Goa is facing a crisis of democracy in the past few months. The elected government has passed legislation that strikes at the very root of the constitutional rights of its citizens.
Goa needs your help and support. Please stand with us and let us take a stand for democracy and good governance in Goa.
The past few months have seen a crisis of democracy in Goa.
There are protests on an everyday basis. The elected Govt as well as the Opposition have chosen to ignore these protests completely.
First, there was the RPG 2021 - the proposed Regional Plan for Goa, locking in place its development up to 2021. The supposed involvement of people in their own development and future planning is tokenism at its worst - there is no technical or base data made available. The RP 2021 is a glossy near-200 page document at odds with its own stated policy. How can that which destroys precious natural resources and a way of life be offered up as development?
Villagers in a peaceful little village from Patiapur were beaten - by the police - when they grouped to protest against a luxury housing development of 41 bungalows in the village. This mega-project, called Dreamwoods, destroyed the hills that provided people in this village their livelihood. (read separate post on Nightmare at Dreamwoods for more details on this)
Second came the proposal for a 6-lane NH 17 across Goa - the alignment that was made public will mow down cultivable fields, houses, villages and destroy one of the six major rivers of Goa. Vitally - the public information conceals the survey numbers that will be affected, in a transparent bid to prevent correct identification and protest. Newspaper reports pegged the damage at 9 lakh sq kms of cultivable fields; 3460 homes...not to mention the environmental devastation from a busy 6-lane highway running 5 kms OVER a river; at the second village from its source and with 500 villages downstream dependent upon the River Sal. No impartial impact assessment studies have been undertaken. Are there alternatives to build this highway in a manner that does not destroy land, habitation and environmental resources? Yes, there are. And these have been brought to the notice of the Town and Country Planning Dept; the PWD minister; the local MLA; the Leader of the Opposition and the Chief Minister of the State. The alternatives have been proposed at public forums as well as by citizen-delegations. These alternatives were proposed by an eminent engineer with international experience and were backed by technical know-how and expertise. They were proposed with a view to ensure that development objectives are not impeded whilst ensuring that such widespread damage and destruction is not wrought upon Goa and its people. These are alternatives however do not allow for land-grab and heedless development and were simply disregarded by the ruling party and the opposition without consideration or explanation.
Third came the amendment to the TCP Act - Sections 16 and 16A - these amendments entitle the Govt to undertake any project without seeking objection or consent. This amendment was violently and strongly opposed by people and citizen-bodies but passed UNANIMOUSLY by the Govt and the Opposition.
Today, the 24th of March 2009, the Goa Govt passed a bill to amends Section 41 of the Land Acquisition Act, 1894. This empowers the government to overrule the judiciary and effectively prevents people from seeking justice through the courts.
Various organisations, communities, local groups and individuals have spent the last 6 months battling these proposed changes. The government dismisses these protests as 'anti-development'.
No, we do not and cannot oppose development. We can, however, demand sustainable development. We can demand that the government remembers it exists to serve people. We can demand that the government awaken to the fact that it holds land and natural resources in trust for the people. We can demand that a greed-and-power sodden government STOP the course of arbitrary destruction it has undertaken.
Enough is enough. Stand up beside us as we take a stand for Goa - HELP!
Contact Info
Email: shibany@gmail.com
FaceBook Group: S.O.S. Goa
Thursday, March 26, 2009
Sunday, March 22, 2009
Terms of Encouragement- The "I Liked This" Letters
"One day a teacher asked her students to list the names of the other students in the room on two sheets of paper, leaving a space between each name.
Then she told them to think of the nicest thing they could say about each of their classmates and write it down.
It took the remainder of the class period to finish their assignment, and as the students left the room, each one handed in the papers.
That Saturday, the teacher wrote down the name of each student on a separate sheet of paper, and listed what everyone else had said about that individual.
On Monday she gave each student his or her list. Before long, the entire class was smiling. "Really?" she heard whispered. "I never knew that I meant anything to anyone!" and, "I didn't know others liked me so much," were most of the comments.
No one ever mentioned those papers in class again. She never knew if they discussed them after class or with their parents, but it didn't matter. The exercise had accomplished its purpose. The students were happy with themselves and one another. That group of students moved on.
Several years later, one of the students was killed in Viet Nam and his teacher attended the funeral of that special student. She had never seen a serviceman in a military coffin before. He looked so handsome, so mature.
The church was packed with his friends. One by one those who loved him took a last walk by the coffin. The teacher was the last one to bless the coffin.
As she stood there, one of the soldiers who acted as pallbearer came up to her. "Were you Mark's math teacher?" he asked. She nodded: "yes." Then he said: "Mark talked about you a lot."
After the funeral, most of Mark's former classmates went together to a luncheon. Mark's mother and father were there, obviously waiting to speak with his teacher.
"We want to show you something," his father said, taking a wallet out of his pocket "They found this on Mark when he was killed. We thought you might recognize it."
Opening the billfold, he carefully removed two worn pieces of notebook paper that had obviously been taped, folded and refolded many times. The teacher knew without looking that the papers were the ones on which she had listed all the good things each of Mark's classmates had said about him.
"Thank you so much for doing that," Mark's mother said. "As you can see, Mark treasured it."
All of Mark's former classmates started to gather around. Charlie smiled rather sheepishly and said, "I still have my list. It's in the top drawer of my desk at home."
Chuck's wife said, "Chuck asked me to put his in our wedding album."
"I have mine too," Marilyn said. "It's in my diary"
Then Vicki, another classmate, reached into her pocketbook, took out her wallet and showed her worn and frazzled list to the group. "I carry this with me at all times," Vicki said and without batting an eyelash, she continued: "I think we all saved our lists"
That's when the teacher finally sat down and cried. She cried for Mark and for all his friends who would never see him again.
The density of people in society is so thick that we forget that life will end one day. And we don't know when that one day will be.
So please, tell the people you love and care for, that they are special and important. Tell them, before it is too late.
Reap what you sow. What you put into the lives of others comes back into your own."
A forward received from one of my ex-bosses. I liked it very much and found it relevant because I have a habit of keeping all these appreciation letters and positive feedback,in fact, I have a blog where all these are updated and stored.
You can click on the link below:
http://vnreferences.blogspot.com/2009/03/what-dozen-people-say-about-me.html
Reading it has been a great tonic and a confidence booster for me:). A practice therefore that I strongly recommend.
Then she told them to think of the nicest thing they could say about each of their classmates and write it down.
It took the remainder of the class period to finish their assignment, and as the students left the room, each one handed in the papers.
That Saturday, the teacher wrote down the name of each student on a separate sheet of paper, and listed what everyone else had said about that individual.
On Monday she gave each student his or her list. Before long, the entire class was smiling. "Really?" she heard whispered. "I never knew that I meant anything to anyone!" and, "I didn't know others liked me so much," were most of the comments.
No one ever mentioned those papers in class again. She never knew if they discussed them after class or with their parents, but it didn't matter. The exercise had accomplished its purpose. The students were happy with themselves and one another. That group of students moved on.
Several years later, one of the students was killed in Viet Nam and his teacher attended the funeral of that special student. She had never seen a serviceman in a military coffin before. He looked so handsome, so mature.
The church was packed with his friends. One by one those who loved him took a last walk by the coffin. The teacher was the last one to bless the coffin.
As she stood there, one of the soldiers who acted as pallbearer came up to her. "Were you Mark's math teacher?" he asked. She nodded: "yes." Then he said: "Mark talked about you a lot."
After the funeral, most of Mark's former classmates went together to a luncheon. Mark's mother and father were there, obviously waiting to speak with his teacher.
"We want to show you something," his father said, taking a wallet out of his pocket "They found this on Mark when he was killed. We thought you might recognize it."
Opening the billfold, he carefully removed two worn pieces of notebook paper that had obviously been taped, folded and refolded many times. The teacher knew without looking that the papers were the ones on which she had listed all the good things each of Mark's classmates had said about him.
"Thank you so much for doing that," Mark's mother said. "As you can see, Mark treasured it."
All of Mark's former classmates started to gather around. Charlie smiled rather sheepishly and said, "I still have my list. It's in the top drawer of my desk at home."
Chuck's wife said, "Chuck asked me to put his in our wedding album."
"I have mine too," Marilyn said. "It's in my diary"
Then Vicki, another classmate, reached into her pocketbook, took out her wallet and showed her worn and frazzled list to the group. "I carry this with me at all times," Vicki said and without batting an eyelash, she continued: "I think we all saved our lists"
That's when the teacher finally sat down and cried. She cried for Mark and for all his friends who would never see him again.
The density of people in society is so thick that we forget that life will end one day. And we don't know when that one day will be.
So please, tell the people you love and care for, that they are special and important. Tell them, before it is too late.
Reap what you sow. What you put into the lives of others comes back into your own."
A forward received from one of my ex-bosses. I liked it very much and found it relevant because I have a habit of keeping all these appreciation letters and positive feedback,in fact, I have a blog where all these are updated and stored.
You can click on the link below:
http://vnreferences.blogspot.com/2009/03/what-dozen-people-say-about-me.html
Reading it has been a great tonic and a confidence booster for me:). A practice therefore that I strongly recommend.
RURAL MARKETS IN INDIA
Indian Rural Market in 12 capsules. - Navya Chaudhary
Source: Advertising Professionals of India: A group in FB
An Overview
The Indian rural market with its vast size and demand base offers great opportunities to marketers. Two-thirds of countries consumers live in rural areas and almost half of the national income is generated here. It is only natural that rural markets form an important part of the total market of India. Our nation is classified in around 450 districts, and approximately 630000 villages, which can be sorted in different parameters such as literacy levels, accessibility, income levels, penetration, distances from nearest towns, etc.
Few Facts
70 % of India's population lives in 627000 villages in rural areas. According to the NCAER study, there are almost twice as many 'lower middle income' households in rural areas as in the urban areas.
At the highest income level there are 2.3 million urban households as against 1.6 million households in rural areas.
Middle and high-income households in rural India is expected to grow from 80 million to 111 million by 2007.
In urban India, the same is expected to grow from 46 million to 59 million. Thus, the absolute size of rural India is expected to be double that of urban India.
Opportunity
The above figures are a clear indication that the rural markets offer the great potential to help the India Inc which has reached the plateau of their business curve in urban India to bank upon the volume-driven growth.
The Indian rural market with its vast size and demand base offers a huge opportunity that MNCs cannot afford to ignore. With 128 million households, the rural population is nearly three times the urban.
Part - II
As a result of the growing affluence, fuelled by good monsoons and the increase in agricultural output to 200 million tonnes from 176 million tonnes in 1991, rural India has a large consuming class with 41 per cent of India's middle-class and 58 per cent of the total disposable income.
The importance of the rural market for some FMCG and durable marketers is underlined by the fact that the rural market accounts for close to 70 per cent of toilet-soap users and 38 per cent of all two-wheeler purchased.
The rural market accounts for half the total market for TV sets, fans, pressure cookers, bicycles, washing soap, blades, tea, salt and toothpowder, What is more, the rural market for FMCG products is growing much faster than the urban counterpart.
Features of Indian Rural Markets
Large and Scattered market:
The rural market of India is large and scattered in the sense that it consists of over 63 crore consumers from 5,70,000 villages spread throughout the country.
Major income from agriculture:
Nearly 60 % of the rural income is from agriculture. Hence rural prosperity is tied with agricultural prosperity.
Low standard of living:
The consumer in the village area do have a low standard of living because of low literacy, low per capita income, social backwardness, low savings, etc.
Traditional Outlook:
The rural consumer values old customs and tradition. They do not prefer changes.
Diverse socio-economic backwardness:
Rural consumers have diverse socio-economic backwardness. This is different in different parts of the country.
Infrastructure Facilities:
The Infrastructure Facilities like roads, warehouses, communication system, financial facilities are inadequate in rural areas. Hence physical distribution becomes costly due to inadequate Infrastructure facilities.
Part - III
The rural bazaar is booming beyond everyone's expectation. This has been primarily attributed to a spurt in the purchasing capacity of farmers now enjoying an increasing marketable surplus of farm produce. In addition, an estimated induction of Rs 140 billion in the rural sector through the government's rural development schemes in the Seventh Plan and about Rs 300 billion in the Eighth Plan is also believed to have significantly contributed to the rapid growth in demand. The high incomes combined with low cost of living in the villages have meant more money to spend. And with the market providing them options, tastes are also changing.
Problems in the Booming Rural Marketing
Although the rural market does offer a vast untapped potential, it should also be recognized that it is not that easy to operate in rural market because of several problems. Rural marketing is thus a time consuming affair and requires considerable investments in terms of evolving appropriate strategies with a view to tackle the problems.
The major problems faced are:
Underdeveloped People and Underdeveloped Markets:
The number of people below poverty line has not decreased in any appreciable manner. Thus underdeveloped people and consequently underdeveloped market by and large characterize the rural markets. Vast majorities of the rural people are tradition bound, fatalistic and believe in old customs, traditions, habits, taboos and practices.
Lack of Proper Physical Communication Facilities:
Nearly fifty percent of the villages in the country do not have all weather roads. Physical communication of these villages is highly expensive. Even today most villages in the eastern parts of the country are inaccessible during the monsoon.
Media for Rural Communication:
Among the mass media at some point of time in the late 50's and 60's radio was considered to be a potential medium for communication to the rural people. Another mass media is television and cinemas. Statistics indicate that the rural areas account for hardly 2000 to 3500 mobile theatres, which is far less when compared to the number of villages.
Part - IV
Many Languages and Dialects:
The number of languages and dialects vary widely from state to state, region to region and probably from district to district. The messages have to be delivered in the local languages and dialects. Even though the number of recognized languages are only 16, the dialects are estimated to be around 850.
Dispersed Market:
Rural areas are scattered and it is next to impossible to ensure the availability of a brand all over the country. Seven Indian states account for 76% of the country's rural retail outlets, the total number of which is placed at around 3.7 million. Advertising in such a highly heterogeneous market, which is widely spread, is very expensive.
Low Per Capita Income:
Even though about 33-35% of gross domestic product is generated in the rural areas it is shared by 74% of the population. Hence the per capita incomes are low compared to the urban areas.
Low Levels of Literacy:
The literacy rate is low in rural areas as compared to urban areas. This again leads to problem of communication for promotion purposes. Print medium becomes ineffective and to an extent irrelevant in rural areas since its reach is poor and so is the level of literacy.
Prevalence of spurious brands and seasonal demand:
For any branded product there are a multitude of 'local variants', which are cheaper, and, therefore, more desirable to villagers.
Different way of thinking:
There is a vast difference in the lifestyles of the people. The kind of choices of brands that an urban customer enjoys is different from the choices available to the rural customer. The rural customer usually has 2 or 3 brands to choose from whereas the urban one has multiple choices. The difference is also in the way of thinking. The rural customer has a fairly simple thinking as compared to the urban counterpart.
The 4A Approach
The rural market may be alluring but it is not without its problems: Low per capita disposable incomes that is half the urban disposable income; large number of daily wage earners, acute dependence on the vagaries of the monsoon; seasonal consumption linked to harvests and festivals and special occasions; poor roads; power problems; and inaccessibility to conventional advertising media.
Part - V
However, the rural consumer is not unlike his urban counterpart in many ways.
The more daring MNCs are meeting the consequent challenges of availability, affordability, acceptability and awareness (the so-called 4 As).
Availability
The first challenge is to ensure availability of the product or service. India's 627,000 villages are spread over 3.2 million sq km; 700 million Indians may live in rural areas, finding them is not easy. However, given the poor state of roads, it is an even greater challenge to regularly reach products to the far-flung villages. Any serious marketer must strive to reach at least 13,113 villages with a population of more than 5,000. Marketers must trade off the distribution cost with incremental market penetration. Over the years, India's largest MNC, Hindustan Lever, a subsidiary of Unilever, has built a strong distribution system, which helps its brands reach the interiors of the rural market. To service remote village, stockists use auto-rickshaws, bullock-carts and even boats in the backwaters of Kerela. Coca-Cola, which considers rural India as a future growth driver, has evolved a hub and spoke distribution model to reach the villages. To ensure full loads, the company depot supplies, twice a week, large distributors which who act as hubs. These distributors appoint and supply, once a week, smaller distributors in adjoining areas. LG Electronics defines all cities and towns other than the seven metros cities as rural and semi-urban market. To tap these unexplored country markets, LG has set up 45 area offices and 59 rural/remote area offices.
Study on buying behaviour of rural consumer indicates that the rural retailers influences 35% of purchase occasions. Therefore sheer product availability can affect decision of brand choice, volumes and market share. Some of the FMCG giants like HLL took out project streamline to significantly enhance the control on the rural supply chain through a network of rural sub-stockists, who are based in the villages only. Apart from this to acquire further edge in distribution HLL started Project Shakti in partnership with Self Help groups of rural women.
Affordability
The second challenge is to ensure affordability of the product or service. With low disposable incomes, products need to be affordable to the rural consumer, most of whom are on daily wages. Some companies have addressed the affordability problem by introducing small unit packs. Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh - the so-called `Bimaru' States.
Part - VI
Hindustan Lever, among the first MNCs to realise the potential of India's rural market, has launched a variant of its largest selling soap brand, Lifebuoy at Rs 2 for 50 gm. The move is mainly targeted at the rural market. Coca-Cola has addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs 5. The initiative has paid off: Eighty per cent of new drinkers now come from the rural markets. Coca-Cola has also introduced Sunfill, a powdered soft-drink concentrate. The instant and ready-to-mix Sunfill is available in a single-serve sachet of 25 gm priced at Rs 2 and multiserve sachet of 200 gm priced at Rs 15.
Acceptability
The third challenge is to gain acceptability for the product or service. Therefore, there is a need to offer products that suit the rural market. One company, which has reaped rich dividends by doing so, is LG Electronics. In 1998, it developed a customised TV for the rural market and christened it Sampoorna. It was a runway hit selling 100,000 sets in the very first year. Because of the lack of electricity and refrigerators in the rural areas, Coca-Cola provides low-cost ice-boxes - a tin box for new outlets and thermocol box for seasonal outlets.
The insurance companies that have tailor-made products for the rural market have performed well. HDFC Standard LIFE topped private insurers by selling policies worth Rs 3.5 crore in total premia. The company tied up with non-governmental organisations and offered reasonably priced policies in the nature of group insurance covers.
Awareness
Mass media is able to reach only to 57% of the rural population. Creating awareness then, means utilizing targeted, unconventional media including ambient media .For generating awareness, events like fairs and festivals, Haats, etc., are used as occasions for brand communication. Cinema vans, shop-fronts, walls and wells are other media vehicles that have been utilized to increase brand and pack visibility. Ideas like putting stickers on the hand pumps, walls of the wells putting on tin plates on al the tree surrounding the pond are some of the innovative media used by personal wash like Lux and Lifebuoy and fabric wash items like Rin and Wheel. Idea was to advertise not only at the point of purchase but also at the time of consumption.
Part - VII
With large parts of rural India inaccessible to conventional advertising media - only 41 per cent rural households have access to TV - building awareness is another challenge. Fortunately, however, the rural consumer has the same likes as the urban consumer - movies and music - and for both the urban and rural consumer, the family is the key unit of identity. However, the rural consumer expressions differ from his urban counterpart. Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan. Consumption of branded products is treated as a special treat or indulgence.
Hindustan Lever relies heavily on its own company-organised media. These are promotional events organised by stockists. Godrej Consumer Products, which is trying to push its soap brands into the interior areas, uses radio to reach the local people in their language.
Coca-Cola uses a combination of TV, cinema and radio to reach 53.6 per cent of rural households. It doubled its spend on advertising on Doordarshan, which alone reached 41 per cent of rural households. It has also used banners, posters and tapped all the local forms of entertainment. Since price is a key issue in the rural areas, Coca-Cola advertising stressed its `magical' price point of Rs 5 per bottle in all media.LG Electronics uses vans and road shows to reach rural customers. The company uses local language advertising. Philips India uses wall writing and radio advertising to drive its growth in rural areas.
The key dilemma for MNCs eager to tap the large and fast-growing rural market is whether they can do so without hurting the company's profit margins. In case of nestle, company's product portfolio is essentially designed for urban consumers which cautions companies from plunging headlong into the rural market as capturing rural consumers can be expensive.
Role of Rural Retailing
Retailing is the final phase of the distribution channel and it is clear by now that it is availability and distribution that drives growth in rural Indian markets. Hence retailing will be significant and will undergo greater organisation and maturity as is being witnessed in the urban markets, even in the rural markets. Innovative retail models which take into account the nuances of rural markets is the way forward.
Part - VIII
Study on buying behaviour of rural consumer indicates that the rural retailers influences 35% of purchase decisions. Therefore sheer product availability can affect decision of brand choice, volumes and market share. India offers a huge, sustainable and growing rural market which can be tapped effectively through innovative distribution channels with retailing being the most critical element of this strategy as it is the final touch point and the actual touch point with the customer which can be the most critical influence in the buying process.
Developments in Rural Retailing
Rural Malls: Chaupal Sagar
Chaupal Sagar is one of the first organised retail forays into the hinterland. It was soft-launched on 15 August. It is actually a warehouse for storing the farm produce that ITC buys through its e-chaupals. The mall has come up in one part of this warehouse.It has been set up by the international business division of tobacco major ITC. It has been initiated as rural shopping-cum-information centres in Madhya Pradesh. The first rural mall has come up 40-odd kilometres journey from Bhopal towards Sehore.
ITC Spent 3 years and Rs.80 crores on research and development of this concept including investments in E-choupal.
Objective
ITC describes the establishment as a set to create a high-quality, low-cost fulfilment channel for rural India. However, any organisation is driven by the profit motive which are served through this initiative:
Reap benefits from the market they have created
Creating an entry barrier for other prospective players
ITC has very effectively integrated its profit and social motives.
Concept
KSA Technopak - "It is definitely a pioneering venture because no other Indian company has yet entered rural retailing with the all-under-one-roof concept."
Malls stocking wide variety of products with floor space of 7000 sq.ft plus a trading zone and information centre. It is a Hub cum Supermarket, which has been set up in a section of the ITC rural warehouses.
Part - IX
Format
Chaupal Sagar cannot be shoehorned into any of the existing retailing categories. At 7,000 square feet, it is too small to be a mall.
It has opted for self-service, stocking its merchandise on shelves lining the neat aisles, it stocks a breadth of products no supermarket can. It offers almost everything - from toothpastes to televisions, hair oils to motorcycles, mixer-grinders to water pumps, shirts to fertilisers... It defies pigeonholing. It is just a very sharply thought-out rural store.
Most of the brands it sells are national such as Marico, LG, Philips, torches from Eveready, shirts from ITC's apparel business, bikes from TVS, and tractors from Eicher.
Facilities
Spread over 5 acres of land at Sehore in Madhya Pradesh: -
Rural shopping malls will be open from 6 am to 9 pm.
Features and facilities at these ITC malls can overshadow those in the metros. The ITC store sells everything that a rural consumer may ask for - sarees to kurta-pyjamas to shirts (in the range of Rs 99-500), footwear, groceries, electronic durable from TVs to microwaves, cosmetics and other accessories, farm consumption products like seeds, fertilisers, pumps, generators and even tractors, motorcycles and scooters.
Banking and automated teller machines will be standard at the malls.
Insurance products for farmers.
Entertainment facilities, restaurants, public facilities and parking space will also be available.
There is even a fuel pump in tie-up with BPCL and a cafeteria.
Parking lot for 160 tractors.
There will be a primary healthcare facility to be serviced by a private healthcare service provider.
Information centres: The company will create the facility for providing online information on commodity rates and weather.
Shopping malls will have a training facility on modern farm techniques.
Farmers can come and log on to the Internet and check the pricing and sell their commodities.
There will also be godowns for storing the wheat and soybean and also for stocking products retailed at the mall.
Part - X
Business Model
The business model of Chaupal Sagar is linked closely with the E-chaupal initiative of ITC.
Role of ITC is to create infrastructure such as space, computers, and building.
ITC will charge a fee for the services and items sold at the mall.
E-CHAUPAL: E-Chaupal is the backbone of these rural malls. While the first layer (E-Chaupal) provides the farmers necessary information about weather and prices, this hypermarket initiative will provide them another platform to sell their produce and purchase necessary farm and household goods under the same roof.
The e-Choupal model required that ITC to make significant investments to create and maintain its own IT network in rural India and to identify and train a local farmer to manage each e-Choupal.
E-Choupal combines a Web portal in the local language and PCs with Internet access placed in the villages to create a two-way channel between ITC and the villagers. The project started with a pilot in June 2000 in Madhya Pradesh with Soybean farmers. Currently, it covers six states, and multiple commodities like prawns, cotton and coffee with 4000 Choupals.
Part - XI
Plans are to reach 15 states by 2010, covering 100,000 villages with 20,000 Choupals.
Each e-Choupal (equipped with a PC with Internet connectivity, printer and UPS) typically housed in the farmer's house, is linked to the Internet via phone lines or, increasingly, by a VSAT connection, and serves an average of 600 farmers in 10 surrounding villages within about a five kilometer radius. Using the system costs farmers nothing, but the host farmer, called a sanchalak, incurs some operating costs (The IT part of each e-Choupal costs about Rs 1.3 lakh, each e-Choupal is estimated to pay back for itself in 4.5 years) and is obligated by a public oath to serve the entire community; the sanchalak benefits from increased prestige and a commission paid him for all e-Choupal transactions. The farmers can use the computer to access daily closing prices on local mandis, as well as to track global price trends or find information about new farming techniques-either directly or, because many farmers are illiterate, via the sanchalak. They also use the e-Choupal to order seed, fertilizer, and other products such as consumer goods from ITC or its partners, at prices lower than those available from village traders; the sanchalak typically aggregates the village demand for these products and transmits the order to an ITC representative. At harvest time, ITC offers to buy the crop directly from any farmer at the previous day's closing price; the farmer then transports his crop to an ITC processing center, where the crop is weighed electronically and assessed for quality. The farmer is then paid for the crop and a transport fee. "Bonus points," which are exchangeable for products that ITC sells, are given for crops with quality above the norm. In this way, the e-Choupal system bypasses the government-mandated trading mandis.
Farmers benefit from more accurate weighing, faster processing time, and prompt payment, and from access to a wide range of information, including accurate market price knowledge, and market trends, which help them decide when, where, and at what price to sell. Farmers selling directly to ITC through an e-Choupal typically receive a higher price for their crops than they would receive through the mandi system, on average about 2.5% higher (about US$6 per ton). The total benefit to farmers includes lower prices for inputs and other goods, higher yields, and a sense of empowerment. At the same time, ITC benefits from net procurement costs that are about 2.5% lower (it saves the commission fee and part of the transport costs it would otherwise pay to traders who serve as its buying agents at the mandi) and it has more direct control over the quality of what it buys.
By building a network of warehouses near the production centres and by providing inputs to the farmers and test output at the individual farm level, ITC is able to preserve the source and quality information of produce purchased. By helping the farmer identify and control his inputs and farming practices and by paying better for better quality, ITC is able to improve the quality of produce that it purchases. In the commodities market, these two combine to help ITC create the differentiator that it set out to establish in the beginning.
Part - XII
ITC gains additional benefits from using this network as a distribution channel for its products (and those of its partners) and a source of innovation for new products. It is also being used to provide services like rural market research to those interested.
Strategy for Success
Use of ITC warehouses
This will help in cost control as well as better utilisation of space in these warehouses. It will also provide convenience and familiarity with the target customer.
Targeted at Farmers selling to ITC warehouse through E-chaupal
With its network of e-chaupals, ITC communicates its latest commodity prices to the farmers via the Internet or VSAT lines. If they find these attractive, they sell their produce to ITC. The sanchalak (the person who operates an e-chaupal; most of them are farmers) of villages near these malls reckons that half the farmers in his village deal only with ITC. Now, by setting up the mall next to the warehouse, ITC is trying to monetise the footfalls from farmers; that is every time sanchalaks- and farmers visit ITC's soybean factories in MP to sell their produce, they also have the opportunity to spend their freshly earned cash.
ITC realised that the farmers had just got money, that they would spend it anyway, and that they had an empty vehicle with which they could lug the stuff back.
ITC intends to capture the rural folks' out-of-village shopping
The warehouse is one bulwark of its strategy, obviously. But the farmers will come here only after every harvest. To ensure that they keep coming to Chaupal Sagar even at other times, the company is offering a slew of other goodies. Another building is coming up next to the main warehouse. When completed, it will house a bank, a cafeteria, apart from an insurance office and a learning centre. ITC has tied up with agri-institutes to offer farmer training programmes. Then, plots of land have been earmarked to display large agricultural machinery like threshers. Other parcels of land have been earmarked for pesticide and fertiliser companies for demonstrating their products. A petrol pump is coming up as well.
To attract footfalls during the lean season, ITC plans to organise various activities and events including melas,training programs, demonstrations.
The hubs are strategically located to attract suburban crowds as well.
Retail channel for its own brands as well as for other brands
Working through the sanchalaks, ITC first pushed its own products, like salt, into the hinterland, and then invited others like Parachute and Philips to ride on this distribution chain. Today, it plans to similarly create revenue streams around its warehouses.
Financing Scheme
ITC is investing initially Rs 3 crore (Rs 30 million) in each such shopping mall. However it is working out a strategy to make it cost-effective for them.
To keep its own investment to the minimum, ITC is encouraging the samyojak - a local broker or middleman co-opted by ITC - to pick up equity and manage these shops as part owners.
Assisted by four ITC salesmen, the samyojaks will assess demand, ensure just-in-time delivery, manage customer service and keep accounts.
Uniqueness Of the Model: lies in the fact that it works equally well for ITC as the buyer of farm produce and ITC as the seller of desirables.
Charge fees from the brands being showcased at the mall as well as for the services being provided at the Mall.
Results & Expectations
During the peak season, a hub sees traffic of about 200 tractors per day on an average, as farmers come to sell their crops at the hubs.
Initial response: On the first day the store notched up a business of about Rs 70,000-80,000. Footfall of about 700-800 people on weekdays and soaring to 1,000 on weekends with conversion levels of 35%.
Credit :
Navya Chaudhary, Cool Avenues
With permission from
Sugandha Dubey –Advertising Professionals of India,
Source: Advertising Professionals of India: A group in FB
An Overview
The Indian rural market with its vast size and demand base offers great opportunities to marketers. Two-thirds of countries consumers live in rural areas and almost half of the national income is generated here. It is only natural that rural markets form an important part of the total market of India. Our nation is classified in around 450 districts, and approximately 630000 villages, which can be sorted in different parameters such as literacy levels, accessibility, income levels, penetration, distances from nearest towns, etc.
Few Facts
70 % of India's population lives in 627000 villages in rural areas. According to the NCAER study, there are almost twice as many 'lower middle income' households in rural areas as in the urban areas.
At the highest income level there are 2.3 million urban households as against 1.6 million households in rural areas.
Middle and high-income households in rural India is expected to grow from 80 million to 111 million by 2007.
In urban India, the same is expected to grow from 46 million to 59 million. Thus, the absolute size of rural India is expected to be double that of urban India.
Opportunity
The above figures are a clear indication that the rural markets offer the great potential to help the India Inc which has reached the plateau of their business curve in urban India to bank upon the volume-driven growth.
The Indian rural market with its vast size and demand base offers a huge opportunity that MNCs cannot afford to ignore. With 128 million households, the rural population is nearly three times the urban.
Part - II
As a result of the growing affluence, fuelled by good monsoons and the increase in agricultural output to 200 million tonnes from 176 million tonnes in 1991, rural India has a large consuming class with 41 per cent of India's middle-class and 58 per cent of the total disposable income.
The importance of the rural market for some FMCG and durable marketers is underlined by the fact that the rural market accounts for close to 70 per cent of toilet-soap users and 38 per cent of all two-wheeler purchased.
The rural market accounts for half the total market for TV sets, fans, pressure cookers, bicycles, washing soap, blades, tea, salt and toothpowder, What is more, the rural market for FMCG products is growing much faster than the urban counterpart.
Features of Indian Rural Markets
Large and Scattered market:
The rural market of India is large and scattered in the sense that it consists of over 63 crore consumers from 5,70,000 villages spread throughout the country.
Major income from agriculture:
Nearly 60 % of the rural income is from agriculture. Hence rural prosperity is tied with agricultural prosperity.
Low standard of living:
The consumer in the village area do have a low standard of living because of low literacy, low per capita income, social backwardness, low savings, etc.
Traditional Outlook:
The rural consumer values old customs and tradition. They do not prefer changes.
Diverse socio-economic backwardness:
Rural consumers have diverse socio-economic backwardness. This is different in different parts of the country.
Infrastructure Facilities:
The Infrastructure Facilities like roads, warehouses, communication system, financial facilities are inadequate in rural areas. Hence physical distribution becomes costly due to inadequate Infrastructure facilities.
Part - III
The rural bazaar is booming beyond everyone's expectation. This has been primarily attributed to a spurt in the purchasing capacity of farmers now enjoying an increasing marketable surplus of farm produce. In addition, an estimated induction of Rs 140 billion in the rural sector through the government's rural development schemes in the Seventh Plan and about Rs 300 billion in the Eighth Plan is also believed to have significantly contributed to the rapid growth in demand. The high incomes combined with low cost of living in the villages have meant more money to spend. And with the market providing them options, tastes are also changing.
Problems in the Booming Rural Marketing
Although the rural market does offer a vast untapped potential, it should also be recognized that it is not that easy to operate in rural market because of several problems. Rural marketing is thus a time consuming affair and requires considerable investments in terms of evolving appropriate strategies with a view to tackle the problems.
The major problems faced are:
Underdeveloped People and Underdeveloped Markets:
The number of people below poverty line has not decreased in any appreciable manner. Thus underdeveloped people and consequently underdeveloped market by and large characterize the rural markets. Vast majorities of the rural people are tradition bound, fatalistic and believe in old customs, traditions, habits, taboos and practices.
Lack of Proper Physical Communication Facilities:
Nearly fifty percent of the villages in the country do not have all weather roads. Physical communication of these villages is highly expensive. Even today most villages in the eastern parts of the country are inaccessible during the monsoon.
Media for Rural Communication:
Among the mass media at some point of time in the late 50's and 60's radio was considered to be a potential medium for communication to the rural people. Another mass media is television and cinemas. Statistics indicate that the rural areas account for hardly 2000 to 3500 mobile theatres, which is far less when compared to the number of villages.
Part - IV
Many Languages and Dialects:
The number of languages and dialects vary widely from state to state, region to region and probably from district to district. The messages have to be delivered in the local languages and dialects. Even though the number of recognized languages are only 16, the dialects are estimated to be around 850.
Dispersed Market:
Rural areas are scattered and it is next to impossible to ensure the availability of a brand all over the country. Seven Indian states account for 76% of the country's rural retail outlets, the total number of which is placed at around 3.7 million. Advertising in such a highly heterogeneous market, which is widely spread, is very expensive.
Low Per Capita Income:
Even though about 33-35% of gross domestic product is generated in the rural areas it is shared by 74% of the population. Hence the per capita incomes are low compared to the urban areas.
Low Levels of Literacy:
The literacy rate is low in rural areas as compared to urban areas. This again leads to problem of communication for promotion purposes. Print medium becomes ineffective and to an extent irrelevant in rural areas since its reach is poor and so is the level of literacy.
Prevalence of spurious brands and seasonal demand:
For any branded product there are a multitude of 'local variants', which are cheaper, and, therefore, more desirable to villagers.
Different way of thinking:
There is a vast difference in the lifestyles of the people. The kind of choices of brands that an urban customer enjoys is different from the choices available to the rural customer. The rural customer usually has 2 or 3 brands to choose from whereas the urban one has multiple choices. The difference is also in the way of thinking. The rural customer has a fairly simple thinking as compared to the urban counterpart.
The 4A Approach
The rural market may be alluring but it is not without its problems: Low per capita disposable incomes that is half the urban disposable income; large number of daily wage earners, acute dependence on the vagaries of the monsoon; seasonal consumption linked to harvests and festivals and special occasions; poor roads; power problems; and inaccessibility to conventional advertising media.
Part - V
However, the rural consumer is not unlike his urban counterpart in many ways.
The more daring MNCs are meeting the consequent challenges of availability, affordability, acceptability and awareness (the so-called 4 As).
Availability
The first challenge is to ensure availability of the product or service. India's 627,000 villages are spread over 3.2 million sq km; 700 million Indians may live in rural areas, finding them is not easy. However, given the poor state of roads, it is an even greater challenge to regularly reach products to the far-flung villages. Any serious marketer must strive to reach at least 13,113 villages with a population of more than 5,000. Marketers must trade off the distribution cost with incremental market penetration. Over the years, India's largest MNC, Hindustan Lever, a subsidiary of Unilever, has built a strong distribution system, which helps its brands reach the interiors of the rural market. To service remote village, stockists use auto-rickshaws, bullock-carts and even boats in the backwaters of Kerela. Coca-Cola, which considers rural India as a future growth driver, has evolved a hub and spoke distribution model to reach the villages. To ensure full loads, the company depot supplies, twice a week, large distributors which who act as hubs. These distributors appoint and supply, once a week, smaller distributors in adjoining areas. LG Electronics defines all cities and towns other than the seven metros cities as rural and semi-urban market. To tap these unexplored country markets, LG has set up 45 area offices and 59 rural/remote area offices.
Study on buying behaviour of rural consumer indicates that the rural retailers influences 35% of purchase occasions. Therefore sheer product availability can affect decision of brand choice, volumes and market share. Some of the FMCG giants like HLL took out project streamline to significantly enhance the control on the rural supply chain through a network of rural sub-stockists, who are based in the villages only. Apart from this to acquire further edge in distribution HLL started Project Shakti in partnership with Self Help groups of rural women.
Affordability
The second challenge is to ensure affordability of the product or service. With low disposable incomes, products need to be affordable to the rural consumer, most of whom are on daily wages. Some companies have addressed the affordability problem by introducing small unit packs. Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh - the so-called `Bimaru' States.
Part - VI
Hindustan Lever, among the first MNCs to realise the potential of India's rural market, has launched a variant of its largest selling soap brand, Lifebuoy at Rs 2 for 50 gm. The move is mainly targeted at the rural market. Coca-Cola has addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs 5. The initiative has paid off: Eighty per cent of new drinkers now come from the rural markets. Coca-Cola has also introduced Sunfill, a powdered soft-drink concentrate. The instant and ready-to-mix Sunfill is available in a single-serve sachet of 25 gm priced at Rs 2 and multiserve sachet of 200 gm priced at Rs 15.
Acceptability
The third challenge is to gain acceptability for the product or service. Therefore, there is a need to offer products that suit the rural market. One company, which has reaped rich dividends by doing so, is LG Electronics. In 1998, it developed a customised TV for the rural market and christened it Sampoorna. It was a runway hit selling 100,000 sets in the very first year. Because of the lack of electricity and refrigerators in the rural areas, Coca-Cola provides low-cost ice-boxes - a tin box for new outlets and thermocol box for seasonal outlets.
The insurance companies that have tailor-made products for the rural market have performed well. HDFC Standard LIFE topped private insurers by selling policies worth Rs 3.5 crore in total premia. The company tied up with non-governmental organisations and offered reasonably priced policies in the nature of group insurance covers.
Awareness
Mass media is able to reach only to 57% of the rural population. Creating awareness then, means utilizing targeted, unconventional media including ambient media .For generating awareness, events like fairs and festivals, Haats, etc., are used as occasions for brand communication. Cinema vans, shop-fronts, walls and wells are other media vehicles that have been utilized to increase brand and pack visibility. Ideas like putting stickers on the hand pumps, walls of the wells putting on tin plates on al the tree surrounding the pond are some of the innovative media used by personal wash like Lux and Lifebuoy and fabric wash items like Rin and Wheel. Idea was to advertise not only at the point of purchase but also at the time of consumption.
Part - VII
With large parts of rural India inaccessible to conventional advertising media - only 41 per cent rural households have access to TV - building awareness is another challenge. Fortunately, however, the rural consumer has the same likes as the urban consumer - movies and music - and for both the urban and rural consumer, the family is the key unit of identity. However, the rural consumer expressions differ from his urban counterpart. Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan. Consumption of branded products is treated as a special treat or indulgence.
Hindustan Lever relies heavily on its own company-organised media. These are promotional events organised by stockists. Godrej Consumer Products, which is trying to push its soap brands into the interior areas, uses radio to reach the local people in their language.
Coca-Cola uses a combination of TV, cinema and radio to reach 53.6 per cent of rural households. It doubled its spend on advertising on Doordarshan, which alone reached 41 per cent of rural households. It has also used banners, posters and tapped all the local forms of entertainment. Since price is a key issue in the rural areas, Coca-Cola advertising stressed its `magical' price point of Rs 5 per bottle in all media.LG Electronics uses vans and road shows to reach rural customers. The company uses local language advertising. Philips India uses wall writing and radio advertising to drive its growth in rural areas.
The key dilemma for MNCs eager to tap the large and fast-growing rural market is whether they can do so without hurting the company's profit margins. In case of nestle, company's product portfolio is essentially designed for urban consumers which cautions companies from plunging headlong into the rural market as capturing rural consumers can be expensive.
Role of Rural Retailing
Retailing is the final phase of the distribution channel and it is clear by now that it is availability and distribution that drives growth in rural Indian markets. Hence retailing will be significant and will undergo greater organisation and maturity as is being witnessed in the urban markets, even in the rural markets. Innovative retail models which take into account the nuances of rural markets is the way forward.
Part - VIII
Study on buying behaviour of rural consumer indicates that the rural retailers influences 35% of purchase decisions. Therefore sheer product availability can affect decision of brand choice, volumes and market share. India offers a huge, sustainable and growing rural market which can be tapped effectively through innovative distribution channels with retailing being the most critical element of this strategy as it is the final touch point and the actual touch point with the customer which can be the most critical influence in the buying process.
Developments in Rural Retailing
Rural Malls: Chaupal Sagar
Chaupal Sagar is one of the first organised retail forays into the hinterland. It was soft-launched on 15 August. It is actually a warehouse for storing the farm produce that ITC buys through its e-chaupals. The mall has come up in one part of this warehouse.It has been set up by the international business division of tobacco major ITC. It has been initiated as rural shopping-cum-information centres in Madhya Pradesh. The first rural mall has come up 40-odd kilometres journey from Bhopal towards Sehore.
ITC Spent 3 years and Rs.80 crores on research and development of this concept including investments in E-choupal.
Objective
ITC describes the establishment as a set to create a high-quality, low-cost fulfilment channel for rural India. However, any organisation is driven by the profit motive which are served through this initiative:
Reap benefits from the market they have created
Creating an entry barrier for other prospective players
ITC has very effectively integrated its profit and social motives.
Concept
KSA Technopak - "It is definitely a pioneering venture because no other Indian company has yet entered rural retailing with the all-under-one-roof concept."
Malls stocking wide variety of products with floor space of 7000 sq.ft plus a trading zone and information centre. It is a Hub cum Supermarket, which has been set up in a section of the ITC rural warehouses.
Part - IX
Format
Chaupal Sagar cannot be shoehorned into any of the existing retailing categories. At 7,000 square feet, it is too small to be a mall.
It has opted for self-service, stocking its merchandise on shelves lining the neat aisles, it stocks a breadth of products no supermarket can. It offers almost everything - from toothpastes to televisions, hair oils to motorcycles, mixer-grinders to water pumps, shirts to fertilisers... It defies pigeonholing. It is just a very sharply thought-out rural store.
Most of the brands it sells are national such as Marico, LG, Philips, torches from Eveready, shirts from ITC's apparel business, bikes from TVS, and tractors from Eicher.
Facilities
Spread over 5 acres of land at Sehore in Madhya Pradesh: -
Rural shopping malls will be open from 6 am to 9 pm.
Features and facilities at these ITC malls can overshadow those in the metros. The ITC store sells everything that a rural consumer may ask for - sarees to kurta-pyjamas to shirts (in the range of Rs 99-500), footwear, groceries, electronic durable from TVs to microwaves, cosmetics and other accessories, farm consumption products like seeds, fertilisers, pumps, generators and even tractors, motorcycles and scooters.
Banking and automated teller machines will be standard at the malls.
Insurance products for farmers.
Entertainment facilities, restaurants, public facilities and parking space will also be available.
There is even a fuel pump in tie-up with BPCL and a cafeteria.
Parking lot for 160 tractors.
There will be a primary healthcare facility to be serviced by a private healthcare service provider.
Information centres: The company will create the facility for providing online information on commodity rates and weather.
Shopping malls will have a training facility on modern farm techniques.
Farmers can come and log on to the Internet and check the pricing and sell their commodities.
There will also be godowns for storing the wheat and soybean and also for stocking products retailed at the mall.
Part - X
Business Model
The business model of Chaupal Sagar is linked closely with the E-chaupal initiative of ITC.
Role of ITC is to create infrastructure such as space, computers, and building.
ITC will charge a fee for the services and items sold at the mall.
E-CHAUPAL: E-Chaupal is the backbone of these rural malls. While the first layer (E-Chaupal) provides the farmers necessary information about weather and prices, this hypermarket initiative will provide them another platform to sell their produce and purchase necessary farm and household goods under the same roof.
The e-Choupal model required that ITC to make significant investments to create and maintain its own IT network in rural India and to identify and train a local farmer to manage each e-Choupal.
E-Choupal combines a Web portal in the local language and PCs with Internet access placed in the villages to create a two-way channel between ITC and the villagers. The project started with a pilot in June 2000 in Madhya Pradesh with Soybean farmers. Currently, it covers six states, and multiple commodities like prawns, cotton and coffee with 4000 Choupals.
Part - XI
Plans are to reach 15 states by 2010, covering 100,000 villages with 20,000 Choupals.
Each e-Choupal (equipped with a PC with Internet connectivity, printer and UPS) typically housed in the farmer's house, is linked to the Internet via phone lines or, increasingly, by a VSAT connection, and serves an average of 600 farmers in 10 surrounding villages within about a five kilometer radius. Using the system costs farmers nothing, but the host farmer, called a sanchalak, incurs some operating costs (The IT part of each e-Choupal costs about Rs 1.3 lakh, each e-Choupal is estimated to pay back for itself in 4.5 years) and is obligated by a public oath to serve the entire community; the sanchalak benefits from increased prestige and a commission paid him for all e-Choupal transactions. The farmers can use the computer to access daily closing prices on local mandis, as well as to track global price trends or find information about new farming techniques-either directly or, because many farmers are illiterate, via the sanchalak. They also use the e-Choupal to order seed, fertilizer, and other products such as consumer goods from ITC or its partners, at prices lower than those available from village traders; the sanchalak typically aggregates the village demand for these products and transmits the order to an ITC representative. At harvest time, ITC offers to buy the crop directly from any farmer at the previous day's closing price; the farmer then transports his crop to an ITC processing center, where the crop is weighed electronically and assessed for quality. The farmer is then paid for the crop and a transport fee. "Bonus points," which are exchangeable for products that ITC sells, are given for crops with quality above the norm. In this way, the e-Choupal system bypasses the government-mandated trading mandis.
Farmers benefit from more accurate weighing, faster processing time, and prompt payment, and from access to a wide range of information, including accurate market price knowledge, and market trends, which help them decide when, where, and at what price to sell. Farmers selling directly to ITC through an e-Choupal typically receive a higher price for their crops than they would receive through the mandi system, on average about 2.5% higher (about US$6 per ton). The total benefit to farmers includes lower prices for inputs and other goods, higher yields, and a sense of empowerment. At the same time, ITC benefits from net procurement costs that are about 2.5% lower (it saves the commission fee and part of the transport costs it would otherwise pay to traders who serve as its buying agents at the mandi) and it has more direct control over the quality of what it buys.
By building a network of warehouses near the production centres and by providing inputs to the farmers and test output at the individual farm level, ITC is able to preserve the source and quality information of produce purchased. By helping the farmer identify and control his inputs and farming practices and by paying better for better quality, ITC is able to improve the quality of produce that it purchases. In the commodities market, these two combine to help ITC create the differentiator that it set out to establish in the beginning.
Part - XII
ITC gains additional benefits from using this network as a distribution channel for its products (and those of its partners) and a source of innovation for new products. It is also being used to provide services like rural market research to those interested.
Strategy for Success
Use of ITC warehouses
This will help in cost control as well as better utilisation of space in these warehouses. It will also provide convenience and familiarity with the target customer.
Targeted at Farmers selling to ITC warehouse through E-chaupal
With its network of e-chaupals, ITC communicates its latest commodity prices to the farmers via the Internet or VSAT lines. If they find these attractive, they sell their produce to ITC. The sanchalak (the person who operates an e-chaupal; most of them are farmers) of villages near these malls reckons that half the farmers in his village deal only with ITC. Now, by setting up the mall next to the warehouse, ITC is trying to monetise the footfalls from farmers; that is every time sanchalaks- and farmers visit ITC's soybean factories in MP to sell their produce, they also have the opportunity to spend their freshly earned cash.
ITC realised that the farmers had just got money, that they would spend it anyway, and that they had an empty vehicle with which they could lug the stuff back.
ITC intends to capture the rural folks' out-of-village shopping
The warehouse is one bulwark of its strategy, obviously. But the farmers will come here only after every harvest. To ensure that they keep coming to Chaupal Sagar even at other times, the company is offering a slew of other goodies. Another building is coming up next to the main warehouse. When completed, it will house a bank, a cafeteria, apart from an insurance office and a learning centre. ITC has tied up with agri-institutes to offer farmer training programmes. Then, plots of land have been earmarked to display large agricultural machinery like threshers. Other parcels of land have been earmarked for pesticide and fertiliser companies for demonstrating their products. A petrol pump is coming up as well.
To attract footfalls during the lean season, ITC plans to organise various activities and events including melas,training programs, demonstrations.
The hubs are strategically located to attract suburban crowds as well.
Retail channel for its own brands as well as for other brands
Working through the sanchalaks, ITC first pushed its own products, like salt, into the hinterland, and then invited others like Parachute and Philips to ride on this distribution chain. Today, it plans to similarly create revenue streams around its warehouses.
Financing Scheme
ITC is investing initially Rs 3 crore (Rs 30 million) in each such shopping mall. However it is working out a strategy to make it cost-effective for them.
To keep its own investment to the minimum, ITC is encouraging the samyojak - a local broker or middleman co-opted by ITC - to pick up equity and manage these shops as part owners.
Assisted by four ITC salesmen, the samyojaks will assess demand, ensure just-in-time delivery, manage customer service and keep accounts.
Uniqueness Of the Model: lies in the fact that it works equally well for ITC as the buyer of farm produce and ITC as the seller of desirables.
Charge fees from the brands being showcased at the mall as well as for the services being provided at the Mall.
Results & Expectations
During the peak season, a hub sees traffic of about 200 tractors per day on an average, as farmers come to sell their crops at the hubs.
Initial response: On the first day the store notched up a business of about Rs 70,000-80,000. Footfall of about 700-800 people on weekdays and soaring to 1,000 on weekends with conversion levels of 35%.
Credit :
Navya Chaudhary, Cool Avenues
With permission from
Sugandha Dubey –Advertising Professionals of India,
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