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