 Roll No. – MM1820546
 Name of Institute – BIMM
 Batch – 2018-20
 Specialization – Marketing
 Semester – IV
 Subject Name – Rural Marketing
 Submitted By – Rahul Negi
 Submitted on date – 18 April 2020
 Total no. of pages written – 25
1
Ans.1 (a) Marketing of services from a rural marketing perspective:
Let us first understand that service marketing is marketing based on relationship and value. Even
when it comes to the rural marketing services marketing is still based on the above principles of
relationship and value. Marketing of the services is unique from marketing goods because of the
unique features of services namely, intangibility, heterogeneity, perishability and inseparability.
The 4As of Rural Marketing
For rural market we consider 4 A’s while marketing the services in rural areas.
1. Availability: - The first challenge in rural marketing is to ensure availability of the service in
villages that are vastly spread in India with the poor infrastructure, it is a huge challenge to
provide various services to the rural areas and villages. Service firms should plan accordingly
and strive to reach these markets on a regular basis.
 AIRTEL is one of the private telecom service providers that has built a strong system
which helps its services reach the interiors of the rural market.
2. Affordability: - The second major challenge is to ensure affordability of the service. With low
disposable incomes, services need to be affordable to the rural consumer.
3. Acceptability: -The next task is to gain acceptability for the service. Therefore, there is a need
to offer services that suit the rural market. Ex: You can’t pitch a high premium insurance in rural
market
4. Awareness: - Awareness is another task in rural marketing. A majority of rural area is
inaccessible to conventional advertising media. As well as there is a language constraint while
spreading awareness about the product.
Promotional Strategies: - The rural market has changed in the past one decade. A decade ago,
the rural market was more unstructured and was not a prioritized target location for corporate.
Service providers must be very careful while choosing the mediums to be used for
communication. Only 30% of the rural population has access to a vernacular newspaper. So, the
audio visuals must be planned to convey a right message to the rural population. The rich,
traditional media forms like folk dances, puppet shows, etc., with which the rural consumers are
familiar and comfortable, can be used for high impact campaigns. Radio is also very popular
source of information and Entertainment, adds on radio can also be a helpful tool some other
Strategies to be followed in Indian Rural Market
Easy-Way Communication especially for Rural Market -
The companies have realized that how important it is to communicate in local language for
promoting their services especially in rural market. They have started using the concept of
quality with proper communication and easily understandable way of communications. Their
main focus is to change the Indian customer outlook about quality.

Developing Specific Products for Specific Segment-
Many companies are developing rural-specific products. Keeping into consideration the
requirements, a firm develops these products. Electrolux is working on a made-for India fridge
designed to serve basic purposes: chill drinking water, keep cooked food fresh, and to withstand
2
long power cuts. In Service Sector like Insurance they are focusing on Micro insurance products
for rural segments.
 The salesman in rural markets should be selected from the educated unemployed villagers,
trained well and appointed as salesmen. The town-to-villages shuttling salesmen are to be
replaced by stationary salesman in villages.
 Companies should also adequately concentrate on educating the villagers to save them from
spurious goods and services.
 Rural markets are laggards in picking up new services. This will help the companies to phase
their marketing efforts.
Ans.1 (b):
Need and Importance: The census of 2011 shows that the rural sector in India comprises
68.84% of the population and generates about 26% of the GDP. Thus, the rural sector is
important both politically and economically. Naturally, rural insurance has been emphasised
since the nationalization of life insurance business in 1956. LIC of India followed a threepronged strategy for life insurance. Firstly, it targeted the rural wealthy with regular individual
policies. Secondly, it offered group policies to those who could not afford individual policies.
Thirdly, for the very poor, it offered government-subsidized policies. It was noted in the section
on regulation that, after five years of operation, every private sector life insurance company has
to achieve a certain proportion of their business in the rural sector. It is a variable and rising
proportion, with at least 15% of business in the rural sector after five years. It is 18% for Life
Insurance Corporation of India.
Importance for rural people:





Insurance helps people in reducing tensions, as the quality of being efficient will improve
when the tensions and fears of rural people involving the risks are shifted to the insurer
and the financial status of farmers and other rural people remains unaffected by the losses
caused by the risks insured.
Rural working population also enjoys better credit standing as the risks are transferred to
the insurance company.
Insurance also provides opportunity for investment as life insurance policies provides
maximum benefit of protection and investment because the event insured against is sure
to happen, thus life insurance investment offers attractive returns.
Some rural insurance schemes offering attractive returns on the savings, which helps in
increasing regular savings of people, it also provides funds for meeting various needs like
children’s education, marriage, and so on.
Insurance sector is playing crucial role in tackling the problem of unemployment in the
country by offering employment opportunities to many rural educated people. Moreover
there are large numbers of rural people who are working as insurance agents.
Penetration: 3
The insurance penetration will certainly increase if everyone can be made aware of the various
risks associated with their life and business in context of all other internal/external environments.
Various ways such as customer awareness seminars, aggressive marketing campaigns, press
releases and write-ups, direct mailing etc. can be adopted to make the consumers aware of the
importance of insurance and availability of its various products in the market. Increasing last
mile access: Rural areas and Tier III cities in India are largely and significantly underrepresented by the insurance companies. There is a vast potential in this segment. Because of
their limited experience, insurance companies are still considering it as a business of loss. It can
be made viable by diversifying the activities and enlarging the rural base. For this the insurance
companies need to scout agents with strong rural background such as Gram Sewaks, secretaries
of co-operative societies etc. who are in direct touch with the rural people.Opportunities in
Health Insurance: In India, health insurance market is still in its infancy. Health insurance
penetration is just 2%. It is much less (about 1/5th) as compared to countries like United States,
Germany and South Africa. This is mainly due to lack of awareness among general public and
the cost of health insurance involved. Our government has limited resources to provide for health
care through state-funded public health care system. The rising medical costs are taking quality
health care beyond the reach of common man. Therefore, it is both a duty and opportunity for
insurance companies to insure maximum population under the Health insurance schemes. By
addressing the existing critical grey areas, the health insurance market can grow leaps and
bounds.
Ans.1 (c):
Private Life Insurance Companies like Reliance, Bajaj and others have closed their
branches especially from the rural areas which has gone against private insurers and hence it is
advisable that they should open their branches in rural market only after doing a good research.
Payback period in case of rural branches is longer and hence they must have patience. Moreover
the market is still not properly tapped. Insurers should come out of shell and should endeavour
for tapping 100% potential of the market. Following distribution channels will help besides the
conventional agency channel, (where distribution is being done by sales managers/ development
officers and individual agent, etc) Franchisee, Corporate Agent: Franchisee or business associates, corporate agents can be
appointed by companies who in turn can recruit agents. A Gram Panchayat, Local
Organization, AanganWaadi, Non-Government Organization, local hospitals, Self Help
Groups can be effective business associates as rural people are in constant touch of these
organizations. They can use concept of networking for quick coverage of market as rural
people like the concept of networking because they see earning potential as well.
 Broker: As they can sell product of more than one or of all insurers, people will get more
choice and hence they would like this channel.
 Bank Assurance; Rural Development Banks, Banks: As people see banks as trustworthy
so insurer‘s partnership with banks in selling life insurance will be beneficial for all. As
they see banks as trustworthy so insurer‘s partnership with banks in selling life insurance
will be beneficial for all. As they believe that just because of selling insurance, banks will
not close down their branches.
4




Post Office: Rural population is scarcely distributed and hence it is time taking and costly
to reach all the potential people. As post office has a very good network in rural India and
hence it will be very beneficial for both the post office and insurers to start selling
products also through post offices.
Stall at village fair can be effective as rural people go there with buying mood and
normally with family and hence they can be contacted for insuring them even if
they don‘t buy there a good prospecting list can be prepared and such people can be
canvassed later on to buy the insurance.
Insurance mobile van: This is a very good concept, a van well dressed with flex boards of
life insurance products can be used, it should have sound system so that pre-recorded
company ads can be played. This will move from one village to another. There should be
some official from insurance company with proposal forms and product brochures that
can be filled that time only. Insurers need to take the initiatives to revamp this channel.
Agents must be given trainings on communication skills, sales techniques, personality
development and product knowledge. They need to be provided with attractive incentives
(club membership, conveyance facility, insurance cover, regular job opportunities etc.) in
addition to commission as reward and recognition for their good work.
Ans.1 (d):
1. How important do you consider health insurance to be?
2. Do you currently have health insurance coverage?
3. How long have you been associated with your current insurance provider?
4. What is your preferred option to get information on your health insurance?
5. Do you plan to purchase one more health insurance policy?
6. Who pays for your health insurance?
7. Which of these is covered in your health insurance plan?
8. How much is your monthly premium?
9. How easily can you access the network hospitals included in your coverage?
10. With your current coverage, how easy is it to file a claim?
11. How satisfied are you with your current insurance provider?
12. If you do not have health insurance coverage, why are you not insured?
5
Ans.2 (a): Agriculture and the food industry are closely connected industries. Agriculture is the
industry that supplies major raw ingredients of the food industry, and agricultural products can
increase the value addition through the food industry. Development of agro-industries aims at
promotion of agriculture and thereby at exploitation of local resources, human and material.
An agro-industry is an enterprise that processes bio-mass, i.e. agricultural raw materials, which
include ground and tree crops as well as livestock and fisheries, to create edible or usable forms,
improve storage and shelf life, create easily transportable forms, enhance nutritive value, and
extract chemicals for other uses. The agro-industry provides the crucial farm-industry linkage
which helps accelerate agricultural development by creating backward linkages (supply of credit,
inputs and other production enhancement services) and forward linkages (processing and
marketing), adding value to the farmer’s produce, generating employment opportunities, and
increasing the farmer’s net income. This in turn motivates the farmer for better productivity and
further opens up possibilities of industrial development. The agro-industry generates new
demand on the farm sector for more and different agricultural outputs which are more suitable
for processing.
(1) Increasing GDP through the provision of additional goods and new processed products in
the country.
(2) Providing income and employment in rural areas, because of their strong backward
linkage to primary agriculture, thus reducing uneven income distribution and diminishing
ongoing rural-urban migration problems.
(3) Creating a source of exports and foreign exchange.
(4) Providing training to unskilled new employees, as well as fringe benefits, thus upgrading
the level of education and living standards prevailing in underdeveloped areas.
(5) Stimulating agricultural production by creating new stable intermediate markets for raw
agricultural products.
Rural food processing industry establish linkages between agriculture and industry which
provides an employment opportunity to the people of rural areas and improve the economic
well-being by increasing their income, and also prevent the migration of rural people to cities
which increases slums.
Successful Contract Farming in India:
Contract Farming is an agreement between the food processor (contractor), who is typically a
large organised player, and the farmer, whereby the farmer is contracted to plant the contractor’s
crop on his land. He also agrees to harvest and deliver to the contractor a quantum of produce,
based upon anticipated yield and contracted acreage at a pre-agreed price. The food processor
provides inputs in terms of technology and training to the farmer, to improve the yield and
quality of the produce. This results in a win-win situation that generates a steady source of
income for the farmer and eliminates supply shocks and assures good quality farm inputs which
are crucial for the processor.
A good example in this area has been Pepsi Foods’ experience with contract farming for its
tomato processing plant at Hoshiarpur in Punjab. Through transfer of technology and providing
good quality seeds and inputs to farmers, Pepsi was able to substantially increase both quality
and quantity of tomato production in the area, so as to meet the demands of its plant. A key
aspect of Pepsi’s approach was its partnership with local bodies such as the Punjab Agricultural
6
University and Punjab Agro Industries Corporation Limited, which went a long way in getting
the farmers’ buy-in and ensuring success of the venture.
Ans.2 (b): Food processing is a large sector that covers activities such as agriculture,
horticulture, plantation, animal husbandry and fisheries. It also includes other industries that use
agriculture inputs for manufacturing of edible products. The Ministry of Food Processing,
Government of India has defined the following segments within the Food Processing industry:
• Dairy, fruits & vegetable processing
• Grain processing
• Meat & poultry processing
• Fisheries
• Consumer foods including packaged foods, beverages and packaged drinking water.
While the industry is large in terms of size, it is still at a nascent stage in terms of development.
Out of the country’s total agriculture and food produce, only 2 per cent is processed. The highest
share of processed food is in the Dairy sector, where 37 per cent of the total produce is
processed, of which 15 per cent is processed by the organised sector. Primary food processing
(packaged fruit and vegetables, milk, milled flour and rice, tea, spices, etc.) constitutes around 60
per cent of processed foods. It has a highly fragmented structure that includes thousands of ricemills and hullers, flour mills, pulse mills and oil-seed mills, several thousands of bakeries,
traditional food units and fruits, vegetable and spice processing units in unorganised sector. In
comparison, the organised sector is relatively small, with around 516 flour mills, 568 fish
processing units, 5,293 fruit and vegetable processing units, 171 meat processing units and
numerous dairy processing units at state and district levels. Food processing has an important
role to play in linking Indian farmers to consumers in the domestic and international markets.
The Ministry of Food Processing Industries (MOFPI) is making all efforts to encourage
investments across the value chain. The industry engages approximately 1.85 million people in
around 39,748 registered units with fixed capital of $ 32.75 billion and aggregate output of
around $ 158.69 bn. Major industries constituting the Food processing industry are grains, sugar,
edible oils, beverages and dairy products.
The key sub-segments of the Food Processing industry in India are: Dairy, Fruits & Vegetables,
Poultry & Meat processing, Fisheries, Food retail etc.





Key facts:
311.71 mn tonnes of horticulture crop production in 2017-18
Milk production of 176.3 mn tonnes during 2017-18 with per capita availability of milk at a level
of 375 grams per day in 2017-18
Egg production of around 95.2 bn during 2017-18
Total fish production was 12.6 mn tonnes during 2017-18
Food Retail market is majorly dominated by Food Grocery (growing at CAGR 25%) and Food
Services (growing at CAGR 15%) segments.
Ans.2 (c): Key Issues and Challenges:

Marketing Infrastructure: The lack of adequate storage and market infrastructure like
weighting, auction platform, and packaging has added to the complexity of the problems
facing Indian agriculture.
7






Lack of Processing- Indian agriculture is still dominated by the practice of productiondriven market supply instead of market-driven production, which leads to an
inconsistency in the quality of produce and the supply thereof. Thus, there is a severe
need to focus on processing-worthy varieties of produce and ensure a year-round supply
of the same.
The costs associated with necessary inputs and bank loans have also shot up in this
period, making it difficult to sustain livelihoods purely through agriculture.
Availability of raw materials: Agricultural produce is a critical aspect of maintaining
food processing activities. Due to the seasonal availability of certain vegetation, the
sector faces delays in production resulting in low supply. For oil manufacturing, most of
the people of oilseed producers are small and marginal farmers with poor get admission
to aid bases along with fertilizers, manure, etc. Hence, oilseeds grown by such farmers
have a low yield. Rabi crops like wheat, barley, and mustard are sown around midNovember and harvested in April or May. These food grains are dependent on forces of
nature, that are instead unpredictable. Seasonal deficiency and high cost of raw materials
constitute one of the most important constraints affecting the growth of small-scale food
processing businesses. This state of affairs outcomes in shortage and higher pricing of
raw materials.
Storage Constraints: Many of these scarcity issues can be solved via following proper
storage norms for raw materials. However, this is the main hazard faced by the Indian
small-scale food processing enterprise. The absence and inadequacy of infrastructure
facilities to store raw substances lower the nice and availability of the quit product. There
are methods for correct storage – warehousing and cold storage. In warehouses, problems
rise up because of the scarcity of space and how commodities are optimally stored in that
region. Product damages are every other trouble confronted in the warehouse; few
damages are inevitable but may be decreased with a rack safety material and resisting off
overload of cabinets. Cold garage for frozen foods is a huge sub-enterprise in and of
itself. With ever-evolving food tendencies, there are growing varieties of equipped-todevour food, drinks, processed frozen fruit and vegetable products, marine and meat
merchandise and so on – lots of those items require specialized garage environments. The
loss of availability of those sorts of centres poses a major constraint for the food
processing sector.
Transportation Issues: Perishable food items should be shipped with proper packaging
to keep away from breakages and damages all through transportation. Also, timely
shipping is essential to keep away from spoilage – sure food gadgets do no longer
ultimate long despite the fact that stored in climate-managed centres.
Large Informal Sector and mainly clustered in small scale industries: More than 50%
of the industries in the food processing sector is concentrated in informal sector and are
small scale industries. Therefore they cannot achieve economy of scale and avail the
benefits from the formal financial sector.
Ans.2 (d):
SIGNIFICANCE OF AGRO-INDUSTRIES IN RURAL DEVELOPMENT:
8
Agro-industries are the industries which integrate agriculture and industry, which are vital for the
prosperity of developing countries. With small capital investment and smaller proportion of
imported equipments, machinery and material, agro-industries provide new avenues of
employment.










These industries serve as a catalytic agent for the development of infrastructure which is
helpful to bridge the gap between rural and urban economies. In developing countries,
more than 75 percent of the total population resides in rural areas, where development of
agro-industries can provide means to channelize savings of the people to accrue fair price
for farm products, to increase employment opportunities, to reduce the pressure of
population on land and to bring equitable distribution of income and wealth.
Development of agro-industries is also useful for the development of agriculture itself, as
these industries act as a source of demand and supply to agriculture. Agro industries,
being a vital means to bridge the gap between agriculture and industries, can promote
integrated growth of the two and thereby a wide-scale development of the rural economy.
Agro-industries can improve agricultural productivity through forward and backward
linkages and through that boost up the rural development process.
Development of agro-industries leads to development of rural areas and helps in
lessening disproportionate growth of large cities and reducing the growth of slums,
overcrowding, social tensions, exploitation and atmospheric pollution.
One more aspect of this development is the emergence of a new industrial culture. The
growth of agro-industries creates a consciousness among the rural people as regards
standard of living and this changes their outlook.
Development of agro-based industries creates demand for farm products and thereby
induces farmers to develop new outlook towards agriculture. One more aspect of
development of agro-based industries is that it brings a change in the "frog in the well"
attitude of the farm community, which is the need of the day.
Social Development: Agro-industries can play a vital role in the social development of
village India. There is ample scope to undertake different types of social activities which
are required for the welfare of the rural masses.
Increase in educational, medical and recreational facilities helps in opening up new fields
of social activities and free the rural people from caste barriers and clutches of religion
and customs.
Development of Markets: Agro-industries can pay attention to educating the rural people
in grading, packing, storing, canning, cleaning, freezing, etc. of agricultural production.
This will create marketing awareness among the growers. Agro-industry can provide
ready market for agricultural produce and, in turn, can supply inputs to agriculture. It is
an attempt to establish vertical integration in agricultural production activity by providing
a happy linkage of production, marketing and processing.
Transport and Communication: Agro-industries have a direct bearing on transport
development within their periphery. Regular movement of the agricultural produce to the
industrial units is possible only by improving the already existing unsatisfactory road
links and even by creating new ones. Network of interior roads even facilitates the
transport of inputs to the fields.
EXPORT POTENTIAL
9
India's rising exports provided a stimulus to domestic production, whereas its growing imports
supported domestic production by supplying necessary raw materials, technology, consumer and
capital goods. India has large prospects for exports of agro-products. The key to India's success,
however, shall be quality. In our endeavour to boost exports, India may be confronted with
genuine quality issues. Despite India being one of the largest producers of agricultural
commodities in the world, agricultural exports as a share of GDP are fairly low in India relative
to the rest of the world. The same proportion is around 4% for Brazil, 7% for Argentina, 9% for
Thailand, while for India it is just 2%.
With processed food exports accounting for 10 percent of India's total exports, growth in the
food processing sector is expected to open up opportunities for players having strong linkages in
the agri-value chain.
Food processing sector constituted as much as 8.83 per cent and 10.66 per cent of Gross Value
Added (GVA) in manufacturing and agriculture sector respectively in 2017-18. The value of
processed food exports during 2018-19 was of the order of US $ 35.30 billion accounting for
about 10.70 per cent of India’s total exports (total exports US $ 330.08 billion).
During FY11–16, India's exports of processed food and related products (inclusive of animal
products) grew at a CAGR of 11.74 per cent, reaching US$ 16.2 billion. Main export
destinations for food products have been the Middle East and Southeast Asia. In FY17 India’s
exports stood at US$ 1.3 billion.
10
Ans.3 (a): Social marketing is marketing designed to create social change, not to directly benefit
a brand. Using traditional marketing techniques, it raises awareness of a given problem or cause,
and aims to convince an audience to change their behaviours. Social marketing is commonly
used for causes like health and safety, Environmental causes, Social activism. It is an approach
used to develop activities aimed at changing or maintaining people’s behaviour for the benefit of
individuals and society as a whole.
Social marketing is marketing designed to encourage social change; rather than selling a product,
it sells a behaviour that benefits society. Well-executed social marketing uses creativity and
evokes emotions to motivate action, through visuals and catchy slogans.
SOCIAL MARKETING IS APPLICABLE IN FOLLOWING AREAS:
1. Health promotion campaigns in India, especially in Kerala and AIDS awareness programmes
are largely using social marketing, and social workers are largely working for it.
2. Anti-tobacco campaigns.
3. Anti-drug campaigns.
4. Anti-pollution campaigns
5. Road safety campaigns.
6. Anti-dowry campaigns.
7. Protection of girl child campaign.
8. Campaign against the use of plastic bags
EXAMPLES
Ex.1. Johnson Tiles launched the ‘Red Ramp Project’ wherein a ramp was built on Kiri beach in
Goa. Disabled people could now visit the beach via the tiled ramp and feel the waters lapping at
their feet. A campaign video was created with three protagonists who had varying physical
challenges. The film showed how this ramp helped them fulfil a long awaited dream – to visit the
beach.
Ex.2. The premium Hakka Chinese brand walked the talk through its latest mission – ‘India Ke
Hunger Ki Bajao!’ in partnership with Akshaya Patra, a not-for-profit organisation that runs the
world’s largest mid-day meal programme. Ranveer, the brand ambassador spread the central
message of the campaign – it takes only Rs 750 to feed a child for a whole year’.
11
Ans.3 (b): The Bottom of the Pyramid (BOP)
Also known as the base of the pyramid.
It is a socio-constituting an unnoticeable, unserved and unexplored market obstructed by
environmental barriers that stop them from recognizing their human potential for their personal
benefit, those of their families, and that of societies at large .It is a large body of consumers
whose annual income on a purchasing power parity basis is less than US$1,500 per year and
numbers 4 billion. This group is variously referred to as the Bottom of the Pyramid (BOP) or the
Base of the Pyramid (BOP). The BOP is a concept of dividing the world into an economic
pyramid by keeping the privileged on the top and unprivileged poor at the bottom. Businesses
need to adopt innovative ways of doing businesses in a market consisting of billions of
underprivileged poor consumers.
Bottom of the pyramid is the largest but poorest group of people living under extreme poverty.
Globally around 3.7 billion people are cut from formal markets and earns less than 2$ per day
and 60% of 3.7 billion people lives in India & China. BOP is term in economics and people
coming under this segment of pyramid lives in adverse poverty
Similarities between social marketing strategy and BOP are:
 Both social marketing strategy and BOP can give some information on behavior of
people.
 Social marketing strategy is implemented on some sets of people similarly BOP also has
some set of people which fall under this category.
 Social marketing strategy has certain sets of questions similarly BOP people due to
poverty always has options and questions in front of them as they have to produce before
they can consume.
DIFFERENCE:
BOP and Social marketing are different where BOP targets the economically weaker section
of the society while the social marketing is aimed to give a social message through its
campaign.
SUCCESS STORIES:


CavinKare success story started with the great idea of launching Chik Shampoo in
sachets at a low price of 50 paisa , and then going on to introduce
Meera,Nyle,Spinz,Indica and Fairever.
Nirma as a company is the best example that proves that if you supply at the right price,
the product itself has the potential to create its own demand. And evidently, today soaps
and detergents have almost 90% penetration in India. To add to that, the group’s two
brands, Nirma and Nima with 32 variants, are distributed amongst more than 2 million
retail outlets, which go on to generate INR 4000 Cr in gross sales.
12
Ans.3 (c): PPP Model of Rural Marketing
The primary features of a PPP are that it is a contractual arrangement between a public and a
private entity, includes a certain degree of transfer of risk to the private entity with the benefit of
remuneration, and has an emphasis on meeting a social need or fulfilling a development project
which is intended for the public good. This also implies that the private sector will operate and
manage the project for a specified period of time.
The PPP model serves as a mechanism for the government to carry out the essential activities of
development, especially rural development through infrastructure construction, while at the same
time minimizing the risks and heavy drain on government budgets.
The private sector can invest heavily as it has the resources to do so, and since these projects are
for social good, the government plays a role in providing incentives for the private sector to
invest, while at the same time ensuring that it is in a position to supervise and regulate the
project.
According to the Government’s National PPP Policy 2011, the government has laid emphasis on
the fact that PPPs would help in achieving broad based and sustainable economic growth.
Following would be the key benefits of the PPP model in rural infrastructure:

Employment of private sector resources to fund rural development projects would ensure
that the quality of these projects are at par with global standards, while guaranteeing the
best technology, expertise and skills are available. Public sector institutions rarely have
access to such resources and expertise to fulfill these targets.

The private sector is known for being efficient. Hence it is certain that problems like
delayed decision-making, functioning of day-to-day operations, etc will not arise. Private
sector companies treat these as their usual corporate plans and projects that they
undertake, and execute them in a smooth, efficient manner.

It bridges the gap between public and private, rural and urban. Not just do these projects
help bring the best of both worlds – public and private – together, but are also ensuring
that the level of economic development in the urban and rural areas occur simultaneously.
Example of Social marketing concept and PPP model coexisting together are:
There was a campaign named "school chalein hum" which was run by state government
successfully along with private social activist, media organisations and people in this campaign
almost 75000 influencers were linked. This campaign was run because there was a huge amount
of school dropouts in school at very early age and children were not able to complete their
primary education. After this campaign became successful many students were able to complete
their basic primary education. This campaign can coexist with social marketing and PPP
marketing strategy.
13
Ans.3 (d): Social Marketing Strategies



Symbols. Many effective social marketing campaigns use symbolic visuals that are
instantly recognizable. Examples include Awareness Ribbons, Smokey the Bear for
wildfire prevention, and Rosie the Riveter, which was used during World War II to
inspire women to help with the war effort.
Slogans. Other social marketing campaigns rely on short, memorable catch phrases,
such as “Just Say No,” the slogan for the U.S. government's War on Drugs campaign.
The phrase was created by First Lady Nancy Reagan to champion a substance abuse
prevention program from the National Institutes of Health.
Imagery. Social marketing campaigns, particularly those pointing out negative
consequences, often use powerful imagery to instantly illustrate the cause. Examples
include the aforementioned photographs of sea turtles, and the photos of starving
children used in the Christian Children's Fund commercials with Sally Struthers.
SOCIAL MARKETING 4P's:
PRODUCT:
With social marketing, the “product” is the desired social action and the benefits this action
offers. Make sure that this change is presented as enticingly as possible…this may include
framing the opposite behaviour as negative. Also, clarity is key. Make sure your audience can
quickly and easily understand your “product” and its benefits.
PRICE:
Minimize the “price” that your audience believes they have to “pay” for the desired social action
to take place.
This price isn’t all monetary. It’s also about minimizing the difficulty, time, and
psychological/emotional costs that people will incur. So, when you’re designing a social
marketing campaign, you’ll need to think about (and research) the obstacles that hinder your
audience from performing the behaviour.
Then, figure out intuitive, feasible ways to fight these obstacles. For example, if your campaign
is aimed at encouraging more exercise in your community, but safe outdoor spaces are minimal
and indoor class costs are a barrier, consider offering free indoor fitness classes.
PLACE:
Where do you want your audience to perform the desired behaviour? How can you reach them in
ways that make it easier to perform the behaviour in that location (and make that behaviour more
desirable than competing behaviours)? Do you need to recruit peers of your audience as
“ambassadors,” to make the campaign more accessible to your audience?
Consider these examples of “place:”
 If you’re setting up a helpline for teens, make it available 24 hours a day, via call, text,
and online messaging.
 If you’re running a donation campaign, include a website, QR code, or live donation link
on your campaign ads.
14
PROMOTION:
This one ties all 4 “Ps” together.
What channels and outlets will help you best reach your audience and draw their attention to the
social marketing campaign?
Social media? Television? Radio?
A sign, billboard, or installation?
Events, such as concerts, expos, and community days?
Guerrilla campaigns?
How will you draw attention to the product (behaviour), the minimized price, and the place you
want the action performed in?
15
Ans.4 (a): Supply chain management with rural markets perspective.
Supply Chain Management has to play a key role in rural market of India, contributing to
improved relationship with suppliers and customers and income generation. Managing the supply
chain has become a way of improving competitiveness by reducing uncertainty and improving
service.
Problems in existing supply chain:

Lack of warehouses
 Fruits and vegetables wastages as high as 45%.
 Planning Commission estimate 35mn MT

Limited reach of mandis
 12 km to 50 km travel

Too many intermediaries
 Inflate cost by 250%

Lack of collateral management option
In India, roughly 60% of nourishment quality is lost in the inventory network from the
homestead to the last purchaser. Purchasers really wind up paying around 35 % beyond what
they could be paying if the inventory network is improved, in light of wastage just as different
edges in the present stock structure. The rancher in India gets around 30% of what the customer
pays at the retail location. Contrast this and the circumstance in created nations, where ranchers
may get up to 70% of the last retail cost and wastage levels are as low as 4 to 6%. One can
without much of a stretch comprehend the advantages that could be created from copying those
practices and tapping that aptitude for the store network in India.
There are so many middlemen in the supply chain in rural market which makes the lives of the
rural people more difficult than they already are. The inventory or the warehouse management in
rural areas is another challenge which affects the supply of the goods. And the literacy rate also
affects their lives because of which they don’t go upfront to sell their own goods and middlemen
get involve and exploit. Another issue is the transportation of the goods and services. Rural areas
are not connected properly with kaccha roads and not proper transport services.
16
Ans.4 (b): LOGISTICS & SUPPLY CHAIN MANAGEMENT OVERVIEW
Logistics and Supply Chain Management (LSCM) is a process of planning, implementing and
controlling an effective flow and storage of goods, services and related information from the
point of origin to the point of consumption for the purpose of conforming to customer
requirements. Modern LSCM concept comprises of a variety of activities, namely inbound and
outbound transportation management, warehousing, materials handling, order fulfillment,
network design, inventory management, supply/demand planning, customer service, sourcing
and procurement, packaging, and management of IT support towards diverse functional areas. It
is an integrated approach, actual work of which is supportive in nature.
Logistics and SCM spend in India at approximately 13% of the Gross Domestic Product (GDP).
The transportation cost in India accounts for nearly 40% of the cost of production, with more
than half the goods being moved by road. Trucking accounts for nearly 70% of transportation
and accounts for 60% of all logistics cost. 67% of truck ownership is in the hands of small
unorganized players. Road is followed by rail and finally coastal shipping.
 According to the World Bank’s 2012 Logistics Performance Indicator, India is ranked
46th and is behind countries such as Japan, the United States, Germany and China.
 The country’s logistics industry which is worth around USD 160 billion is likely to touch
USD 215 billion in the next two years.
 With the implementation of GST, the Indian logistics market is expected to reach about
USD 215 billion in 2020, growing at a CAGR of 10.5 per cent.
 Provides employment to more than 22 million people.
 The Global Ranking of the World Bank’s 2016 Logistics Performance Index shows that
India jumped to 35th rank in 2016 from 54th rank in 2014 in terms of overall logistics
performance.
Ans.4 (c): Challenges and bottlenecks for smooth flow of goods and services:
1) Transportation Infrastructure is a major hurdle in the management of supply chain in
rural markets nearly 50% of 5, 76,000 villages of the country are not connected by roads
at all. Still today many villages in India have “Kachaa road” and in monsoon even these
roads become un-operational leaving lots of villages totally unconnected. Due to such
infrastructure bottlenecks, the supply and distribution network of most of the companies
17
does not penetrate the backward areas of the State. Thus there is a significant constraint
of essential commodities and other items of general utility, which is leveraged by the
local convenience stores, selling them at high margins or even selling duplicate and
spurious goods. The study ICICI on rural markets has shown that the village shops have
an important role to play for making goods of frequent requirements available to mass
village population specially the lower income section of the society. Certainly the
development of road network and improving their condition will help improving the
“supply chain management”. Insufficiency of suitable carrier is also one of the constraint
that not only increases the distribution time and cost but also ends up with wasting large
amount of material quality and very small profits to producers.
2) Lack of Organizational Relationships: Strategic alliances and partnerships are important
for a successful supply chain. They encourage firms to focus their attention on the entire
supply chain and reduce the number of suppliers they deal with. Many companies have
developed preferred vendor programs, as well as carriers, to ensure that a quality product
is received where and when it is needed. However, in India the markets are informal and
emerge at cross-roads with small concentrations of households to facilitate the exchange
of products among local farmers and villagers. These markets are not connected to the
national markets and little attempt is made to engage with the larger markets in the
region.
3) Warehousing also is a big problem in rural India, it is very difficult to find suitable
godowns in many parts of India and even there is no Government and public
warehousing facilities available in many villages of the country. Much of the material
goes waste due to the unavailability of required space. Today many companies find
holding inventory is costly and try to push the inventory onto someone else in the supply
chain. Where inventory is held is a challenge in most chains. Some companies are
demanding the manufacturer deliver the inventory to private customer warehouses in
smaller lots, more frequently. Some important inventory issues for SCM include:
A.
shorter delivery times (as part of cycle time reduction)
B.
just in time (JIT) (a shift from batch ordering)
C.
point of sales (POS) data
18
D.
vendor managed inventory
E.
consignment inventory
The first three issues are quite complementary. To utilize a JIT system, shorter delivery times
are needed. POS data are required to know what products need to be quickly replenished. These
three issues rely on information sharing to succeed. Vendor managed and consignment
inventory are emerging management strategies designed to efficiently place inventory in the
supply chain.
4) Communication is necessary to reduce uncertainty and improve inventory levels. The
willingness to share information must extend across the supply chain (suppliers and buyers).
Rural markets have peculiar characteristics and differ even from village to village,
Communication may decide who the customer is and what the company's goals are, and may
make sure that these two issues match. The long term SCM goal is to increase information
sharing in the supply chain. Communicating the following types of information is essential
for a successful buyer/supplier relationship:
Product improvements and/or Innovations
Demand Forecasting
Vendor Communication
Production schedule
It is important to get information about end-user back through reverse supply chain.
Companies realize the importance of creating an integrated relationship with their suppliers and
customers. Effective communication can become a way of improving competitiveness by
reducing uncertainty and improving service.
5) Cost Issues: Supply chain management must be able to quantify a bottom line impact.
Major reason to establish a supply chain is to reduce various costs such as inventory,
Logistics, Obsolesce, Channel members costs by taking out the redundancies in the chain. The
concept of vendor managed inventory is the glaring example. This system allows the inventory
to be pushed back to the vendor and as a result lowers the investment and risk for the other
chain members.
19
Ans.4 (d):
Logistics is an integral part of a company’s strategic business plan and operations. It is used to
plan and coordinate the movement of products timely, safely, and effectively recognizing
the importance of infrastructure for doing business, the federal government is invested in critical
initiatives to help companies leverage their economies of scale and provide integrated logistics
networks that are cost effective. These are as follows:
 Dedicated freight corridors: The government has notified five major industrial corridors –
Delhi-Mumbai Industrial Corridor (DMIC), Amritsar-Kolkata Industrial Corridor
(AKIC), Chennai-Bengaluru Industrial Corridor (CBIC), Visakhapatnam-Chennai
Industrial Corridor (VCIC) and Bengaluru- Mumbai Economic Corridor (BMEC), for the
faster movement of freight. These corridors are spread across 15 states in India.
 Logistics parks: These parks serve as centers for freight aggregation and distribution
hubs, storage, warehousing, and multi-modal transportation. The government has
announced the development of 35 such parks to cut transportation cost and enable swifter
freight movement on higher sized trucks and rails between hubs.
 Sagarmala: The Sagarmala project aims at doubling the share of seaways in the transport
mix over the next decade by executing multiple projects related to the expansion and
modernization of various ports.
 Technology upgrades: New technology such as the internet of things or IoT, mobile
applications, cloud storage, big data analytics, and computing are increasingly being used
by startups and logistics companies to improve the existing business operations, transact
with new customers and expand their network. Startups like Rivigo are using IoT for real
time data collection of truck’s fuel, engine oil temperature, brake oil pressure and more,
to improve services and increase transparency in India’s truck industry.
 The federal government has also adopted new systems to overcome long-standing
logistics challenges. These include: Geographical Information Systems (GIS) based
National Highways Information System to overcome the traffic and transportation
problems on road; Rake Management System (RMS) for handling commercial
transactions on Indian railways; Implementation of Radio Frequency Identification (RFI)
for identifying the movement of ships wirelessly using radio waves; and the GST
Network – a technology platform at the heart of the GST’s administration – to simplify
the taxation system of the logistics companies.
 Three primary distribution models are:
1. Traditional Warehousing/Distribution, in which vendors ship goods to retail DCs, w
where the goods are stored until store orders need fulfilled, where they are then picked (often
using a ‘wave process’ for batches of stores) and delivered to the stores.
2. Cross dock DCs, in which shipments from inbound suppliers are moved directly to outbound
vehicles, with very little if any storage in between. In the best possible situation, products never
touch the floor or a shelf, though some amount of staging is often used.
20
3. Direct to Store Delivery, in which vendor’s ship goods directly from their own facilities to
retail store outlets.
Ans.5 (a):
India's largely rural population has also caught the eye of retailers looking for new areas of
growth .A slew of supermarket chains, including those of the Tata and ITC, are set to storm the
rural areas of the country as corporate realize the huge potential of the untapped market ITC
launched the country's first rural mall 'Chaupal Sagar', offering a diverse product range from
FMCG to electronic appliances to automobiles, attempting to provide farmers a one-stop
destination for all of their needs. Companies such as Godrej and DCM Shriram Consolidated are
launching `one-stop shops' for farmers and their communities. Godrej Agrovet, for instance, is
planning to set up 1,000 Aadhar stores across rural India by 2010. The rural market is no longer a
non-player in the retail game. It is now accounting for over one-third of the market for most
durable and non-durable products. Even manufacturers are developing new products with
the rural consumer in mind besides using village-oriented marketing strategies for brand
promotions. Whether it is Rani Mukherjee promoting the chocolate Munch or master
batsmen Sachin wowing village lads with a soft drink, both ad makers as well as top
company honchos know where to put their money and how. The rural market is no longer of
hypothetical empirical value but is well researched and reached by most companies looking to
tap India's vast and abundant bounty. Moreover lack of infrastructure and logistics together with
multiple tax rates, restrictions on goods movement, among others increase inventories and,
therefore, costs. Due to lack of scale and diversity in buying behaviour, marketers are also
forced to not only create multi layered distribution networks but also develop new
packaging and price points. However increasing penetration of TV, rebirth of radio, through FM,
availability of broadband internet, fast spread of mobile phones, and rural road development
programmes could in a short span of time may apart from improving infrastructure, bridge gaps
in behavioural patterns across the country. For a retailer it is essential to see in which segment it
is catering in the above division of villages. For example Shakti caters to villages with a
population of 500or above. Where in Eveready considers even the remotest of village as its target
customer.
It operates through more than thousand company-owned vans and has over 4,000 distributors to
directly providing service to 6, 00,000 retail outlets.
The trends that are driving the growth of the retail sector in India are:

Low share of organized retailing

Falling real estate prices

Increase in disposable income and customer aspiration

Increase in expenditure for luxury items
21
Ans.5 (b): Market Size
Retail industry reached to US$ 950 billion in 2018 at CAGR of 13 per cent and expected to reach
US$ 1.1 trillion by 2020. Online retail sales are forecasted to grow at the rate of 31 per cent yearon-year to reach US$ 32.70 billion in 2018. Revenue generated from online retail is projected to
grow to US$ 60 billion by 2020.
Revenue of India’s offline retailers, also known as brick and mortar (B&M) retailers, is expected
to increase by Rs 10,000-12,000 crore (US$ 1.39-2.77 billion) in FY20.
India is expected to become the world’s fastest growing e-commerce market, driven by robust
investment in the sector and rapid increase in the number of internet users. Various agencies
have high expectations about growth of Indian e-commerce markets.
Luxury market of India is expected to grow to US$ 30 billion by the end of 2018 from US$ 23.8
billion 2017 supported by growing exposure of international brands amongst Indian youth and
higher purchasing power of the upper class in tier 2 and 3 cities.
Income level in the rural sector sees an increasing trend, and their lifestyles are changing. They
are now willing to spend more on goods that are designed to improve their lifestyle. A Neilson
report states that by 2025, rural markets would contribute approximately $100 billion of retail
sales. The tremendous growth potential of the rural areas is now attracting the eyes of retailers.
With heavy and cut-throat competition in the urban sectors, retailers are chalking out bold
strategies targeting the rural consumers in a big way.
The following points reflect the growth potential of rural retail market in India: Rural per capita
consumption of FMCGs will catch up with the current urban levels by 2017. As per expert
report, The FMCG sector in rural area grow 40 % in comparison to 25 % in urban market. Right
now, one out of six rural customers has access to organized retailing or distribution. So, rural
retailing has tremendous potential for growth. A major part of “Bottom of Pyramid” consumer
class resides in rural areas. There is paradigm shift towards higher value consumption among
rural consumers like from tooth power towards tooth paste, from local brands towards national
brands. Though internet penetration in rural areas is very low, but concepts like m-cash by ICICI
bank provide an impetus to rural retailing as mobile telephony has made rapids into rural market.
Rural areas account for half the total market for television, tooth powder, fans, pressure cookers,
washing soaps, tea, salt etc.
Major Players at rural retailing scenario are1. ITC choupal sagar- ITC launched choupal sagar in 2004 and it was the first organised retail
store in the rural india.it is a rural hypermarket which is managed by ITC agri business
division.currently it has 24 choupal sagar.
2. TATA Kisan Sagar- It’s a dedicated network of retail store created by TATA chemicals that
act as one stop shop for farm solution. There are total 820 stores all over India that reaches
around 2.3 million farmers .
22
3. Aadhaar Retailing – Aadhaar Retailing was Godrej agrovet’s rural retail initiative catering to
the growing consumption demand in the rural India.it deals in agr-inputs , durable and services
include credit and financing.
4. Hariyali Kisaan Bazaar- It is a division of DCM Shriram Consolidated ltd. It operates in two
lines of business i.e agri /rural chemicals and polymers . It is a one stop shop for meeting farming
and family needs of the rural population.
Ans.5 (c): E
- Choupal success story from ITC
The e-Choupal is one of the ICT based private offices which is arrangement data sources and
expansion administration in the field of agribusiness. E-Choupal is an activity of Indian Tobacco
Corporation (ITC) Limited (an enormous Multi Business Conglomerate in India) to interface
straightforwardly with country ranchers for the acquirement of agrarian/aquaculture produce. EChoupal was imagined to handle the test presented by the interesting highlights of Indian
horticulture described by divided ranches feeble framework and the association of various
middle people. ITC's Agri-Business Division probably the biggest exporter of farming wares has
considered e-Choupal as an increasingly productive inventory network planned for conveying an
incentive to its clients around the globe on an economical premise. E-Choupal additionally
unshackles the capability of Indian rancher who has been caught in an endless loop of generally
safe raking capacity, low venture, low profitability, powerless market direction, and low worth
option. Such a market drove plan of action can improve the seriousness of Indian horticulture
and trigger a high-minded pattern of higher efficiency, higher salary and growth limit with
respect to ranchers’ chance administration bigger ventures and higher calibre and profitability.
Fundamentally, an e-Choupal is a work station with web gets to, housed in a little room, costing
under three lakhs to set physically active Rs 10,000 yearly to keep up. The e-Choupal likewise
suppliers day by day need things produced by ITC. E-Choupal straightforwardly interfaces with
ranchers for the acquirement of farming products like soybeans, wheat, espresso, and Prawns.
Generally, these items were secured in "mandi" [major Agricultural showcasing focuses in
country areas], where the go-between used to make the greater part of the benefit. These agents
utilized informal intends to pass judgment on the nature of the item to set the cost. The contrast
in cost for good quality and substandard quality was less and subsequently, there was no
motivation for the ranchers to contribute and deliver great quality yield. With e-Choupal, the
ranchers have a decision and the exploitative intensity of the go-between is killed. The eChoupal framework gives ranchers more command over their decisions a higher overall revenue
on their harvests and access to data that improves their efficiency. By giving a progressively
straightforward procedure and enabling nearby individuals as key hubs in the framework. ITC
expands trust and reasonableness. In spite of troubles from undependable telephone and electric
force framework and in some cases restricted long stretches of utilization, the framework
likewise connects ranchers and their families to the world. Some sanchalaks track future costs on
the Chicago Boards of Trade just as nearby mandi costs for prompting the ranchers about current
patterns in the showcase. Town youngsters have utilized the PCs for schoolwork, games and to
23
acquire and print off their scholarly test outcomes. The outcome is a noteworthy advance
towards provincial improvement.
Ans.5 (d): GODREJ – AADHAR
Godrej's agri business, started 30 years ago in a modest way, had grown to an Rs 1,000 crore
division under Godrej Agrovet and Goldmohur Foods. It started its rural marketing initiative
based on two concepts- Aadhaar and Manthan. Godrej Industries test-launched the concept in
Maharashtra and Andhra Pradesh to sell its own and other products, besides offering soil testing
and veterinary services through Aadhaar. Manthan focuses entirely on supplying quality animal
feed so that the animal produce, dairy and poultry, gets a boost. In 2008, Future Group had
picked up around 70 per cent stake in Aadhar Retailing Limited. It now operates stores in
Gujarat, Maharashtra, Haryana and Punjab and mainly sells wheat and paddy apart from daily
need products. The company also provides farmers with solutions to problems regarding their
agricultural output, which includes what kind of crop can they plant and when, along with
techno-commercial suggestions to help them give a better output. Now future Group is planning
to restore Aadhar brand. It is planning to come up with wholesale distribution centres across
different districts and then roll out franchisees to individual entrepreneurs. They can source
products from these wholesale centres and then sell it in villages.
DCM HARIYALI KISSAN BAZARS
DCM Sriram Consolidated Ltd., which is in consumer finance and insurance businesses, has
diversified into rural malls too under the banner “Hariyali Kissan Bazars”. Each "Hariyali Kisaan
Bazaar" centre operates in a catchment of about 20 kms.
A typical centre caters to agricultural land of about 50000-70000 acres and impacts the life of
approx. 15000 farmers. Each centre is engaged in:
• Bridging the last mile: Provides handholding to improve the quality of agriculture in the area.
Provides 24X7 supports through a team of qualified agronomists based at the centre.
• Quality Agri-Inputs: Provides a complete range of good quality, multi-brand agri inputs like
fertilizers, seeds, pesticides, farm implements & tools, veterinary products, animal feed,
irrigation items and other key inputs like diesel, petrol at fair prices.
• Financial Services: Provides access to modern retail banking & farm credit through simplified
and transparent processes as also other financial services like insurance etc.
• Farm Output Services: Farm produce buyback opportunities, access to new markets & output
related services.
• Other Products and Services: Fuels, FMCG, Consumer Goods and Durables, Apparels etc.
Haryali centres are IT enabled capturing critical data of farmers and providing them with an
access to weather forecasts, market prices and latest technical knowledge. (DSCL) now has
entered the milk procurement business in Uttar Pradesh and is looking to expand to Rajasthan
and other states also. The milk is being supplied to dairy units and is being mainly used to
produce milk powder. The company has started a pilot dairy operation in Hardoi and Lakhimpur
24
Kheri districts of central UP, where it has four sugar mills. The company has also made
arrangements with regional rural banks to facilitate farmers in getting finance for cattle purchase.
However after thriving opening of about 300 outlets and an economic slowdown it did not
expand in 2009-10 and 2010-11 also.
25