Rural Marketing IIBM EXAM ANSWER SHEETS PROVIDED. MBA EMBA BMS DMS ANSWERS PROVIDED. DR. PRASANTH MBA PH.D. DME MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com
Section A: Objective Type (30 Marks)
This section consists of Multiple Choices and Short Notes Type Questions.
Answer all the questions.
Part one carries 1 mark each & Part Two carries 5 marks each.
Part One:
Multiple Choices:
1. Social class, personality and lifestyle is included in which category of variables
a. Geographic Variables
b. Demographic Variables
c. Psychographic Variables
d. Product related Variables
2. Post Liberalization period of the 20th century is the _____ phase of rural marketing
a. Phase I
b. Phase III
c. Phase II
d. Phase IV
3. The pricing decision is not determined by which of the following 4c‟s of pricing
a. Customer Value
b. Competitor‟s Prices
c. Cost to company
d. Cost – Plus Pricing
4. Price determined on the basis of the customer‟s perception of value is categorized under which of
the following pricing method
a. Value – Based Pricing
b. Target – Return Pricing
c. Cost – Plus Pricing
d. Psychological Pricing
5. Co – Operative Notice Board is a _________ type of media frequency
a. Low Reach High Frequency
b. High Reach Low Frequency
c. High Reach High Frequency
d. Low Reach Low Frequency
6. Which of the following is the modern P of Rural Marketing
a. Product
b. Price
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c. Pace
d. Packaging
7. The process of testing the product‟s operational or performance capacity under controlled
conditions is a
a. Concept Testing
b. Test Marketing
c. Product Testing
d. Performance Testing
8. ___________ is regulated by the Retention – Pricing Scheme.
9. „Sheet Anchors‟ are categorized under which of the following Co – Operative Societies
a. Agriculture Credit Co - Operatives
b. Non Agricultural Societies
c. Re – Organisation of Marketing Societies
d. Agriculture Marketing Society
10. The behavior in which purchase is made in a hurry to avoid stock – out situations
a. Emergency Purchase Behavior
b. Planned Purchase Behavior
c. Complex Buying Behavior
d. Habitual Buying Behavior
Part Two:
1. Differentiate between Rural Marketing and Urban Marketing?
2. Explain the Segmentation of Rural Marketing?
3. Write a short note on „Customer Orientation‟ in reference to Rural Consumer Behavior?
4. Describe „Pricing strategies‟ in Rural Marketing Mix?
Section B: Caselets (40 Marks)
This section consists of Caselets.
Answer all the questions
Each Caselets carries 20 marks.
Detailed information should form the part of your answer (Word limit 150 to 200 Words)
Caselet 1
At the start, ICICI like any other bank in India did rural banking because it had to. It is mandatory for the
local banks operating in India as per government rules to allocate a good proportion of their overall
lending for priority sectors lending in rural India.
END OF SECTION A
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But lately, it has started exploring how to turn this obligation into a profit – making opportunity. Having
sufficient deposits to lend ICICI decide to make serving the rural poor its long – range growth strategy.
Rupees 2,500 Crores was disbursed by ICICI Bank toward rural sector financing in 2005.
In order to develop focus for serving the rural consumers ICICI has established its rural banking
operations as a stand – alone division. RMAG (Rural, Micro banking & Agri business Group) has been
formed by the bank for a more focused approach. Earlier it was just a part of the social initiatives group.
Marketing strategies Adopted to Tap the Rural market
Overhaul of Operational Practices
ICICI had to modify the way it operates in order to create operational efficiencies to serve the rural
markets in an effective manner to meet the unique challenges of rural market.
i. Deployment of New Technology Tools Developed for Rural Markets
The bank is deploying chip – embedded card that can verify a depositor‟s identity offline by storing the
person‟s thumbprint in order to serve clients who are too remotely placed to have access to reliable phone
service.
The rural internet Kiosk can become new face of banking in rural areas. These kiosks owned by local
entrepreneurs can be set up in a makeshift stall, a room in a village bungalow, or at a multipurpose store.
The kiosk will also offer movies and online medical advice. ICICI trains these entrepreneurs, connects
them to the internet and utilize them as conduits to sell banking products, or simply to inform local people
about the banking products that bank have developed for the rural markets. At the ICICI village kiosk,
people are coming with queries for credit cards, home loan, etc.
ii. Redesign of Operations of the Bank
The internet kiosks that are owned and operated by the local entrepreneurs not only save the bank from
heavy overhead of opening branch offices that were unviable to think of but at the same time the local
entrepreneur can leverage his investment by selling other products and services through the same kiosk.
iii. Designing Novel Products
The bank is merging products like insurance and mutual funds with banking to serve clients living hand to
mouth on a daily wage. ICICI sells personal – accident insurance at its rural branches for Rs. 1,00,000 in
case of death and half of that in case of incapacitating injury.
It is testing mutual fund that will cost just Rs. 100 to join. The daily wage labourers and landless farmers
can pay that small sum up front and then add to their investment in increments as small as Re 1 to Rs. 10.
To protect farmers against the bad monsoons that spoil their crops and make them default on loans, ICICI
is now selling farmer‟s rainfall insurance that delivers when the clouds do not. The premium varies from
2.5 percent of the payout for 30 days of coverage, to 8 percent to 12 percent for coverage lasting three or
four months.
Micro – Credit Products
The bank is providing funds to cattle farmers so that they can buy fodder, by having an arrangement with
the companies that manufacture fodder. Working in partnership with postal department, the bank intends
to expand its rural base in the country.
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To check the cumulative effect of farmers borrowing from one moneylender to repay another, ICICI now
offers small farmers bridge loans, which allow them to sell last season‟s harvest at the time when prices
are at their best, without missing out on buying next season‟s seeds. The bank charges an interest rate of 9
percent to 11 percent a year, compared with 2 percent a month that was charged by moneylenders, who
often take an additional cut once the asset is sold.
The bank even is providing some value added services through its kiosks in the villages, but at a cost like
electronic facsimiles of land deeds and other government documents that remain difficult for individuals
to acquire and often require farmers one or more day to board a bus to a big city and wait in line. The
service is provided at cost up to Rs. 15 for a printout.
Result
Rural banking division, which overseas micro – finance, agriculture business and rural lending, generated
144 Crores ($32 million), in net interest income in the year 2004, which is about 5 per cent of the bank‟s
total interest income. The division was expected to end financial year 2005 with Rs. 13,000 Crores in
assets, which would be about 8 percent of the bank‟s total assets. But as per its expectation there is about
Rs. 3, 00,000 Crores worth of demand for credit from rural areas.
Questions
Q 1. Discuss the marketing strategies adopted by ICICI to tap the Rural Market?
Q2. Define the term „Micro Credit‟ in terms of ICICI Bank?
Caselet 2
In the year 2002, there were 23 insurance companies in India, with 13 in the life insurance business and
10 in the non – life sector. The contribution of insurance in India is pitiably low at just about 1.6 percent
of GDP. The life insurance premium in India is just 1.8 percent of GDP as against 5.2 percent in US and 8
percent in South Korea.
To increase the penetration levels, insurance companies will need to look at newer segments especially
the relatively untapped rural market rather than fighting for a share in the same pie in the urban markets.
RNCOS‟ research report on insurance market potential in rural areas, says that progress in the semi –
urban and rural areas would largely fuel the growth in insurance sector.
Associated Chambers of Commerce (ASSOCHAM) stated that rural and semi – urban areas would have a
share of US $35 billion (Rs 1,57,500 Crores) in the US $60 billion (Rs 2,70,000 Crores) Indian insurance
industry. Life insurance market in semi – urban and rural territories is expected to rise to US $20 billion
(Rs 90,000 Crores) mark by the year 2010 from the existing value of less than US $5 billion (Rs 22,500
Crores) in 2006. This is because more semi – urban and rural populace would opt insurance cover for a
secure future. The non – life insurance business in semi – urban and rural regions would reach US $15
billion (Rs 67,500 Crores) by 2010. This all is expected because large segment of rural India is still
untouched because of long distances, poor distribution and high return costs.
Challenges in Rural Markets for Insurance Services
What stopped the insurance companies to enter the rural market in full –fledged manner is just the
common perception and belief that it is expensive to do business in rural areas. So, most of them are
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merely focusing on meeting the regulatory opportunities. Some of the challenges for insurance companies
in the rural market are:
Lack of Cost – effective and Efficient Distribution and delivery systems
The cost of building exclusive delivery system for selling insurance in rural markets could be prohibitive
for a single organization.
Lack of Education about Insurance Concept
Villagers are not yet fully informed about the cost – benefit analysis of being insured.
Lack of Awareness about Relevant Insurance Products
Majority of the rural population is not aware of the possibility of existence of products like crop or
weather insurance.
Factors suggesting Potential for Insurance Services in Rural market.
There is a huge potential for insurance business in rural areas. The following factors suggest good
potential for insurance services in rural market provided they are catered to in an effective manner:
Saving Habit
The good habit of saving for the rainy days in rural areas is prevalent even in the relatively low – income
families, which tend to save about a third of their annual earnings.
Improving Economic Scenario
The overall economic scenario is improving in the rural areas. There is a growing middle class with
regular income and the rural rich are becoming rich.
Increasing investment by Government in Rural Sector
With government planning to make huge investments in the rural sector it will certainly have the effect of
pushing up rural incomes at a much faster rate, thus increasing the scope of income being invested in
insurance products.
Low Penetration level for insurance Products
Penetration of insurance products is very low. Only a third of population has any type of insurance
product with them. The insurance of cattle, crops and assets like pump set is very rare. This is an
untapped market waiting to be exploited with rural specific products.
Development of rural Specific products
Insurance companies are planning and launching products that have been developed exclusively for the
rural market, after analyzing their needs, environment and paying capacity. Launching of such like
products in the market will help in spreading the insurance culture in rural India.
Increasing Rural disposable Incomes
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With higher purchasing power in the rural market the demand for goods and services is expected to rise.
Rural India has started to figure in the marketing strategies of most organizations, including the insurance
companies.
Rising Product Demands
As there is increasing demand for agriculture input durables and automobiles in the rural areas there will
be corresponding increased potential for general insurance in rural India.
Potential Agents to Market Insurance Policies in Rural Areas
Following categories of persons could be identified as potential agents, to sell insurance products in the
rural market:
i. Postal Agents: The post – office sells savings certificates such as Kisan Vikas Patra, National savings
Certificate and also generates recurring deposits through postal agents. Insurance companies can recruit
and train these agents for marketing insurance products. The familiarity with financial instruments
(savings) will be advantageous to these agents and o the insurance company as well.
ii. Cable TV operators: Cable TV operators are educated and have access to all homes in the village that
have a cable connection, that is, about 400 households in villages with a population of more than 5000.
They visit the homes at least once a month to collect the subscription. Their accessibility to rural homes
makes them a potential insurance agent.
iii. Recruiting Youth Club Members: These youth who are educated and seek avenues for generating
income for them can be selected and recruited for making insurance companies products by companies.
iv. Involving Doctors and Schoolteachers: Registered medical practitioners and teachers are the more
educated persons in a village and command considerable trust, respect and influence. These persons can
be easily trained under the IRDA curriculum and appointed as insurance agent by the insurance
companies.
Crop Insurance
Crop Insurance against weather and diseases can be a big business. Insurance companies need to educate
the farmers with respect to the benefits of insurance. They can also establish tie – up with corporate sector
organizations that have contract farming arrangement with the farmers so that crop insurance is integrated
into the contract farming agreement with the farmers. ICICI Lombard plans to market weather insurance
product in the rural areas.
Questions
Q 1. Discuss the challenges faced by Insurance companies in Rural Market?
Q2. Name some potential agents of Insurance companies in detail?
Q3. Define the term „Crop Insurance‟?
Q4. What are the factors that can help Insurance companies to enter the Rural Market?
END OF SECTION B
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Section C: Applied Theory (30 Marks)
This section consists of Applied Theory Questions.
Answer all the questions.
Each question carries 10 marks.
Detailed information should form the part of your answer (Word limit 200 to 250 Words)
1. Define the concept of Rural Marketing? What are the various characteristics of the Rural Market?
2. What are the challenges of Rural Marketing?
3. What are the objectives behind New Product Launch? List the Process of New Product
Development for Rural Market?
END OF SECTION C
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IIBM Institute of Business Management
Examination Paper MM.100
Rural Development
Section A: Objective Type (30 Marks)
This section consists of Multiple Choices and Short Notes Type Questions.
Answer all the questions
Part one carries 1 mark each & Part Two carries 5 marks each.
Part One:
Multiple Choices:
1. Education, culture, demography etc. are included in which of the following dimension of Rural
Development
a. Economic Dimension
b. Human Dimension
c. Political Dimension
d. Science & Technology
2. Which of the following is not a benefit of efficient financial institution
a. Be insulated from local pressures for staffing
b. Operate on a hard budget constraint
c. Have a sense of performance
d. Indigenous development and growth
3. Peri – Urban means _________________________
4. EARDF stands for ________________________________________
5. Which of the following is not included in the „four priority axes‟ of new rural development policy
a. Mainstreaming of the LEADER
b. Economic diversification and quality of life
c. Support for competitiveness
d. High value of agriculture
6. The weight of exports to total output of GDP is included in which index to measure global
economic exposure
a. Intra – Industry Trade (IIT)
b. Intra – industry Trade (IFPRI)
c. Industry Exposure (EPTT)
d. Industry Exposure (EPGDP)
7. Which of the following is not an element while constructing an index
a. Percentage of bilingual individual‟s
b. Responding to exogenous stress
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c. Percentage of self – employed workers
d. People in the census consolidated subdivision.
8. Name any two innovations in Rural Development done by NABARD?
9. Write any two criterions for establishing a Public – Private Partnership?
10. OCAP stands for _______________________________________
Part Two:
1) Differentiate between Target Fulfillment and Quality Fulfillment?
2) Define the term „Rural Development‟?
3) Write a short note on Rural development policies in India?
4) Define the characteristics of Rural sector?
Section B: Caselets (40 Marks)
This section consists of Caselets
Answer all the questions
Each Caselet carries 20 marks each.
Detailed information should form the part of your answer (Word limit 150 to 200 Words)
Caselet 1
Juvenile homes are run by Government agencies in all Indian sates. Most of these homes are over –
crowded, located in dilapidated buildings and provide extremely poor care of the children. Stories are
children running away from juvenile homes get regularly reported in the media. The majority of homes
are run as purely departmental undertakings managed by the State Social Welfare Departments. The
conditions in the homes depend on the amount of interest taken by the responsible government officials.
General consensus, however, remains that these homes are poorly managed.
Juvenile homes for boys and girls in Chennai were run along similar lines until Ms. Vidya Shankar
intervened. Ms. Shankar, chairperson of the state Juvenile Welfare Board and founder – director of the
NGO Relief Foundation, forged a partnership with the government for the management of these juvenile
homes. The Relief Foundation made several interventions to improve the lives of the children in the
homes. Non – governmental funds were raised to improve and repair the buildings. Sponsors were
enlisted to supplement the resources provided by the Government for food and other expenses. Doctors
came forward to provide voluntary care for the children.
Efforts have focused on working within the juvenile justice system both inside the government homes and
in classrooms. Courses given include computer literacy classes, tution for girls from class seven to ten,
basic literacy for children at the reception centre and observation home, story – telling sessions and
END OF SECTION A
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library use. The issue of children running away was tackled by explaining the need to stay in a home. The
Documentation of case histories happened simultaneously. The need for spirituality, change in behavior
and family relationships was addressed. Finally, the children were prepared for their return to their
families, whenever possible.
This experiment represents, in the words of Ms. Vidya Shankar, “the synergy between the kinetic energy
of a voluntary organization and the potential energy of the government system. Learning to keep a low
profile and directing our efforts in mutually – agreed areas of value – added services – all done with no
effort to publicize other than what is officially done by the government – go a long way in allowing us to
work together. Raising funds in spite of this low profile is another aspect we have to keep in mind. And,
equally important, there is an agreement to be evaluated and criticized even though there is no funding
from government sources.
Required
Q 1. Does Juvenile homes set – up by government helped in Rural Development? Comment
Caselet 2
“Just as the whole universe is contained in the self, so is India contained in the villages” (Mahatma
Gandhi, father and the visionary architect of India‟s Rural Development Programmes). In India around 75
percent people are living in rural area and rural India holds the core Indian traditions and culture.
Therefore holistic development is required for retaining real Indian culture. This write – up gives an
overview of the Rural Development initiatives adopted by Government of India.
Indian government framed several schemes for rural development and launched by the Ministry of Rural
Development (MoRD). These are listed below:
Sampoorna Grameen Rozgar Yojana (SGRY)
Pradhan Mantri Gram Sadak Yojana (PMGSY)
Swarnjyanti Gram Swarozgar Yojana (SGSY)
Integrated Wastelands Development Programme.
Drought Prone Areas Programme.
Technology Development, Extension & Training (TDET)
Rural Water Supply Programme etc.
However, 73rd Amendment of the Indian constitution has brought about a paradigm shift in the Rural
Development Strategy. The focus has now shifted to decentralization through speedy and effective
devolution of financial and administrative powers to the locally elected bodies called Panchayati Raj
Institutions (PRIs).
ICT Initiatives for Agriculture and Rural Development
In order to bring information management culture at village level, ICT infrastructure has been created in
NARS by ARIS. In NARS, more than 400 ARIS have already been created. Such kiosks have already
been established in some other states like Andhra Pradesh, Maharashtra, Karnataka, Madhya Pradesh,
Kerala, Tamil Nadu etc. Use of ICT for rural development and transfer of agriculture technology has been
done by Government and Private Organizations (including NGO‟s). The Ministry of Communication and
Information Technology of the Government of India and the Telecom Regulatory Authority of India
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(TRAI), as well several state governments, have already developed strategies for accelerating the growth
of the Internet and broadband connectivity in rural India.
New Initiatives for ‘AAM AADMI’ through KVIC
The Khadi and Village industries Commission (KVIC) operate through 30 Khadi & Village Boards and
over 5000 institutions in different states. The production of the sector in Khadi (hand – woven textiles)
was Rs. 462 Crore and production of Village Industries was Rs. 10,460 Crore in 2004 – 2005. During
2004 – 2005, about 76 lakh persons were employed in Khadi & Village Industries. KVIC products
include khadi, herbal products, handmade paper, agarbatti, handicrafts, processed foods etc., and these
products are registered with different export promotion councils. During 2004 -2005, KVIC exported
goods worth Rs. 39 Crore. Exports are projected to grow to around Rs. 300 Crore in the next five years.
Required
Q 1. Discuss in detail about the various initiatives adopted by government for Rural Development?
Section C: Applied Theory (30 Marks)
This section consists of Long Questions
Answer all the questions
Each question carries 15 marks each.
Detailed information should form the part of your answer (Word limit 200 to 250 Words)
1) Explain the Rural Development policies? And how we improve it?
2) What are the challenges faced by Indian Agriculture in terms of Rural Development?
S-2-300813
END OF SECTION B
END OF SECTION C
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