Description
It describes the features and challenges of rural markets. It also describes the 4 A Approach i.e., affordability, availability, awareness, acceptability. It also talks about the opportunities and challenges of rural markets. It then describes the history of Amul and the three tier amul mode
Rural Marketing
Features
• Large and Scattered market - over 63 crore consumers from 5,70,000 villages • Major income from agriculture • Low standard of living - low literacy, low per capita income, social backwardness, low savings, etc. • Traditional Outlook-Do not prefer changes • Diverse socio-economic backwardness • Infrastructure Facilities - physical distribution becomes costly
Challenges
• Underdeveloped People and Underdeveloped Markets
• Lack of Proper Physical Communication Facilities Nearly fifty percent of the villages in the country do not have all weather roads • Media for Rural Communication - rural areas account for hardly 2000 to 3500 mobile theatres
• Many Languages and Dialects - number of recognized languages are only 16, the dialects are estimated to be around 850.
Challenges
• Dispersed Market - impossible to ensure the availability of a brand all over the country
• Low Per Capita Income - about 33-35% of gross domestic product is generated in the rural areas but it is shared by 74% of the population • Prevalence of spurious brands and seasonal demand • Different way of thinking - has a fairly simple thinking as compared to the urban counterpart
4 A Approach
Availability:
• India’s 627,000 villages are spread over 3.2 million sq km • Target- Reach atleast 13,113 villages with a population of more than 5,000 • Study on buying behaviour of rural consumer indicates that the rural retailers influences 35% of purchase occasions • Projects taken to Enhance and Control Supply Chain
Affordability:
• With low disposable incomes, products need to be affordable to the rural consumer • Companies have addressed the affordability problem by introducing small unit packs Eg. Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs 4-5
• Most of the villagers are paid on the basis of daily wages
Acceptability: • There is a need to offer products that suit the rural market • In 1998, LG developed a customised TV for the rural market and christened it Sampoorna • The insurance companies that have tailor-made products for the rural market have performed well • Company tied up with non-governmental organisations and offered reasonably priced policies
Awareness:
• Mass media is able to reach only to 57% of the rural population • For generating awareness, events like fairs and festivals, Haats, etc., are used as occasions for brand communication • Only 41 per cent rural households have access to TV • LG Electronics uses vans, local language advertising and road shows to reach rural customers
Opportunities
• Due to large size and demand base, rural markets offer tremendous opportunity
• Rural India, accounts for more than 70% of India’s total population, 2.5 times that of US • Today it accounts for more than 70% of the toilet soap users and 40% of the two wheelers purchased • In 2008, rural consumer market grew by more than 25%
Opportunities
• It is expected to reach US$425 billion in 2011 with 720790million consumers
• The rural market in India is showing a growth of 15%
• FMCG sales are up 23% and telecom is growing at 13%
• 2009-10 union budget hiked the allocation for NREGA to US$8.03 billion • Outlay of US$ 34.84 billion for improving rural infrastructure
Constraints
• With an average income of less than $42 per month, rural Indians have a very low disposable income • Incomes vary greatly depending on the monsoons as a result difficult to predict demand • Minimal storage space and no refrigeration
• 627,000 villages spread over 3.2 million sq. Km, with poor infrastructure distribution costs are very high
Constraints
• Low literacy rate of 36% as compared to the national average of 52%
• Facilities such as telephone, fax and telegram are poor in rural villages • Life in rural India still governed by a lot of customs and traditions and people don’t adapt new practices
• Reach of formal media is low in rural markets
• It offers a very challenging career and requires specialized talent
Agenda
• Products of AMUL • History • Birth and Development • Three Tier Model
• Achievements
• Rural IT
Amul - Products
• Butter Spreads
• Milk Drinks
Amul Kool, Amul Kool Café, Flavored Bottle Milk, Lassee, Thandai, Spiced Buttermilk, Chocolate Milk, etc
Amul – Products
• Powdered Milk Skimmed Milk Powder, Spray Infant Milk Food, Tea Coffee Whitener, Amulya Dairy Whitener
• Milk, Cream, Cheese, Ghee, Ice-cream, Desserts, Chocolates, Health Drink
Amul – History
• AMUL – Anand Milk Union Limited
• Formed in 1946 as a Dairy Co-operative
• AMUL – a brand name managed by GCMMF
• Spurred the White Revolution in India • Dr. Verghese Kurien – Key person behind the success of Amul
Amul – Birth and Development
• Monopoly of the Polson Dairy in Anand
• Exploitation of the milk producers
• Unfair and manipulative trade practices • Formation of Kaira District Co-operative Milk Producers’ Union Limited • Milk collection de-centralised • First modern dairy of Kaira Union established at Anand- called AMUL • Many such unions came up in Gujarat- Combining to form GCMMF
Three Tier Amul Model
Village Dairy Co-operative Society
Milk Union at the District level Milk Federation at the State level.
Village Dairy Co-operative Society(VDCS)
• Main Objective- Collection of Milk
Weighing the milk
Determining the fat content
Calculation of the Purchase price
Functions of VDCS
Collection of surplus milk
Providing support services to the members
Selling liquid milk for local consumers of the village Supplying milk to the District Milk Union
Milk Union at the District Level
Formed by Headed by Managed by
• Village Societies of a District
• 9 to 18 Elected Representatives of the Village Societies • Member Secretary of the Board • Paid Employee
Functions of Milk Union at District Level
Procurement of milk Arranging transportation of raw milk from the VDCS to the Milk Union Providing input services to the producers
Conduct training
Establish Chilling Centers & Dairy Plants Selling at the District Level Processing
Decide on prices of Milk to be paid and also the services offered
Functions of State Cooperative Milk Federation
Marketing of milk & milk products Distribution network for marketing of milk & milk products. Arranging transportation Creating & maintaining the Brand Providing support services Determine the product mix and capacity for the same
Pricing
Achievements of ‘Amul Movement’
• Production-20 million MT to 100 million MT in a span of 40 years • Cattle population reached 500 million • 13 million member families included • Covers more than 125,000 villages of 180 Districts in 22 States • 8.5 million liters of milk procured per day • 48 Sales offices, 3000 Wholesale Distributors, 5 lakh retail outlets
Amul – The Poster Boy of Rural IT
Roadmap
• Automated milk collection system units for collection of milk • Customised ERP system used in conjunction with GIS • Data analysis software for forecasting milk production and productivity • All zonal, regional and member dairies connected through VSAT • Made IT education compulsory for all its employees • Opted for the .coop domain to position its brand in a distinct way
THANK YOU!!!
doc_203547277.pptx
It describes the features and challenges of rural markets. It also describes the 4 A Approach i.e., affordability, availability, awareness, acceptability. It also talks about the opportunities and challenges of rural markets. It then describes the history of Amul and the three tier amul mode
Rural Marketing
Features
• Large and Scattered market - over 63 crore consumers from 5,70,000 villages • Major income from agriculture • Low standard of living - low literacy, low per capita income, social backwardness, low savings, etc. • Traditional Outlook-Do not prefer changes • Diverse socio-economic backwardness • Infrastructure Facilities - physical distribution becomes costly
Challenges
• Underdeveloped People and Underdeveloped Markets
• Lack of Proper Physical Communication Facilities Nearly fifty percent of the villages in the country do not have all weather roads • Media for Rural Communication - rural areas account for hardly 2000 to 3500 mobile theatres
• Many Languages and Dialects - number of recognized languages are only 16, the dialects are estimated to be around 850.
Challenges
• Dispersed Market - impossible to ensure the availability of a brand all over the country
• Low Per Capita Income - about 33-35% of gross domestic product is generated in the rural areas but it is shared by 74% of the population • Prevalence of spurious brands and seasonal demand • Different way of thinking - has a fairly simple thinking as compared to the urban counterpart
4 A Approach
Availability:
• India’s 627,000 villages are spread over 3.2 million sq km • Target- Reach atleast 13,113 villages with a population of more than 5,000 • Study on buying behaviour of rural consumer indicates that the rural retailers influences 35% of purchase occasions • Projects taken to Enhance and Control Supply Chain
Affordability:
• With low disposable incomes, products need to be affordable to the rural consumer • Companies have addressed the affordability problem by introducing small unit packs Eg. Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs 4-5
• Most of the villagers are paid on the basis of daily wages
Acceptability: • There is a need to offer products that suit the rural market • In 1998, LG developed a customised TV for the rural market and christened it Sampoorna • The insurance companies that have tailor-made products for the rural market have performed well • Company tied up with non-governmental organisations and offered reasonably priced policies
Awareness:
• Mass media is able to reach only to 57% of the rural population • For generating awareness, events like fairs and festivals, Haats, etc., are used as occasions for brand communication • Only 41 per cent rural households have access to TV • LG Electronics uses vans, local language advertising and road shows to reach rural customers
Opportunities
• Due to large size and demand base, rural markets offer tremendous opportunity
• Rural India, accounts for more than 70% of India’s total population, 2.5 times that of US • Today it accounts for more than 70% of the toilet soap users and 40% of the two wheelers purchased • In 2008, rural consumer market grew by more than 25%
Opportunities
• It is expected to reach US$425 billion in 2011 with 720790million consumers
• The rural market in India is showing a growth of 15%
• FMCG sales are up 23% and telecom is growing at 13%
• 2009-10 union budget hiked the allocation for NREGA to US$8.03 billion • Outlay of US$ 34.84 billion for improving rural infrastructure
Constraints
• With an average income of less than $42 per month, rural Indians have a very low disposable income • Incomes vary greatly depending on the monsoons as a result difficult to predict demand • Minimal storage space and no refrigeration
• 627,000 villages spread over 3.2 million sq. Km, with poor infrastructure distribution costs are very high
Constraints
• Low literacy rate of 36% as compared to the national average of 52%
• Facilities such as telephone, fax and telegram are poor in rural villages • Life in rural India still governed by a lot of customs and traditions and people don’t adapt new practices
• Reach of formal media is low in rural markets
• It offers a very challenging career and requires specialized talent
Agenda
• Products of AMUL • History • Birth and Development • Three Tier Model
• Achievements
• Rural IT
Amul - Products
• Butter Spreads
• Milk Drinks
Amul Kool, Amul Kool Café, Flavored Bottle Milk, Lassee, Thandai, Spiced Buttermilk, Chocolate Milk, etc
Amul – Products
• Powdered Milk Skimmed Milk Powder, Spray Infant Milk Food, Tea Coffee Whitener, Amulya Dairy Whitener
• Milk, Cream, Cheese, Ghee, Ice-cream, Desserts, Chocolates, Health Drink
Amul – History
• AMUL – Anand Milk Union Limited
• Formed in 1946 as a Dairy Co-operative
• AMUL – a brand name managed by GCMMF
• Spurred the White Revolution in India • Dr. Verghese Kurien – Key person behind the success of Amul
Amul – Birth and Development
• Monopoly of the Polson Dairy in Anand
• Exploitation of the milk producers
• Unfair and manipulative trade practices • Formation of Kaira District Co-operative Milk Producers’ Union Limited • Milk collection de-centralised • First modern dairy of Kaira Union established at Anand- called AMUL • Many such unions came up in Gujarat- Combining to form GCMMF
Three Tier Amul Model
Village Dairy Co-operative Society
Milk Union at the District level Milk Federation at the State level.
Village Dairy Co-operative Society(VDCS)
• Main Objective- Collection of Milk
Weighing the milk
Determining the fat content
Calculation of the Purchase price
Functions of VDCS
Collection of surplus milk
Providing support services to the members
Selling liquid milk for local consumers of the village Supplying milk to the District Milk Union
Milk Union at the District Level
Formed by Headed by Managed by
• Village Societies of a District
• 9 to 18 Elected Representatives of the Village Societies • Member Secretary of the Board • Paid Employee
Functions of Milk Union at District Level
Procurement of milk Arranging transportation of raw milk from the VDCS to the Milk Union Providing input services to the producers
Conduct training
Establish Chilling Centers & Dairy Plants Selling at the District Level Processing
Decide on prices of Milk to be paid and also the services offered
Functions of State Cooperative Milk Federation
Marketing of milk & milk products Distribution network for marketing of milk & milk products. Arranging transportation Creating & maintaining the Brand Providing support services Determine the product mix and capacity for the same
Pricing
Achievements of ‘Amul Movement’
• Production-20 million MT to 100 million MT in a span of 40 years • Cattle population reached 500 million • 13 million member families included • Covers more than 125,000 villages of 180 Districts in 22 States • 8.5 million liters of milk procured per day • 48 Sales offices, 3000 Wholesale Distributors, 5 lakh retail outlets
Amul – The Poster Boy of Rural IT
Roadmap
• Automated milk collection system units for collection of milk • Customised ERP system used in conjunction with GIS • Data analysis software for forecasting milk production and productivity • All zonal, regional and member dairies connected through VSAT • Made IT education compulsory for all its employees • Opted for the .coop domain to position its brand in a distinct way
THANK YOU!!!
doc_203547277.pptx