Rural Marketing Environment

RURAL MARKETING ENVIRONMENT

It is ironic that the census of India defin considering that there were only villages before the development of cities and towns.

Population

There are currently more than 20,000 villages in the 5,000-10,000 population strata as per the Census of 2001, so any population cut-off criteria should definitely include these villages as rural areas.

Occupation pattern

^o The occupational pattern of people in a segment naturally affects their buying behavior.

^o  A daily wage earner has to account for variations in income, whereas a salary earner brings home an assured fixed amount and therefore can plan expenses in a better way.

^o Three-fourths of rural household heads are either cultivators or wage earners, whereas three-fourths of urban household heads are salary earners, petty shopkeepers and wage earners.

o The cultivator‘s disposable income is highly seasonal, with more disposable income available immediately after the harvesting season. This is therefore the time when he is  more inclined to make purchases, especially of durables and high-involvement products. Basic occupations that exist and help directly agro-related works are:

^o  Farm Labourer –The farm labourer helps a village through his agricultural activity directly. The labourer works by tilling, weeding out, sowing, reaping, cleaning the

^o Produce, guarding the field at harvest time and many other odd jobs related to agriculture.

^o  Priest –He reads horoscopes, arranges poojas, tells villagers regarding auspicious dates for marriages, house warming, sowing in addition to his duties in the temple.

^o  Blacksmith – The agricultural implements are made and repaired by the village blacksmith.

^o Carpenter ^o Washerman ^o Barber

^o Shoe maker ^o Potter

^o Milk man

Demographic profile of people in a segment naturally affect their buying behavior. The wage earner and salary earner cannot be expected to behave in the same way. A daily wage earner has to account for variations in income, whereas a salary earner brings home an assured fixed amount and therefore can plan expenses in a better way.

Three-fourth of rural household heads for either cultivators or wage earners, whereas three-fourth of urban household heads are salary earners, petty shopkeepers and wage earners.

The cultivator‘s disposable income is hig available immediately after the harvesting season. This is therefore the time when he is more

inclined to make purchases, especially of durables, and high-involvement products. The purchases at such times are quite significant, as 40% of the rural population, i.e. 50 million families, are farmers.

Income generation

The pattern of income generation in rural areas based on agriculture is seasonal and highly unreliable unlike the fixed monthly income in the urban areas. This created a consumption pattern that is quite different from the urban one.

By sale of agricultural produce

By sale of animal produce

By service –Rendered by teacher, doctor or nurse. By interest on investment

Government subsidies and grants By mortgage of properties and gold By charities and donations

By labour and wages –Labourers do jobs in construction of roads, bridges and buildings.

Income of Rural Sector is rising at a considerable rate. Percentage of Very Rich, Consuming Class, and Climbers are rising whereas Aspirants and Destitutes are

declining.

The structure of Rural Income depicts the following trends:

1.     On the income ladder, the top two slots are occupied by the non-farm sector, whereas the farmer is at the third place and wage earner is at the bottom.

2.     The highest per capita income in rural comes from the formal segment of the non-farm sector at Rs. 19514 which is higher than the urban per capita income at Rs. 19407.

Location of rural population

It has been observed that the majority of rural institutions, agri markets and rural banks are located in larger villages and towns, upto 10,000 populations. Moreover, the characteristics in terms of occupation, consumption, and buying behavior change from rural to urban in locations of more than 10,000 population.

Expenditure pattern

Per capita consumption expenditure in rural has increased four times over last 20 years.

Rural spending in non-food items is increasing; out of a total per capita spending of Rs.486, approximately 40% is spent on non-food items. This shows an encouraging trend for consumer durables and non-durables (non food item)

Analysing the consumption patterns of non-food items of rural consumers, we find that the major share of spending goes to clothing, medical services and fuel needs, whereas urban consumers spend much more on rentals, education and conveyance.

Literacy level and Rural demand

Lower level of education in rural sector (approximately 60% of the population lies below the middle education bracket) lead to little or low demand for a range of products such as literacy books, magazines, notebooks, pen/pencils, drawing instruments, calculators, digital diaries, computers, etc.

But change is taking place because the literacy retain the rural sector has risen 23% over the last 20 year. This has contributed significally to an improvement in the socio-economic status of the

people. With this growth, the demand for educational products has increased. Overall, products and brand awareness have increased and rural consumers have become more mature in purchase decision.

Land use pattern

Land Management is gaining importance because of increasing demands on land and growth of the population.

Forest area and cultivable land percentages have increased. Forest has increased from a

level of 14% to 22%. Area sown has increased from 20% to 43%. Area not available for cultivation has reduced .

Change of mindset of common man towards ecology, increasing greenery and that every square meter of land be used gainfully. Multi-storeyed buildings form part of the city‘s landscape.

Irrigation

In last four decades, the irrigated area has doubled.

For centuries, Indian agriculture has depended on rains. The special programmes launched by Government of India to increase the irrigation facilities along length and breadth of India have yielded results and reduced dependence on rain.

There is considerable difference in irrigation patterns from state to state in India. States like Punjab and Haryana, where there are enough natural water resources have a good percentage of gross irrigated area to total crop area.

If a farmer owns many patches scattered at distances, it makes the entire efforts in

agriculture less remunerative.

Mechanical farming or agricultural methods cannot be adopted for small land holdings.