distribution in rural markets

8/2/2019 Distribution in Rural Markets

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http://www.interarchbuildings.com/casestudies-

itc.asp?links=cases


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channels

Level 1

Level 2

Level 3

Level 4

Level 5

Channel partners Market place

Company depots / CFAs/super stockiest

National / state

CFAs / redistributionstockiest / retailers

(modern/ traditional)

Cluster of districts /district headquarters

redistribution stockiest /semi-wholesalers /retailers

Sub-district (Tehsil/Block)/ feeder town

Semi-wholesalers /retailers / Mobile tradersin haat/ van

Feeder town / periodicmarket

Retailers / vans /barefoot agents( Shaktidealers) / cooperative

societies /-

Large and small villages


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Rural channel members

Conventional distribution channelmembers servicing rural market

primarily include:


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CFAs

CFAs are the first link with the companydepot for supplying products to channelMembers, generally engaged by FMCG

and consumer goods companies tosupplement their own depotUsually cater to one region or state,depending on stock handled

Carrying &Forwarding agents


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CFAs

Two types:

One with the investment,

investing in stocks andtransporting it to the next level

Without investment (forwarding

agents), acting as thetransporter for the company

Majority falls in second category,

providing go down space for stock-


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Redistribution

stockiestThey are critical link between a company

and its rural channelsResponsible for supplying stocks to bothrural & urban retail network

Located at district headquartersFirst customers of company, investing instock & employing a sales force to coverrural & Urban retailersCom anies with lar e roduct ortfolios


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wholesalers

One of the oldest channel memberIn rural area, there is seldom distinctionbetween wholesalers & retailers

Retailers

Last link in distribution chainProcure stock from wholesalers in nearby feedertowns, & in some cases supplies reach them

from stockiest through van supplies.


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The rural retailenvironment


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Traditional retail

With the Spread of consumers acrossvarious population categories,

marketers face the problem ofaccessing these markets

They apart from ensuring the reach

of their products to retail outlets,marketers also need to motivateretailers to stock their brands


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The rural retail spread

Number of rural retail outlets hasmore than doubled in the last

decade, from 3.5 million in 2002 to7.8 million in 2010

Today more than 40 per cent of retailoutlets are present in rural areas.

Retail outlets increases as we movefrom smaller to larger villages

Need to design cost-effective


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Retail premises

Manifestations:

More permanent shops than kiosks

Transition from all-in-one tospecializationShops : Bakeries, stationers, chemistsetc. entry of specialty shop categoriesnon-existent

earlier : mobile shops, photo studios,beautyparlors, Computer centersNew categories in food segment : Ice-cream

Parlors , Cold drink, milk parlors etc.Improved availability of brands

Implications

Changing lifestyleWider choicesChanging consumptionhabitGreater use ofspecialized product/servicesImproved in-storeexperience

Rural marketplace


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The rural retail shelf

With the changing consumptionhabits and rising demand for newproducts and services, the profile ofrural outlets & stocks on shelves arechanging rapidly

Earlier rural markets used to haveshops stocking groceries andtobacco products

New categories have emerged:


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The rural retail shelf

Type of shop Shops (in per cent)

Chemists 4

General stores 13

Grocery stores 62

Paan plus 21

Total 100


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Rural retail habits

With improving connectivity, brandawareness, rural retail habits arealso changing fast

Tendency to shop from the nearbytown or city is high amongcustomers who residing within 25-km periphery

80 per cent of durables & 70 percent of cloths/ footwear are

urchased from nearb towns and


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Emergence of modernretail in rural areas

Major players: ITCs Choupal Saagar,DSCL Hariyali Kisaan Bazaar, Godrej

Aadhaar & TATA Kisan Sansar


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Emergence of modernretail in rural areas

Share of organized retail is verylow (merely 5%)

Approximately, only 10,000 outof 600,000 villages in India haveaccess to organized retail

services

In such conditions marketershave largely taken the agri-inputn ri- t t r t thr h


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Assignment

write a note on the following:

1. ITCs Choupal Saagar,

2. DSCL Hariyali Kisaan Bazaar,

3. Godrej Aadhaar4. TATA Kisan Sansar

5. 3A Bazaar


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Channel behavior in ruralareas

distribution in rural markets

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