Strategic Alternatives in Rural Mktg

8/3/2019 Strategic Alternatives in Rural Mktg

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KIIT School of Rural Management (KSRM)

STRATEGIC ALTERNATIVES INSTRATEGIC ALTERNATIVES INRURALMARKETINGRURALMARKETING

Dr. L. K.Dr. L. K. VaswaniVaswaniKIIT School of Rural Management (KSRM)KIIT School of Rural Management (KSRM)

KIIT University,KIIT University, BhubaneswarBhubaneswar

FICCI Rural Marketing Summit 2007FICCI Rural Marketing Summit 2007

New Delhi, 9New Delhi, 9--10th May 200710th May 2007


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RURAL MARKETINGRURAL MARKETING TASK ENVIRONMENTTASK ENVIRONMENT

Nearly 44% of total villages haveNearly 44% of total villages havepopulation less than 500 (fragmentation).population less than 500 (fragmentation).

Only 33% of total villages only areOnly 33% of total villages only areconnected byconnected bypuccapucca roads (accessibility).roads (accessibility).

McKinsey fourMcKinsey four--fold classification of 593fold classification of 593rural districts:rural districts:

67 were classified as urban cousins,67 were classified as urban cousins,

118 as those close to rural economic118 as those close to rural economic centrescentres

160 as able districts with basic minimum160 as able districts with basic minimuminfrastructureinfrastructure

248 districts as deprived248 districts as deprived


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RURAL MARKETINGRURAL MARKETING TASK ENVIRONMENTTASK ENVIRONMENT

Poverty ratio at the national level was 27.8 andPoverty ratio at the national level was 27.8 and

22.0 percent (NSS 61st Round data for 200422.0 percent (NSS 61st Round data for 2004--05)05)

based on two different criteria.based on two different criteria. SCsSCs andand STsSTs constitute 24.43 percent of theconstitute 24.43 percent of the

countrys population and continue to be sociocountrys population and continue to be socio--

economically backward.economically backward. Share of agriculture in total employment down toShare of agriculture in total employment down to

54.19 percent in 200454.19 percent in 2004--05 from 61.67 percent in05 from 61.67 percent in

19931993--94. With the declining share of agriculture to94. With the declining share of agriculture to18.5 percent in GDP, the scope for absorbing18.5 percent in GDP, the scope for absorbing

substantialsubstantial labourlabour force appears limited.force appears limited.


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RURAL MARKETINGRURAL MARKETING

SCHOOLS OF THOUGHTSCHOOLS OF THOUGHT

Economic vs. Development PerspectiveEconomic vs. Development Perspective

Schools of Thought in DevelopmentSchools of Thought in Development

PerspectivePerspective

Determinist SchoolDeterminist School: Marketing responds to: Marketing responds toenvironmental stimuli and plays passiveenvironmental stimuli and plays passive

role in developmentrole in development

Activist School Activist School: Marketing as a stimulus in: Marketing as a stimulus in

economic developmenteconomic development


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RECONCEPTUALISING RURAL MARKETINGRECONCEPTUALISING RURAL MARKETING

As perAs per activist schoolactivist school of thought marketingof thought marketing

plays an active role in development.plays an active role in development.

ConceptualisingConceptualising rural marketing as anrural marketing as an

instrument to deliverinstrument to deliver standard of livingstandard of living ratherrather

than a process of exchange.than a process of exchange. New business models to associate rural people inNew business models to associate rural people in

productionproduction--distribution chain to profit anddistribution chain to profit and

improve their incomes with a goal toimprove their incomes with a goal to

Create customersCreate customers..


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MARKETINGMARKETING-- CURRENTCURRENT

AND EMERGING PERSPECTIVEAND EMERGING PERSPECTIVE

Mainstream marketing twinMainstream marketing twin

perspectiveperspective customercustomer behaviourbehaviour

andand strategic marketing.strategic marketing.

Emerging perspectiveEmerging perspective create andcreate anddistribute values among the marketdistribute values among the market

parties. In other words, winparties. In other words, win--winwinbehaviourbehaviour between market parties, i.e.,between market parties, i.e.,

buyers and sellers.buyers and sellers.


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PROPOSED RURAL MARKETINGPROPOSED RURAL MARKETING

PERSPECTIVEPERSPECTIVE

Proposed dual perspective of ruralProposed dual perspective of rural

marketing :marketing :

rural producers empowerment andrural producers empowerment and

strategic marketing.strategic marketing. Enhancing rural producer productivity fromEnhancing rural producer productivity from

marketing exchange tomarketing exchange to rationaliserationalise theirtheir

gains throughgains through productivity enhancingproductivity enhancing

systems.systems.


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PROPOSED RURAL MARKETINGPROPOSED RURAL MARKETING

PERSPECTIVEPERSPECTIVEAs products of rural industries lose out in widerAs products of rural industries lose out in wider

marketplacemarketplace

Strategic marketing perspective is necessary toStrategic marketing perspective is necessary to

improve productivity, cut costs and improveimprove productivity, cut costs and improve

profitability of rural enterprisesprofitability of rural enterprises To promote farm and nonTo promote farm and non-- farm products with farm products with

comparative/competitive advantagecomparative/competitive advantage

Combine global and local characteristics whichCombine global and local characteristics which

are consistent with consumer preferences inare consistent with consumer preferences in

local marketslocal markets


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REDEFINING RURAL MARKETING DOMAINREDEFINING RURAL MARKETING DOMAIN

Rural Buyer-Seller (Producer) Matrix

Bu

ye

r

II

US-RB

ConsumerGoods/Services

Agro-Inputs/FarmImplements & Machinery

I

RS-RB

Intra-Rural

(All Products)

IV

US-UBIntra-Urban

(All Products)

Rural

Urban

UrbanRural

III

RS-UBFarm & Non-Farm

products

Seller


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CATEGORIES OF VILLAGE INDUSTRIESCATEGORIES OF VILLAGE INDUSTRIES

Minerals basedMinerals based -- pottery, lime stonepottery, lime stone

Textiles (excludingTextiles (excluding KhadiKhadi)) -- readymadereadymade

garments, leather, bandagesgarments, leather, bandages Agro and FoodAgro and Food

Polymer and Chemical basedPolymer and Chemical based -- cottage soap,cottage soap,

rubber, detergent, essential oilsrubber, detergent, essential oils Engineering and NonEngineering and Non--Conventional EnergyConventional Energy --

carpentry,carpentry, blacksmithyblacksmithy,, aluminiumaluminium

Forest BasedForest Based -- hand made paper, cane andhand made paper, cane andbamboo, herbal products, honey, gums & resinsbamboo, herbal products, honey, gums & resins

ServicesServices


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TYPE OF RURAL MARKETING EXCHANGETYPE OF RURAL MARKETING EXCHANGE

RELATIONSHIP AND PROMISING MODELSRELATIONSHIP AND PROMISING MODELS

Rural ServiceRural Service CentresCentres

Rural Malls / ProjectRural Malls / Project ShaktiShakti

USUS RB (Agro inputs)RB (Agro inputs)

USUS RB (Goods/Services)RB (Goods/Services)

--AmulAmul/Contract Farming//Contract Farming/-- ITCsITCs ee--ChoupalChoupal/Reliance/Reliance

--KVIC /KVIC /SHGsSHGs/ RBH/ RBH

RSRS UB (Farm)UB (Farm)

RSRS UB (NonUB (Non--Farm)Farm)

--GandhigramGandhigram Rural TrustRural TrustRSRS RBRB

Promising ModelsPromising ModelsType of Market ExchangeType of Market Exchange

RelationshipRelationship


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INDIAN RETAIL:ON THE FAST TRACK

KPMG-FICCI SURVEY 2006


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TYPOLOGIES OF MARKET INSTITUTIONSTYPOLOGIES OF MARKET INSTITUTIONS

AND TRANSANCTIONSAND TRANSANCTIONS

Bu

ye

r

II(US-RB)I( RS-RB)

IV(US-UB)

Rural

Urban

UrbanRural

III(RS-UB)

Seller

Rural Haats/Rural Retail

Farm products

Rural Haats/APMCs/ContractFarming/Reliance/ITC e-Choupal

Non-Farm products

Rural Haats/Exibitions/

RBHs/Domestic Trade/Exporters

Consumer Goods/Services

Rural Haats/Rural Retail/ Malls/

HLL Project Shakti

Agro-Inputs/Farm Equipments

Rural Service Centres/Rural Haats/ Retail / Malls


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Organisational Support/

Professional ManagementMarket Access

Higher Productivity of

Market Transactions

RURAL MALL RURAL HAAT

RURAL MALLCUMHAAT:

A Retail Format for Broad Based Rural Economic Growth

Cover all types of market

exchange relationships

Consumer Gravitation

Higher footfalls

New product opportunities


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SUMMARYSUMMARY Rural Marketing in development paradigmRural Marketing in development paradigm

goal as creating customersgoal as creating customers

Dual perspective:Dual perspective: -- Rural ProducersRural ProducersEmpowerment and Strategic Marketing.Empowerment and Strategic Marketing.

Promising Exchange Models requirePromising Exchange Models requireupscalingupscaling andand replicabilityreplicability..

Broad basing rural retailing to cover allBroad basing rural retailing to cover all

exchange relationships through Rural Mallexchange relationships through Rural Mall--cumcum--HaatHaat..


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Strategic Alternatives in Rural Mktg

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