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Submitted By: Group 1 Abha Bhuskute Deepak Ranjan Rout Nikhil Singhal Venkata Narsi Reddy 10P133 10P135 10P155 10P178
ACKNOWLEDGEMENT
We would like to express our deepest gratitude to Prof. S. Chandwani for guiding us on the course Issues in Rural Marketing and for his invaluable guidance, support, and encouragement throughout our term paper which has helped us in the successful completion of our project.
We also extend our gratitude to our friends who directly or indirectly helped us during our project work.
TABLE OF CONTENTS
ACKNOWLEDGEMENT ....................................................................................... 3
Objectives of the Project: 1. Understanding the merchandising practices being followed in Kiryana stores in rural areas 2. Understanding the procurement practices of Kiryana stores in rural areas
Stores Selected: Kiryana Stores in villages Kiryana stores cater to the basic day to day needs of rural people in villages & keep a large number of products which includes some big brands as well as local brands. As these stores are have big brands as well, we wanted to study if these retail stores are being influenced by MNCs for merchandising & what is the procurement methods being followed by the rural retailers and contrast it with urban retailers where the channels of distribution are established & well developed.
Primary Research: To collect information about the rural retailers villages near Gurgaon were visited, details of which are given below. For understanding urban retailers, Retailers in Gurgaon & Rohini, Delhi were visited. Interviews of these retailers were conducted asking various questions about the practices they follow related to merchandising & procurement. Village Visited Basai Village near Gurgaon Teekli Road near Sohna Road Urban Retailers Visited: Sector-14 Gurgaon Sector-9 & 13, Rohini, Delhi These are villages in Gurgaon District and can be categorized as well off villages with constant interaction with urban areas as they are in vicinity (10-15kms) from urban areas. People regularly travel between village & urban centers for work & to meet other needs.
2. In terms of number of days per replenishment cycle: Rural Retailers For the retailers visited in Basai Village and Teekli Road, the replenishment cycle is two to three days for FMCG products which are obtained from the wholesalers and every alternate day for local products like potato chips, biscuits etc. which have a short shelf life. The retailers attributed this short replenishment time to the lack of storage space as they had small stores and used their houses as well as a part of the store for stock keeping. Also, they could not afford to invest capital to buy goods to last for longer periods and the customer base being very small, limited to one or two nearby villages, they did not want goods to lie in stock for longer periods. They also said that shorter replenishment time was more suitable for them because FMCG companies changed schemes, discounts and offerings very fast and advertised the same via mass media. But since the time to market was much longer, customers were unwilling to buy older stock without discounts once they heard about the new discounts. Since the shopkeepers had to procure stocks themselves as compared to delivery by the wholesalers in urban areas, hence returning old stock regularly when customers did not want to buy them represented additional transportation costs for them. Hence shorter replenishment time helped the rural retailers overcome this problem.
Urban Retailers This is in contrast to urban retail, where the replenishment time is usually a week. Given the larger stores, greater capital investment, a huge customer base which leads to large demand as well as demand for greater variety of SKUs, urban retailers procure stocks in much larger quantities as compared to rural retailers which usually last for about a week.