CHANNEL MANAGEMENT IN RURAL MARKET

Group Members: Varsha Sawlani Savita Chaudhary Vinay Tripathi Mehul Sihag Abhishek Gajra

P-58 C-33 C-44 C-49 C-55

RURAL MARKET
The

Indian rural market with its vast size and demand base

offers great opportunities to Companies.

Two-thirds

of Indian consumers live in rural

areas and almost half of the national income is generated here.

Rural

markets form an important part of the total market of

India
The

total FMCGs demand in India, nearly 53 per cent comes

from the rural market. For consumer durables, the figure is 59 per cent.

WHAT IS CHANNEL MANAGEMENT

Channel

management is a process by which a company creates formalized programs for selling and servicing customers within a specific channel

Company owned delivery vans.

PHYSICAL DISTRIBUTION OF STOCKS IN RURAL AREAS

Mobile Traders. Public Distribution system

Distribution upto feeder markets/mandi towns

Syndicate Distribution. Hired Vans. Bullock cart or Camels.

HOW CHIK SHAMPOO CONQUERED THE RURAL MARKET?

They went to the rural areas of South India where people hardly used shampoo

They showed them how to use it They did live demonstration on a young boy

They asked those assembled to feel and smell his hair

Next they planned Chik Shampoo-sponsored shows of Rajnikanth's films

They showed their advertisements in between, followed by live

demonstrations

They also distributed free sachets among the audience after these

shows

This worked wonders in rural Tamil Nadu and Andhra Pradesh

After every show, their shampoo sales went up three to four times
They altered the scheme; they started giving one free Chik Shampoo sachet in lieu of five Chik Shampoo sachets only

They sold shampoo in 50 paisa sachets at a time when other

shampoo sachets were selling at Rs. 2 These price points helped penetrate deep rural pockets

Soon, consumers started asking for Chik sachets only

The sales went up from Rs 35,000 to Rs 12 lakh (Rs 1.2 million) a month

DISTRIBUTION STRATEGY

Instead of using the conventional distribution route, they have created a `sachet' sales force that sells only sachet packs to small retailers including cigarette and paan shops

Separate hawkers channel is being created that has moved from

neighbourhood to neighbourhood

The hawker channels exist in all cities where they have a distribution network

CavinKare's personal products division is moving towards post offices They are placing products at post offices, products such as shikakai powder & shampoo

They are using such channels to expand product reach and

gain accessibility

Because the unconventional route is not expected to become a major revenue generator in the coming years. Apart from unconventional method, the company hired professionals for sales and distribution and expanded its network beyond South

India

CavinKare has its offices in Chennai, Pondicherry, New Delhi, Mumbai and Kolkata along with 2000 stockists, which supply to six lakh outlets

RETAILER PROMOTION

Apart from the service charges Cavinkare also gave

retailers a Chik sachet free for every 15 empty sachets they

get from the consumer

They give special gift if dealer sale more products in a particular season

They also give discount on bulk purchasing

Company Overview COMPANY OVERVIEW

Founded in 1969 by Karsanbhai patel. In 2004, Nirma's annual sales touched 800,000 tones. Today Nirma has over 15000 employees and a turnover of over Rs. 3550 crores.

PRINCIPLE CHANNEL

Low cost system in india. Speed in distribution. Flexibility.

PARALLEL CHANNEL

Wider reach. Speed market intelligence. Competitive Edge and Better Focus.

Complementing principle Channel.

NIRMA DEPOT DIRECT DISTRIBUTOR

At district level

Ahmedabad

Hyderabad, Kolkata, Kanpur

SUB DISTRIBUTOR/BIG WHOLESALER

At Tehsil level

Covers 300400 outlets directly

WHOLESALER

RETAILER

WHOLESALER

RETAILER

DABUR

Company: FMCG

Founder: Dr. S K Burman

Key people: Dr. Anand Burman(Chairman) Mr. Amit Burman(Vice-Chairman) Mr. Sunil Duggal(CEO) Products: Dabur Amla, Dabur Chyawanprash, Vatika, Dabur red toothpaste, Babool Toothpaste Hajmola & Real Revenue: $1billion Employees:3000

CHANNEL MANAGEMENT

Dabur tackled the secondary supply chain of over 30 factories, six key warehouses, and 52 stocking points distributing over 1,000 SKUs to 10,000 stockists countrywide. Dabur built a system using Visual Basic and ASP with SQL Server 2000 as the database. Linked primary distributors to the system & factories were hooked up using PAMA (Permanent Assigned Multiple Access) The problems The Benefits

RURAL MARKETING

Dabur turns to reality contests for rural growth

Banke Dikhao Rani" Pratiyogita in Rural India a mega model hunt 'Dabur Gulabari Miss Fresh Face Of UP Dabur Vatika Koyal Punjab Di to mark the launch of its range of natural conditioners, including the Vatika conditioners. Dabur India Ltd has identified 30 villagers in Uttar Pradesh and Bihar to be Immunity Ambassadors for its ayurvedic product Chyawanprash.

CHALLENGES IN DISTRIBUTION AND CHANNEL MANAGEMENT

Low literacy rate Lack of Proper Warehousing Facility Transportation problem Large and scattered market Lack of Brand Trust Affordability After Sales Service

Distribution Network Design Fast Moving Consumer Goods: Hub-andSpoke Consumer Durables: Aggregate Demand in Population Centres.

Thank You