Rural Marketing Seminar: Collaborative partnerships are the way forward in rural marketing
By By Dhruv Tanwar | 10 May 2008
Mumbai: For the way ahead, Dr Singh suggested the corporates adopt a much wider, collaborative approach to provide an integrated set of services, and partner with other organisations to jointly benefit from rural markets. He said that the key to this was experimentation, reflection, and learning.
One of the best presentations of the day at the Marcus Evans proactive rural marketing strategies conference, was that of Dr Rajaram Tripathi, from te central herbal agro marketing federation of India. An ex – banker, Dr Tripathi gave up his banking career in favour of organic farming of herbs, medicinal and aromatic plants. He said that out of personal experience, rural folk too have to suffer losses in their products and produce, on account of a lack of marketing opportunities.
Challenging the thought process of the audience which was essentially comprised of marketers wanting to sell to the rural folk, Dr Tripathi asked them to ponder over the question as to how they could facilitate a reverse osmosis and help rural products to reach urban markets. He said that since 2002, his organisation has evolved to seven regional offices, covering over 20,000 farmers in seven states, and even has five outlets in overseas markets. That, he said, was because of a lack of marketing channels available to the agricultural and rural communities, which left farmers like him with no other option but to take on the mantle of marketing their own produce.
Dr Tripathi shared the view that the efforts of urban marketers wanting to sell to rural markets have been met with limited success, only because they are geared towards relatively short term gains in a three to five year time span. He said that the way to make strategies for rural markets is not through research and data collation (saying that data collation and presentation methods most often are questionable, and are geared towards supporting preconceived notions), but by experiencing and visiting ground realities.
In a lighter vein, Dr Tripathi said, ''Two people no one wants to pay in this country, are the rickshaw pullers, and the farmers.'' Though this had the audience in splits of laughter, he was more than successful in driving home the sombre thought that in India, there is no acknowledgement of the cost of cultivation when it comes time to sell the produce. Saying that agriculture in India is a loss making proposition, he said that farmers would be most probably be better off investing the amount of money they do in farming, in financial institutions or bank deposits, and would get better returns, citing experience from his banking career.
Dr Tripathi said that the only way forward, is for corporates to forge partnerships with a view to grow the rural markets, and that agriculture needs to be done on the basis of cost of cultivation.
Coming to his point of organic farming, he said it is ideal for the fragmented kind of land holding seen in India, as it needs to be done by hand. He said the biggest support corporations can give to this sector, is setting up facilities for agro-processing. Also, for addressing export demand, in which Dr Tripathi showed China's dominance by way of market share numbers, corporate – agricultural partnerships are the only way to go according to him. Another market that could be of excellent interest is that of food supplements, where he cited the example of Amway, which does about Rs250 crore worth of business selling food supplements in India – a country where most of those supplements are grown by organic farming. Dr Tripathi also said that along with corporate partnerships, the next rung in developing rural markets is stimulating rural entrepreneurship, by tapping rural entrepreneurs in both inward and outward supply chains.
Showing the case of tractors, he said that the tractor market not doing well in India today is one of the most profound examples of marketers not being able to fathom the rural market. He said that the current tractors, the 35 – 40 horse power mammoths that are manufactured and sold to rural India, are the main cause of the problem. He said that given the small size of the land holding, smaller power tillers are better suited to farming in India, but yet, the industry continues to make and sell these 5 litre an hour diesel guzzling behemoths, which can barely even execute a U-turn in the fields of the average Indian farmer. Moreover, at that rate of diesel consumption, the farmer increases his debt burden by burning more fuel than what is actually needed for tilling the land. Countering the industry's case for the tractor being used for transport, he said the primary function of the machine was to assist in farming, and that is where it has failed. He said that bullock carts, and taxis ply regularly and more than cater to the needs of rural transportation. He said the need of the hour is to adopt small power tillers like China has, which consumes around a single litre of diesel for three hours of operations, and are more manoeuvrable in smaller fields. Summing up the case discussion, he said that the tractor personifies the need to build products according to ground realities in the rural markets.
Dr Rakesh Singh, director of the centre for rural management at the Great Lakes Institute at Chennai suggested a more collaborative approach to distribution into the rural markets. Making a case for collaborative partnerships, he said that ground realities in rural markets are usually different from the statistics collated and made available to marketers. Amongst distribution alternatives, Dr Singh listed direct marketing, van operations, super stockists and sub stockists vs. rural retailing and agricultural distribution.
