The value chain way of looking at the rural problem

Rural problems and opportunities are so different from the urban problems and the usual Kotler’s way of dealing with it can lead to making blunders. It is not that I am blaming Kotler, it is just that we have to apply ourselves in a different way.

The following is my attempt to build a model to find solution to rural problems after listening to the classes of our beloved professor SHANATH KUMAR an alumnus of IRMA

   Value Chain:

Supplier ------                                                                                   ------- Consumer

         Warehouse -------                                                            ------- Retailer

                     Processing -------                                      --------Dealer

                                            Distributer -------- Wholesaler    

Supplier:

    Constraints under which the supplier is operating:

            Infrastructure facilities (power, water)

            Technological awareness, education levels and training requirements

            Finance

            Externalities (social, political and ethical issues)

Force majeure (flooding, earthquake and other calamities)

    Ways to ensure continuous uninterrupted supply:

            Contractual arrangements

            Making the supplier partner

     Look for new innovations from around the world:

Warehouse:

            Capacity, frequency of refill, safety stock

            Additional features like temperature control, dust free space etc based on product

            Carrying and operational costs

Processing:

Capacity at different processes

            Bottlenecks

            Throughput in terms of sale for the input provided

            Cycle time

            Outsourcing possibilities

Distributer, Wholesaler, Dealer:

            Competitor’s margin   v/s our margin

            Reach required

            Incentives & Offers

            Utilizing community people who can play this role

Retailer:

            Level of influence in purchase decision

            Competitor’s margin   v/s our margin

            Innovative ways by which we can make him more than a retailer or look for other people who are in relevant professions or activities who can influence consumer decision making and sell our product

Consumer:

            Related market researches and data

Segmentation, targeting, positioning

            Consumer buying behavior & buying patterns

            4P’s (product, price, place, promotion)

Logistics:

Supplier ------Warehouse                                                      Retailer ---------- Consumer

               Processing -----Distributer                    Dealer------------Retailer

                                           Wholesaler ------------Dealer

            Modes of transport and the most cost effective and feasible one

            Infrastructure facilities (roads, ports, rail etc)

            Vehicles used for transportation (capacity, additional features like temperature control etc)

Tracking mechanism  

Possibilities for damage of goods during transit

            Adulteration and pilferage possibilities

            Costs to be incurred and frequency of transport

            Distribution model

Are fisheries and marine foods the next big things for coastal rural India? Is it going to make them richer…?

Most of the natural resources in our country and as well as in other countries are common property resources (also called commons), which are held by the state and used by the individuals and communities to their own ends. Forest, water bodies and land come under these natural resources. Water resources are tapped by millions of poor fisherman, to eke out a living and form the primary link in the large industrial value that exists in fisheries.

Firstly let us look at why there is lot of potential in fisheries and marine foods which are mainly the outcome of the natural resource i.e. water bodies. Sea food is nature’s fast and convenience food, with low fat, rich in vitamins D, B6/12, proteins and minerals, besides being a source of omega-3 fatty acid. Accepted in modern meal planning as a part of healthy diet and suits innovative lifestyles of health conscious upper classes in India and many industrialized nations. Sea food can be of several varieties with a range of ready to eat convenience packs in the form of pre cooked and processed foods. Per captia consumption of sea foods is rising sharply in India as well as in other countries. With changing urban lifestyles causing a lot of health problems and increasing awareness to maintain healthy diet, we can see there will be huge potential for low fat foods with lot of protein (sea food).

Since launching of the first five year plan in 1951 till the close of 1960s the export of Indian marine products mainly consisted of dried items like dried fish, dried shrimp, shark fins, fish maws etc. The frozen items entered the export basket in 1953 in negligible quantities. Now the trend is changing there is huge increase in exports for frozen and canned products. Japan, USA, European countries always remained the favorite locations for export.

India with a long coastline of 8,128 kms, 1.2 mill ha of brackish water bodies offer vast potential for development of fisheries and aquaculture. With new scientific ways of farming and better techniques and proper marketing channels I think there is a lot of potential for rural coastline people to earn better making use of this opportunity. Now it is up to the savvy marketers as to how they want to use this source from the rural market whether by including the farmers as stakeholders sharing the profits and technology to make the growth sustainable and environmental friendly or just by squeezing profits through middlemen which will be profitable in the short run and not in the long run.

After all sustainable rural marketing strategy takes quite a time to materialize and will happen only when the stakeholders trust the company…

Indian industry and its interrelation to Rural Economy:

Mentioned below are some of the rural agro products along with the big companies which use them.

Milk powders and condensed milk – HLL, AMUL

Infant milk foods – Nestle India

Malted Milk foods – Smithkline Beecham, Cadbury’s, Jagatjit Industries

Butter, Ghee and other Milk Fats – Milkfood, Nestle India

Ice-Creams – HLL, Vadilal

Flour milling products – NEPC, Delhi Flour Mills

Biscuits – Britannia, Parle

Bread – More than 3000 bakeries

This shows how important rural economy is for the big companies.

Rural Market:

1) Marketing of all rural production outputs in urban areas

2) Marketing of urban production centers in rural areas

3) Marketing of rural products in rural areas

Indian Rural Economy:

The Indian economy is better understood by understanding the rural economy as it represents the country’s majority of the population and the most significant component of the GDP of the economy. The Indian rural sector is woven around the basic economic activity – agriculture and its allied occupations. The farming community is engaged in agriculture, dairying, pisciculture, poultry, animal husbandry, forestry, marine fishery; minerals etc. produce the primary products are the major stake holders of the economy. Those engaged in non – agricultural activities in the rural areas comprise the remaining contributors. The rural industries both agro and non agro either located in rural areas or otherwise, engaged in value addition of the rural produce form the other end of the spectrum.
The key stake holders of the rural economy are the farmers, agricultural and non agricultural labourers, artisans, traders, money lenders, those engaged in education etc
Rural community lives with the resource base of common property resources at the village level and individually owned private property resources at the individual level. A judicious mix of using these resources by various stake holders results in weaving of social and economic fabric of a village community.
The rural environment is shaped by the economy, society and culture as much as political scenario and religious bent of people, existing leadership, educational and literacy levels and the institutional structures existing and their influence on people’s lives.

Intro to Rural Marketing Concepts & Practices by A.V.Ramana Acharyulu

India is a country with more than a billion people, speaking more than 800 languages and living with as many cultural nuances. The vibrancy of this land is enriched not only by the various occupations that people pursue, but by the single principle of unity in diversity. In the last decade or so several market savvy organizations keyed into this principle to succeed from Kashmir to Kanyakumari, marketing their wares with equal ease and aplomb, irrespective of the number and types of market segments they have to deal with. The 2001 census reports show that rural India comprises 72.22% of the total population. It is in this spirit that makes rural marketing a very interesting and exciting subject and also poses innumerable problems and challenges to one seeking to reach the rural customer.
In this context this book tries to cover various principles of marketing by relating them to the emerging concepts and theories. The focus on environment, natural resources, society and social systems, rural realities in the form of cases enriches and makes the reader understand the nuances of rural marketing in detail.