NAME -SHUBHAM RAJ.

ROLL NO.-2114100704

PROGRAM -BBA

SEMESTER -4

COURSE NAME &CODE-RURAL MARKETING -DBB2206

1) Explain the main components of rural markets ? Classify the rural markets ?

Ans) Rural marketing involves activities performed by the marketers to motivate the people
living

in rural areas to create demand for goods and services and facilitate the availability of these

products in the rural places. The aims behind developing rural markets are to improve the

standard of living of the people living in rural areas and achieve the business objectives and

profits.

There are certain components that must be present for the existence of any market, urban

or rural. Following are the main components of rural market:

• Presence of goods for conducting transactions

• Presence of buyers and sellers

• Development of business relationships between buyers and sellers

• Clear division of areas, like region, country, etc.

Like any market, rural markets also provide a place for both buyers and sellers to meet.

There exist many classifications of rural markets based on several factors, like areas, goods

offered, etc.

Classification of rural markets:

Local retailers – These are small shops in villages which are established through little

investments and form an important means of earning livelihoods for many. Local retailers

offer various types of FMCG goods, like shampoos, soaps, edible oils, biscuits, beverages,
and

even some durables. They keep their shops open every day making them accessible round

the year.

Haat – It is a type of rural market which is organized for a specific period of time based on
the convenience of the people living in nearby villages. Such haats operate on a weekly or
bi-

weekly basis and offer distinctive variety of goods, like agricultural products and tools,

cosmetics, edible items, etc.

Mandi – It is a market wherein agricultural products and limited durable goods are offered.

For each region comprising several villages, there exists one mandi. In these markets,
people

engage in exchange of products/services through intermediaries. Mandis are also known as

agri-markets and is used to sell agricultural produce of farmers along with farm inputs and

consumer durables.

Mela – Also known as fair, mela offers entertainment in the form of games, plays, sports,
etc.

along with the great deal of shopping. People buy agri-products and consumer durables in

these fairs.

Trade fairs/exhibitions – Lately, many business organizations and government agencies

have begun to organize trade fairs and exhibitions to promote the sale of farm goods and
consumer durable.

2) Differentiate between rural and urban markets ? Explain the concept of E-Rural market.

Ans) Family structure

People live in joint families in rural areas, whereas in urban areas, nuclear family system is

adopted by most of the people. The nuclear family systems have a severe impact on the
joint
families of rural areas.

Attitude

The attitude and outlook of both the regions are highly different. People in rural areas tend

to be more fatalistic, whereas urban people have rational and scientific outlook.

Socio-cultural background

Various factors, like illiteracy, cultural adaptations in the rural areas are different from
urban
areas. The beliefs, superstitions, and the way of looking at products and services are
different

in rural and urban markets.

Mobility

In rural areas, people are engaged in traditional occupations, like agriculture. As a result,

their mobility is low. On the contrary, urban areas have high mobility as people keep

changing their jobs and companies.

Consumer behavior
The mindset of the people in rural areas and urban areas is different. For instance, if people

of urban markets have to buy an electronic item, they look for updated features and brand

name. On the other hand, while buying the same item, people living in rural areas have to

consider various factors, like durability, affordability, etc.

Rural marketing has gained much prominence lately. Both Indian business organizations
and

MNCs are taking lot of interest in reaching out to consumers in rural markets. Apart from

this, emphasis is laid on the use of the advanced technologies and in rural sector for bringing

modernization in it. This has given rise to the concept of e-rural marketing.

e-rural marketing includes all the marketing activities to encourage rural people to engage

in buying and selling through electronic platforms and information technologies (IT) with

the aim of improving the standards of living of rural areas. Through e-rural marketing, rural

markets have experienced great expansion. Goods and services can be moved to different

villages easily and production cycles are reduced. The main advantages of e-rural
marketing
in rural sector are:

• It removes the infrastructure restrictions, such as poor connections in rural areas.

• It facilitates ease of access to information and services.

• It promotes and upscales micro, crop & insurance related programs.

• It increases transparency in the sales transactions.

• It enables registering and storing of complaints and feedback and using them for

improvements.
• It supports monitoring and controlling of payments and repayments.

• It helps in providing individualized services.

• It helps in managing supply chain and controlling distribution costs.

3) Discuss the factors affecting rural consumer behaviour ?

Ans) 1. Environmental Impact on Rural Consumers

The environment is a significant factor that plays a role in determining the

requirements of customers in rural areas. Products designed to meet the demands of

urban environments may not be suitable for use in more rural areas. Electrical items

are subject to frequent malfunctions in many rural areas, especially in regions that have

limited access to electricity. If a device can endure frequent voltage fluctuations, rural

buyers may not mind paying a higher price for it, especially if the product in question

is a television or radio.

2. Patterns of Employment and Spending

Agriculture and closely associated activities are the principal sources of income for the

vast majority of rural residents. Approximately half of the people who live in rural

regions own or lease the land on which they cultivate to support themselves. Income in

rural regions is highly dependent on agricultural activities such as land usage, crop

production, sales, consumption, and marketing strategies due to the nature of the job

structure prevalent there. If there is enough rain, favourable weather conditions, and

considerable technical resources are available. Rural consumers' purchasing behaviour

is heavily influenced by their income structure.

3. Variations in the Place of Purchase
Shoppers in rural locations do not necessarily all do their purchasing at the same retail

outlet. It is also true that a single consumer may make purchases from a number of

different locations, depending on the kind of items and the specifications that they have

in mind for their purchases. Customers living in more remote locations sometimes

choose to do their buying at haats because of the lower prices, superior quality, and

more diverse selection of items that are available there.

4. Behavioural and Social Impacts

The rural consumer is impacted not only by his or her own needs and preferences, but

also by the location in which they live. Understanding the social and attitudinal elements
that influence rural consumer behaviour is critical for marketers since these

factors dictate decisions on product offering, pricing, distribution, media, and message;

in essence, these aspects comprise the "rural marketing strategy." To develop an

effective marketing strategy, it is vital to understand the social and cultural elements

that influence behaviour. The rural markets' traditions were preserved because to the
distant settlements and limited connectivity. Increasing access to metropolitan regions

and disseminating knowledge may lessen the importance of traditions. Consumer

preferences for product features, size, form, and colour demonstrate the effect of

culture.

5. Perspective on Price and Quality

People who are well-versed in rural marketing hold the misperception that a villager

want the same products that his city-dwelling relative gets but simply cannot afford

them. As a result, most organisations will try to save costs by lowering the quantity of

their items or the degree of quality they deliver. This method works in certain

circumstances and with specific types of commodities.

SET-2

4) Explain the different distribution models for the rural markets ?

Ans) Distribution Model 1

This method emphasises rural distribution by distinguishing it from urban distribution.

Rural distributors (RDs) cover specific geographic regions. To reach rural communities,
the

firm engages a sub-distributor (SD) under the RD. The RD covers a large area with

insufficient roadways and little outlet flow, making small sites unprofitable. Wholesalers
are

served by the local RD. The wholesaler is important because of his variety, volume, and

satellite market customers. The generalised model has more points since rural areas are
many and scattered. This allows for maximum rural product dissemination.

Distribution Model 2

There is no unique way for reaching out to people in rural areas. This method reduces

distribution costs, enabling the company to pay bigger profits to distributors and other

channel partners, who then help sell the products. Wholesaler locations act as feeder

markets, where the company meets the needs of neighbouring towns that are not supplied

by the distributor. The majority of organisations that use this technique have a small number

of SKUs but a significant number of sales. There are few channel partners, and the
distributor

has a huge region to cover. Distributors and other channel partners may also make a good

living by selling a big number of things. This is the model used by Ghari detergent,
Priyagold

cookies, and other significant regional enterprises. People who are just beginning out and
do

not have the resources to sustain a broad distribution network, such as this technique.

Furthermore, most enterprises that use this technique do not have a specific plan for the
rural markets.

The Durables Distribution Model-3

In the realm of distribution for durable products, two distinct sorts of models that are

analogous to FMCG distribution have emerged. The conventional model takes an approach

that is not distinctive, meaning that it serves rural markets by using urban distribution

systems that are already in place. The second model approaches the problem of effectively

serving rural areas by using a distinct distribution and service network. A select group of
businesses, including Philips and LG, have made the decision to implement this approach
by

establishing separate sales and service channels geared specifically for rural areas.

Models for Rural-Based Distribution-4

Because more people are moving into rural areas, businesspeople are trying to think of cost-

efficient methods to contact customers there. The answer must come from gaining

knowledge from traditional rural distribution systems such as haats, mobile merchants, and
 PDS, and making the most of the existing social and physical infrastructure. Gas stations
and

non-governmental organisations are two examples of the non-traditional distribution

channels that are being targeted by recent initiatives aimed at expanding access to rural

customers. The rural portions of India are home to a variety of weekly marketplaces known hat

5) Discuss the role of marketing agencies in agricultural products?

Ans) Marketing Channels for Agricultural products

There is a long line of different functionaries that may be discovered, starting with the
farmers and ending with the final consumer.

a. At Village Level Channels

i. Large Cultivators

Wealthy farmers with considerable holdings and a large surplus that may be sold are

the first kind of market functionaries active at the village level. They may also employ

carts, tractors, and other modes of transportation. They have a plenty of marketable

excess because of both the large-scale farming they have done themselves and the

seasonal purchases made at the village level. In fact, they generate buffer stock by

acquiring grain during the harvesting season and then selling it in surrounding

"Mandis" after the season is done. They acquire surplus grain produced by smaller

producers directly or indirectly through them.

ii. Rural Merchants

In different regions of India, people would refer to them as 'Beopari,' 'Baniya,'

'Sahukar,' 'Paikars,' 'Farias,' and other names along those lines. They are one of the

most important organisations in the community for acquiring information. Even if

they use their own money in certain circumstances, the bulk of the time enormous

wholesale merchants in assembly and distribution centres, known as "Arhatias" or

"Arhatdars," provide the financial backing necessary for them to function. Village The

responsibility for transporting a village's excess to the wholesale mandis or other

cities falls on the shoulders of merchants. The local business owners are responsible

for this. Marketable excess is dispersed to the secondary and final markets in this

manner, with the distribution agencies in charge of the process.

iii. Traders or merchants who move from one location to another

They are mobile merchants that go from village to village bringing farmers the

essential materials. They use carts or animals, such as ponies, to transport products

to the local market. As a result of factoring in shipping expenses, market fees, and

their own profit margin, they may offer a price that is lower than the norm in the local

market. The farmers are typically compensated three to four days after the food has

been sold in the market and the money has been collected from 'Arhatia.

b. Mandi level Channel

i. Arhatias (agent who is doing business on behalf of others)

The "Arhatias" are the most significant of all the functionaries that are located in bid

mandis. This phrase refers to buyers who acquire items either on their own behalf or

on commission from the seller. When talking about the Arhatias in a broader sense,

the two primary classes that they come under are referred to as kuchha arhatias and

pucca arhatias.

• Kuchha Arhatias: Agents with low commissions. They often act as mediators in the

local market between primary producers or sellers and wholesale customers. He

seldom shops alone. He links manufacturers and customers in the assembly

sector. He lends money to farmers and village banias at a low interest rate in

exchange for the produce.

• Pucca Arhatias: Large businesses that trade in grains, oilseeds, and other

agricultural products as agents or directly. They support "KuchhaArhatias" and

small retailers in their efforts to assemble agricultural items.

ii. Brokers
The primary objective of their work is to bring together purchasers and vendors. They

are distinct from the Arhatias in that they do not operate their own permanent enterprise,
unlike the Arhatias. They take a cut of the transaction from both the buyer

and the vendor.

iii. Cooperative Marketing Organizations

These were made possible by the Integrated Rural Credit and Marketing Scheme,
which was implemented in the midst of the Second Five-Year Plan. The primary goal

of such groups is to act as distribution hubs for the services and products provided

by its participants. They buy crops entirely, manage storage and grading, and prevent

merchants from taking advantage of farmers. They help farmers get a good price for

their goods, too.

6) Explain the concept of E-Rural Marketing? Discuss the impact of digitization in rural
India?
Ans) E-Rural Marketing is a specialised area of marketing that is centred on achieving one's

objectives in rural regions through the use of various forms of electronic communication

technologies found on the Internet.

i. Present situation

As online shopping has grown more popular over the last several years, there has been a

corresponding increase in rural India in the use of e-commerce. A significant number of

people who can use the internet and have mobile devices are located in India's rural regions.

The Indian government's goal is to provide the conveniences of the internet to those who

live in more remote areas of the country, such as villages and rural communities.

Because having an online presence is essential to the success of a company, every shop

should investigate the possibility of selling their items through various online channels. In

recent years, the nation has seen a significant shift that may be characterised by big e-

commerce behemoths like Flipkart, Amazon, and others pulling back significantly on their

expansion efforts in rural areas or villages. It was now possible for those living in rural
areas
of India to undergo the lifestyle change that they had longed for so long. They will be able
to

get all brands that are stocked at a single location with no effort on their part.

ii. Pitfalls and difficulties associated with e-rural marketing

• Because of the hyper-local nature of these marketplaces, a seller's product range is

also essential to the success of their business if they wish to break into the rural

market and expand their reach.

Impact of Digitization in Rural Areas

People's buying power in rural India has improved significantly as a result of increasing

engagement in development activities and better understanding of fundamental demands.

Rural customers, on the other hand, have a strong emphasis on value for money, a deep
affection for local culture, and a more conservative financial approach than urban ones.
Their shopping preferences are often disappointed by the quantity of alternatives readily
accessible. The expanding desires of India's underserved and unreached rural regions may
be satisfied by enhanced accessibility and availability of an increasing number of services
and commodities, which may be made available via the use of digitalization and
technology.

The Digital India project is putting enormous pressure on the government in this area.

It is predicted that rural India will have passed up urban India in terms of internet use, and

that rural India will now account for more than half of all Indian internet users. With the

assistance of digitization, some of rural India's most urgent requirements, such as e-

governance, banking and financial services, academic and medical care, mobile and DTH

recharge, e-ticketing services, shopping online, and so on, may be able to be met.

The "brick and click" centers are "one-stop digital stores" for those living in outlying

locations, providing both in-person and online services. In order to meet the ever-changing

demands of people who live in remote areas, these centres have been progressively

expanding their range of services to include banking, financial services, mobile top-ups,

electricity payments, train tickets, online learning, and online shopping. To that end, the

government prioritizes providing access to banking services for all citizens.

The widespread use of financial services is being significantly aided by the vital
contributions made by common service centres. Villagers may simply pay their bills or add

money to their accounts by using the alternatives that are conveniently located just outside

their homes. The Aadhaar-enabled Payment System, also known as AePS, was recently put

into operation to facilitate even more bulk transactions.

E-commerce companies that adopt a hyper-specialized approach to meeting the

requirements of those living in rural areas are gaining more and more customers. This is
only

the beginning of a new wave that will have an effect on the base of the pyramid.
Demonetization may have cleared the way for faster adoption of digital payment methods,

but there are a number of start-ups that are knocking on the doors of rural clients with novel

solutions in digital learning and medical. T