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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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KIIT School of Rural Management (KSRM)
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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KIIT School of Rural Management (KSRM)
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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KIIT School of Rural Management (KSRM)
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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KIIT School of Rural Management (KSRM)
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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KIIT School of Rural Management (KSRM)
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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KIIT School of Rural Management (KSRM)
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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KIIT School of Rural Management (KSRM)
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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KIIT School of Rural Management (KSRM)
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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KIIT School of Rural Management (KSRM)
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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KIIT School of Rural Management (KSRM)
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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KIIT School of Rural Management (KSRM)
INDIAN RETAIL:ON THE FAST TRACK
KPMG-FICCI SURVEY 2006
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KIIT School of Rural Management (KSRM)
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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KIIT School of Rural Management (KSRM)
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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KIIT School of Rural Management (KSRM)
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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KIIT School of Rural Management (KSRM)