Archive for the ‘Markets’ Category
Marketing to Rural India
In a country like India, where the 70% of the people live in rural area, the rural market holds a lot of marketing potential. There is a wide spread difference in the standard of living between urban and rural India. In order to launch products and develop advertising for rural market there is a need to understand both the rural context and also the consumer.
This article by Satish Chandra and Sowmya Shankar, provides the opportunity to explore consumers and the type marketing programmes which emphasizes the advertising patterns on consumer dividend that has been successful in emerging markets and more specifically in rural India. The article begins by discussing the marketing opportunity for companies in rural India and then progresses to focus on some of the unique characteristic of rural India and how this translate into innovative advertising programmes for companies entering the rural market and finally to see the advertising in rural area.
Read the entire article here.
Business Models in the Context of Deep Poverty
The amount of literature on the benefits of working with the BoP is substantial. The BoP market identifies the poor as potential customers who can be served if companies learn to fundamentally rethink their business strategies. However, there is little literature among those who study the BoP on how exactly this can be achieved.
In their paper, Profitable Business Models and Market Creation in the Context of Deep Poverty: A Strategic View, authors Christian Seelos and Johanna Mair use two BoP examples to illustrate corporate and competitive strategies to reach the BoP. Their first case study, from Bangladesh looks at how Telenor and the Grameen Bank, created a new market by creating a supply of a key input – telecommunication services. The second study focused on the work of Map Agro and Waster Concern in India, which built a new market by creating demand for a product.
Building on their study, the paper also makes recommendations for companies evaluating BoP stratergies.
Read the entire article here.
Can MFIs Work as a Distribution Channel to Reach the B60?
The story of microfinance has been told several times over. Having proven itself to be a viable industry, the sector has witnessed increased attention from mainstream investors and corporate sector. While investors have been keen to fund the sector, although cautiously, the corporate sector has been looking for new ways to reach the bottom of the pyramid (BoP) market that MFIs cater to.
Several examples exist of such partnerships within India. The most well-known of them being Hindustan Unilever’s partnership with the ACCESS Microfinance Alliance (AMA) for the sale of its Pureit home-use water purifiers. Emami, a leading Indian cosmetics company is currently establishing a partnership with Spandana, one of India’s leading MFIs to engage women entrepreneurs who take their personal care products to previously-untouched markets.
But how effective are MFIs as distribution channels? What sort of products sell best through MFIs? What should MFIs and corporate keep in mind while entering into a partnership? The Monitor Group’s Inclusive Markets team delves into these questions in their latest study, Stretching the Fabric of MFI Networks authored by Nishant Lalwani and Michael Kubzansky.
The report highlights four models from India – Hindustan Unilever Water Filters, Moksha-Yug Agarbatti Manufacturing, SKS Mobile Phones, and Emami Personal Care Products. The case studies bring out several interesting findings. For example, Hindustan Unilver which partnered with AMA to sell their water filters found that the cost of distribution was higher than expected, and additionally encountered after-sales service which proved too taxing. It didn’t help that customers didn’t fully understand the utility of an intangible product such as clean drinking water. SKS, which sold mobile phones on credit found they were being blamed for technical glitches and poor service customers received from the mobile phone service provider.
Based on the findings of these four projects, the report goes on to establish four viable models for MFI Channel Expansion. It also offers valuable advice for MFIs and product and service providers. The report concludes that while MFIs have undoubtedly been successful in reaching the B60 (the term used in the report to indicate the bottom 60% of the economic population), one should not assume a “one-size-fits-all” approach, and must careful assess the suitability of a product, the nature of the relationship between the MFI and providers, as well as distribution and sales aspects.
The Report can be downloaded from the Monitor Website.
Not Just for Profit
The drawback of prevailing conventional shareholder-centric (corporate) design is that it focuses only on achieving short term goals and clearly overlooks long term benefits. Corporate model works with for-profit motive with out holding any responsibility for customers’ interests, protecting the environment, and supporting the communities in which they operate with social responsibility. The recession of 2008 is the corollary of the pursuit of making immediate profit by investment bankers and mortgage brokers who disregarded the impact of their actions on customers, economy, stockholders and the company itself in a long run. This clearly indicates the need for alternative and efficient designs that could replace this outdated industrial age model.
Though these alternative designs are emerging they are still at very nascent stages and needs further experimentation. But they indicate the transition of the conventional “for-profit” approach to “for-benefit”, which is more philanthropic.
In her article, Not Just for Profit, author Marjorie Kelly discusses the pros and cons of three broad emerging and promising approaches: stakeholder-owned companies, mission-controlled companies, and public-private hybrids, termed as hybrid between for-profit and nonprofit approaches. They could help in designing alternative models that could address the priorities of the 21st century better.
Read the entire article here.
Going Organic: Marketing Methods for Non-profit Organic Producers in India
The following is an abstract to a paper by authors K. Vijayalakshmi, M. Suresh, A.V. Balasubramaniam, and S. Aramugasamy of the Centre for Indian Knowledge Systems. The paper addresses several marketing methods adopted by organizations working closely with farmers who produce organic goods.
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The purpose of this study was to understand different forms of enterprises that an NGO in India can choose to promote and operate the commercial activity of marketing organic products and at the same time safeguard the farmers’ interest. Five enterprises having different structures were studied. It was concluded that if the enterprise model carried out as a society is proven viable, it would not be difficult to attract mutual fund investors particularly those keen on supporting rural enterprises. After the initial phase of establishment when the enterprise operations have stabilized and matured, the enterprise can be converted into a suitable form as a producer, public or private limited company, depending on the interest of the stakeholders. The results and analysis of this study would provide insights to various other development organisations involved in organic cultivation and marketing.
Read the entire article here.
Global Dimensions of Intellectual Property Rights in Science, and Technology
The Office of International Affairs of the National Research Council undertook an examination of the global dimensions of intellectual property rights in science and technology in response to increasing concern expressed by important segments of U.S. industry—and, to a lesser extent, the U.S. university research community—about the lack of uniform international treatment of IPRs and the difficulty of protecting their innovations from imitation. This volume focuses on the nature of the changes, the challenges present for national and international IPR systems, and their implications for science and technology. This examination took the form of a major conference, the proceedings of which are published in this volume.
Read the volume here.
Is the Fortune a Mirage?
Professor C.K. Prahalad’s much-acclaimed book, Fortune at the Bottom of the Pyramid, lead the discussion on engaging with the poor and how the private sector could help lift people out of poverty. While his book lead to much discussion and attention to the so-called bottom of the pyramid (BoP), others such as Aneel Karnani of the University of Michigan, have questioned Prahalad’s assumptions.
In his paper, Mirage at the Bottom of the Pyramid, Karnani says the BoP argument is “riddled with fallacies,” and that the notion that selling to the poor can simultaneously be profitable and help eradicate poverty is a “harmless illusion” at best and a “potentially dangerous delusion.” Through the paper Karnani argues that rather than focusing on the poor as consumers, we need to view them as producers. When the poor engage in production, Karnani argues that it leads to a higher increase in real income, which is a better route out of poverty.
Read the entire article here.
Promotion of Brand in Rural Market of India
The following is the abstract to the original article, Promotion of Brand in Rural Market of India, by authors Hitendra Bargal, Ashish Sharma and Dr. Vijay Pithadia.
Promotion of brands in rural markets requires the special measures. Due to the social and backward condition the personal selling efforts have a challenging role to play in this regard. The word of mouth is an important message carrier in rural areas. Infect the opinion leaders are the most influencing part of promotion strategy of rural promotion efforts. The experience of agricultural input industry can act as a guideline for the marketing efforts of consumer durable and non-durable companies. Relevance of Mass Media is also a very important factor.
The Indian established Industries have the advantages, which MNC don’t enjoy in this regard. The strong Indian brands have strong brand equity, consumer demand-pull and efficient and dedicated dealer network which have been created over a period of time. The rural market has a grip of strong country shops, which affect the sale of various products in rural market. The companies are trying to trigger growth in rural areas. They are identifying the fact that rural people are now in the better position with disposable income. The low rate finance availability has also increased the affordability of purchasing the costly products by the rural people. Marketer should understand the price sensitivity of a consumer in a rural area. This paper is therefore an attempt to promote the brand image in the rural market.
Read the entire article here.