Targeting for Rural Market27th March 2021
For FMCGs distribution becomes complex. The distributor in the towns needs to have a supply network of hundred plus outlets in 50 odd locations, which cover villages up to 200 plus population. There are only 85,000 larger villages out of more than 6,38,000 villages. But they have 40 per cent of the rural population and 60 per cent of total consumption.
Many of the established packaged goods companies reach more than 20 lakh retail outlets using trains, trucks, bullock drawn carts, camels, and bicycles and many companies claim to service each one of those Outlet once a week. As, only small percentage of consumables can reach the rural market automatically through the retailers and consumer coming to the town for the purchases.
This pain of reaching the rural consumer is worth taking as this direct contact with the retail in the rural world enables a closer relation with the trade, as retailer is a critical link in the overall chain for supplying products to the rural consumer. In a study, to measure the level of influence that the rural retailer has on the rural consumers, it was found that in about 35 purchase occasions, rural retailer was able to influence the sales to the rural consumers.
Therefore, rural retailer needs to be targeted effectively through various strategies so that he sides with the company’s products whenever he is in a position to do so.
Understanding of Peak Seasons:
Different regions of India especially the rural parts have different peak seasons of demand. These times are associated with the festivals, harvest and marriage seasons. Bulk of the demand for the consumer durables is concentrated during these times. Organisations have to ensure that their products are available in accordance with the increased demand the rural consumers are in shopping mood and have the same at this time. On account of their joyous mood they are more acceptable to try new and somewhat premium brands.
As these peak seasons are at different times in different parts of India, organisations can focus their distribution energy for that time to that particular region. Sankranti during Kharif harvest or Pongal in South India. Baisakhi during the Rabi harvest and Diwali in North, Durga Puja in the East are coming at different times in different regions. Even the marriage season, which is in winter in North India, it is in summer in the Southern part.
Missing these times for a particular region is almost equivalent to missing the year in that rural market for any product categories. Quantity discounts can be offered to the rural stockists in small towns and gift schemes should be launched for the bigger shops in feeder villages. This will motivate the distributors to be more aggressive in taking these goods to the rural retailer’s shelves. The rural retailer considering the peak season could be willing to stock more brands. Even the promotional campaigns at local and regional level can be customized according to the theme of the festivity.
Certainly, reaching out to 33 lakh retail outlets in rural areas is an uphill task. Company delivery vans which can serve two purposes; they can take the products to the customers in select rural areas and also enable the firm to establish direct contact with them and thereby provide an opportunity for promotion. However, only the bigwigs can adopt this channel.
The companies with relatively fewer resources can go in for syndicated distribution where a tie-up between non-competitive marketers can be established to facilitate distribution. In order to move products in rural areas in cost effective manner, the organisation and distributors can make use of rural makeshift transport vehicles known in different areas.
They are very cost effective as their acquiring cost is very low and is not a barrier. They are very rugged to handle the excessive wear and tear that happens on the rural roads. These vehicles are very popular in the rural areas of Uttar Pradesh, Haryana and Punjab and can be easily available to different organisations to transport their products in remote villages at a low cost. These vehicles were employed quite effectively by the rural sub-stockist of Coca Cola to distribute soft drinks in the rural market.