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rural retail

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rural retail

  3. 3. INTRODUCTION • The world’ s econom ce ic ntre is s hifting away from the e tablis d, we s he althy econom s of Europe J apan, and North ie , Am ricaandtow e ardstheAs iaPacific • India is one of the fas s -g te t rowing larg e econom s in the w ie orld. Ove the las 15 r t years India has chang d m e uch fas r te thanm any predicte . d RURAL RETAILING 3
  4. 4. • Overall, competition and structural changes within the economy have raised the bar in terms of what consumers have come to expect. • Retailing is the largest private sector industry . Retail is the sale of merchandise in small quantities to the ultimate consumer. RURAL RETAILING 4
  5. 5. The Indian Consumer Is Rapidly Transforming Outlook– From Traditional to Modernized Traditional RURAL RETAILING 5
  6. 6. • From Functional to Lifestyle RURAL RETAILING 6
  7. 7. DEFINITION • Retailing can be defined as the set of activities that markets products or services to final consumers for their own personal or house hold use. This is done by organizing the availability of goods and then supplying them to consumer on a relatively small scale. RURAL RETAILING 7
  8. 8. • The mix of variables including price, location, communications, merchandise, physical attributes, services and personnel form the retail mix and these components form the over all strategic marketing components of retailing. RURAL RETAILING 8
  9. 9. INDIA N RURA L RE TA IL M A RK E T Rural Retail  Pillars of Indian economy  Rural markets are V irgin markets.  Retailing is part time .  L ow maintenance cost.  High Transportation and traveling cost.  Penetration is facilitated through intermediaries.  98% of traditional retailing is handled by local kirana stores. RURAL RETAILING 9
  10. 10. TRADITIONAL KIRANA STORES Complete utilization of space in traditional outlets RURAL RETAILING 10
  11. 11. ROLE OF RURAL RETAILING • Retailing the final phase of the distribution channel it is the availability and distribution that drives growth in rural Indian markets. • Hence retailing will be significant and will undergo greater organization and maturity in rural markets. • Innovative retail models is the way forward. RURAL RETAILING 11
  12. 12. • S tudy on buying behavior of rural consumer indicates that the rural retailers influences 35% of purchase decisions. • Therefore sheer product availability can affect decision of brand choice, volumes and market share. • India offers a huge, sustainable and growing rural market which can be tapped effectively through innovative distribution channels. RURAL RETAILING 12
  13. 13. RURA L RETA IL S Y S TEM • V illage retailers often double up as money lenders. • Occupation facilitates multi-person interaction in the closed society. • Rural Retail spread • Retail premises • Rural retail shelves RURAL RETAILING 13
  14. 14. B EHA V IOR OF THE CHA NNEL • Understanding channel behavior has critical bearing in channel decisions. • The ability to influence the retailer to stock and promote products requires identifying the manner in which the retailer performs his business. RURAL RETAILING 14
  15. 15. • The dimensions of channel behavior examined are: • Credit facilities to consumers • Pricing • S easonal pattern of stocking • Information source and retailer influence • Purchase source for the retailer • Channel credit • Purchasing cycle RURAL RETAILING 15
  16. 16. DEVELOPMENTSIN RURAL RETAILING Rural Malls Chaupal Sag ar : • Chaupal S agar first organised retail forays. It was launched on 15 A ugust. • A warehouse for storing the farm produce that ITC buys through its e-chaupals. • Initiated as rural shopping-cum-information centres in M adhya Pradesh. • The first rural mall has come up 40 kilometres journey from B hopal towards S ehore. • ITC S pent 3 years and Rs.80 crores on research and development of this concept including investments in E -choupal. RURAL RETAILING 16
  17. 17. OBJ ECTIVE • A n establishment to create a high-quality, low-cost channel for rural India. • A ny organization driven by the profit motive which are served through this initiative: • Reap benefits from the market they have created • Creating an entry barrier for other prospective players RURAL RETAILING 17
  18. 18. FORMAT • It has opted for self-service, stocking its merchandise on shelves lining the neat aisles, it stocks a breadth of products no supermarket can. It offers almost everything - from toothpastes to televisions, hair oils to motorcycles, mixer- grinders to water pumps, shirts to fertilizers. • M ost of the brands it sells are national such as M arico, L G, Philips, torches from E veready, shirts from ITC's apparel business, bikes from TV S , and tractors from Eicher. RURAL RETAILING 18
  19. 19. I TC ’s C houpalsagar store in S ehore district of M adhya Pradesh • RURAL RETAILING 19
  20. 20. DCM S riram Consolidated L td. (DS CL ) Hariyali Bazaars– Focuses mainly on agri products. • These bazaars offer – • QualityAg -Inputs ri • Financial Service s • FarmOutputSe rvices • Othe ProductsandSe r rvices • S o far, 70 quot;Hariyaliquot; S tores have been set up in different states across India. • Ranbaxy’s Fortis Health World is tying up with Hariyali Kisan B azaar to make entry into the rural market. RURAL RETAILING 20
  21. 21. GODREJ A GROV ET L TD • Initiated its rural retail business through ‘Godre Aadhaar’. j • These outlets offer rural households, the basic food, grocery, apparel, footwear to furniture, kitchenware and home appliances to value-added services including banking, postal services and pharmacy. • Godrej is planning to setup 1000 stores across the rural India in next five years. RURAL RETAILING 21
  22. 22. KIS A N S EV A KENDRA • K isan S eva K endra is a low cost business model by Indian Oil corporation of a retail outlet offering fuel and other non fuel value added services with penetration in rural markets generating high returns. • K S K a one stop center of service(seva) for the farmers at his doorstep making available: Diesel and Petrol with Q& Q S eeds, pesticides, fertilizers and other agri needs Nutan stove, Hurricane lamps Daily needs such as grocery, personal care S tationery for children. Tools, auto spares L ocation specific value additions L ow investment ranging from Rs.6 to 9 lacks with a pay back period of 3 to 4 years. RETAILING RURAL 22 • It currently has approx. 100 operational stores.
  23. 23. PA L ENGK E NITO • A n innovative retail format in the Phillipines called the ‘Palengkenito’, which means ‘mini-market’ in English. • The Palengkenito is a mobile grocery store on wheels, developed to bring retail convenience to less-affluent consumers in the Philippines. • S pecially converted S uzuki minivans are outfitted with a generator, shelving units, food heating elements and a •The roving store offers quality refrigerator. pre-packed fresh and processed food, snacks, canned goods, toiletries, and other basic household items in small packages and sachets ! RURAL RETAILING 23
  24. 24. Em rg e ingTrendsfromRural India • Em ploym nt e Incom e • • Cons ption um • Rising Aw ne s Le ls and are s ve its Cons que Influe e nt nceon Life tyle s RURAL RETAILING 24
  25. 25. RURAL RETAILING 25
  26. 26. CONCLUS ION • L ed by the rising purchasing power, changing consumption patterns, increased access to information and communication technology and improving infrastructure, rural retail market is estimated to cross US $ 45.32 billion mark by 2010 and US $ 60.43 billion by 2015, says a study by CII and Y ES B A NK. • Consequently, Corporate India is already firming up concrete plans to tap the rural retail market, which is growing at double the rate of urban markets, with innovative schemes and human resource policies. • A nd with 87 per cent of rural markets not having access to any sort of marketing and distribution, this segment has tremendous potential for growth. RURAL RETAILING 26