Wednesday, March 19, 2008

Perspectives on Retailing in India and Rural Marketing IV

Continued from previous posts, Part I, Part II & Part III (will open in new window) 

Marketing to Rural Consumers – Proactive Approach

Another point of view that redefines marketing as a set of activities that influence the environment by playing a part in its development. It is important to mention that the considerations and actionables as mentioned in BOX 1 remain the same regardless of the marketing strategy an organisation pursues. The only difference lies in the approach. Cost, income and access issues are also important considerations for proactive marketers, but access assumes enhanced significance. Reaching the un-reached, calls for collaborations whereby stakeholders benefits are ensured without much strain on the financial resources. A better example of such a strategy would be the venture of Telenor[1], a Norwegian Telecommunications Company in Bangladesh.

Box 1




Development of low cost processes for offering quality goods and services at cheaper prices


Marketing and sales programme to match erratic incomes


Initiate collaboration with existing players / networks

Starting out in 1997, through a joint venture with Professor Mohd. Yunus of Grameen Bank, Telenor established two separate entities, one a pure commercial model: Grameen Phone and the other with a social objective of catering to the poor, namely Grameen Telecom. Grameen Phone, which broke even in 2000, is now the second largest taxpayer besides being one among the largest private business companies in Bangladesh. It commands a subscriber base of as much as 16.48 millions at the end of December 2007.[2]  Grameen Telecom, which is non-commercial, is also a profitable venture by accounting for more than 10 per cent of Grameen Phone revenues. Grameen Telecom has created more than 1,00,000 micro entrepreneurs, also known as Village Phone Ladies, who provide phone services in unconnected villages, thereby allowing people to easily connect and save on by avoiding costly trips to towns. Such a strategy not only has resulted in gains for Telenor, it has also helped empower several people by offering them a regular source of income.

Moving a bit further into the past would let us know the reasons behind the success of the venture. NORAD, which is the Norwegian Agency for Development had invested in development of fibre-optic network for internal communication of the Bangladeshi railway system, this network was not being used to its full capacity. Telenor was able to procure this important constituent at very cheap rates. Further, since venture had a social arm, Telenor was able to access cheap funding from ADB, IFC, NORAD and the Commonwealth Development Corporation, effectively lowering the cost of capital to Telenor. And most importantly, collaborating with Grameen Bank, the brand that it is, brought in the much-needed trust not only from the government but also from the populace of Bangladesh. Bangladesh has become one of the most profitable growth markets for Telenor.

Such a strategy that redefines marketing, specifically in rural areas, essentially involves improving the productive capacities of producers as a seller of goods and services and in turn transitioning him into a productive consumer of goods and services. The perspective to empower rural producers essentially covers the all exchange relationships in rural scenario. These relationships have been depicted in the matrix.

Cell I to III in the matrix covers all types of exchange relationships that occurs in a rural scenario, it is essential to note that the above framework recognizes rural populace not only as consumer of goods and services (as is predominantly emphasized in popular culture) but more importantly as the producers of goods and services. Recognising the above would help us realize the potential that the rural population has. This is where the real opportunity for marketing lies, the opportunity to increase the productive capabilities of rural producers both in intra-rural and rural seller – urban buyer exchange / transactions.

To be Concluded in next post though an India specific perspective on Proactive Marketing.....

[1] Seelos, Christian and Johanna Mair; “Profitable Business Models and Market Creation in the Context of Deep Poverty: A Strategy View”; IESE Occasional Paper. October 2006
[2] Source: Wikipedia; retrieved as on February 21, 2008.
[3] Rural Buyer Seller Matrix; Vaswani L K, Rajesh Aithal, Debasis Pradhan, G Sridhar (2005), International Conference on Marketing Paradigms for Emerging Economies, IIM Ahmedabad

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