SOLVED QUESTION PAPER – DIBRUGARH UNIVERSITY

B. Com 6th Semester-

RURAL MARKETING – 2016

1. Answer the following as directed: –
2. In what areas, most of the products consumed are in the nature of basic goods. (T/F)

Ans: True.

1. Write the full form of (i) SFG and (ii) AGMARK

Ans: SFG – Self help group.

AGMARK – Agricultural Marketing.

1. Marketing is a pre production activity. (T/F)

Ans: True.

1. Rural marketing promotion can be effective through –

(I) Melas (II) Village fairs (II) Door to door campaign.

(IV) All of the above.

Ans: (IV) All of the above.

1. Name one of the online retailing sales portals.

Ans: Amazon.

1. Which is the main crop of India?

(I) Rice (II) Wheat (III) Corn

(IV) None of the above.

Ans: (I) Rice.

1. Write shorts notes on: –
2. Scope of rural marketing: – 2017 (2)(i)
3. Evolution of rural marketing: – 2017 3(b)
4. Legal marketing environment

The legal environment includes the laws and regulations of a state. The laws and regulations of a slot. The laws and regulation will influence the way in which an organization will market or sell the product and services. The legal factors influence trade agreements between different governments and states.

The legal marketing plays a very important role in determining the success of any business around the global. The government taxes that are being imposed among other regulatory measures help to promote economic growth and to protect consumer from exploitation and other illegal factors.

The legal environment refers to the principles, rules and regulations established by the government and applicable to people. These regulations come through various legislations. The government has passed and enacted various Acts. Now due to globalisation of economy, it became necessary to make change in these Acts.

1. Rural marketing strategies

A rural marketing strategy refers to the planning of adequate supply of consumer goods and agricultural input to the villages at an affordable price to fulfil the needs of the consumer residing in these rural areas. Rural markets have a high potential and can generate huge sales volume for the companies which manufacture cost – efficient products and have active supply chain management.

Considering the environment in which the rural market operates and other related problem, it is possible to evolve a effective strategies for rural marketing. For rural market, it will be ideal to think of strategies from the marketing mix point of place and promotion. Now we discuss these four components of the marketing mix concerning the product being introduced in the rural market.

1. Product and strategies

The Company first needs to analyse the requirements and demand of the rural consumers. Since whatever products are being sold in the urban areas may not be acceptable in the villages also.

Following are the factors which are taken into consideration while framing the product strategies: –

1) Product launch. 2) New product design. 3) Brand name

4) Small unit low price packaging.

1. Pricing strategies

In rural markets consumers are less brand conscious and more responsive to the price of the products. The company’s pricing decision is dependent upon the consumers’ occupation and income pattern.

1. Promotion strategies

Promotion is the stage where the product is introduced in the market. In rural markets, the promotion mix should be planned in such a way that rural consumers can easily understand the product features.

1. Distribution strategies

To create a regular demand for the product, the markets must ensure in rural market is necessary not only for corporate organization engaged in marketing of agricultural goods and manufactured goods intended for sales in rural areas . but marketing information system in rural market is required also by the agriculturists and farmers who have enormous decision making to do. The marketing information system refers to the systematic collection, analysis, interpretation; storage and dissemination of the market information from both the internal and external sources to the marketers on a regular continuous basis. It is designed to support marketing decision making. Developing an MIS is becoming extremely important as the strength of economic rely on services and to better understand the specific need of the customers. Its main benefit is to integrate market monitoring system with strategy development and monitoring system with strategy development and the strategic implementation of policies and processes that help capture and act on customer management application with marketing decision support system.

1. Marketing information system

Marketing information system in rural market is necessary not only for corporate organizations engaged in marketing of agricultural goods and manufactured goods intended for sales in rural areas. But marketing information system in rural market is required also by the agricultural ad farmers also have enormous decision

making to do. The marketing information system refers to the systematic collection, analysis, interpretation, storage and dissemination of the market information from both the internal and external sources to the marketers on a regular. Continuous basis. It is designed to support marketing decision making. Developing an MIS as becoming extremely important as the strength of economic rely on services and to better understand the specific need of the integrate market monitoring system with strategy development and process that help capture and act on customer management application with marketing decision support system.

1. Role of rural marketing research

Market research helps companies know their customer. They need to find out which products consumers want and the quality that is required to be produced. How and where to deliver and how best to reach the customers. All there are task of marketing research. Usually researchers go out armed with questionnaire and talk to potential consumers trying to figure out what is in their minds, how many people will actually pay the prices fixed for the product.

Rural market research is neither easy nor it is a series of steps because customers are spread over large distances and sometimes are not exposed to brands and products.

The research process is very critical to rural marketing. There are two reasons for this: –

1. The marketer has limited understanding of the rural consumer.
2. The marketer who is urban oriented may find it useful to unlearn consumer responses to decision variables in the urban market.
3. a) Explain the term ‘Rural marketing’. Discuss the characteristics of rural marketing.

Ans: Rural marketing is a process of developing pricing, promoting, distributing rural specific goods and services leading to exchange between urban and rural markets which specifics consumer demand and also achieve organisational objectives.

It refers to the activities undertaken by the marketer to encourage the people living in the rural areas to convert their purchasing power in to an effective demand for the goods and services and making these available in the rural areas, with the intention to improve the standard of living of the people in the rural areas. It is the selling of rural products in rural and urban areas and agricultural inputs in rural markets.

The characteristics of rural marketing are: –

1. Major income of rural consumer is from agriculture

Rural prosperity is tied with agriculture prosperity. Major part of income of rural people comes from agriculture. In the event of crop failure, the income of rural masses is directly affected.

1. Large, diverse and scattered market

Rural market in India is large, and scattered in to a number of regions. There may be less number of shops available to market product. A significant percentage of population resides in villages. There are numerous villages located throughout the country with a small group of people living in each of them. Thus rural market is spread over a vast area.

1. Traditional bullocks

The village population tend to stick to their tradition and are resistant to change due to low literacy level. However the rural youth is initially development through of a slower pace.

1. Low literacy level

The percentage of illiteracy is quite high in remote areas as composed to the urban areas and lead to the problem of communication for promotion purpose. This disconnecting them with the print media and therefore the marketers use another medicine such as radio, road shows and nuked dramas for rural marketing.

1. Infrastructural facilities

The infrastructural facilities like commented roads, warehouses, communication system and financial faculties are inadequate in rural areas. Hence physical distribution is a challenge to marketers who have found innovative ways to market their product.

1. Standard of living

The village lifestyle is quite conservative and straight forward. People here spend more on necessities instead of luxury goods, making it very different from that of city life.

1. Seasonal demand

The seasons and stages of agricultural influence the demand for goods and services in rural markets. Hence they have two major seasons namely Kharif and Ragi.

1. Market growth

The rural market is growing steadily over the years. Demand for traditional products such as bicycle agricultural inputs. FMCG products etc have also grown over the years. The growth has not been only quantitative but also qualitative.

1. Purchasing capacity

The purchasing power of the people in rural areas in dependent on several direct and indirect factors related to the rural economy. Marketing agricultural surplus and rural – urban terms of trade are the main sources of purchasing power for rural consumers. To a large extent, Indian agriculture is dependent or rainfall.

1. Diverse socio economic background

Due to dispersion of geographical areas and uneven land fertility rural people have separate socio economic background, which ultimately affects the rural market villagers belong to different religions culture and social groups socio cultural background influence consumer willingness to accept innovations and new product.

b) Discuss the importance of rural marketing in the growth of business firms and in the development of rural areas. (6+6 = 12)

Ans: The importance of rural marketing in the growth of business firm are: –

1. Employment generation

At present, nearly 70% of total Indian population feeds on agricultural activities in rural areas. Rural marketing can generate more attractive employment opportunities to rural and urban people. Growth of rural marketing leads to increased business operations, professional activities and services that can generate a lot of employment opportunities.

1. Development of Agro based industries

Rural marketing leads top set up agro based industries fruits, vegetables; cereals, pulses etc are used as raw materials. Such industries can improve farmers’ profit margin and employment opportunities.

1. Optimum utilisation of rural untapped resources

There are unlimited businesses opportunities exists in rural areas untapped and underutilized resources can be utilised at optimum level and that can further accelerate overall economic growth.

1. Literacy growth

Literacy rate is increasing in rural areas. According to census 2018, it stood at 68.9%. There are now more graduate in rural than in urban India. This brings social and cultural changes are buying behaviour of the rural customers.

The importances of rural marketing in the development of rural areas are: –

1. Reduce urban in urban population

Rural marketing can contribute to rural infrastructure and prosperity. People can live comfortably in villages due to the availability of all goods and services in villages. People due to development of marketing activities can earn their livelihood in rural places. This population pressure on urban can be reduced.

1. Improved living standard

Due to rural marketing system, rural buyers can easily access needed standard goods and services at fair prices. In the same way, rural marketing improves rural infrastructures. Additionally, rural marketing can also improve their income. These all aspects can directly improve living standard.

1. Improved rural infrastructures

Rural marketing and basic infrastructures go hand to hand. Growth of rural marketing leads to improved transportation insurances, banking, communication, entertainment and other facilities. Due to availability of basic infrastructural facilities, business units can easily reach the target rural buyers.

1. Balanced industrial growth

The gap between rural and urban development can be reduced gradually. Rural development improved rural life and reduces pressure on urban life.

1. Price stability

Marketing results in to better transportation, warehouse and communication facilities. Agricultural products can be systematically marketed throughout the year. Huge gap between demand and supply can be avoided and as result price of most of commodities remain more or less stable.

1. Favourable government policies

Tax exemption in backward areas, subsidy, commission, incentives and heavy investment in rural development programmes have brought rapid growth of rural market and capital investment plans of consumer goods companies.

1. a) What do you mean by rural marketing environment?

Explain the problem f rural marketing. (4 + 7 = 11)

Ans: 4(a) 2017

The problem of rural marketing: –

3 (a) (2017) (written)

b) Discuss the impact of geographical and socio cultural factors on rural marketing operations.

Ans: 2017 4(b) (written).

1. Market segmentation is the process of dividing the total heterogeneous market into several homogenous markets into several homogenous sub markets or segments. Discuss the statement and highlight the pre-requisite for effective segmentation.

Ans: The concept of market segmentation is based on the fact that the markets are not homogenous but are heterogeneous. Market represents a group of customer having common characteristics but two customers are never common in their nature, habits, hobbies, income and purchasing techniques. They differ in their behaviour and buying decision. The main purpose of market segmentation is to set up separate programmes or strategies to all segments so that maximum satisfaction to consumers of different segments may be provided. It is used to increase sales for particular segment.

Market segmentation is the process of dividing an entire market into different consumer segments in which each segment as common characteristics such as needs or behaviour.

It is strategy of divide and conquer. In other words, it is a marketing strategy that divides a broad target market in to subsets of consumers, businesses or countries that have of are perceived to have common needs, interests and priorities and then designing and implementing strategies to target them.

The pre-requisite for effective market segmentation are: –

1. Measurable

The size, needs, purchasing power and characteristics of the customer in the segment should be measurable. Quantification should be possible. Certain segmentation variables are difficult measure.

1. Divisible

The segments should be differentiable. There must be clear cut basis for dividing customers into meaningful homogeneous groups. They should respond differently to different marketing mixes. There should be a difference in buyer’s needs characteristics and behaviour for dividing in groups.

1. Accessible

The segment should be reachable and service able. It should be accessible through existing marketing institution such as distribution channels, advertising media and sales force. There should be middlemen to distribute the products

1. Substantial

The segment should be substantial. It should be large enough in terms of customers and profit potential. It should justify the costs of developing a separate marketing mix.

1. Actionable

It should be actionable for marketing purposes. Organisations should be able to design and implement the marketing mix to serve the chosen segment.

b) Explain briefly the basic method of rural market segmentation.

Ans: 5(a) 2^nd part (2017)

1. a) Describe the different stages in product planning process for rural market.

Ans: The different stages in product planning process for rural market are: –

1. Idea generation

The focus in this first stage is on searching for new product ideas. Few idea generated at this stage are good enough to be commercially successful. New product ideas come from a variety of sources. An important source of new product ideas is customers. Fundamentally customer need and want seem to be the fertile and logical place to start looking for new product ideas. This is equally important for both consumers and industrial customers.

1. Screening the ideas

It means critical evaluation of product ideas generated. After collecting the product ideas, the next stage is screening of these ideas. The main object of screening is to abandon further consideration of those ideas which are inconsistent with the product policy of the firm.

1. Concept testing

After the new product idea passes the screening stage, it is subjected to concept testing. Concept testing is different from that marketing which takes place at a later stage. What is tested at this stage is the product concept itself whether the prospective consumer understand the product idea, whether they are receptive towards the idea, whether they actually need such a product and whether they will try out such a product if it is made available to them.

1. Business analysis

This stage is of special importance in the new product development process, because several vital decisions regarding the project are taken based on the analysis done at this stage. Estimates of sales, costs and profits are important components of business analysis and forecasts of market penetration and market potential are essential.

1. Product development

Product development is the introduction of new product in the present market. New or improved are offered by the firm to the market so as to give better satisfaction to the present customer.

1. Test marketing: – by test marketing we mean what is likely to happen, by trial and error method when a product is introduced commercially into the market. These tests are planned and conducted in selected geographical areas, by marketing the new products. The reactions of the consumers are watched.
2. Commercialization

This is the first stage of product planning. At this stage, promotion starts marketing programme begins to operate and product flow to the market for sale. It has to compete with the existing products to secure maximum share in the market sales and profits. When a product is born, it enters into the market and like human beings has a life span product life cycle.

b) What factors will you consider in selecting a suitable distribution channel for rural market? Discuss.

Ans: The factors that are considered in selecting suitable distribution channel for most rural market are: –

1. Product: – Perishable goods need spring movement and shorter route of distribution. For durable and standardized goods, longs and diversified channel may be necessary. Whereas, for custom made product direct distribution to consumer or industrial user may be desirable.
2. Market

For consumer market, retailer is essential whereas in business market we can eliminate retailing. The larger market size, we have many channels, whereas or well market size, direct selling may be profitable.

1. Middlemen

Middlemen who can provide wanted marketing services will be given first preferences the middlemen who can offer maximum co-operation in promotional services are also preferred.

1. Company

The Company’s size determines the size of the market, the size of its target accounts and its ability to set middlemen co-operation. A large company may have shorter channel. A company with substantial financial resources may not rely or middlemen and can afford to reduce the level of distribution. A financially weal company has to depend on middlemen.

1. Marketing environment

During recession or depression shorter and cheaper channel is preferred. During prosperity, we have a wider choice of channel alternatives. The distribution of perishable goods even in distant markets becomes a reality due to cold storage facilities in transport and warehousing. Hence this lads to expanded role of intermediaries in the distribution of perishable goods.

1. Competitors

Marketers closely watch the channels used by rivals. Many a time, similar channels may be desirable to bring about distribution of a company’s product. Sometimes, marketers deliberately avoid channels used by compositors. For example – company may bypass retail store channel and adopt door to door sales.

1. Customer characteristics

This refers to geographical distribution, frequency of purchases, average quantity of purchase and number of prospective customers.

1. Channel compensation

This involves cost benefit analysis. Major elements of distribution cost apart from channel compensation are transportation warehousing, storage insurance, material handling distribution personnel’s compensation and interest an inventory carried at different selling points. Distribution cost analysis is a fast growing and perhaps the most rewarding area in marketing cost analysis and control.

1. a) Write the explanatory note or role of government in marketing of agricultural product.

Ans: Agriculture marketing covers the service involved in moving an agricultural product from the farm to the consumer. At the state level, government agencies promote local agricultural products; provide food safety and inspection services, soil’s conservation and environmental protection. State policies regulate the production. Transportation, processing and marketing of commodities. Much state funded agricultural education, research and extension services important to the health of the industry.

At the local level, country and municipal governments promote agricultural education in schools and through civic organization. They also regulate the size of framing operations permitted in their respective communities and approve laws related to farmers markets, community garden and food assistance program.

Government of India has adopted a number of measures to improve agricultural marketing, the important one being establishment of regulate markets, construction of warehouse provision of grading and standardisation of produce, standardisation of weight and measures daily broadcasting of market price of agricultural crops on all India Radio, improvement of transport facilities etc.

Activities like transportation, processing storage, grading etc are included in agriculture marketing. These activities are very important for the development of agricultural atmosphere in the country.

At all levels, government influence in agriculture is often the centre of debate. Government policies must balance the cost and benefits to farmers’ consumers, the environment, government budget and competing interests.

b) What do you mean by co-operative marketing? Explain its relevance to the rural market of a country like India?

Ans: co-operative marketing is a system by which a group of farmers or market gardeners join together to carry on some or all the processes involved to carry on some or all the processes involved in bringing goods from the procedures to the consumers.

The co-operative marketing may be considered as a process of marketing of procedure which enables the growers to market their produce at better prices followed by the intention securing better marketing services and ultimately contributing to improvement in the standard of living of members. It is a collective and institutional form of rural marketing.

The need of co-operative marketing in India is increasingly felt as the future of co-operation depends to a large extent on its development. It has been recognised that co-operation form of organisation can play a significant and predominating role in improving the system of agricultural marketing.

The relevance of co-operation marketing to the rural market of a country like India are: –

1. Increases bargaining strength of the farmers

If the farmers join hands and form a co-operative society. They will be able to increase their bargaining strength because their produce will now marketed by single agency.

1. Direct dealing with final buyers

It outcast an intermediaries which eliminates exploiters and ensures prices to both, the producers and the consumer.

1. Provision of credit

The marketing co-operative activities provide credit to farmers to save them from the necessity of selling their produce immediately after harvesting. This ensures better returns to the farmers.

1. Easier and cheaper transport

This reduces the cost and botheration of transportation produce to the market.

1. Storage facilities

The co-operation marketing societies generally have storage have facilities. Thus the farmers can wait for better prices also there is no danger to their crop from rains, rodents and thefts.

1. Grading and standardisation

This task can be does more easily for a co-operative agency than for an individual farmer. For this purpose, they can seek assistance from the government or can even evolve their own grading arrangements.

1. Market intelligence

The co-operative can arrange to obtain data on market price, demand and supply and other related information from the markets on a regular basis and can plan their activities accordingly.

1. Influencing market prices

while previously the market price were determined by the intermediaries and merchants and the helpless farmers were mere spectators forced to accept whatever was offered to them, the co-operative of the game.

1. Provisions of inputs and consumer goods

The co-operative marketing societies can easily arrange for bulk purchase of agricultural inputs like seeds, manures, fertilisers, pesticides etc and consumer goods at relatively lower prices and can then distribute them to the buyers.

1. Processing of agricultural produce

The co-operative societies can undertake processing activities like crushing oil seed, gaining and pressing of cotton etc.

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