Page 274 - DMGT509_RURAL MARKETING

Unit 14: Corporate Sector in Agri-Business

Consider Some Examples Notes

The State Bank of India (SBI) has started a zero-balance bank account program for villagers.
Called the SBI Tiny account, there are no physical branches or officials, just a paid volunteer who
is equipped with a small box and a cell phone. The box enables biometric measurements
(fingerprints), at the time of opening the account to confirm the account holder’s identity. The
cellphone enables communication with the zonal office to check on available balance. Payments
under programs such as the NREGS and pensions are made directly to these accounts. The
advantage for the villagers is that they can withdraw money from their accounts at any time of
the day or night. (Withdrawals are never more than a few dollars.) SBI hopes to cover 100,000
villages by 2012. The bank has tied up with India Post for some services.
India Post, the public sector postal network, has its own plans. It has been hard hit in urban areas
because of the more efficient (though more expensive) private sector courier services. Now it is
looking at consolidating its hold on the rural areas. Project Arrow has been launched to IT-
enable post offices in the hinterland. A pilot project involving 500 post offices — the country has
more than 150,000 — has been kicked off. It will focus on banking, money remittance, and
transmission and delivery of information.

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Caution ASSOCHAM suggests that for deeper penetration in the rural markets, the industry
needs to create proper channels and inform the community about the products through
local language advertising as well as other tools such as local exhibitions and mobile vans
to tap the rural consumer.

14.14 Products for Rural Markets

Maruti Suzuki, India’s leading automobile manufacturer, today sells 5% of its vehicles in the
rural markets. The company expects this number to rise to 15% in the next two years. “This is not
just our wish, but reflects market demand,” says director (marketing & sales) Shuji Oishi.
In telecom, service providers are making a beeline for the villages. That’s where the growth in
what is now the world’s fastest growing mobile market lies. According to industry estimates,
70% of all new subscribers will come from rural areas. (See NTT DoCoMo’s Tata Deal: Why
Global Telecom Firms Want to Dial India.)

Mobile device manufacturers are also tailoring their products to this market. Nokia had earlier
launched a basic handset with a torch (large parts of rural India don’t have electricity) and an
alarm clock. (See How Did Nokia Succeed in the Indian Mobile Market, While Its Rivals Got
Hung Up?) In December 2008, it went one step further with the launch of Nokia Life Tools.
“Nokia Life Tools is a range of agriculture, education and entertainment services designed
especially for the consumers in small towns and rural areas of emerging markets,” says the
company. “Aimed at providing timely and relevant information customized to the user’s location
and personal preferences directly on their mobile devices, Nokia Life Tools is the first step
towards bridging the digital divide.”
The mobile phone is a new-age product; gold jewelry is as old as the hills. Here, too, there has
been a rural move. According to World Gold Council figures, 60% of India’s US$15 billion
annual consumption of gold and gold jewelry is from rural and semi-urban areas. The Tatas
have launched a mass-market jewelry brand — GoldPlus. The Tatas train unemployed youth
and send them to the villages as brand ambassadors. The problem with gold in India is that it is

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