Challenges in Distribution in Rural Marketing

Presented By :Kuldeep Singh Deepak Vishwakarma Mohit Kohli Shambhu Ritesh Singh Devendra Sharma

What is Rural Marketing

Rural marketing is a function which manages all those activates involved in assessing, stimulating and converting the purchasing power into an effective demand for specific products and services, and moving them to the people in rural area to create satisfaction and a standard of living to them and thereby achieves the goals of the organization.

Introduction
Agricultural 24.7% to GDP of the country also contributes to
13.1% to Indian Exports Agro based economy and growth of the other sectors is driven by rural demand More than 70% of population lives in village and constitutions a big market for industry because increasing disposal incomes and awareness level Problems - Having enough money but their level of awareness and hence consumerism is very low Economic empowerment, education, health etc., are major problems

Why Rural India/Market

About 285 Mn live in urban India where as 742 Mn reside in rural areas constituting 72% of Indias population resides in 600,000 Villages More rural development Initiatives by the Government. Increasing agricultural productivity leading to growth of rural Disposable Income Lowering the difference between tastes of Urban and Rural Customer Growing Rural Infrastructure

Various factor which have made rural market Viable

Large Population Raising Propensity Growth in Consumption Life Cycle Changes Life cycle advantages Market growth rate higher than Urban Rural Marketing is not expensive

Attractiveness of rural market

Rural markets have become the new targets to corporate enterprises for two reasons : 1. Urban market has become congested with too many competitors. 2. The market have reached a near saturation point.

Challenges
Low Literacy (36%) when compared to all India average 52% Seasonal Demand buying capacity is not stable or regular Transportation Distribution Communication Problm

Cont..
Traditional Life Buying Decisions

Media for promotion

Career in rural market Cultural factor

Cont.
Vast and Scattered market Low standard of living

Lack of Desire for new styles

Over all Backwardness Lack of proper planning

Cont.
Inadequate Bank and Credit Facilities Pricing of the product

Levels of Distribution
Level 1 2 Partner Company Depot/ C & FA Distributor/ Van Operator/ Super Stockist/ Rural Distributor Location National/ State level District level

Sub Distributor/ retail Stockist/ sub stockist/star seller

Wholesaler

Tehsil HQ, towns and large villages

Feeder towns, large villages, haats Villages, haats

Retailer

Distribution Adaption
Hub and Spoke Model, Example: Coca Cola Use of Affinity groups, Example: Project Shakti Haat Activation, Example: Colgate Syndicated distribution, Example: Calvin Care & Amrutanjan Use of marketing co-operatives, Example: Warna Bazaar in Rural Areas Mobile traders, Example: FMCG companies

Promotion- Adaptations for Rural Markets

Conventional Television Radio Non- Conventional Haat and Mela Folk Media( puppet and magic show) Video Van Mandi Personalised Direct mailer POS (demonstration, leaflet) Word of mouth Interpersonal communication Animator

Press Cinema

Outdoor: Wall Painting, Hoarding

Types of Promotions
Advertising Sales promotions coupons, contests, demonstrations and sampling, Example: Tata Shaktee Haat Hungama Direct marketing, Example: Videocon Publicity, Example: Project Shakti and AP Online Using a direct selling through a sales force, Example: Swasthya Chetna for Lifebouy

"Yaara da Tashan... ads with Aamir Khan

created universal appeal for Coca Cola

Contd
Push strategy sales force and trade promotion

Pull strategy advertising and consumer promotion

Nirma
Depot

Ahemdabad

Hyderabad, Kolkata, Kanpur

Direct Distributor
At District level Covers 300-400 Outlets Directly

Sub-Distributor

At Tehsil level

Wholesaler

Retailer

Wholesaler

Retailer

Nirma Distribution Channel

Project Shakti
In 2001,with partnership of self help group of rural women & covers 5000 villages in 52 districts in different states. SHAKTI targets small villages with the population of less then 2000.

Cont..
Providing health & hygiene education through shaktivani program. Now SHAKTI has been extended 80,000 villages in 15 states with 45,000 women entrepreneurs & generating Rs.700-1000 per month to each women.