Rural Marketing

Case Study: Where lanes have no names Fortune Industries having a turn over more than Rs 400 Crore is manufacturing and marketing hair care products including hair oil, shampoo, hair dye etc. The company’s brand name ‘Sunshine’ is well established. The company has nationwide marketing operations. The marketing structure of the company is as follows: General Manger (Marketing)

Product Manager (3)

Regional Manager(4)

(Hair oil/Cream, Cream, Shampoo, Hair dye)

Area Sales Manager

Territory In charges Sales Rep. During the last quarterly marketing review meeting, Mr. Malhotra, GM (Marketing) of the company was concerned about the increasing competition and stagnancy in sales volumes of the Sunshine range of products. During the discussions Regional Managers and Area Managers were of the views that urban markets are getting saturated day by day and company must go deeper into the hinterland to explore the potential markets. Mr. Rathore, Regional Sales Manager (North) strongly advocated the philosophy “dig deep and strike gold”. His Area Managers also seconded his thought and apprised the participants that rural market is growing about three times faster than urban market. Mr. Malhotra showed his agreement with the views of the participants and invited their views for following issues: 1) How to enter into the vast and scattered rural market in a cost effective way? 2) What changes are required in marketing structure of the company? 3) What changes are required in sales force, distribution and channel management? The RM (West) suggested that company should enter into rural market in a phased manner and prioritize markets as per population strata. RM (East) suggested for the concerted efforts to tap the rural markets, and advised some changes in company’s distribution channels. Currently, the company has appointed wholesale dealers (WD) district wise, who are delivering products to the retailers. Company’s C & F Agent has been arranging delivery of the goods to these WDs. These WDs are always less willing to distribute products in distant towns & villages due to higher distribution cost, which erodes their profits. The RM (West) suggested for a separate distribution channel for rural marketing. The RM suggested for appointment of 3-4 super distributors (SDs) in a state to carry out rural distribution of the products. He also suggested giving these SDs

more margins to compensate higher distribution cost. GM (Mktg), how ever, opposed the idea on ground of higher channel /distribution cost which will squeeze the profit of the company. One of the RM was of the view to have a separate & independent rural marketing cell. Area Manager (North) stressed the need of appointing Rural Sales Representatives (RSR) to penetrate rural markets. Mr. Malhotra, GM (Marketing) was thinking hard how to use all these ideas to design an effective rural distribution system & other rural marketing strategy to boost the sales of Sunshine range of hair care products in the untapped rural markets. You being a smart rural marketer must help the GM in designing an effective rural sales force & distribution system.