The document summarizes a report on business opportunities in rural Indian markets. It finds growing business confidence in rural markets for several reasons: rural incomes are less dependent on farming; government spending and loan waivers have increased rural purchasing power; and policy measures have boosted employment and wages. The report presents a framework for high-performing rural businesses, identifying capabilities in market creation/shaping, supply chain adaptation, and technology-enabled value co-creation. It argues businesses can accelerate rural development through employment, education, infrastructure, and wealth creation opportunities.
ICICI Prudential Life Insurance is looking to expand into rural markets in select states in India. They want to target rural affluent customers in the SEC R1 and R2 categories. Their objective is to launch ICICI Prudential as a trusted and credible life insurance company for this target segment. The presentation discusses using market research tools to select priority districts and villages, understanding the rural customer, and developing a communication strategy aligned with ICICI Prudential's brand positioning of "being there at every step".
This document provides an overview of opportunities and challenges for marketing in rural India. It begins with 12 questions to consider about rural India's economy and demographics. The majority of India's population lives in rural areas and depends on agriculture. Rural marketing can generate profits by developing new markets, driving innovation, and strengthening value chains. However, challenges include poor infrastructure, fragmented markets, and lack of supply chains. Successful rural marketing requires innovations tailored to local needs as well as focused execution through strategies like aggregating demand and minimizing distribution costs. The rural market potential is large but also heterogeneous, requiring an understanding of regional differences. The document examines myths and realities about rural consumers and expenditures. Opportunities exist due to rising incomes and changing consumption patterns
The document discusses LG's rural marketing approach in India. To penetrate the rural market, LG increased its branch and service center presence, gave area managers more power, and localized products and promotions. LG's approach focused on availability through widespread service centers, affordability by offering cheaper products, acceptability by localizing features, and creating awareness through cricket promotions and word of mouth. This approach helped LG gain 20% revenue from rural India and the largest share of the color TV market. However, competitors like Samsung began targeting premium buyers more aggressively, and LG's growth declined as it focused solely on the mass market.
Rural markets in India are emerging as an important trend due to the large rural population, increased literacy rates, and rising consumer demand. Some key developments include more rural Indians using mobile phones, purchasing insurance, and gaining internet access, showing they are becoming more brand conscious. However, marketing to rural consumers also faces challenges like lack of awareness, affordability, availability, and acceptability of products. Companies are developing solutions like tailored new products, expanded distribution networks, and effective communication strategies to better reach rural customers and capture the growth opportunities in rural India.
This document discusses rural retailing in India and its future outlook. It notes that rural markets represent a large opportunity as two-thirds of India's consumers live in rural areas. Rural demand is growing for packaged foods, personal care products, and other goods. Several companies have customized their products, pricing, and distribution for rural consumers. While rural retailing faces challenges like infrastructure and taxation issues, the future outlook remains positive as rural incomes and consumption are expected to significantly increase over the next decade. Organized retailers and FMCG companies are recognizing the potential of rural markets.
Rural Retailing In India By Alok SharmaAlok Sharma
The document discusses rural retailing in India and its challenges. It notes that rural India contributes significantly to sales across various industries like FMCG and consumer durables. It also provides an example of a successful rural retail model called E-Choupal, launched by ITC, which sets up knowledge centers and directly sources from farmers. This approach builds trust with locals and benefits farmers through higher prices and the company through an alternative procurement channel. Some key challenges for rural retailing include high initial costs due to a vast, scattered market and low purchasing power. Regulations like the Essential Commodities Act also impact the fertilizer industry. Success requires focusing on availability, affordability, acceptability and awareness.
Rural retailing in India is an important and growing sector. Approximately 70% of India's population lives in rural areas across 66,000 villages. Rural retail is growing at 7% annually and represents a significant portion of India's overall GDP and consumption in various industries such as FMCG. However, rural retailing also faces challenges including poor infrastructure, lack of suitable dealers and retailers, and low investment capacity. To succeed in rural markets, companies must focus on availability, affordability, acceptability, and awareness of products for rural consumers. Various models for rural retailing have emerged such as Hariyali Kisaan Bazaar, Aadhaar, and E-Chaupal which aim to be one-stop shops
Rural India is characterized by low per capita income, low productivity, low literacy and low rate of industrialization along with absence of basic amenities. The unprivileged class is set back by a lack of educational opportunities that could empower them to confidently pursue economic progress and overcome the debilitating effects of low literacy and rigid social hierarchies. India’s rural markets are growing at double the rate of urban markets. The retail revolution is going to act as a catalyst. So, the new concept that is hitting the market today is the "Rural Retailing".
ICICI Prudential Life Insurance is looking to expand into rural markets in select states in India. They want to target rural affluent customers in the SEC R1 and R2 categories. Their objective is to launch ICICI Prudential as a trusted and credible life insurance company for this target segment. The presentation discusses using market research tools to select priority districts and villages, understanding the rural customer, and developing a communication strategy aligned with ICICI Prudential's brand positioning of "being there at every step".
This document provides an overview of opportunities and challenges for marketing in rural India. It begins with 12 questions to consider about rural India's economy and demographics. The majority of India's population lives in rural areas and depends on agriculture. Rural marketing can generate profits by developing new markets, driving innovation, and strengthening value chains. However, challenges include poor infrastructure, fragmented markets, and lack of supply chains. Successful rural marketing requires innovations tailored to local needs as well as focused execution through strategies like aggregating demand and minimizing distribution costs. The rural market potential is large but also heterogeneous, requiring an understanding of regional differences. The document examines myths and realities about rural consumers and expenditures. Opportunities exist due to rising incomes and changing consumption patterns
The document discusses LG's rural marketing approach in India. To penetrate the rural market, LG increased its branch and service center presence, gave area managers more power, and localized products and promotions. LG's approach focused on availability through widespread service centers, affordability by offering cheaper products, acceptability by localizing features, and creating awareness through cricket promotions and word of mouth. This approach helped LG gain 20% revenue from rural India and the largest share of the color TV market. However, competitors like Samsung began targeting premium buyers more aggressively, and LG's growth declined as it focused solely on the mass market.
Rural markets in India are emerging as an important trend due to the large rural population, increased literacy rates, and rising consumer demand. Some key developments include more rural Indians using mobile phones, purchasing insurance, and gaining internet access, showing they are becoming more brand conscious. However, marketing to rural consumers also faces challenges like lack of awareness, affordability, availability, and acceptability of products. Companies are developing solutions like tailored new products, expanded distribution networks, and effective communication strategies to better reach rural customers and capture the growth opportunities in rural India.
This document discusses rural retailing in India and its future outlook. It notes that rural markets represent a large opportunity as two-thirds of India's consumers live in rural areas. Rural demand is growing for packaged foods, personal care products, and other goods. Several companies have customized their products, pricing, and distribution for rural consumers. While rural retailing faces challenges like infrastructure and taxation issues, the future outlook remains positive as rural incomes and consumption are expected to significantly increase over the next decade. Organized retailers and FMCG companies are recognizing the potential of rural markets.
Rural Retailing In India By Alok SharmaAlok Sharma
The document discusses rural retailing in India and its challenges. It notes that rural India contributes significantly to sales across various industries like FMCG and consumer durables. It also provides an example of a successful rural retail model called E-Choupal, launched by ITC, which sets up knowledge centers and directly sources from farmers. This approach builds trust with locals and benefits farmers through higher prices and the company through an alternative procurement channel. Some key challenges for rural retailing include high initial costs due to a vast, scattered market and low purchasing power. Regulations like the Essential Commodities Act also impact the fertilizer industry. Success requires focusing on availability, affordability, acceptability and awareness.
Rural retailing in India is an important and growing sector. Approximately 70% of India's population lives in rural areas across 66,000 villages. Rural retail is growing at 7% annually and represents a significant portion of India's overall GDP and consumption in various industries such as FMCG. However, rural retailing also faces challenges including poor infrastructure, lack of suitable dealers and retailers, and low investment capacity. To succeed in rural markets, companies must focus on availability, affordability, acceptability, and awareness of products for rural consumers. Various models for rural retailing have emerged such as Hariyali Kisaan Bazaar, Aadhaar, and E-Chaupal which aim to be one-stop shops
Rural India is characterized by low per capita income, low productivity, low literacy and low rate of industrialization along with absence of basic amenities. The unprivileged class is set back by a lack of educational opportunities that could empower them to confidently pursue economic progress and overcome the debilitating effects of low literacy and rigid social hierarchies. India’s rural markets are growing at double the rate of urban markets. The retail revolution is going to act as a catalyst. So, the new concept that is hitting the market today is the "Rural Retailing".
Rural retailing in India is a major opportunity as over 70% of India's population lives in rural areas. Major players like Godrej, Reliance, and MAX are establishing rural retail hubs and stores to provide farmers with supplies and sell their produce. Rural consumption is growing at over 10% annually. Effective supply chain management, including cold storage infrastructure, is key to success. Horticulture is experiencing a 4% growth in India, driven by retail demand and investments from groups like the World Bank. Public-private partnerships are improving rural infrastructure like roads, warehouses, and IT networks to support rural retailing.
The Impact of Innovation on Rural MarketingShreya Mishra
This document discusses marketing innovation and rural marketing in India. It begins with defining marketing innovation as exploiting new ideas to create new products, processes or services. It then discusses various perspectives on marketing innovation including product development, marketing mix, culture, and integrated marketing campaigns. The document then highlights features of the rural market in India including that it is large and scattered, accounting for about 74% of the population and growing demand for products. It concludes that the rural market offers significant opportunities for marketers.
The document discusses rural retail in India, including defining characteristics of rural India, regulations and policies around rural retail, and significant players in the rural retail space such as Godrej Adhar, ITC Chaupal, and Hariyali Kisan Bazaar. It outlines the business models of these companies and impediments to rural retail, recommending increasing infrastructure and education to better tap into the rural market opportunity.
India is a developing country. Today 65% of India’s population is living in rural areas, and today their purchasing needs are witnessing a change. Today there is a huge opportunity in the retail sector due to FDI clearances in retail and only a good vision is required.
This presentation deals with changing scenario of retail in rural sector .Other part of presentation covers various challenges and optimum strategies for the rural sector. A ray of light have also been thrown on few successful models such as ITC’s Choupal Saagar, DCM’s Hariyali Kisaan Bazaar, Triveni Khushali Bazaar, Future group and Godrej’s joint venture Aadhar etc.
The document presents information on rural marketing in India. It defines rural areas and provides facts about the rural market, including that 70% of India's population lives in rural areas. It then discusses the meaning and evolution of rural marketing. The document outlines some key innovations in rural marketing, such as product innovations, pricing strategies, promotion methods, and packaging innovations. It provides examples of specific rural marketing innovations by companies. In conclusion, it states that rural India has significant untapped potential for companies and growth can be achieved through proper strategies and technologies.
Case study on Indian Rural Marketing_Ravi Guntaka from P.B.Siddhartha,VijayawadaRavi G
Hi friends this is Ravi. I am pursuing my MBA in P.B.SIDDHARTHA,Vijayawada.I am very interested about rural marketing because it is the place where companies have high opportunities for their growth.so friends i have done a small case study and i prepared this with some of my ideas.please guide me with your valuable suggestions. thanking you...... --Ravi
The document discusses the 4 Ps of the rural marketing mix - product, price, place, and promotion. It provides examples of how companies have tailored each aspect of the marketing mix to better target rural consumers with more affordable and accessible products, competitive pricing, expanded distribution networks, and promotion strategies that increase awareness in rural areas through various media vehicles.
This document discusses rural marketing environment and factors influencing rural consumer behavior. It defines rural marketing environment as the sum of external factors surrounding a rural marketing organization, including social, economic, ethical, political, physical and technological factors.
Some key points made in the document are:
1) Social factors like sociological, anthropological and psychological aspects influence rural consumer habits, tastes and lifestyles.
2) Economic factors like competition, consumers, prices, ethics, politics, infrastructure and technology shape rural marketing strategies.
3) Factors influencing rural consumer behavior include their environment, culture, social class, personal characteristics, and marketing mix elements.
The document provides an overview of rural marketing in India. It discusses:
1) Rural marketing is becoming increasingly important as rural markets outpace urban markets in growth. Many companies have made inroads into rural India.
2) Rural consumers have different characteristics than urban consumers due to factors like occupation, income sources, and lifestyle. Their buying behavior is influenced by their culture, reference groups, and available information.
3) Rural and urban markets differ in terms of population density, infrastructure, income stability, and other factors. Marketers must tailor their approaches to address the specific constraints of rural areas.
This document provides an overview of rural marketing in India. It discusses the evolution and attractiveness of rural markets, opportunities they present, and some common myths. Key opportunities include India's large rural population, rising rural incomes, and government programs increasing agriculture spending. However, rural markets also face challenges related to infrastructure, distribution, promotion, and understanding diverse rural consumer needs. Successful strategies include increasing availability through innovative last-mile distribution, ensuring affordability through small packs, promoting acceptability of products suited to rural areas, and raising awareness through local opinion leaders and traditional media. The example of ITC e-Choupal demonstrates how these strategies can be effectively implemented.
The document discusses the growing importance of rural markets in India. It notes that over 70% of India's population lives in rural areas, yet they remain an untapped market. Rural incomes are rising due to increased agricultural procurement prices and government programs, growing the rural consumer market. Companies will need targeted marketing strategies to succeed in rural India, focusing on product relevance, affordable prices, widespread distribution networks, and culturally-appropriate communication. Developing a dedicated rural business vertical and leveraging new retail and IT models can help companies better access this sizable rural consumer base.
Rural markets represent a significant opportunity for growth as over 70% of India's population lives in rural areas. However, rural marketing presents challenges including underdeveloped infrastructure, low incomes, and cultural differences. Successful rural marketing strategies adapt products and promotions to rural needs through affordability, availability, awareness and acceptability. Companies implement various initiatives such as customized products and targeted campaigns to effectively tap into India's vast rural consumer base.
This document discusses rural marketing in India. It begins by defining rural marketing and describing how it differs from urban marketing. Key points include:
- Rural areas rely primarily on agriculture as an economic activity while urban areas focus more on manufacturing, trade, and services.
- The rural market is large in size and growing rapidly due to factors like increasing prosperity and consumption among rural populations.
- Reaching rural consumers presents challenges like poor infrastructure and low literacy.
- Several companies have found success marketing to rural Indians, such as Hindustan Unilever through low-cost products and Coca-Cola through universal appeal advertising.
- The rural market remains largely untapped and has great potential for
Logistics and supply chain in rural india the opportunityAmarwaha
This document discusses the opportunities in logistics and supply chains in rural India. It notes that rural India has a large population and consuming class, accounting for close to 70% of users of some consumer products. While the rural market is alluring due to its size, it also presents challenges like low incomes, seasonality, and lack of infrastructure. Some companies are addressing challenges of availability, affordability, acceptability and awareness in rural markets. It provides examples of companies innovating their supply chains and distribution networks to better serve rural consumers.
Rural markets in India offer great potential for growth given that 2/3 of India's population lives in rural areas. Rural India has a large consuming class that accounts for 41% of the middle class and 58% of total disposable income. The size of key rural markets are FMCG at 80,000 crores, durables at 10,000 crores, and agri inputs including tractors at 55,000 crores. Rural consumers have less strict social structures now, improved infrastructure, and more disposable income. Companies need strategic marketing management, research and development, communication, and systematic structures to tap opportunities in rural markets and address challenges like rationalization and marketing indigenous goods.
LG India adopted a unique distribution strategy to target rural markets. It decentralized its distribution network, establishing branch offices in cities and Remote Area Officers (RAOs) in rural territories. RAOs oversaw Regional Sales Officers and were given autonomy over marketing in their territories. This pyramidal structure improved rural sales and penetration. However, competitors like Samsung and Electrolux used similar rural distribution strategies.
Rural retailing presents a tremendous opportunity for growth in India. Over 50% of India's GDP comes from rural areas where the population is growing and disposable incomes are rising. While literacy rates are still low, exposure to technology is increasing brand awareness. Companies need to gain the trust of rural communities by respecting local needs, flavors and traditions. They must also provide reliable infrastructure to support farmers in selling produce directly. Strategies include establishing fresh produce stores and rural hypermarkets to connect farmers and consumers while bypassing intermediaries.
1) e-Choupal is an initiative by ITC Limited that created electronic marketplaces in rural India to connect farmers directly with buyers and provide information.
2) It aimed to reduce inefficiencies and costs in the agricultural supply chain by eliminating intermediaries and allowing farmers to access real-time market prices and best farming practices.
3) Studies showed e-Choupal reduced transaction costs for farmers from 8% to 2% by handling activities like procurement, weighing and storage at local collection centers called e-Choupals.
This presentation on LG's Sampoorna Color TV talks about an innovative consumer product for Rural India, Its marketing strategies and growth story. It explains 4As and 4Ps of Rural Marketing wrt LG Sampoorna
Rural Marketing- Acceptability for a productPriya Soni
Each Company is making their way to Rural India. Most of them have studied the market and Analyzed the things over there and ready to fight at Rural India. There are some of the companies which have already written their success stories in Rural market. Companies like HUL, ITC, LG, Mahindra have given a new format for rural marketing. They have done a great job. So, the marketing is always have the difference in Urban and rural, which makes the companies to think over the Marketing mix.
A series of pre-defined standards related to the performance of an individual product, service or system that enables someone to easily determine the capability to perform its function within an acceptable range.
LumiLive is a dynamic platform that helps broadcasters and producers build relationships with audiences in real time through powerful engagement tools. It works across mobile devices, PCs, and tablets to create second screen experiences using patented technology and social media integration. The platform also provides targeted advertising, customization, and scalability to unlock commercial value.
Lumi Mobile began in 2004 in Finland as a mobile content management system and is now a market leader in audience engagement and consumer insight technology. Based in London, New York, and Finland, Lumi Mobile enables media companies, market researchers, and brands to engage consumers across all mobile devices. Lumi's patent-pending platform instantly links mobile users to each other and clients, delivering games, polls, events, networking and more.
Rural retailing in India is a major opportunity as over 70% of India's population lives in rural areas. Major players like Godrej, Reliance, and MAX are establishing rural retail hubs and stores to provide farmers with supplies and sell their produce. Rural consumption is growing at over 10% annually. Effective supply chain management, including cold storage infrastructure, is key to success. Horticulture is experiencing a 4% growth in India, driven by retail demand and investments from groups like the World Bank. Public-private partnerships are improving rural infrastructure like roads, warehouses, and IT networks to support rural retailing.
The Impact of Innovation on Rural MarketingShreya Mishra
This document discusses marketing innovation and rural marketing in India. It begins with defining marketing innovation as exploiting new ideas to create new products, processes or services. It then discusses various perspectives on marketing innovation including product development, marketing mix, culture, and integrated marketing campaigns. The document then highlights features of the rural market in India including that it is large and scattered, accounting for about 74% of the population and growing demand for products. It concludes that the rural market offers significant opportunities for marketers.
The document discusses rural retail in India, including defining characteristics of rural India, regulations and policies around rural retail, and significant players in the rural retail space such as Godrej Adhar, ITC Chaupal, and Hariyali Kisan Bazaar. It outlines the business models of these companies and impediments to rural retail, recommending increasing infrastructure and education to better tap into the rural market opportunity.
India is a developing country. Today 65% of India’s population is living in rural areas, and today their purchasing needs are witnessing a change. Today there is a huge opportunity in the retail sector due to FDI clearances in retail and only a good vision is required.
This presentation deals with changing scenario of retail in rural sector .Other part of presentation covers various challenges and optimum strategies for the rural sector. A ray of light have also been thrown on few successful models such as ITC’s Choupal Saagar, DCM’s Hariyali Kisaan Bazaar, Triveni Khushali Bazaar, Future group and Godrej’s joint venture Aadhar etc.
The document presents information on rural marketing in India. It defines rural areas and provides facts about the rural market, including that 70% of India's population lives in rural areas. It then discusses the meaning and evolution of rural marketing. The document outlines some key innovations in rural marketing, such as product innovations, pricing strategies, promotion methods, and packaging innovations. It provides examples of specific rural marketing innovations by companies. In conclusion, it states that rural India has significant untapped potential for companies and growth can be achieved through proper strategies and technologies.
Case study on Indian Rural Marketing_Ravi Guntaka from P.B.Siddhartha,VijayawadaRavi G
Hi friends this is Ravi. I am pursuing my MBA in P.B.SIDDHARTHA,Vijayawada.I am very interested about rural marketing because it is the place where companies have high opportunities for their growth.so friends i have done a small case study and i prepared this with some of my ideas.please guide me with your valuable suggestions. thanking you...... --Ravi
The document discusses the 4 Ps of the rural marketing mix - product, price, place, and promotion. It provides examples of how companies have tailored each aspect of the marketing mix to better target rural consumers with more affordable and accessible products, competitive pricing, expanded distribution networks, and promotion strategies that increase awareness in rural areas through various media vehicles.
This document discusses rural marketing environment and factors influencing rural consumer behavior. It defines rural marketing environment as the sum of external factors surrounding a rural marketing organization, including social, economic, ethical, political, physical and technological factors.
Some key points made in the document are:
1) Social factors like sociological, anthropological and psychological aspects influence rural consumer habits, tastes and lifestyles.
2) Economic factors like competition, consumers, prices, ethics, politics, infrastructure and technology shape rural marketing strategies.
3) Factors influencing rural consumer behavior include their environment, culture, social class, personal characteristics, and marketing mix elements.
The document provides an overview of rural marketing in India. It discusses:
1) Rural marketing is becoming increasingly important as rural markets outpace urban markets in growth. Many companies have made inroads into rural India.
2) Rural consumers have different characteristics than urban consumers due to factors like occupation, income sources, and lifestyle. Their buying behavior is influenced by their culture, reference groups, and available information.
3) Rural and urban markets differ in terms of population density, infrastructure, income stability, and other factors. Marketers must tailor their approaches to address the specific constraints of rural areas.
This document provides an overview of rural marketing in India. It discusses the evolution and attractiveness of rural markets, opportunities they present, and some common myths. Key opportunities include India's large rural population, rising rural incomes, and government programs increasing agriculture spending. However, rural markets also face challenges related to infrastructure, distribution, promotion, and understanding diverse rural consumer needs. Successful strategies include increasing availability through innovative last-mile distribution, ensuring affordability through small packs, promoting acceptability of products suited to rural areas, and raising awareness through local opinion leaders and traditional media. The example of ITC e-Choupal demonstrates how these strategies can be effectively implemented.
The document discusses the growing importance of rural markets in India. It notes that over 70% of India's population lives in rural areas, yet they remain an untapped market. Rural incomes are rising due to increased agricultural procurement prices and government programs, growing the rural consumer market. Companies will need targeted marketing strategies to succeed in rural India, focusing on product relevance, affordable prices, widespread distribution networks, and culturally-appropriate communication. Developing a dedicated rural business vertical and leveraging new retail and IT models can help companies better access this sizable rural consumer base.
Rural markets represent a significant opportunity for growth as over 70% of India's population lives in rural areas. However, rural marketing presents challenges including underdeveloped infrastructure, low incomes, and cultural differences. Successful rural marketing strategies adapt products and promotions to rural needs through affordability, availability, awareness and acceptability. Companies implement various initiatives such as customized products and targeted campaigns to effectively tap into India's vast rural consumer base.
This document discusses rural marketing in India. It begins by defining rural marketing and describing how it differs from urban marketing. Key points include:
- Rural areas rely primarily on agriculture as an economic activity while urban areas focus more on manufacturing, trade, and services.
- The rural market is large in size and growing rapidly due to factors like increasing prosperity and consumption among rural populations.
- Reaching rural consumers presents challenges like poor infrastructure and low literacy.
- Several companies have found success marketing to rural Indians, such as Hindustan Unilever through low-cost products and Coca-Cola through universal appeal advertising.
- The rural market remains largely untapped and has great potential for
Logistics and supply chain in rural india the opportunityAmarwaha
This document discusses the opportunities in logistics and supply chains in rural India. It notes that rural India has a large population and consuming class, accounting for close to 70% of users of some consumer products. While the rural market is alluring due to its size, it also presents challenges like low incomes, seasonality, and lack of infrastructure. Some companies are addressing challenges of availability, affordability, acceptability and awareness in rural markets. It provides examples of companies innovating their supply chains and distribution networks to better serve rural consumers.
Rural markets in India offer great potential for growth given that 2/3 of India's population lives in rural areas. Rural India has a large consuming class that accounts for 41% of the middle class and 58% of total disposable income. The size of key rural markets are FMCG at 80,000 crores, durables at 10,000 crores, and agri inputs including tractors at 55,000 crores. Rural consumers have less strict social structures now, improved infrastructure, and more disposable income. Companies need strategic marketing management, research and development, communication, and systematic structures to tap opportunities in rural markets and address challenges like rationalization and marketing indigenous goods.
LG India adopted a unique distribution strategy to target rural markets. It decentralized its distribution network, establishing branch offices in cities and Remote Area Officers (RAOs) in rural territories. RAOs oversaw Regional Sales Officers and were given autonomy over marketing in their territories. This pyramidal structure improved rural sales and penetration. However, competitors like Samsung and Electrolux used similar rural distribution strategies.
Rural retailing presents a tremendous opportunity for growth in India. Over 50% of India's GDP comes from rural areas where the population is growing and disposable incomes are rising. While literacy rates are still low, exposure to technology is increasing brand awareness. Companies need to gain the trust of rural communities by respecting local needs, flavors and traditions. They must also provide reliable infrastructure to support farmers in selling produce directly. Strategies include establishing fresh produce stores and rural hypermarkets to connect farmers and consumers while bypassing intermediaries.
1) e-Choupal is an initiative by ITC Limited that created electronic marketplaces in rural India to connect farmers directly with buyers and provide information.
2) It aimed to reduce inefficiencies and costs in the agricultural supply chain by eliminating intermediaries and allowing farmers to access real-time market prices and best farming practices.
3) Studies showed e-Choupal reduced transaction costs for farmers from 8% to 2% by handling activities like procurement, weighing and storage at local collection centers called e-Choupals.
This presentation on LG's Sampoorna Color TV talks about an innovative consumer product for Rural India, Its marketing strategies and growth story. It explains 4As and 4Ps of Rural Marketing wrt LG Sampoorna
Rural Marketing- Acceptability for a productPriya Soni
Each Company is making their way to Rural India. Most of them have studied the market and Analyzed the things over there and ready to fight at Rural India. There are some of the companies which have already written their success stories in Rural market. Companies like HUL, ITC, LG, Mahindra have given a new format for rural marketing. They have done a great job. So, the marketing is always have the difference in Urban and rural, which makes the companies to think over the Marketing mix.
A series of pre-defined standards related to the performance of an individual product, service or system that enables someone to easily determine the capability to perform its function within an acceptable range.
LumiLive is a dynamic platform that helps broadcasters and producers build relationships with audiences in real time through powerful engagement tools. It works across mobile devices, PCs, and tablets to create second screen experiences using patented technology and social media integration. The platform also provides targeted advertising, customization, and scalability to unlock commercial value.
Lumi Mobile began in 2004 in Finland as a mobile content management system and is now a market leader in audience engagement and consumer insight technology. Based in London, New York, and Finland, Lumi Mobile enables media companies, market researchers, and brands to engage consumers across all mobile devices. Lumi's patent-pending platform instantly links mobile users to each other and clients, delivering games, polls, events, networking and more.
This document outlines the course content for AutoCAD and 3D modeling training provided by Multisoft Systems. The training covers topics such as drawing shapes and objects in 2D, modifying objects, annotations, dimensions, layers, sectioning, hatching, isometric views, and 3D modeling including solid modeling functions. It also includes projects in manufacturing, architecture, civil and electrical engineering domains, as well as workshops on communication and personality development.
La campaña navideña de Lindt busca promover su marca y productos durante la temporada navideña a través de imágenes elegidas que reiteran y acumulan la imagen del chocolate Lindt hasta una imagen final del producto.
This website provides information about long-term parking options near Stockholm Arlanda Airport. Visitors can find details on parking rates and locations for lots that are a 10-15 minute shuttle ride from the airport terminals, allowing travelers to park their cars for durations while traveling. The site gives contact information for the parking facilities.
During the 18th century, the population of Europe grew significantly due to advances in nutrition, hygiene, and reductions in epidemics. Society was very young, with half the workforce under 20, and nuclear families became more common. Enlightenment ideas spread new notions of rationalism and tolerance, strengthening early feminism and arguments for women's equality. However, most thinkers still believed in traditional gender roles and women's subordinate status to men. Salons run by women provided an acceptable social and intellectual space for women's education and participation in philosophical debates.
1) The document discusses distinctive capabilities that enable companies to succeed in India's rural markets. It identifies three key capabilities: the ability to create, shape and develop markets; the ability to adapt and optimize supply chains; and the ability to co-create value through innovative use of technology.
2) It also examines the growing confidence of businesses in rural opportunities in India based on a survey of over 100 companies. More than half expect 20-50% of revenues to come from rural markets in the next three years and over 65% have already invested in rural India.
3) However, rural markets also present challenges like inadequate infrastructure, low literacy, and high costs to enter. Over 70% of surveyed companies cited lack
European businessgroup india and retail landscape 4th feb 10v1 5sanamkalra
The document discusses opportunities for business in India, focusing on the retail sector. It notes that organized retail in India has grown from $2 billion in 2002 to $37 billion currently, and is expected to reach $70 billion by 2011. Key opportunities for growth include supply chain investments, developing IT infrastructure, partnerships for workforce training, and tapping the large rural market. The retail sector is poised for phenomenal growth as India's economy and consumer base continue to expand rapidly.
Agriculture sector is playing a significant role in the
development of rural areas in our country. Agriculture is the
main occupation and still is a strong means of livelihood and
there is necessity for ensuring sustainability in these
livelihoods. Agriculture and allied sectors contribute nearly
22% of GDP of India and further 9.93% contribution in total
export of India.
Rural indebtedness, agricultural distress,
dependency on private money lenders, and farmers suicides
are common features surrounding Indian Agriculture. For
more than 100 years RBI and Central Government have been
making efforts to enhance institutional credit in rural areas
particularly to assist agricultural operations. But economic
survey (GOI) 2010 shows that out of 27 public sector banks,
only 14 sector banks achieved the agricultural credit target of
18% agricultural credit and in case of private sector banks
only 8 achieved the target of 18% for lending to agriculture
in 2009.
The Indian economy grew at 6.9% in 2010-11, with GDP increasing from $0.5 billion in 2000 to $1.53 trillion in 2010. Investment grew at 10.9% annually over this period. FDI inflows were $37.76 billion in 2010-11, an increase of 8.41% from 2000. Key sectors driving growth include telecom, automobile, and retail. New opportunities are emerging in tier 2 and 3 cities as affluence spreads beyond major metro areas. Understanding the diversity of consumer types will be important for marketers targeting India's expanding affluent population.
The service sector has become the largest and fastest growing sector in India's economy over the last few decades, contributing over half of India's GDP. Key drivers of growth have been the IT/ITES industries, financial services, retail, and other consumer services. However, economic growth has not been evenly distributed across sectors or regions. The government is taking steps to boost GDP and make growth more inclusive, such as policies to increase FDI, SEZs, and NRI investment. Leading developed countries also rely heavily on their large service sectors for economic output and employment.
The document provides an overview of the Indian economy and expectations from the 2020 Indian budget. It discusses India's goal of becoming a $5 trillion economy by 2024-25 and the key challenges to achieving this. Some of the challenges mentioned include the need for higher GDP growth, improving workforce skills and productivity, increasing R&D spending, and boosting exports. The document also summarizes highlights from the Economic Survey 2019-20 related to wealth creation, entrepreneurship, job growth, and reforms needed in the banking and infrastructure sectors.
This document summarizes a research paper on influencing the rural market in India and overcoming challenges. It begins with background on the size and spending habits of India's rural population. Key points include that rural markets now account for over 68% of India's population and rural spending has increased, especially on discretionary items. However, many companies have struggled to profit from the rural market due to challenges like inadequate transportation and media coverage in rural areas. The document then examines strategies for rural marketing, opportunities in the rural market, and how consumption of various products is increasing faster in rural versus urban India. It concludes by identifying significant factors for rural marketing and discussing challenges companies face in penetrating the rural market.
Retail evolution trends & business ppt @ bec domsBabasab Patil
This document discusses business opportunities in India, specifically in the retail sector. It provides background on India's growing economy and positive macroeconomic environment. It then discusses key trends in the Indian retail landscape, including the large potential for growth of organized retail as consumption increases. Specific sectors highlighted as emerging opportunities include infrastructure, education, healthcare, and insurance. The retail sector is poised for phenomenal 35-40% annual growth as organized retail expands across India. Challenges and opportunities for retail businesses are also summarized.
Marketing Strategy of Reliance Jio against Airtel Arjun Gupta
Airtel and Reliance Jio marketing management analysis on India based on stipulated target audience with a detailed discussion on their objectives, expenditure, effectiveness with a brief understanding of product life cycle.
The document discusses strategies that companies are using to market to rural Indian consumers. Some of the key strategies mentioned include communicating about quality and value to change rural perceptions; using Indian languages in promotions; understanding cultural values; developing rural-specific products; associating with Indian celebrities, sports teams, and culture; and using effective media communication tailored for rural audiences. The overall strategies are aimed at better understanding rural customers and associating the company's brands with Indian values and identities.
Hindustan Unilever Ltd (HUL) sees its rural market growing faster than urban markets. Nitin Paranjpe, HUL's managing director, notes that HUL has significantly increased its direct rural reach through adding one million stores over the last two years. Paranjpe also states that rural incomes and aspirations continue to rise in India, presenting opportunities for growth. The rural market is a $1.8 trillion opportunity according to HUL chairman Harish Manwani, who advocates for convergence between rural and urban markets to spread prosperity across India.
This document provides an overview of the rural market in India and opportunities for FMCG companies. It includes an index listing the document's topics and page numbers. The executive summary discusses the size and growth of India's FMCG sector and untapped potential in rural and developing product categories. The introduction notes that rural markets account for over 70% of India's population and are less impacted by economic fluctuations than urban markets. Government programs are pumping funds into rural infrastructure, education, healthcare, and other areas. Overall, the document outlines the sizable and growing rural consumer market in India and its importance for future development and growth.
Real estate - Making India_Ernst and YoungPratik Chawla
The real estate sector in India slowed down in recent years due to reduced demand, rising construction costs, and high debt costs. However, the sector is now showing signs of recovery due to political stability under the new government, proposed reforms, and initiatives like the smart cities project. Real estate contributes significantly to India's GDP and job creation. The new government's policies aim to boost growth in the sector through measures like increased foreign investment, a housing program, and allowing real estate investment trusts.
The document discusses contemporary trends in India's economy and marketing sectors. It notes that India has the 4th largest economy globally and has experienced strong growth rates in sectors like IT and manufacturing. The rural sector remains largely untapped and presents major opportunities. Key strategies discussed include expanding infrastructure and targeting rural consumers through affordable products and technology. The services, retail, and export sectors are also outlined as major drivers of growth. The document concludes by emphasizing India's strong economic outlook and human capital as factors that will support continued prosperity.
Impact of Government Policies on productivityBirpartap Singh
Government policies have impacted productivity in various sectors in India. In manufacturing, total factor productivity growth was slow or negative from 1951-1979 but has not improved significantly in the post-reform period from 1980-2007. In agriculture, total factor productivity growth rates were approximately 1.45-2.33% per year between 1973-1993. In the automotive industry, policies like allowing 100% FDI and exempting manufacturing from licensing have supported growth. However, productivity in India's defense sector has been limited by the government's failure to sufficiently encourage private sector involvement in defense production.
The document provides an overview of the fast moving consumer goods (FMCG) sector in India. Some key points:
- The FMCG market in India is expected to grow at a CAGR of 27.86% to reach US$103.70 billion by 2020 from US$52.75 billion in 2017-18.
- Total consumption expenditure in India is set to increase at a CAGR of 22.57% from 2016-2021 to reach nearly US$3,600 billion by 2020.
- The rural FMCG market in India is expected to grow to US$220 billion by 2025 from US$29.4 billion in 2016, as rural consumption drives growth in the sector
MSME Sector - Growth, Challenges & Opportunities Resurgent India
The document summarizes opportunities for growth in the MSME sector in India across various industries. It highlights that the MSME sector contributes significantly to India's GDP, exports, and employment. Key opportunities for MSMEs mentioned include in the electronics systems design and manufacturing industry, IT/ITeS sector, pharmaceutical industry, auto components sector, and other growing sectors like railways and defense. The document also outlines various government policies and initiatives to support the growth and development of MSMEs in India.
Trend and Growth of Flow of Credit to Agriculture after 1991 in Indiaiosrjce
Agriculture in India is at a crossroads and major challenge of the policy makers is to reverse the
trend of deceleration in agricultural growth which is directly associated with the declining of public investment
in agricultural research and development, fragmentation of holdings, lack of infrastructure and structured
markets, outdated technology and inappropriate input pricing policies of the government. The crisis of
agricultural stagnation needs immediate attention and treatment on the part of planners and policy makers.
Recognizing the continuous deceleration of agricultural growth, the present study attempts to analysis the trend
and growth of flow of credit to agriculture after 1991in India. The study based on secondary sources of data
compile from several sources, revealed that structure of credit outlets has witnessed a significant change and
commercial banks have emerged as the major source of institutional credit to agriculture in recent years, but
the declining share of investmental credit in total credit may constrain the sustainable growth of agriculture in
India. The situation calls for concrete efforts to augment the flow of credit to agriculture, alongside to exploring
the new innovations in the farming practices, product design and methods of delivery through better use of
technology and related processes. Facilitating credit through processor, NGO’s and input dealers that are
vertically integrated with farmers for providing them critical inputs or processing their produce, could increase
the credit flow to agriculture significantly.
MSMEs role in driving the make in india initiativeSeilan Anbu
The document discusses the important role that Micro, Small, and Medium Enterprises (MSMEs) play in driving India's "Make in India" initiative, contributing approximately 45% of manufacturing output, 40% of exports, and employing over 36 million people. MSMEs promote balanced regional development, generate most non-farm jobs, and contribute to sustainable development. The government supports MSMEs through various programs and policies to strengthen the sector and help realize the growth opportunities it presents.
The Rising Bottom of the Pyramid in India Kimberlee Luce
This document discusses the potential for growth in consumption among India's large lower-income population, known as the "Bottom of the Pyramid" or BoP segment. It notes that over 70% of Indian households earn less than $4,000 annually but are steadily becoming richer. The upper part of the BoP segment in particular seeks out aspirational products and represents a major opportunity for companies. Successful companies catering to this segment offer value, innovate to lower costs and effectively reach customers, while also establishing long-term, trusting relationships.
Similar to Accenture masters of_rural_markets (20)
2. Contents
Foreword: Unleashing India’s rural 03
multiplier effect
Growing business confidence in 05
rural opportunities
The attractions and distractions of 09
rural markets
Distinctive capabilities that enable 15
companies to succeed in India’s hinterland
Framework factors critical to nurturing 28
distinctive capabilities
Developing the right capabilities—and 29
acting on them
Last word 31
2
3. Foreword
Unleashing India’s rural multiplier effect
But rural India’s contributions to But, there is one more theme that
the nation’s economic success—and cannot be ignored. It is about the
the obvious potential for profitable enormous disparity in incomes and
growth—is just a part of the promise living standards and lack of social-
of wholehearted commitment to doing infrastructure across India.
business beyond the city centers and
suburbs. India’s rural markets offer Accenture firmly believes that
unprecedented opportunities for businesses that are benefiting by
global and local companies to providing goods and services to rural
experiment with approaches and consumers have a duty to bring
business models, which if successful, more inclusive, sustainable, social
may be replicated in rural markets of and economic growth to those
other emerging economies. consumers’ communities.
India is on the march. Its momentum
is not only evident in metros— This report chronicles the business As this report explains, businesses can
it is apparent in small towns and sector’s growing confidence in do much to accelerate employment,
villages as well. Collectively, all India’s rural markets. It draws on educational opportunities,
over India’s rural heartland and in the new Accenture survey results infrastructure development, and
its teeming cities, India is readying to demonstrate the strength of wealth creation. In particular, they
for an even more impressive era of business leaders’ belief in the future are in prime position to help bring
economic growth. of the rural opportunities in India education, healthcare and productive
and their willingness to invest in the employment to a youthful workforce
There is no question that India’s rural opportunities. Just one snapshot: more whose size promises to make it
markets are becoming a powerful than half of our survey respondents the major engine of India’s future
economic engine. One telltale sign: foresee 20 to 50 percent of their workforce and economy.
rural accounts now comprise over 50 revenues coming from rural markets
percent of new subscribers for some of over the next three years. We believe this report can accelerate
the leading telecom providers.1 those efforts. We look forward to
The report also offers a framework discussing its findings with you.
The rural multiplier effect is what that highlights the characteristics of
excites policy makers and business high-performance businesses in rural
leaders alike. For every new markets. The framework identifies
opportunity for a villager to use his three distinctive capabilities−the
mobile phone to protect his crops, ability to create, shape and develop
there is a knock-on opportunity for markets; the ability to adapt and Sanjay Dawar
him to purchase a small refrigerator optimize supply chains; and the
APAC Supply Chain Lead
or a motorcycle. There is a growing ability to co-create value through
realization that global investment and innovative use of technology. The
growth will increasingly come from report explores each of these tenets in
rural populations, as their savings detail, before highlighting the facets of
translate into consumption. organizational culture essentials to the
organization’s growth strategy.
3
5. Growing business confidence
in rural opportunities
India’s rural markets2 present (c) The government has increased (e) Policy measures such as the
opportunities that companies spending in rural areas, from US$9 US$13.9-billion waiver of agricultural
seeking to become high-performance billion for the financial year ending loans and the National Rural
businesses cannot afford to ignore. March 2007 to an anticipated US$16 Employment Guarantee Scheme
But the size and scale of those billion for the financial year ending (NREGS), which guarantees 100 days
markets (three-fourths of the country’s March 2010.3 of employment to one member of
approximately 1.1 billion people live in every rural household, have helped to
villages) have been offset by concerns (d) Improved access to finance and reduce rural under-employment and
about the profitability of these markets institutional credit has brought greater raised wages. The official minimum
and the durability of rural demand. cash inflows to rural households. average per-day wage paid under
Institutional credit to the agriculture NREGS has increased from INR65
Now, though, there is abundant and allied sectors increased from (US$1.4) in 2006-07 to INR84
evidence to indicate that businesses INR695.6 billion (US$14.5 billion) (US$1.8) in 2008-09.5
are seeing more promise in India’s
in 2002-03 to INR2.6 trillion
hinterland. There are several strong
(US$55 billion) in 2008-09.4
regional and macroeconomic reasons
for greater confidence. And, there
is a growing body of statistics to
demonstrate that rural markets, fueled
in part by rising purchasing power, hold
real prospects for profitable growth Figure 1.1. Government budgeted expenditure on rural development
across a wide range of industry sectors.
20
Five reasons for greater business
confidence in rural India
(a) Rural spending is now less
dependent on farm income, which now 15
constitutes less than 50 percent of the
total rural income. Income remittances US$
from migrant rural populations and billion
increases in nonfarm activities such
as trading and agro-processing are 10
boosting nonfarm income.
(b) The increase in procurement prices
(the minimum price that farmers earn 05
on produce sold to the government)
is putting more money into the hands
of the rural population. A series of
good harvests, on the back of several
good monsoons from 2005 to 2008,
has accelerated rural employment in
agricultural and allied activities.
Source: Ministry of Rural Development
5
6. Figure 1.2a. FMCG—Rural market share as percent of all India market The increase in rural purchasing
power is reflected in many ways. Rural
incomes have been growing at more
than 7 percent over the past few years,
helping to account for almost 40
percent of India’s total consumption
of goods and services6. Non-food
expenditures are growing at an 8.2
percent annual compound rate. Rural
households are purchasing a wide
range of products—cars, flat-screen
televisions, microwaves—that until
recently would have been beyond
their reach. Some industrial sectors
have seen surprising growth coming
from rural consumers. Fifty percent
of revenues from the fast moving
consumer goods (FMCG) sector now
come from rural sales7.
In the case of the telecom sector,
subscriber base in the semi-urban and
rural markets (Circle C geographies)
has grown at a phenomenal 98 percent
over the last five years in comparison
to other circles representing metros
Source: National Council for Applied Economic Research (NCAER) and urban markets (see Figure 1.2c.).
6
7. Figure 1.2b. Automobile—Share of rural market as a Figure 1.2c. Total teledensity
percent of all India market (ownership per hundred population)
Source: Edelweiss Research Source: Telecom Regulatory Authority of India (TRAI)
*data for the period April 2009 to September 2009
7
9. The attractions and distractions
of rural markets
The macroeconomic data clearly point Rural markets present Rural presence strengthens
to the soaring potential of India’s opportunities competitiveness
nonurban markets. But the statistics The overarching trend that emerged Our survey findings indicate that
do not give clues to how interested from our survey findings is that corporate leaders believe a rural
business leaders might be in the businesses are confident about the presence can help strengthen their
opportunities at hand. Nor do they opportunities that rural India has to overall competitiveness. As Figure
say whether companies are prepared offer. Further, they plan to strengthen 2.2 illustrates, the investment
to make the kind of investments that their presence in semiurban and decision depends on factors that
are required to unlock long-term rural areas over the medium to long range from access to cheap labor
term8. More than half of our survey pools and sources of raw materials
value from rural markets.
respondents foresee 20 to 50 percent to market expansion and an
of their revenues coming from the improved public image.
Are business executives who do rural market over the next three
express interest in the nation’s rural years. And, more than 65 percent
opportunities typically looking at them of the organizations surveyed have
as consumer markets or as sources of already invested in rural India, in
raw materials and labor—or both? Do some cases more than five years ago
they believe they have what it takes (see Figure 2.1).
to understand what exactly rural
consumers want now and in future?
And have business leaders really begun Figure 2.1. Businesses are investing in rural markets
to identify the challenges and drivers (Percent of survey respondents)
that will influence their approaches to
rural opportunities?
To get answers to questions such as
these, Accenture commissioned a
quantitative survey of 109 large and
mid-sized multinational and domestic
companies with revenues ranging from 21%
US$200 million to more than US$10
billion (see "About the research" for
more information).
We also interviewed select C-suite
executives from companies in a range
of industries to learn more about
what made them succeed in rural
markets. Here are the key findings,
highlighting the attractions and
distractions of rural markets.
9
10. Figure 2.2. Rural markets offer opportunities across the value chain
(Percent of survey respondents)
match
tax breaks
Rural markets are home to Rural markets suffer from the lack of granular information
resources and talent persistent structural handicaps on rural markets and consumers,
Rural markets encompass eager Issues such as inadequate and limited access to financing
consumers who want to share the fruits infrastructure, low literacy, options. Timely data collection on
of India’s industrial growth. More than and high levels of poverty raise demographics and consumption
half of the senior executives surveyed serious question marks about patterns is difficult; data analysis is
were keen to tap rural areas’ new the sustainability of the rural no easier. One retailer related how
segments of consumers (see Figure 2.2). opportunity. Our survey findings difficult it was to switch suppliers
From a supply-side perspective, more from one season to another because
indicate how concerned businesses
than 40 percent wanted to access raw rural customers, hit by a season of
are about these issues. Around 74
materials. Unsurprisingly, more than a poor crops, could no longer afford
third of respondents agreed that rural percent of respondents reported that
lack of proper linkages for roads, a particular commodity at the price
markets offer labor pools at much lower they had paid a year earlier.
cost than in urban markets. railways and telecom infrastructure
are big hindrances. Another 40
Rural markets are crucibles for percent cited the lack of skilled
business model innovation talent and 34 percent highlighted
fragmented demand patterns as
Many consumers in rural areas lack key challenges. Other barriers to
the prejudices that make their urban profitability and scalability include
counterparts resistant to change.
They are keen to experiment with
new products, new services and new
processes. “Ready to be trained rural
talent is far more hard-working,
experimental, ready to adjust
and learn,” was the opinion of an
executive in a telecom company.
10
11. Figure 2.3. Key external barriers to expanding in rural markets Rural markets are costly to enter
(Percent of survey responses) More than 60 percent of respondents
identified the size of the necessary
upfront investments as the biggest
hurdle towards establishing rural
operations (see Figure 2.4). For
instance, each of the 4,100 kiosks
(containing a computer with a
V-SAT connection) set up under ITC’s
e-choupal scheme cost between
US$3,000 and US$6,0009 to install
and about US$100 for annual
maintenance. That translates to
an average initial investment of
US$20.5 million and a variable cost
of US$0.4 million each year.
Skilled local talent is hard to find
in rural regions
Compounding this issue, companies
also find that their trained, seasoned
staff are very reluctant to relocate
to rural areas. Forty�three percent
of respondents said this was a
challenge. Commented one mobile
content services executive: “Most
of the young people we interview say
they have already done their rural
stint and are not keen to spend more
Figure 2.4. Key internal barriers to establishing successful rural operations time there. We have recently made
three offers for the position of rural
(Percent of survey responses)
marketing lead but all three have been
turned down.”
Success in rural markets demands
flexible approaches
More than a third of the respondents
cited their inability to create flexible
business models as one of the key
internal barriers to establishing a
successful rural presence. That finding
meshes with a recent Accenture
research report which concluded that
mobile-phone entrepreneurs who have
successfully penetrated urban markets
are struggling to implement business
models that can earn them sustained
profits from their rural operations.10
11
13. About the research
This report draws on three major to their companies’ strategy and Accenture also interviewed select
research components. First, operations in India. Respondents C-level executives across a range
Accenture conducted a quantitative represented companies in consumer of industries to understand how
survey to discover how companies goods−manufacturing, banking, they are shaping their strategies to
view the rural market opportunity, communications, electronics harness the rural market opportunity.
to learn what kinds of investments and high technology, capital The interviews also sought to
they are making in rural areas to markets, automotives, insurance, understand how companies are
access growth opportunities, and pharmaceuticals and consumer addressing human resources issues,
to understand the challenges that goods−retail. Around 57 percent of marketing infrastructure, and supply
companies face while operating in respondents belonged to domestic chain challenges as they venture into
rural areas. The data was collected Indian public companies, 23 percent rural markets.
through an online survey, conducted to domestic Indian private companies
between June and August 2009. and the remaining 20 percent to
The survey was completed by Indian subsidiaries of multinationals.
respondents from 109 large and mid-
sized multinational and domestic Secondly, between March and
companies, with revenues ranging November 2009, Accenture undertook
from US$200 million to more than extensive secondary research into the
US$10 billion. All respondents held rural strategies and operations of more
positions of influence with regard than 100 companies.
Figure 2.5. Revenue breakup of business survey respondents Figure 2.6. Industry classification of business survey respondents
6
19
10%
10
10%
5%
13
15. Distinctive capabilities that enable
companies to achieve high performance
in India’s hinterland
Figure 3.1. Key imperatives for profitable and sustainable growth in rural markets
(Percent of survey respondents)
A growing number of companies, large have been able to accelerate the At the base of the framework are
and small, are steadily transforming adoption of their products and ensure the organizational imperatives
their rural operations into viable profit consistent availability by investing in that sustain high performance over
centers. They have been successful comprehensive market development the long term—what Accenture
in selling to unsophisticated buyers and by making their supply chains refers to as performance anatomy.
in geographically dispersed locations as efficient as possible. And, they And, at the core of the framework
using appropriate “reach strategies.” have effectively utilized technology is a set of three distinctive
and social networks to achieve the capabilities—the capabilities that
So what can other organizations scale necessary to reach diverse customers value highly and which
seeking to achieve high performance consumer segments across rural India. competitors cannot easily copy. The
learn from these leaders? And how And, in some cases, they are taking leaders’ ability to create markets is
can they think in terms of applying lessons learned in India and applying foremost; it involves highly effective
successfully in other emerging markets. market analysis, leading to product
the lessons learned to other rural
localization and innovation. Their
markets worldwide? We asked our
ability to set up and extract value
C-suite respondents to identify the Drawing from the key learnings of
from supply chains enables them
imperatives for profitable growth in our research, Accenture proposes a
to adapt to the varied and volatile
rural markets. It quickly became clear framework to unlock long-term value
demands of rural markets. And, their
that supply chain and distribution from rural markets and become a high-
understanding and mastery of the
efficiency is the most important performance business (see Figure 3.2). enablers of supply chain efficiency is
success factor, followed closely by The framework is headed by market their third key capability.
product localization and innovation focus and position involving selection
(see Figure 3.1). of rural markets—a combination of
All three distinctive capabilities
products and geographies, which can
are underpinned by the need for
Essentially, the rural market best generate long-term value for the
organizations to become part of the
leaders have mastered product company. This decision to invest in social fabric of the communities in
development and pricing, arrived at rural markets is intrinsic to the core which they work and to build social
an optimal channel mix, and set up strategy of a company and is best networks using local participation.
local partner networks that work guided by the company’s long-term The bulk of the discussion that follows
well and generate revenue. They vision and strategic fit. will be about the three distinctive
capabilities. Each merits a closer look:
15
16. Figure 3.2. Building blocks of high performance
1. Leading companies effectively Creating new categories into customized mobile phones for
create, shape and develop markets Businesses may need to develop new the rural market. Sold as a part of the
Rural lifestyles and behavioral trends products tailored to the unique needs “bundled offers” by different telecom
are increasingly coming to resemble and circumstances of rural consumers. providers, the phones are priced at
urban patterns, in both form and An example: BP Energy India saw less than INR2,000 (US$42) and are
variety. Like urban consumers, the an opportunity to offer a cleaner feature rich, with multilingual keypads,
rural middle class is buying more fuel alternative for the traditional a built-in flashlight and FM radio.
fairness creams, whereas many of charcoal- and wood-fired stoves used
the rural poor are keen to invest in a in the countryside—a move that the Setting the right price points
mobile phone connection. Growing company believed could convert 3.6
The rural market leaders usually
aspirations are as much a factor in billion potential consumers to more
address their customers’ price
rural markets as price sensitivity and environment-friendly energy solutions.
perceptions in two ways: by offering
an acute sense of value for money. The company bought patented
low-priced products in the first
Success in those markets calls for technology from the Indian Institute
place, with a range of even cheaper
knowing how to balance those factors. of Science (IISc) that used fuel
variants; and by selling products as
pellets made from agri-waste to run
discrete units rather than in multi-
Creation and development of markets smokeless stoves; it had successfully
unit packs. Many FMCG companies,
in the hinterland involves building sold the pellets to nearly 200,000
selling products ranging from biscuits
consumer understanding, product households by early 200811.
to shampoos, have introduced smaller
customization, relevant pricing, value
pack sizes to increase category
engineering, and innovative modes Customizing products
of advertising and promotion—all penetration. The rural market experts
Rural consumers typically define value may also practice value engineering,
designed to increase consumption and
open up new markets. The following in terms of the functional focus of lowering the input costs by using
activities stand out: a product or service—its durability, alternative materials for raw materials
affordability, and fit for multiple uses. or as packaging alternatives.
Nokia translated this perspective
16
17. Generating awareness and A leading producer of motor oil and However, small, focused initiatives
promoting products through the lubricants has leveraged similar are now under way, using consumer
right media media to support its field marketing feedback as input for crucial marketing
resources: its vans roam the factors such as product design, price
Since rural consumers typically lack
countryside to shape demand and points and positioning in the right
the product awareness of their urban
increase penetration of its products distribution channels. For example,
counterparts, consumer education and
among tractor and motorcycle users. Godrej tapped into the connections of
generation of interest are mandatory
The company’s demand generation Swayam Shikshan Prayog, leveraging
first steps for market creation.
strategy relies in part on promoting a some of the microfinance institution’s
mix of premium and value-for-money customers—local self-help groups
Non-conventional and interactive
brands. It also enlists influencer groups (SHGs)—to “co-create” a custom
media such as puppet shows, and live
such as well-respected mechanics and product for the rural market: a mini
demonstrations in haats and rural fairs
retailers to advocate for its brands. fridge without a compressor that runs
have proven effective. Hindustan Lever
on a battery, weighs less than 8kg,
ran a brand awareness exercise called
Capturing and analyzing data in has a top-loading storage system and
"Operation Harvest" that used the
audiovisual media and delivery vans novel ways is priced at only INR3,200 (US$67).
to provide “mobile entertainment” in Developed through iterative rounds
Detailed information on the rural
the form of songs and film sequences, of consumer feedback, this unique
consumer continues to be elusive
interspersed with the company’s product demonstrates the value of
because of the dearth of mechanisms
ads. The company targeted 30,000 capturing the many nuances of the
for capturing data and analyzing
“high potential” villages with at least it. Organized retail units typically rural consumer’s needs.
2,000 people each and good road provide such mechanisms, but they
connections. The vans traveled to do not usually operate in out-of-the-
six villages a day, distributing free way communities. Further adding to
product samples. The goal was to the challenge is the lack of defining
promote product trials and identify key parameters such as income categories
distribution and retail points based on and ownership patterns across rural
audience interest12. consumer clusters.
17
19. LG them to read instructions written in
English or to operate the product.
Who This need had been overlooked for
years, ever since television became
Based in Korea, LG is the world’s accessible in rural homes. LG spent
leading manufacturer of consumer close to US$50,000 in developing a
electronics. India, the company’s unit with on-screen display options
largest market in the Asia Pacific in the regional languages of Hindi,
region, generated 35 percent of Tamil and Bengali. It priced the model
the company’s India revenues from with rural affordability in mind at
rural sales. INR14,400 (US$300), still INR2,000
(US$42) more than equivalent
Understanding markets and products from other companies. But
investing in their needs "Sampoorna", with its customized
LG Electronics has seen sustained year- features that gave the rural consumer
on-year growth in its India business, ease-of-use, was a complete hit,
largely driven by its aggressive selling more than 100,000 sets in the
marketing and distribution strategy. first year of its launch.
The company expects future growth
to come from the nonmetro market, Building the foundations for
called the semiurban and rural market. growth
In the company’s lexicon, all cities LG also invested early in building a
and towns other than India’s seven strong district networking system to
largest cities fall into the semi-urban drive its marketing efforts, creating
and rural category. The company a hierarchy of 45 area offices and
decided to focus on two aspects of the 59 rural/remote area offices14. With
value chain to capture this market— the infrastructure in place, LG then
understanding consumer needs better mounted a campaign for distribution
and strengthening the distribution and penetration. Today, the company
after-sales service reach. has more than 9,000 sales and
service dealers working through
Differentiator different rural sales channels, close
to 1,100 distributors and 40 branch
LG set up a lifestyle research team warehouses supplemented by an
to analyze the needs and preferences elaborate customer service initiative.
of the rural consumer in-depth. Called the "211" initiative or "Service
Since the price-value tradeoff was When You Want", complaint are
a critical purchase determinant handled within a maximum of 24
and usage satisfier for the rural hours. The IT infrastructure for the
consumer, the company investigated "211" program currently exists in 100
its various nuances, leading to some cities and will soon be extended to
innovative product customization. 200 more, deepening the company’s
In 1998, LG developed a television ability to service its semi-urban and
brand specifically for the rural rural consumers15.
market, christening it "Sampoorna".
This region-specific branding was
This frontal strategy of insight-based
unprecedented for a multinational
product customization, backed by a
corporation. Further, the product had
strong retail, distribution and service
features that addressed needs revealed
presence, has made the customer’s
by the research: a majority of the
shelf-to-use journey smooth and
semiurban and rural consumers are
satisfying. Volume growth, a further
comfortable with regional languages
goal, can be driven in line with demand
but have little or no understanding
generation, creating a strong supply
of English, making it impossible for
chain backbone for the company.
19
20. Figure 3.3. Key barriers to setting up efficient rural supply chains
(Percent of survey responses)
2. Market leaders adapt and profitability in rural marketing. But eliminating brokerage costs, better
optimize their supply chains given the nascent character of the controlling end supplies, and developing
rural market, businesses need to its producer base for the long term.
Our survey findings show that
view profitability there in terms of The e-choupal network relies on self-
corporations face major structural
low margins and high volume. They driven computer kiosks with VSAT
roadblocks in setting up efficient
must focus on building their market connections, manned by a sanchalak,
rural supply chains, with as many
infrastructure properly from the or conductor. Farmers can use this
as 68 percent of respondents citing
start, with the right sourcing and channel to quote their prices directly
inadequacies in physical infrastructure,
procurement features and with supply to ITC and to close deals promptly,
including substandard or non-existent
chain linkages and structures that leading to greater transparency and
roads, rail and telecom networks (see
act as growth multipliers over the creating a level playing field for all
Figure 3.3). Another 50 percent point
long term. Here are some of the most producers. The channel is also used
to the absence of effective distribution
important supply chain activities: to transfer information that helps
and retail linkages—facilities which, if
farmers earn better returns and survive
businesses have to build them, usually
involve heavy capital expenditure. Sixty Optimizing sourcing processes market fluctuations. There are regular
data feeds on crop and region-specific
percent of the respondents considered The transformation of farm-to-market
farming methods, weather and real-
these factors to be major deterrents to linkages holds particular appeal given
time crop prices16.
doing business in rural markets. that India boasts the world’s second�
largest farm output. Corporations can
improve their sourcing processes by The e-choupal network has since
Investments in better transportation,
using the following initiatives: evolved into a retail format; more than
warehousing, infrastructure and
50 companies use this network to
storage can boost returns over the
sell products ranging from seeds and
long term for all participants in the Replacing middlemen with direct
fertilizers to bicycles and insurance
supply chain. Our analysis shows that manufacturer-to-producer linkages:
policies. The e-choupal network
the specific supply chain functions By replacing the middlemen who had
relies on self-driven computer kiosks
of sourcing, procurement and acted as its procurement agents, ITC
with VSAT connections, manned by a
distribution offer the most scope forged direct links with producers
"sanchalak", or a "person in-charge".
for improvement and increasing through its e-choupal network, thus
20
21. Process outsourcing: Contract farming and retail outlet. We suggest the in rural areas19. Procter & Gamble has
has been steadily expanding in India. following approaches to overcome the agreements with Godrej and Marico
A relatively new phenomenon, the distribution obstacles: Industries, and also with Nirma, to
practice uses forward contracts distribute Camay Soaps.
Leveraging feeder towns, adopting a
between buyers and producers to
hub-and-spoke distribution model:
reduce the risks involved in agricultural India’s postal service, a captive network
Under the traditional dealer-distributor
activity, guaranteeing timely raw with a deep rural reach, is the world’s
chain model, companies have a direct
materials at a fair price. Since large largest postal network, with more than
presence in certain towns, with a
corporations dominate contract 200,000 post offices, almost 89 percent
distributor/dealer at the district level,
farming, professional help is readily of them outside urban areas. State
and, sometimes, sub-distributors or
available to provide seeds, fertilizers Bank of India has partnered with India
stockists at the tehsil headquarter
and free technical guidance, raising the Post to provide banking facilities to the
level. To increase penetration further,
quality bar and performance levels. The people in rural areas of Punjab. Under
companies have historically relied
contract farming model also creates a this collaboration, India Post will act as
on wholesalers. Yet within the rural
virtual web of inter-relationships with a business correspondent of State Bank
distribution structure, small retailers
indirect beneficiaries, attracting banks, of India in the unbanked areas20.
and consumers use feeder towns
insurance firms and even storage and
(usually large villages) or mandis as
equipment companies. Wheat farmers Using mobile retailing and
sourcing and replenishment points.
are using contract farming through an distribution options: Delivery vans
association among Hindustan Unilever, and sales vehicles can reach the
Most large companies lack a direct
Rallis and ICICI Bank17. rural interior. Nokia makes contact
presence in the feeder towns. A possible
solution would be to increase sub- with its customers in remote villages
Farm process outsourcing, a variant of through its "Care-on-Wheels" program,
distributor and sub-stockist presence
the contract farming model, involves providing after-sales service, building
lower down the chain, a model that has
a single corporate entity that acts as loyalty and supplementing the
worked very well for the FMCG industry.
the buyer, with manufacturers as the company’s rapidly growing distribution
To ensure that this model succeeds
customers. The model’s strength lies in network in rural India21.
for other industries too, businesses
the market control that such a large
need to maintain low working capital
buyer acquires, and also in the benefits Key enablers to enhance supply
investments and quick cycle times,
of outsourcing. Manufacturers can chain efficiency
resulting in maximum returns for
better focus on their competencies.
channel partners. Companies could push The Accenture survey further explored
Soft drinks and snacks manufacturer
products deeper into the markets by the factors that enhance the efficiency
PepsiCo India, for example, acts as a
establishing company-owned outlets of rural supply chains. Improving
farm process outsourcer, leveraging
in feeder towns and large villages with infrastructural linkages, training local
its experience in contract farming. LT
heavy consumer traffic. talent, improved data collection and
Overseas, a rice miller and owner of the
popular Daawat basmati brand, is one information on rural markets, and use
The hub-and-spoke distribution of technology emerged as key enablers
of PepsiCo India’s clients. With PepsiCo
model is another option for reaching (see Figure 3.4).
India taking care of its cost, quality and
customers in remote areas. Coca�
sourcing concerns, LT Overseas is the
Cola uses this model; its products
pre-contracted buyer for more than
are transported from bottling plants
4,000 rice farmers across Punjab
to the hubs or large distributors and
and Rajasthan18.
from the hubs to the spokes or smaller
distributors in semi-urban areas. These
Reaching the customer small retailers then distribute products
Translating customer segmentation and to village retailers.
analysis into strategies and tactics for
reaching them is especially challenging Infrastructure-sharing among
in India’s fragmented and unfamiliar non-competing companies: By
rural markets. Sixty thousand villages collaborating with companies that
in India have no form of retail outlet, already have a well-entrenched
making it very difficult to reach reach, new entrants can quickly scale
potential customers there. But, three up and expect quicker returns. The
million retail outlets exist in the infrastructure provider gains a steady
remaining villages. The challenge is source of revenue at no additional cost.
how to get products to those outlets For instance, Samsung has partnered
and replenish them consistently and with the Indian Farmers Fertilizer
reliably. Any logistics problems spell Cooperative (IFFCO) to market its
additional costs for both supplier handsets using IFFCO’s broad presence
21
23. Hero Honda Differentiator in the district headquarters. Under
him are “authorized representatives”—
Hero Honda’s consumer research
Who smaller dealerships where locals can
highlighted the power of communities
make purchases and also get their
Hero Honda, the world’s largest and extended families within the rural
bikes serviced. The company recognizes
manufacturer of two-wheelers, context. The company consequently
that while someone might be willing
generates over 40 percent of sales from built its rural marketing strategy
to travel 50km to buy a bike, he might
rural areas. around the role of influencer groups.
not want to travel that distance every
Called the "Har gaon, har angan"
time the bike needs servicing. These
Acting on the rural “opportunity” program, 500 sales representatives
ARDs are appointed and managed by
were initially hired and given work
Recognizing the potential of the rural the dealers through a profit-sharing
tasks rather than sales targets. They
market, the company set up a separate mechanism. Since Hero Honda avoids
were required to meet potential
rural vertical in 2007 based on the directly managing the ARDs, there are
customers and opinion leaders in
belief that enhanced rural mobility no additional investments in the supply
villages. Rural elders and powerful
would be a growth multiplier for chain from its side. The company has
influencers such as teachers and
the agrarian economy. Hero Honda, quickly ramped up its touch points
panchayat members were roped in
in keeping with its strategic vision, with customers, increasing its network
to spread the campaign’s message to
undertook a series of initiatives related of showrooms and service centers to
prospective customers. Since then,
to product development, consumer around 4,000.
Hero Honda has simultaneously been
understanding, marketing, distribution running two-month-long "waves",
and after-sales service. a kind of marketing campaign, that In line with its consumer insight-
coincide with the pre-harvest seasons driven product and marketing strategy,
Understanding rural mobility of April and September-October. This Hero Honda has kept the brand fresh
needs gives the company an early start in and appealing to rural consumers
influencing and forming purchase through product differentiation. The
The rural motorbike owner’s product
intent and opinions. Each wave has company relies heavily on variants
expectations differ from his urban
so far resulted in additional sales of and refreshers which cost much less
counterpart’s. Hero Honda knew that
15,000-16,000 motorcycles. All these than creating an entirely new product.
fuel efficiency and smaller engine sizes
“waves” are led by members of the It has launched some entry-level
would be the governing characteristics
influencer groups23. products with trimmings tailored to
in this market. Yet the company
suit the rural consumer, like adjustable
realized there were also finer consumer
suspension, strong headlights and
nuances and stepped up its market With a focus on building enduring
research efforts. “Usage and attitude” relationships with rural customers, good ground clearance.
studies were conducted by the in-house the "Har gaon, har angan" program
research team and have since become a includes a number of activities with
biannual exercise. These studies capture no direct sales outcome. There are
different aspects of the consumer’s life, free service and check-up camps,
ranging from brand awareness levels consultations for obtaining driving
and current modes of transportation licenses, safe riding educational
to product expectations and potential programs, health check- ups and
usage opportunities. awareness camps. "Sikhao Baliye,"
another unique initiative, targets
The company also does “rural footprint” rural women to persuade them to
studies on a quarterly basis to chart driving motorbikes.
different events taking place in villages.
The aim is to understand and map To help increase its reach to 70 percent
event suitability for promotional drives of India’s 6 lakh villages, Hero Honda
and increased sales push. They take the added a new layer of “Authorised
brand to the customer when he is in Representatives of Dealers” (ARDs) to
a happy mood, which typically occurs its distribution network, similar to the
during good harvests, festivals and hub-and-spoke model. Within a district,
marriages, when there is cash the company’s main liaison is located
in hand22.
23
24. Figure 3.4. Key enablers to enhance efficiency of rural supply chains
(Percent of survey responses)
3. High performers co-create Tapping rural sources to fill Using technology as a
value through innovative use of talent needs differentiator
technology Rural youth are often unskilled In many instances, companies have
and have little or no familiarity already adopted knowledge-based
The ability to create and nurture
with computers or with the English systems to streamline their logistics
new markets and adapt and optimize
language. Trained, urban talent is processes, increase efficiency and lower
supply chains are essential hallmarks
unwilling to relocate to rural areas, costs. These companies use a variety of
to serve the rural markets. But high-
leaving a huge demand-supply gap. tools to select the best delivery routes
performance businesses go beyond this:
Business models adopted by some of and reduce the number of vehicles
they employ technological platforms
the vanguard outsourcing companies needed to transport goods. During the
and solutions innovatively to co-
offer an interesting insight into next decade, as multinationals begin
create value by actively involving local
bridging that gap. Fostera, the country’s using the same sophisticated tools in
resources. By utilizing technological
first rural BPO, located in Tamil Nadu, India that they use elsewhere, their
platforms to gather authentic data on
hires poor youth from neighboring suppliers—both international and
the customer base—companies actively
areas and trains them to handle local—will follow suit.
find ways to improve their reach and
customer queries in English, Tamil,
scale as well as share the benefits. High
�performance businesses also employ Telugu and Kannada. Fostera provides Meticulous planning must precede
innovative approaches to overcome outsourcing services to telecom any such technology initiative. Before
talent deficits. They utilize state-of- companies and banks, managing their moving to a rural location, the CIO
the-art technologies to nurture local help desks and service-related queries. needs to articulate how the company
human resource, thereby reducing their Such BPOs offer an employment and will overcome such basic obstacles
dependency on urban talent pools and training model that may be a template as the lack of IT awareness, weak
parallely unlock income opportunities for entry-level talent development electrical power availability, poor
in hinterlands. while providing a service platform for communications connectivity, and lack
other rural-facing industries24. of trained people. At the same time, it
is necessary to keep track of IT assets
and manage multiple locations across a
large network.
24
25. Sumul, a district union that offers a wide range of agricultural
manufactures dairy products for supplies such as fertilizers, seeds and
Gujarat Co-operative Milk Marketing pesticides, as well as services such as
Federation, chose a capability-building soil testing, crop advisory and foliar
approach. When Sumul started to applications. The company maintains
computerize, it faced internal resistance the PC terminals and provides software
complicated by the realization that and connectivity upgrades across
scaling up and managing would have this extensive network. Today, the
to be done by its own people since organization is exploring the option
external skilled manpower was scarce. of using handheld devices that can
The union chose the “train-the-trainer” be directly connected to a centralized
approach, starting with a small group server; the devices could provide
of interested employees. Sumul is now online inventory accounting at every
working on the Village Connectivity retailing point, print invoices, and give
Project, an initiative to connect 1,036 support for accounting and tax-related
village co-operative societies through information. Further, the transaction-
wireless and leased-line technologies25. related information would be used to
build a database of farmers26.
Tata Kisan Sansar, an umbrella
organization that operates franchisee-
run centers called Tata Kisan Sansar
kendras (TSK), faced a similar problem
in running its network of outlets. There
are nearly 600 TSKs reaching about 4
million farmers across 22,000 villages
in northern and eastern India. Each
center acts as a one-stop shop that
25
26. Tapping partnerships to source
information and increase
distribution reach
RML has its own team of reporters
who track 600 mandis in the country.
It also has content�sharing.
partnerships with agricultural
universities. The information thus
gathered is sent out to the farmers
over all operators and all mobile
phones. Those who want the service
need to buy an RML Direct Card
available in over 4,000 retail outlets.
Then, they make a phone call to RML
center specifying the information they
need, their geographic location and
the crops they grow. The user profile
system developed by RML captures
such individual farmer details, mobile
number and preferences. This is then
connected to the mobile delivery
platform, which sends the messages
Reuters Market Light Mobile phone calls that improve based on the user profiles.
crop yields
Who Each day, over 100,000 farmers in the
Innovative solutions that are
With US$13.4 billion in revenues, states of Maharashtra, Haryana and profitable, yet socially relevant
Thomson Reuters is the world's largest Punjab receive text messages on their Within the first 23 months of its
multimedia news agency. mobile phones, giving them spot prices launch, more than 250,000 RML
for their chosen crops from nearby quarterly subscriptions have been
markets, news and crop-related advice bought by over 100,000 farmers
Bringing vital information to the
for their region or crop, localized across 10,000 villages. The farmers
hinterland
weather forecasts, and prices of supplies have realized huge financial benefits—
Thomson Reuters’ focus in India was such as fertilizers, all according to their ranging from INR500 (US$10.4) to
on finding strong and differentiated individual preferences and in a language as high as INR400,000 (US$8333). In
revenue streams. Spotting a business of their choice. This SMS-based fact, a grape farmer in Nashik recalls
opportunity in rural markets, information service, called Reuters how a RML weather alert helped him
the agency decided to launch a Market Light (RML), was launched two take action to save his crop, saving
personalized information service for years ago. Access to such a range of him INR200,000 (US$4167).
information has helped farmers improve
farmers. Farming communities in India
their crop yields and their productivity For RML, the existing customer
often cannot access even the most
for a wide range of produce while also base alone turns in revenues worth
basic information. Typically, small farms reducing risks. INR60 million (US$1.3 million).
are located deep in the rural hinterland
The cumulative impact across a
and their only source of information RML expects to have more than a growing subscriber base can be
was Krishi Darshan on Doordarshan. million subscribers in three years. game changing in terms of both
But this program gave them only a The subscription can be bought for a the company’s profitability and
macro view of things. Besides, most period of three, six or 12 months at overall returns to its subscribers.
farmers relied on intermediaries for a price of less than US$3 per month. Thomson Reuters estimates that
local market rates. Since the latter Content is available in local languages its customers could well save more
had exclusive access to information, like Marathi and Punjabi. RML offers than US$5-6 billion 27.
these intermediaries invariably took information on more than 250 crops,
more than 1,000 markets and 1,800 The unprecedented and pioneering
advantage of the farmers. Lack of
local weather locations. Growth in businesses of RML has been
proper information about crop- recognized by and is a case study for
mobile telephony has been a key
related technology was another huge the UN, the UK government, leading
enabler, creating a market for value-
challenge. Thomson Reuters sensed this added services. The market is growing academic institutions like Cambridge
as a chance to grow the market and fast, adding more than four million new University and London Business
make a social impact. connections every month in rural India. School, and leading publications such
as The Economist and the BBC.
26
27. to US$20) a month on a sustainable
basis. This translates into financial
independence and social change for
women who would otherwise live in
poverty. Their new income often goes
toward educating their children,
and improving their overall quality
of life. The Shakti ammas, in turn,
become consumers of higher value
items such as consumer durables29.
Making a difference to the
bottom line
Shakti distributors now account for 15
percent of HUL’s sales in rural India.
Initially run as a pilot in 50 villages
of the Nalgonda district in Andhra
Pradesh, the unexpected success of this
project has encouraged HUL to expand
it to 15 states, creating 37,000 women
distributors covering 100,000 villages.
By 2010, the goal is to recruit 100,000
Hindustan Unilever to become micro-distributors. Shakti Shakti distributors covering 500,000
villages, touching lives of around 600
grew out of the need to strike the
Who correct balance among return on million people30.
investments, expanding reach and
Hindustan Unilever (HUL) is one of Because other companies are showing
facilitating volume growth for the
India’s largest FMCG companies. About interest in using the reach of HUL’s
company’s product categories.
30 percent of its revenues come from Shakti network, the company may find
rural sales. The Shakti network uses women that it has generated an entirely new
members of existing SHGs working revenue stream.
Bringing innovation to the in villages, appointing them as sales
“4th P” persons called Shakti Ammas. These Partnerships beyond distribution
women then become direct-to-home
Distribution infrastructure has In addition to the distribution network,
distributors of HUL products in rural
always been the bugbear for Indian the Shakti project also includes “Shakti
markets that would otherwise be
companies targeting the rural market. Vani” (or the “Voice of strength”)—a
difficult to access through traditional
Distribution channels very often social awareness program operating in
networks. The products distributed
must be built from scratch and their more than 20,000 villages in Madhya
include a range of mass-market items
efficacy makes all the difference Pradesh, Karnataka, Chhattisgarh, and
especially relevant to rural consumers,
to a company’s success. When HUL Andhra Pradesh.
such as soaps, toothpastes, shampoos
identified rural markets as a potential
and detergents28. “iShakti” is a portal initiated as a part
growth target, it knew that success
would only come from innovation of Project Shakti. "iShakti" provides
in all the 4 P’s of the marketing Empowering women consumers the rural community with a computer
mix—product, price, place and Shakti ammas are small entrepreneurs based information portal on key
promotion. The company decided to who invest in their distribution areas such as agriculture, health,
increase penetration by extending its businesses, often using money they vocational training, legal procedures
reach to villages with populations of receive as microfinance loans. They and education. The computers are
1,000, using new marketing options are specially trained to communicate equipped with the "iShakti" software,
alongside the traditional distributor- in social environments such as which is based on a unique dialogue-
led model. schools and village get-togethers, interactive technology developed and
and to target non-users. They patented by Unilever. Users can surf
across various content areas, accessing
Helped by the self-help groups deliver goods right to the doorstep
and service nearby clusters of at information or posting queries which
Launched in 2001, “Project Shakti”, are then answered by experts. Many
least three villages and as many
a key element of HUL’s alternate organisations act as content partners
as six. A typical Shakti distributor
distribution strategy, involved using "iShakti" as a communication
sells INR10,000-15,000 (US$208
working with self-help groups (SHGs) channel to rural communities31.
to US$312) worth of products each
to educate and train rural women
month, earning INR700-1,000 (US$15
27
28. Framework factors critical to
nurturing distinctive capabilities
Being a part of the local Building social networks with
community local participation
To succeed in rural markets, it is Since rural consumers are unfamiliar
important for companies to engage with many commercial products,
local communities as partners. It they often look to trusted sources
has to be a collaborative model with such as friends and family for advice
long-term horizons. Rural market in making purchase decisions. Many
leaders such as HUL, ITC and Hero companies have developed innovative
Honda have moved beyond traditional communication pathways, often
vendor roles to partner with local borrowing from social marketing
communities; today, they regularly models to use word-of-mouth
work to develop skills and to generate advocacy. Effective social networks
employment locally. build partnerships among NGOs,
self-help groups (SHGs), microfinance
If companies are to build and retain institutions (MFIs) and local rural
public trust and confidence, particularly populations. These relationships have
in rural regions, they must consistently a business and social use. For example,
demonstrate that they are genuinely MFI-SHG combinations in India have
interested in helping solve some of the access to 50 million consumers over
major issues affecting socio�economic whom they also exert influence.
development. For instance, there is
no point in businesses waiting for This makes the MFI-SHG network
governments to figure out how to fix a powerful distribution and retail
the region’s infrastructure deficiencies channel that combines reach, proximity
—they must make many of those to the consumer, and access to finance.
investments themselves. It is also a high impact, multipurpose
channel since it captures and transfers
A core point is that businesses have consumer needs and preferences,
a moral and ethical responsibility influences and promotes purchases and
to the communities in which they helps lower overall distribution costs
work. In rural areas, they can make —and ultimately, grows the market.
major contributions to employment,
education, and health and welfare.
Of course, the efforts must not be
viewed simply as philanthropy—they
should be about harnessing business
capabilities to deliver profitable
growth and social impact.
28
29. Developing the right capabilities—
and acting on them
It is one thing to exhibit appropriate Secure top-down commitment and At the same time, the organization
capabilities from time to time, or in advocate constantly must build its rural workforce carefully.
certain circumstances. But doing so Following the strategic commitment, Different skills and competencies are
as part of normal working behaviors management must develop clarity on needed, such as cultural congruence
is a different matter entirely, and is how to proceed, including mapping and adaptability; employees do need to
a hallmark of true high performance. organizational capabilities and be willing to live in rural areas and do
Accenture believes that the habitual market conditions. Top managers need to show empathy and sensitivity
application of such capabilities must continue to advocate for rural towards rural consumers and their
requires buy-in from all the relevant initiatives, visibly and vocally. Even needs. They also require knowledge
players in the organization. When hugely successful initiatives like of the local language, the ability to
it comes to serving rural markets e-choupal and Shakti have reached the handle several product lines, and of
effectively, it is necessary for critical mass of volume only after many course, the creativity and enthusiasm
everyone across the organization to years of investment in scale and reach. to carry it all through in often
think and act in concert with those adverse circumstances.
objectives. Here is what is required to
Reshape your operating model and
promote that mindset:
mindset
Integrate rural markets into the Organizational priorities may need
core strategy to shift to meet the rural mandate.
A business model that has leaned
Treating a rural market foray as towards higher margins and lower
an experiment or an exercise in volumes may need to adapt to a
image creation is very unlikely to low�margin, high�volume approach
bring positive results. “The entire for the rural business operations,
organizational philosophy has to be substantially affecting financial
geared towards treating rural markets planning and organizational culture.
as a key part of the business,” said
one executive whose energy company
Invest in the future workforce
has succeeded in India’s hinterland.
The company’s leadership team must A long-term rural strategy requires
closely match the organization’s core strong capabilities in talent creation,
growth strategy with the drivers for planning and management, both at the
growth in the rural market. First, the top and the bottom rungs of the skills
executives need to assess whether the pyramid. A key challenge is that trained
company’s core value proposition—its staff is reluctant to move to villages
product portfolio, price points, and while local labor is unqualified for
overall brand image—will appeal to most jobs. This capability gap requires
the rural consumer. Once the points of innovative talent-creation models that
convergence are clear, management tap the intrinsic strengths of local
must make a strategic commitment to labor; it also calls for strong leadership
the rural effort, backed by a long-term commitment. Top managers can convey
financial investment and by clear the seriousness of their organization’s
messaging to the entire organization. A rural commitment by personally serving
senior executive of an FMCG company stints in the hinterland. The top-down
that now thrives in rural markets noted message conveyed is that professional
that, “Any organization wishing to growth lies in helping to drive rural
grow in rural must be willing to invest market growth.
and be patient. It has taken us many
years to build this edge.”
29
31. Last word
A large number of businesses merely
scratched the surface of the potential
Notes 21. http://www.hclinfosystems.com/
Investor%20Presentation_FY%2008.pdf
for profitable growth in rural India. 1. India Brand Equity Foundation, 22. http://www.business-standard.com/
And, they have made only a dent in “Rural Market” dated August 2009, india/news/hero-honda-stepsrural-touch-
the social infrastructure challenges http://www.ibef.org/economy/ points/368920/
that keep so much of India’s ruralmarket.aspx
23. http://business.rediff.com/slide-
population in the shadows. 2. The National Sample Survey Organization show/2009/may/20/slide-show-1-the-
(NSSO) defines rural markets as those secret-behind-hero-honda-success.
But as Accenture’s latest research areas with fewer than 5,000 residents, a htm#contentTop
reveals, there is now real momentum population density less than 400 people per 24. http://www.krishnagiri.tn.nic.in/
on both fronts. Whether it is LG’s square kilometer and at least 75 percent of fostera.htm
the male working population employed as
impressive market-creation activities, agriculturists. 25. http://www.prsi.co.in/ict.htm
Hero Honda’s customer outreach 26. http://www.tatachemicals.com/farm_
during village festivals or Thomson 3. Ministry of Rural Development centre/overview.htm
Reuters’ mobile content services 4. Economic Survey 2008-09 27. http://business.outlookindia.com/article.
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There is ample evidence to indicate population of less than 100,000 but more 30. http://www.hul.co.in/
that the best businesses help lift up than 5,000.
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the lives of those less privileged. In 9. http://www.globalenvision.org/ HUCelebrates75YrsInIndia.aspx
a nation where income disparities library/7/576/
31. Director’s Report in the 75th Annual
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boost education levels, to provide 11. http://optimistworld.com/PFV. *US$1 = INR48, average exchange rate
employment, and to think in terms of aspx?id=Cooking-to-end-fuel-poverty/ for the period April 01, 2009 to February
their long-term involvement in and 02, 2010
12. http://managementarticles.info/
contributions to the rural communities distribution-model-of-hul/2009/01/
in which they work.
13. http://www.accenture.com/Global/
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The high-performance businesses will
Y2009/APassageToIndia.htm
be those that deliberately learn from
14. http://www.ibef.org/economy/
their experiences in India and quickly ruralmarket.aspx
apply those experiences elsewhere,
15. http://www.business-standard.com/
not only in other emerging markets india/news/lg-india-will-bring-relevant-
but in highly mature markets as well. products-to-indiafocusrural-markets-after-
These are the companies that also sales-serviceit/356362/
understand that today’s multi-polar 16. http://www.itcportal.com/newsroom/
world of dispersed economic power press06june07-a.htm
does not simply refer to the growing 17. http://www.manage.gov.in/pgpabm/
economic might of hubs such as spice/March2k3.pdf
Mumbai, Sao Paulo and Dubai. It also
18. http://business.outlookindia.com/article.
means that global investment and aspx?101604
growth will come increasingly from
19. http://www.dnaindia.com/money/
rural regions and populations the report_samsung-ties-up-with-
world over. iffco_1167286
20. http://www.financialexpress.com/news/
SBIIndia-Post-tieup-to-provide-banking-
facilities-in-rural-Punjab/335652/
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