Page 161 - DMGT509_RURAL MARKETING

Rural Marketing

Notes wash, personal wash and beverages are in rural areas. And we see a future in going rural in a
major way”.
Industry’s role in building market linkages: To make an effective market linkage, industries
have to play as an engine of market, which can generate a brand image of the rural products.
This initiative of industries will also strengthen the backward and forward linkages of the rural
market, besides, accelerating the innovations of the rural products. Definitely, this strategy will
also give a remarkable dividend to the industries & profit making companies. In micro level, it
is observed that to create a sustainable market linkage for rural products, industries can develop
an ecosystem of Self Help Groups (SHGs) by involving the local communities
through village level empowerment. It is nothing less than the next phase in the democratization
of commerce. Under this paradigm, industries can create a network with viable marketing
channels covering all the linkages from villages to the global level. This architecture provides
the right value of procurement through the village procurement centres and rural entrepreneurs
can sell their products faster with better price realization. This model is also capable of generating
a consumer business and an output business in a win-win scenario, where rural producers can
get a wide marketing horizon and the industries shall get a new, lower cost ‘sales force’.
Another role of industries in building market linkages for agro-based rural products can be the
‘dynamic contract farming’. If a conventional industry can kick off a contract farming business,
and export niche horticulture crops like cucumbers, the small and marginal farmers who could
grow these small cucumbers would make 30,000 in profits in a year. KRBL, one of India’s
largest basmati exporters, has contract farming agreements with 24,000 farmers; Global Green
buys from about 12,000 farmers. Moreover, in the current era of information technology, industry
and private companies can also creatively use ICT for building sustainable marketing linkages.
This approach creatively leverages information technology (IT) to set up a meta-market in
favour of small and poor producers/rural entrepreneurs, who would otherwise continue to
operate and transact in ‘unevolved’ markets where the rent-seeking vested interests exploit
their disadvantaged position. ITC e Choupal is the best example in this context. Through creative
use of Information Technology, ITC eChoupal has been creating sustainable stakeholder value
by reorganizing the agri-commodity supply chains simultaneously improving the
competitiveness of small farmer agriculture and enhancing rural prosperity. eChoupal also
sidesteps the value-sapping problems caused by fragmentation, dispersion, heterogeneity and
weak infrastructure. ITC takes on the role of a Network Orchestrator in this meta-market by
stitching together an end-to-end solution. It eliminated the traditional ‘mandi’ system which
involved lot of middlemen as a result of which farmers failed to get the right value for their
produce. The solution simultaneously addresses the viability concerns of the participating
companies by virtually aggregating the demand from thousands of small farmers, and the
value-for-money concerns of the farmers by creating competition among the companies in each
leg of the value chain.
Scope & opportunities: The basic scope of this novel initiative will be the mutual benefits of the
rural entrepreneurs and industries. The entrepreneurs – primary beneficiaries, SHGs – bridge
with the community, participating companies/industries and rural consumers have befitted
through a robust commercial relationship. These models of marketing linkages demonstrate a
large corporation which can play a major role in reorganizing markets and increasing the
efficiency of a rural product generation system. While doing so it will benefit farmers and rural
communities as well as shareholders. Moreover, the key role of information technology—
provided and maintained by the industry/company for building linkages, and used by local
farmers—brings about transparency, increased access to information, and rural transformation.
Besides, this strategy of market linkage, addresses the challenges faced by rural entrepreneurs
due to institution voids, numerous intermediaries and infrastructure bottlenecks. Moreover,
the prime scope of this model is the creation of opportunities for the rural entrepreneurs for
product differentiation and innovation by offering them choices. Because of this sustainable

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