ByVidya Gorakshkar, Roll No. 16Casestudy 1Adeco in Rural marketsQUESTIONS1. Do you think the rural marketing strategy of Adeco wasright? If you were the decision maker what suggestionswould you give to Adeco?AnswerThe rural marketing strategy has some very commendablepoints
. Some of the salient ones are that the
Adeco tried toreach out to so far untouched segment of rural marketing.
According to NCAER’s the rural population accounted for asignificant chunk, in case of households earning between 2 to 5 lacsa year, the rural share was as high as 36%. Drought proofing of agriculture & dairy had contributed to rural prosperity, which madeit a promising lucrative market waiting to be served. Before startingthe countrywide sales promotion Adeco did
experimentation on asmaller scale
initially in Saurashtra & thereafter in Northern &Southern states. Adeco also did use innovative
advertising &awareness generation
drives using the local concept such asChofulla & Gumbatbari apart from films & music. Adeco used
Hub &spoke distribution model
for distribution to ensure that ruralmarket is reached and also catered effectively. Adeco tried to
overcome the problems associated with the electricity &refrigeration problems in rural area
by providing not onlyrefrigerators but also the tin & thermacol boxes with an associationwith the local ice factories.
In short Adeco had all the basicscovered as far as rural markets are concerned, in depthknowledge of rural psyche, strong distribution channels andawareness form the basic pre-requisites for making a dentin rural markets.
I feel that
Adeco made a major mistake in pricing of theproduct,
to penetrate the rural market Adeco kept the prices of ‘Chota Adeco’ far too low. The model used by Adeco was largevolumes and low margin
. The possible problems such as rise inthe raw material prices, rise in transportation costs, rise thedealers & distributers would expect over a period of timewere not foreseen & were not factored in
while deciding theproduct price. Though foreseeing the unexpected events like the