primary health care system and the community. The Staff at health Sub-Centres are assigned tasks related to


Ø   Interpersonal communication in order to bring about behavioral change in relation to maternal and child health, family welfare, nutrition, immunization, control of diarrhoea and control of communicable diseases.


Ø   Primary health Centres : First contact point between the village community and a medical officer. These are established and maintained by the State Government under


the Minimum Needs / Basic Minimum Services Programme.

Ø   Manned by a medical officer and is supported by 14 paramedical and other staff.


Ø   Activities include curative, preventive and promotive health care as well as family welfare services.


Ø   Community Health Centres : Established and maintained by the State Governments under the MNP/BMS programme. Four medical specialists, i.e. surgeon, physician, gynaecologist and paediatrician supported by 21 paramediacal and other staff. 30


indoorbeds, with X-ray, labour room, operation theatre and laboratory facilities.




From six radio stations at the time of Independence, All India Radio today has 208 radio stations. All Stations of All India Radio broadcast farm programmes and home programmes directed at rural audience. The thrust of the broadcast is on increasing production of agri-products and various programmes adopted by the Government of India.




DD-1 operates through a network of 1042 terrestrial transmitters of varying powers reaching over 87% of the population. Over the years, the viewership of Doordarshan as increased enormously, reaching 7.5 crore homes. Community television sets have been introduced under various schemes operated by Central and State Government.

Telecom Services


By 2004, over 80% of all villages had been connected through 5.4 lakh Village Public Telephones. Similarly, 1.42 crore telephone connections had been given in rural areas.


People who are unable to afford a telephone facility of their own can now have access to VPTs in rural areas in addition to Public Call Offices.


Rural credit institution


§    Asmitha –Provides rural poor women access to financial resources in the form of collateral free small loans for income generation and livelihood promotion. This enables them to set-off small start up business, which soon translates into adequate nutrition, medical aid and education. With increased businesses, these low-income women become economic agents intrinsic to development rather than simply homemakers


§    Bandhan MF- Bandhan was set up to address the dual objective of poverty alleviation and women empowerment. The microfinance activities are carried on by Bandhan Financial Services Pvt. Ltd. (BFSPL), incorporated under the Companies Act, 1956 and also registered as a Non Banking Financial Company (NBFC) with the Reserve Bank of India (RBI).


§    That apart, Bandhan is also engaged in de entity.



§    Cashpor India –Our mission is to identify and motivate poor women in the rural areas and to deliver financial services to them in an honest, timely and efficient manner so that our Vision is realized and CASHPOR itself becomes a financially sustainable micro finance institution for the poor.


§    Grameen Foundation –Works in 6 key areas : Connecting microfinance institutions with capital markets, Strengthening organizations by building people practices, Harnessing the power of technology, Helping track peopl knowledge widely for broader impact and Social Business



§     Grameen Koota –Grameen Koota recognises the future competition and challenge of retaining exclusivity of clients. Instead of targeting a high market share in high competition areas we will focus on incre becoming a preferred microfinance provider. We will leverage our existing goodwill with the community and have a strong focus on orienting our field staff towards this objective.

§    Hand in Hand –is a development organisation whose objective is to eliminate poverty by creating enterprises and jobs?


§    Focusing on help to self-help, we take a holistic approach that combines microfinance and support for women to start enterprises with work in four other areas that matter most


too poor communities: education and child labour elimination, health and sanitation, a sustainable local environment and information technology access. With currently more than 450,000 members in Tamil Nadu, Karnataka and Madhya Pradesh, who have collectively started more than 250,000 micro-enterprises, our goal is to create 1.3 million jobs by 2013. Supported by international offices in the UK and Sweden, we are now taking our model to South Africa, Afghanistan and Latin America.


Micro Credit India –Microcredit Foundation of India (MFI) is a not-for-profit Section 25 Company in Tamil Nadu dedicated to promoting entrepreneurship and community level




action in rural areas as a means to sustainable economic prosperity. Today MFI works primarily with women. Through its field staff, MFI helps them form Self Help Groups (SHGs), trains them in good financial practice, facilitates access to microcredit loans, equips them with business skills and facilitates access to new markets for their products.


MYRADA – MYRADA is a Non Governmental Organisation managing rural development programmes in 3 States of South India and providing on-going support  including deputations of staff to programmes in 6 other States. It also promotes the Self Help Affinity strategy in Cambodia, Myanmar and Bangladesh New Life –New Life designs projects based on survey of the socio,economic problems of the project area and support the poor, abused and abandoned children and women by executing the projects with a defined goals/objectives. The current projects of New Life includes orphanages for children of incarcerated parents,Save children from Child Labour,Ensuring primary education for the rural children in India,Early learning centres for children of vulnerable community groups,Read to Lead Project, Taking care of the medical needs of Physically handicapped and Mentally retarded children.


RangDe –Rang De‘s mission is to make microcr household by lowering loan interest rates through innovative means. Rang De is committed  to  enabling  individuals  to  become  social  investors  through  a  transparent  platform. While strive to improve Rangde.org as an interface, we work extensively with our field partners to ensure that we do not compromise on our vision –making credit available at affordable rates.



Role of cooperative institution


Cooperative society is an organization of group of people with collective responsibilities and thoughts for the development of needy, especially under privileged. Cooperatives helped in the development of agriculture, banking, credit, agro-processing, storage, marketing, dairy, fishing and housing and its network covers 85 per cent of rural households. It occupies a key position in agricultural development with support in resource and input use, harvesting of water resources, marketing channels, storage facilities, distribution channels, value addition, market information and a regular monitoring network system. Cooperatives are also engaged in economic activities like disbursement of credit, distribution of agricultural inputs (seeds, fertilizers, and agrochemicals), etc.


Financial service


Input supply services Marketing services Consumer services Welfare Services


Extension services Training centre Scholarships


Regulated market


A regulated market or controlled market, is a market where the government controls the forces of supply and demand, such as who is allowed to enter the market or what prices may be charged.[1] It is common for some markets to be regulated under the claim that they are natural monopolies. For example, telecommunications, water, gas or electricity supplies. Often, regulated markets are established during the partial privatization of government controlled utility assets.


A variety of forms of regulations exist in a regulated market. These include controls, oversights, anti-discrimination, environmental protection, taxation and labor laws. In a regulated market, the government regulatory agency may legislate regulations that privilege special interests, known as regulatory capture.

Agriculture Export Zone


An Agri Export Zone or AEZ is a specific geographic region in a country demarcated for setting up agriculture based processing industries, mainly for export. The term is widely used mainly inIndia.


AEZ are to be identified by the State Government, who would evolve a comprehensive package of services provided by all State Government agencies, State agriculture universities and all institutions and agencies of the Union Government for intensive delivery in these zones. Corporate sector with proven credentials would be encouraged to sponsor new agri export zone or take over already notified agri export zone or part of such zones for boosting agri exports from the zones.


Establishments of marketing departments for various agricultural & non-agricultural produce KAPPAC




Main motive of this board is to purchase the coconut and prepare the coconut fibre. Scheme


Rejuvenation, modernization, & technology up gradation of coir industry Scheme of fund for regeneration of traditional industries


Skill upgradation & quality improvement scheme Science & technology scheme


Export market promotion scheme Domestic market promotion scheme


Trade & Industry related functional support service scheme Welfare measures.




Employee Welfare Scheme


Allocation of fund for each region


I.                   Educational stipends


II.                Incentive award


III.             Financial assistance.




The Sub-Group on Housing Finance for the Seventh Five Year Plan (1985-90) identified the non-availability of long-term finance to individual households on any significant scale as a major lacuna impeding progress of the housing sector and recommended the setting up of a national level institution.


NHB has been established to achieve, inter alia, the following objectives –


a.     To promote a sound, healthy, viable and cost effective housing finance system to cater to all segments of the population and to integrate the housing finance system with the overall financial system.


b.     To promote a network of dedicated housing finance institutions to adequately serve various regions and different income groups.


c.          To augment resources for the sector and channelise them for housing.


d.         To make housing credit more affordable.


e.      To regulate the activities of housing finance companies based on regulatory and supervisory authority derived under the Act.


f.       To encourage augmentation of supply of buildable land and also building materials for housing and to upgrade the housing stock in the country.


g.         To encourage public agencies to emerge as facilitators and suppliers of serviced land, for






Residential mortgage backed securitization process of national housing bank Reserve mortgage loan


Reverse mortgage loan enabled annuity Housing finance


Retail deposits


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