SOLVED QUESTION PAPER

DIBRUGARH UNIVERSITY

B. Com – 6th Semester

RURAL MARKETING – 2015

1. Answer the following question as directed:
   1. Rural India presents a homogenous market. (state true or false)- FALSE
   2. Rural consumer in general is more sensitive to product price than the urban consumer. (state true or false) – TRUE
   3. NABARD stands for National Bank for agriculture and rural development.
   4. Which of the following factors influence the price of agriculture commodities?
      1. Storage facility.
      2. Inadequate Uncertainty of supply.
      3. Superfluous middleman.
      4. All of the above.

Ans: IV. All of the above.

1. Which of the following is not an agricultural input?
   1. Seed.
   2. Tractor.
   3. Pesticide.
   4. None of the above.

Ans: III. Pesticide.

1. Which of the following is the quality certification mark for agriculture produce?
   1. B/S
   2. AGMARK
   3. ISO2000
   4. ISI

Ans: III. ISO20000

1. The Consumer Protection Act was passed in 1986. (state true or false) – TRUE
2. What is the full form of FMCG?

Ans: Fast Moving Consumer Goods.

1. Write short notes on any four of the following:
2. Dynamic in rural marketing: – 2017 2(d)
3. Role of geographical factors in determining rural marketing environment

The role geographical factors in determining rural marketing environment are: –

1. Population

The rural population forms a major chunk of the Indian population from time immemorial and this trend is expected to continue in future as well about 70% of Indian resides in rural areas. In other words, for every consumer in an urban area, there are those of them in rural area.

1. Occupation

The occupation pattern dictates the pattern of income generation also with agriculture being the main occupation, 75% of income generated in rural area is from agriculture and agriculture related activities.

1. Location of rural population

One of the deterrents for the marketers to exploit the rural market potential has been the vastness of area to be covered and the location of the population. It is much easier to caster to the needs of urban population because of its concentration in relatively smaller geographically areas.

1. Pre-requisites for effective segmentation of rural market: – 2016 5(a)
2. Role of co-operation in marketing the agricultural product

The role of co-operative in marketing the agricultural products are –

1. Optimization in resource use and output management

An efficient co-operation marketing system can contribute to an increase in the marketable surplus by reducing loses arising out of inefficient processing, storage and transportation.

1. Increase in farm income

An efficient co-operation marketing system guarantee the farmer better price for farm products and induces them to invest their surplus in the purchase of modern inputs so that productivity and production may increase.

1. Widening the markets

An organized and well knit co-operative marketing system widens the market for the products by taking i.e. to areas far away from the production points.

1. Growth of agro based industries

The improved and efficient system of agricultural marketing helps in the growth of agro based industries and stimulates the overall development process of economy.

1. Rural marketing: – 2017 2(c)
2. (a) Define rural marketing. Discuss the nature and importance of rural marketing.

Ans: 2016 3(a)

Nature / characteristics 2016 3(a)

The importance of rural marketing are: – 2016 3(b)

(b) Write explanatory notes on the following

1. Scope of rural marketing: – 2017(a)
2. Evolution of rural marketing: – 2017 3(b)
3. (a) Discuss various socio cultural and economic factors which influence rural marketing operations. 6 + 6 = 12

Ans: 2017 4(b)

(b) Evaluate the major factors which determine rural marketing environment.

Ans: The major factors which determines rural marketing environment are: –

1. Demographic factor

Demographic factor are related to population marketer must study these factors due to the fact that the market is made of people, and people candidate the population. Demographic study provides customers profile that is basic need for market segmentation as well as selecting target market.

Demographic variables include: –

1. Total population and population growth rate.
2. Age groups and gender distribution.
3. Family system and household pattern.
4. Occupation based classification of population.
5. Ecological factor

These factors primarily concern with ecological environment. They are closely related to protection of ecological environment and pollution global levels efforts are made to protect environment.

Analysis of ecological environment involved –

1. Availability and use of natural resources.
2. Pollution and pollution control measures.
3. Ecological awareness and use of eco friendly product.
4. Economic factors

Economic environment consists of economic forces that affect company’s costs, revenue and profits on one hand and customer purchasing power and willingness to spend on the other hand.

Economic force includes a large number of variables such as: –

1) Economic growth rate. 2) Interest rate. 3) Inflation rate.

4) Export import policies. 3) Functioning of stock market and commodity market.

1. Socio cultural factors

Social and cultural factors affect consumers’ tastes and preferences. People buy or favour those products which suit or complement their social and cultural norms values, traditions and habits. Socio cultural environment is ever changing and requires the manager to undergo adjustment and re-adjustment in his marketing mix to balance between what consumer want and what company effects.

Socio cultural variables are: –

1. Cultural norms, values, beliefs and rituals.
2. Castes, creeds, racial aspects.
3. Age and life cycle stages.
4. Social tradition, customs, habits and superstitious.
5. Social classes.
6. Political and legal factors

A firm has to operate without the present political system and legal framework. Political factors affect economic policies. Every marketing decision is subject to be affected by political legal factors. Government have formulated a series of legislation to regulate business operation to restrict unfair trade practices and protect consumer and social interests. Some of political and legal factors are: –

1. Political philosophy.
2. Political and legal reforms.
3. Government approach to different sectors.
4. Political stability.
5. a) Define market segmentation. Explain the different basis of rural market segmentation.

Ans: 2016 5(a) 2017 5(a)

b) What do you mean by rural market segmentation? Discuss the influence of rural market segmentation in rural market.

Ans: 2016 5(a) + 2017 5(a)

1. a) What is rural marketing strategy? Discuss various stages involved to introduce a new product specially designed for rural market.

Ans: 2016 2(a) , 6(a) 2016

b) Write a critical note on the distribution channels and logistics in rural market.

Ans: Distribution involves getting the product from the manufacturer to the ultimate consumer. A key decision among the four P’s of marketing managers is distribution. Distribution decides the manner in which product and services are made available to a target consumer. It involves the bridging of lace utility gaps between manufactures and customers. The design of physical distribution referred to logistics and supply chain management and trade channels of distribution are the major components in distribution.

The link between manufactures and customers is the channel of distribution. It consists of producer, consumer and any intermediary organization that are aligned to provide a means of transferring ownership or possession of a product from producer to consumer.

Brands in search of India’s fast growing rural markets will need to focus primarily on their logistics if they are to reach acquire and retain customers, a leading consultancy has agreed. An Accenture report, Masters of Rural Markets: Profitably selling to India’s Rural Customers, included interview with more than 40 business leaders, 20 industry experts and academicians and a quantitative survey of 70 businesses operating in rural markets. It found that an efficient sales and distribution models was the most critical factor for successful Rural expansion in India, with 59% of survey respondents saying it was a top priority, well ahead of the 40% response for both customer service and Marketing Campaigns. The report identified a group of business that had successfully gained rural market share, whom it termed rural masters and analyzed their strategies. These included the adoption of a multi – programmed approach “to the last mile.” The report noted that supply extending an urban hub and spoke model was widely used but that rural masters had also embraced village entrepreneurs, commerce and alternate channel partners in their search for ways to overcome distribution challenges.

1. a) What are the different problems in marketing agricultural products in India? Suggest a few remedial measures to overcome the problems.

Ans: The different problems in marketing agricultural products in India are:

1. Too many intermediate

The one main defect of the Indian Agricultural marketing is the presence of too many middlemen and exploitation of farmers by them on one hand these middlemen exploit the farmers by purchasing the products at lower prices and on the other hand they exploit the customers by demanding higher from them.

1. Defective weights and scales

One of the biggest defects of agricultural marketing arises due to their weights and scales. Usually in the rural areas bricks to are used as weights and in urban markets also defective weights are found. Thus the grain of the farmers is weighed by a heavier weight for their own gain.

1. Illiteracy and lack of unity among farmers

The Indian farmers are illiterate who are easier be fooled by the money lenders, traders, middlemen due to their simple nature. Similarly lack of unity among farmers also causes their exploitation because Indian farmers are spread in distant areas in rural places.

1. Lack of financial resources

In the rural area, there is a lack of financial resources, due to which even their conditions, the farmers sell their products before its ripening. Similarly some financial facilities like instalments or loans for pumping set, tractor, thrasher, etc have to be paid on monthly or quarterly basis due to which they have to sell the product as soon as possible.

1. Lack of organised marketing system

The agricultural marketing is also very defective in India because here organised marketing is not in vague like co-operative societies, government marketing activities, regular market etc. As a result the farmer remains entangled in exploitation. Thus lack of organised marketing system is harmful for the farmers.

1. Lack of transport facilities

The roads from village to cities are usually during the rainy season. The bullocks’ carts can take the product only up to a limited area. During the lack of transport facilities the farmer is unable to take receive a fair price for his product.

1. Lack of store house

An important deficiency of Indian agricultural marketing is lack of store house. Due to lack of the facility the farmer is unable to keep his product safely until it can felth a fair price and he is forced to sell his product at a low price.

1. Lack of standardization

The lack of standardization and grading is clearly visible in the Indian Agricultural marketing, due to which fixing a deal in relation to these products becomes difficult due to lack of standardization and grading the customers have problem in purchasing the product.

1. Lack of awareness of the market

The Indian farmers have no knowledge about marketing. He believes on information acquired from the businessman and many lenders of the village. Mostly the Indian farmers are illiterate so they cannot read the newspaper. Thus they do not have sufficient knowledge about the market.

1. Corrupt policies of the Mandis

If we observe the condition of the mandis, this fact is no more hidden that the middlemen and the trader jointly make fool the simple farmers. The Indian organization society has clarified the following fasts relating to the corrupt policies of the mandis.

1. The farmers are paid low price as they lack appropriate knowledge about prices, their fluctuation government policies etc. Thus by keeping the rate secret policies, the farmers are cheated.
2. Before the sale, large amount of grains are taken from the farmers as samples. By declaring the product to be sub standard quality minimum prices are paid for it.
3. The inappropriate marketing system is also deep laden in India that about 5% of the amount is deducted from the farmers produce in the name of donation ‘dharmada’, ’chanda’ etc.

The following measures may be taken to improve the present system of agricultural marketing in India.

1. Regulated Market

Regulated market may be established unhealthy and unethical trade practices and reducing various marketing charges with a view to benefiting the poor marketing charges with a view to benefiting the poor cultivator. Quite recently numerous regulated markets have been set up in various cities to safeguard the interest of the farmers.

1. Expansion of market yard

This is a vital necessity. This must be supported by a corresponding expansion of similarly facilities in the various existing markets and setting up new markets and market yards for handling the phenomenal increase in market arrivals, particularly in those areas where the green revolution has occurred (viz. Punjab, Haryana and Western UP).

1. Cooperative marketing societies

There is a need to set up such societies. Some progress has been achieved in this direction. In India, the co-operative marketing structure societies during 1990-00, covering all important agricultural markets in the country. The total value of agricultural product marketed by co-operatives amounted to Rs. 22,800 crore in 1999-00, as against Rs. 169 crore in 1960-61.

1. Storage facilities

An extension of storage facilities at the farm land and storage warehousing corporation, with a view to constructing and managing a whole network of warehouses in all towns and mandis. The co-operative societies get necessary financial and technical assistance from the government for promoting warehouses in villages.

1. Credit

Steps may be taken to provide cheap credit to farmers, especially from institutional sources like commercial banks and co-operative society are providing credit facilities to farmer with a view to Improving their economic conditions, protecting them from the exploitative practices of village moneylenders and for helping them to get reasonable prices for their produce.

1. Transport facilities

Expansion of transport facilities between the villager mandis seems to be need of the hour. Rural transport has been given emphasis in the five year plans and quite some progress has been made in this direction.

1. Other measures

Various other measures takes include prompt supply of market information through published documents and TV programmes standardization and grading to ensure quality to consumers and better prices to production.

b) Discuss the role of government in solving the problem of agricultural marketing in India.

Ans: The role of government in solving the problem of agricultural marketing in India are: –

1. Market survey

Various surveys have been conducted and published by the government for various goods and problems with remedies suggested.

1. Development and strengthening of grading and standardization system

Setting up of grading stations under Agricultural produce (grading and marketing) Act, 1937 for products like glue, flour, eggs etc. Laying down often standard for 162 Agricultural and allied products.

1. Setting up of regulated market

Written in previous answer.

1. Strengthening the provision of storage and warehousing facility

Written.

1. The organization of the co-operative marketing system

Written.

1. Setting up of special board and organization

The central government has set up a number of such boards for unique commodities like Rice, Pulse, Millets, Oilseeds, Sugarcane, Jute, Cotton, Tobacco and so forth.

1. Marketing research and information Network schemes

An ICC based central sector scheme of Marketing Research and Information Network (AGMARK NET) was launched in March 2000. Aimed to provide electronic connectivity to important wholesale markets in the country.

1. Appointment of Inter Ministerial Task Force on Agricultural Marketing Reform

Its aim at the promotion of direct marketing and contract farming development of agricultural markets in private and cooperates sectors, expansion of future trading to cover Agricultural products. Introducing of negotiable warehousing receipts system, use of information technology.

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