Marketing of non-farm products

In general, non-farm products are synonymous with manufactured items. However, as economic terms, non-farm products, as opposed to farm products are those which after some sort of processing in small units in the rural areas, themselves become value-added and are traded at premium. Such non-farm activities in rural areas include tobacco curing, small-scale oilseed crushing, tanning on cottage-scale, etc. Beside these, collection of milk, woolshearing, dates-curing, primary processing of raw sugar (shakkar and gur-making are non-farm activities and eventually become non-farm products. !his sort of small-scale industry in the rural areas over a period of time has grown appreciably. "arketing in rural areas# $nlike marketing in urban areas, a comple% and multisectoral operation, marketing in rural areas is based on age-old traditional way of processing and distribution. !he bulk of marketing function is usually performed by persons traditionally known as, &middlemen' or &distributors' and also called, whole sellers, retailers, or brokers. !hey include trader-cum-peasants in various &open markets'. In some comparatively bigger rural areas where production of a particular commodity gets concentrated, a sort of a market develops on permanent basis. (or instance, )unnri, district "irpurkhas (Sindh is perhaps the largest chilis market in *akistan. +fficiency# In order to improve the working and the efficiency of such rural markets, efforts be made to revitalise them altogether. !heir efficiency is much more important if one was to keep in mind that these are the markets with which farmers come in contact with directly and from which they earn their incomes. !he reason of their failure could be traced to their uni-sectoral nature and singlepurpose approach. ,ll of such programmes were based on the theory that it was the ignorance about the modern agricultural practices which was the basic cause of low production and conse-uently the rural poverty. In other words, these programmes remained production-oriented with little stress on marketing. !hey .ust failed to appreciate as to how the benefits of increased production could be made available to small farmers. !he integrated rural development programme (I/0* was still yet another rural development effort. 1o doubt, it had some innovative features, like people's participation in decision-making, planning and implementation through the branches of various nation-building departments at dispersed rural focal points. But even these arrangements failed to prove effective as these centres largely remained pre-occupied in the supply of various input items.

animal bones. (6 In order to end the dependency of non-farm products. it is proposed that separate walled markets be established e%clusively for sale-purchase of non-farm products.. Suggestions# In view of the above problems. some suggestions are made for improving the marketing of non-farm products# (4 Suitable varieties of fruits and vegetable may be evolved which are all e%clusively meant for processing. may be made available at cheaper rates in rural areas. in the case of farm produce.acent regulated wholesale markets in the urban areas. . raw sugar and gur. 1on-farm products# "arketing mechanism of the non-farm products in the rural areas is not a problem like that of farm products. take place mostly through &arhthis' (commission agents . have to sell their products at highly unfavourable prices. !he markets in the rural areas are still ungoverned by any legal framework. particularly owners of small land holdings.ects be prepared by -ualified consultant. electric and electronic appliances may also be made. (8 . However. /ather proper arrangement of the necessary items for the rural inhabitants like te%tile goods. . (7 1on-farm product of greater value may be processed and produced in the rural areas. hides and skin. keeping in view the findings of the survey. In some cases. oil cakes. in the province of *un. In fact it is an e%ercise towards the revitalisation of rural market under a legal cover. survey of non-farm products and an estimation of those which can be produced with advantage may be carried in prospective focal areas and pilot pro. domestically processed fruits and vegetables such as chutney achar. curd date.ab a concept of 2(eeder "arkets3 has been translated into practice according to which certain rural markets have been linked with the ad. wool and hair as well as various items of inputs (such as seeds. price fi%ation is also done through bargain between buyers and sellers.Inade-uate facilities# It is due to insufficient facilities in the rural areas that farmers. murabba etc. Selling non-farm products such as edible oils. in rural areas. pesticides etc. is mostly based on the open auction sale and the prices of non-farm products are mostly fi%ed by producers themselves. (5 (acilities such as transportation. !he price fi%ation. (9 1on-farm products may not be taken for granted.

Entrant :ompany starts /ural "arket after success in $rban "arket (eg H<<.Entrant :ompany starts /ural "arket after success in $rban "arket for long (eg :adbury urpose R G A Retain Grow Add t!e market . "eera Shampoo Mid. <= Late .DISTRIBUTION CHANNEL IN RURAL MARKETING ENTERINING THE RURAL MARKET New Entrant :ompany starts /ural "arket first . then ventures in $rban "arket (eg :avin )are :hik .

RURAL MARKETING "TRATEG# L *rofile the /ural "arket A *rofile the :onsumer N * N "arket Behaviour . "/ I Segmentation !argeting *ositioning N G E --------------------------------------------------------------------------------$ /ural *roduct E /ural *ricing % + /ural 0istribution U T /ural Sales (orce "anagement I /ural :ommunication & --------------------------------------------------------------------------------N ' "onitor the /ural Strategy E E . :ontrol A % K . ( ) (eedback .

Poor storage system ).being first on t$e s$elf in t$e product category and .gate / program &peration 0agruti Switch from :harcoal to :olgate tooth powder HLL (ree samples of <ifebuoy :avin )are C (ree sample of :hik :hampoo Marico Industries C arac!ute coconut oil “Sudhata ki pehchan” –smell to differentiate between real and spurious Rural Marketing. 11.wareness (Hyndai did with I@: and *1B and SBI subsidiaries >6AB sale of Hyndai!rial from /ural?Semi $rban areas *urchase *ost-*urchase Satisfaction %o. &n suc$ an environment. Lo# investment capacity of retailers 1*./s. Poor availability of suitable dealers ". Large number of small markets 2. Lo# density of s$ops per village %. Poor visibility and display of products on rural s$op s$elves.(E-EL& MENTAL MARKETING 0evelopmental marketing is a process through which awareness is created >could be demonstration >could be presentation >(ree samples >could be through up eg tie up with Bank tie up with *etrol?0iesel pumps . &nade'uate banks and credit facilities (.Distribution strategy  CHALLENGES IN RURAL DISTRIBUTION rural retailer can0t afford to keep many different +.eeping /nit rig$t. Poor communication of offers Distribution +trategy  Ensuring Reach & Visibi i!" # .$e t$ing #$ic$ is critical. Dispersed population and trade to get t$e +tock . Poor road connectivity . Multiple tiers !.

in addition to petrolAdieseloil and lubricants are also selling consumables suc$ as soaps.odre<. Distribution 7$annels in Rural &ndia Use %+ c%%$era!i*e s%cie!ies5 . 1rgani2ations $ave to ensure t$at t$eir products are available at t$ese times.           developed a privileged relations$ip #it$ t$e retailer is a source of competitive advantage to consumer good companies. 6armers +ervice 7o-operative +ocieties function like a mini super market for rural consumers #$ere t$ey sell soaps.companies may contact t$ese societies to sell t$eir products.$ese bunks may also t$ink of stocking certain consumable agricultural inputs like fertili2ers. Use %+ . Agricu !ura in$u! &ea ers # .detergents.# .u)$s # .clot$es.fertili2erspesticides etc.$ence t$e .<ect +$akti of @/L is one suc$ e?ample. C% ab%ra!i%n +%r Dis!ribu!i%n # 9arious organi2ations #it$ comparatively lesser distribution reac$ can collaborate #it$ organi2ations t$at already $ave ac$ieved $ig$ penetration levels in rural areas.seeds.kitc$en e'uipment and agri-input by making t$eir products available upto feeder to#ns.seas%ns 5 Peak season times in rural parts are 6estivals$arvest and marriage seasons.Marico &ndustries and no# its planning one #it$ =irma for distribution of 7amay soaps.s %(n Dis!ribu!i%n Ne!(%r. 6or eg.$ere are only (!*** large villages out of more t$an "-3(-*** villages. C%n*er!ing un%rganise& sec!%r )anu+ac!urers in!% &is!ribu!%rs # +mall scale manufacturers $ave good kno#ledge of t$e territory and $ave good sales net#ork. .$ere are about 2-"2-*** fertili2er dealers in t$e country. U!i i/a!i%n %+ . at economical and reasonable prices.semi-urban centers or mandis.3% lak$ fair price s$ops operating in t$e country.ea.$ere are about .seeds and pesticides.biscuits etc. +ince t$ese societies $ave necessary infrastructure for storage and distribution. $ad tie-ups #it$ . 3ulk of t$e demand for t$e consumer durables concentrated during t$ese times. . C%)$an". 6or eg. 3ut t$ey $ave *4 of t$e rural population and "*4 of total consumption. During off season most of t$e dealers don0t $ave business. 1rgani2ations like >?ide are attempting to convert t$ese small scale manufacturers to become t$eir dealers. Un&ers!an&ing %+ . . De i*er" *ans # 7ompany delivery vans #$ic$ can serve t#o purposes8 t$ey can take t$e products to t$e customers in select rural areas and also enable t$e firm to establis$ direct contact #it$ t$em and t$ereby provide an opportunity for promotion.$e rural consumers are in s$opping mood and $ave t$e cas$ for t$e same at t$is time.t$e Public Distribution +ystem is #ell organi2ed.e!r% .clot$. Reaching u$!% Man&is' T%(ns' Se)iurban cen!res # 1rgani2ations can cater to rural needs for consumer and dairy cooperative in rural areas. Targe!!ing arger *i ages # .detergents.ub ic Dis!ribu!i%n S"s!e) # &n &ndia.$ese petrol pumps.particularly on t$e $ig$#ays.$ere are over lak$ co-operatives operating for different purposes like marketing. +ince t$e PD+ outlets cover t$e entire country t$ey can be utili2ed for marketing consumable items and lo# value durables in rural areas.

#$ic$ $ave $ardly any s$ops.3 lak$ tiny villages. La"er Channe $ar!ner L%ca!i%n Layer 1 Layer 2 7ompany depot A 7:6 B DistributorAvan operatorA super stockistA rural distributor =ationalAstate level District level Layer 3 +ub-distributorA retail stockistA sub-stockistA star seller A +$akti dealer .large villages$aats 9illages.c$eap and appropriate.&.  Bt t$e ot$er end are 2.$ese villages are connected by all-#eat$er roads and t$ey account for "*4 of rural #ealt$.  Shan&ies0 Haa!s0 1a!hras0 Me as # +$andies are periodic markets #$ic$ operate in a #eekly cycle.$aats Layer ! Retailer . .  !*4 of t$e rural population resides in t$e 1 lak$ odd large villages.and t$ey also need to motivate retailers to stock t$eir product or and large villages Layer F$olesaler 6eeder to#ns.$ey offer a ready distribution net#ork and are steady.>veready.companies may try to motivate t$em so t$at t$ey can sell ot$er products also during t$eir free time.7 etc are t$e companies t$at $ave t$e most deeply penetrated rural distribution system <ust about cover t$e retail net#ork up to t$e 2***D population villages.e$sil @E. Melas #ork best for introducing ne# brands and building brands t$roug$ t$e organi2ation of events at t$e venue.  Bccessing Rural markets C 7overage +tatus in Rural Markets  Marketers $ave to ensure t$e reac$ of t$eir product to retail outlets. @aats can be used effectively for distribution. .  Rural distribution 7$annels 6ive layers of distribution c$annels for t$e movement of products from t$e company depot to t$e interior village markets.  @/L.demonstration and sampling of daily need products.

$e average mont$ly sale per village s$op is less t$an Rs. Rural markets #ere neglected by most companies due to t$e lo# density of retail outlets and t$e small off-take per retailer. .#$ic$ are fre'uented by village retailers to replenis$ stocks. .t$e rural distribution system $as included #$olesalers. . Rura Re!ai S"s!e) Rural &ndia accounts for "!4 of retail outlets in t$e country.retailers act as #$olesalers and vice versa to sell to small retailers #$o come from surrounding villages. 2h% esa ing !*4 of rural consumption is still routed t$roug$ #$olesalers because t$ey are located in nearby feeder markets. &ndian #$olesaler is a trader rat$er t$an a distributor and t$erefore tends to support a brand during periods of boom and #it$dra#s support during periods of slump.$e logistics of feeding t$e 3! lak$ retail outlets spread over " lak$ villages is a toug$ task.$e $ig$ distribution costs due to geograp$ical spread and lo# volumes per outlet act as a barrier to t$e entry of products in rural markets.retailersmobile traders.vans and #eekly $aats.         E*% u!i%n %+ Rura Dis!ribu!i%n S"s!e)s @istorically. .#$o often indulged in trade malpractices in t$e c$annel.#$ic$ restricts t$e variety and range of t$e products stocked. . &n t$e feeder markets. +ome to#n retailers send t$eir salesmen to villages to book orders and supply goods to t$ese small retailers.$is resulted in t$e $old of t$e market by t$ese #$olesalers. F$olesalers based in feeder to#ns took advantage of t$is situation as village retailers found it convenient to buy from t$ese places. !***.

$is difference in stocking pattern is because of poor reac$ and difficulty in servicing stores. 3ut #$at does vary is t$e number of puts most village s$ops in a self-limiting sales cycle.***D distributors and #are$ouses.but simultaneously marketers also need to make efforts to ensure t$eir visibility on rural retail s$elves.rural retail s$elves are flooded #it$ local and regional brands as t$ese promise t$e retailer $ig$er margins and longer credit periods. Rura re!ai She *es  /nlike urban retail s$elves.$ese vans reac$ " lak$ retail outlets directly.$e number of product categories stocked by rural and urban stores does not vary significantly.Turn%*er  Bverage value of stock per product category in interior villages is about a t$ird of t$at in feeder villages.#$ereas toiletries $ave a $ig$er take-off in feeder villages in comparison to ot$er products.$e lo# off-take.t$e salesman loads t$e van #it$ stocks from t$e nearest stockist or company stock point and #orks t$e surrounding markets.H Vans  Mobile vans $ave an important place in t$e distribution and promotion of products in villages.  .  .  1ff-take of packaged food stuff and tobacco is $ig$er in interior villages.  Rural retail s$elf space can be occupied by offering consumers a combination of attractive margins. .!(4 of villagers prefer to buy t$ese from a $aat because of better price.'uality and variety.$e visibility of brands is very poor due to t$e absence of proper racks and display bo?es and stands.  +lo#-moving products covered #it$ dust accumulated over a period of time are a common sig$ facility and servicing t$at is superior to t$at offered by t$e competition.$erefore marketers need to devise strategies to occupy rural retail s$elf space by providing display and storage systems.eac$ van making !* to .$e cas$ outlay of rural retail outlets is e?tremely lo# and most of it is invested in fast moving brands and $ig$ margin commodities. Products are stocked in a cluttered and disorgani2ed #ay.  .  . S!%c. +ince a significant portion of t$e sale is on credit.  3rands t$at are advantageous to t$e retailer0s business are displayed prominently.  .lo# stocks and lo#er stock turnover ratio toget$er pose a c$allenge to t$e marketer of a ne# product t$at $o# to occupy retail s$elf space in rural markets.  >veready batteries and torc$es are market leaders.  Despite t$e same product being available in t$e village s$op.  &n t$is system.$e moves to t$e ne?t stock point and starts covering t$e villages surrounding t$at stock point.$e first task is making brands available. &t establis$ed an e?tensive distribution net#ork t$at includes 1*** vans. . G#all mounted display strips for fairness creams and ice bo?es for soft drinks.  1nce $e $as covered all suc$ markets. .

$ey carry t$eir product on bicycles.mostly local brands ranging from detergentcosmetics. . Haa!s 0 Shan&ies @aats are t$e periodic markets and t$e oldest marketing c$annel in & traders en<oy a good rapport #it$ t$eir clients.              "* calls per day.and personal care products to garments and foot#ear. &t $as emerged as a ma<or instrument of t$e . Mostly sell fakes and local brands.raders 5 . . .rice.  PD+ =et#ork 1rders 1.but also to sell surplus agricultural and allied products.$ey provide a first-contact point for villagers #it$ t$e market.overnment0s economic policy aimed at ensuring availability of food grains to t$e public at affordable prices as #ell as for en$ancing food security for t$e poor.political and cultural contact. Procurement 2. +torage 3.edible oil and kerosene. Rural Mobile .$eir direct selling approac$ ensures $ig$ involvement on t$e part of consumers and since t$ey $ave a fi?ed and committed consumer base.$e commodities are #$eat. >ac$ $aat caters to t$e need of a minimum of 1* to a ma?imum of !* villagesdra#ing around *** persons #$o come to buy and sell a range of daily necessities and services. +ell a variety of daily-need products. .sugar.$e Last-Mile distribution Mobile trading is an age-old.often referred to as Iration s$ops0H.$ese markets provide people an opportunity not only to purc$ase consumer opportunity for buying daily necessities as #ell as farm supplies and e'uipment and a place for social. . .mopeds. PD+ #it$ a net#ork of about .ransportation .$andcarts or on foot.$e stock for t$ese vans is supplied by t$e small to#n distributors. PD+ $as been evolved to reac$ t$e urban as #ell as t$e rural population in order to protect consumers from t$e fluctuating and escalating price syndrome. .direct to $ome. 3ulk Bllocation 3e$avior of t$e 7$annel . .a means for distributing local products and e?c$anging rural surplus.unorgani2ed distribution system in rural &ndia. Mobile traders $ave a deep reac$ since t$ey target small villages to avoid competitions from s$ops in bigger villages.ub ic Dis!ribu!i%n S"s!e) 3.%" lak$ 6P+ is t$e largest distribution net#ork of its type in t$e #orld.$e company ensures t$at t$e van revisits a retailer every 1! days. .DS4 PD+ is a system of distribution for essential commodities to a large number of people t$roug$ a net#ork of 6P+ G6air Price s$ops.

Sub6s!%c-is! O$era!i%n  .ribbons.#$ile in ot$ers it is only 1! to 2*4.a part of t$e outstanding dues is cleared every mont$ but t$e final settlement takes place at t$e $arvest time.bangles.urchasing c"c es 5 &n $ig$ turnover feeder villages.  .  .$e sub-stockist covers all t$e outlets in $is rural market like t$e regular stockistby e?tending credit and services.  B distance of "*-%* km is covered per day.$ey provide better control over sales account for as $ig$ as "* to %*4 of t$e total rural business.ricing b" !he channe # +ometimes retailers in interior villages sell at a price $ig$er t$an t$e ma?imum retail price.seeds also follo#s t$is pattern. Cre&i! +aci i!ies !% cus!%)ers # &n some districts.  Chane cre&i! 5 +mall retailers and retailers in t$e interior villages must buy in cas$.  +uper stockists typically cover 1*-1! sub stockists in t$e district.  In+%r)a!i%n s%urce an& in+ uence 5 F$olesaler is t$e most important source of information and also most important influence on t$e retailer.  . 7ompanies Distribution Model 1 .clot$es.#$ile large retailers in feeder markets are offered credit.  .re*a en! Rura Dis!ribu!i%n M%&e s Retail F$olesale Rural distribution can broadly be categori2ed into t#o modelsC +maller companies adopt t$e #$olesale activation route o#ing to a lack of viability.$ey <ustify doing t$is on t$e ground t$at t$ey spend time and money to fetc$ t$e products from to#n #$olesalers.  .#$ere rural s$opkeepers depend only on counter sales and not on #$olesale purc$ases.fertilisers. Van O$era!i%n 5  +tockists from nearby urban markets cover four to five rural markets per day.$ey operate mostly on cas$ basis as per t$e desired fre'uency.t$ey may buy once a #eek or once a fortnig$t. &n ot$er areas.ets stock from super stockists appointed in t$e district. .sometimes as fre'uently as t$ree to four times a #eek.  Reas%n +%r s!%c-ing a $r%&uc!0bran& 5 Rural retailers stock a particular item usually because consumers demand it and to a lesser e?tent because of t$e #$olesaler0s pus$ or because a competitor stocks t$e item too. Seas%na $a!!ern %+ s!%c-ing # +easonal pattern is probably because t$e main buying season for rural consumers is during t$e $arvest and retail stocking of toiletriescosmetics.rural s$opkeepers often visit t$e neig$bouring urban #$olesale market for t$eir purc$ases. B to#n #$olesaler may deliberately cut t$e price of a fast-moving brand to increase $is business.urchase s%urce 5 Retailers in interior areas are not visited by agents of distributors8 retailers go to t$e nearby to#n A large feeder village once or t#ice a mont$ to buy t$eir stock.  .  Distribution Model for 6M7. 7onsumers usually $ave a running account.#$ereas companies #it$ si2eable product baskets adopt t$e retail route to reac$ rural markets. .

$e RD services t$e #$olesale market in $is area.allo#ing t$e company to offer better margins to t$e distributors and ot$er c$annel partners #$o t$en pus$ t$e sales of suc$ products.$is model minimi2es distribution costs.  Distribution Model of Durable .$e orders are generated by t$e company0s sales field force.a big #$olesaler plays t$e role of a sub-distributor. . Direct distributors receive supplies from t$e depot.  =irma Distribution +ystem  =irma Distribution +ystem  .  &n some cases.oods 7ompanies  +ince durables are purc$ased largely from small and large to#ns. 7ompany appoints a subdistributor under t$e distributor to penetrate deeper into rural areas upto t$e !*** population villages.  F$olesaler locations #ork as feeder markets.  .  &t is mostly companies #it$ a limited number of +.  Distribution Models of 6M7.#$ic$ in turn is supplied by t$e 7:6 agent.from #$ere t$e company caters to t$e re'uirements of nearby villages.$e finis$ed goods are transported from t$e manufacturing plant to t$e company-o#ned depot#$ic$ in turn passes do#n t$e line to 7:6 agents. .$e RD covers a large area #it$ poor road net#ork and a lo# volume per outlet#$ic$ #ould make it unprofitable for $im to cover small locations.  Distribution of 6ake Products .  7$annel partners are fe# and t$e distributor is given a large territory. .rural distribution $as been separated from urban distribution to create a specific focus on t$e rural market.  Model focuses more on distributors and sub-distributors rat$er t$an t$e #$olesale c$annel.s manufacturing plant is located in .$e structure follo#ed by =irma consists of minimum c$annel partners.  7overage area of rural distributors is clearly defined. 7$annel +tructure  &n Model 1.$is is a simpler model compared to DM1.supplying to t$e retailers and #$olesalers.t$e number of locations for distribution is a fe# t$ousand only and t$ese can be managed by a fe# c$annel partners. .$ere is a specific area assigned to eac$ 7:6 agent and multiple dealers and e?clusive dealers are tied to t$e 7:6 agent by t$e company0s field force.because t$e locations are many and scattered./s and $ig$ sales volume t$at adopt t$is model. .near Del$i.  L.reater =oida.places not covered by t$e distributor.$ere is no separate c$annel for rural distribution. 7ompanies Dis!ribu!i%n M%&e 7  7$annel +tructure  .  &t $as a large number of points appointed in t$e rural areas.  . Market coverage is mainly t$roug$ t$e #$olesaler0s net#ork and $ence fe# distributors are re'uired to $andle bulk despatc$es.

.  Retailers in and around t$e feeder to#ns get attac$ed to t$ese stockists. . is a group of 1*-1! #omen organi2ed by government bodies or =.$ey receive stocks from @/L rural distributors and make sales to bot$ retailers and direct consumers in villages. rural distribution drive. from t$e nearest to#n to deliver products. Large trucks #ere used to move stocks from t$e bottling plant to t$e $ubs.t$e stockists operate t$eir o#n delivery vans to take care of secondary transport and local delivery <obs.  HUL. C%ca C% a Hub & S$%-e M%&e  Recently modified its distribution c$annel by s$ifting from a centrali2ed model to a t$ree-tier $ub-and-spoke model.medium commercial ve$icles .bH #are$ousing and cH subdistribution..s #ere formed to support povertyalleviation programmes in rural areas after t$e success of t$e model in 3anglades$. Members of +@.1s.  . . 1riginally.$e manufacturer supplies goods to t$e stockists eit$er on a consignment basis or on a cas$ or credit purc$ase basis.  Sa!e i!e Dis!ribu!i%n 3!he Hub6an& S$%-e S"s!e)4  +tockists are appointed in ma<or to#ns and feeder to#ns. .  Wholesaler in small town/kasba to village retailer/mobile trader/haat – +alesmen of fake products visit retailers in villages of 3***D population category located 1!-2* km. Delivery is made to #$olesalersAretailers t$roug$ vans and tempos aut$ori2ed by t$e manufacturer. E)erging Dis!ribu!i%n M%&e s  C%r$%ra!e6SHG Lin-age # +@.0s #ere appointed as +$akti entrepreneurs.t$ey disc$arge t$e follo#ing functions C aH financing. 7$annels of Distribution for fake products  Manufacturers to wholesalers/retailer in big city or small town.covering a population of "***-1****. &nterested #omen from inculcate savings discipline and boost feelings of self-#ort$ among #omen.  Wholesaler in big city to wholesaler in small town/kasba – F$olesalers in kasbas source t$eir supply of fakes t$roug$ daily rail commuters.s Pro<ect +$akti #as targeted at strengt$ening t$e company0s 6M7. &nvested in glass bottles and ne# ve$icles in consonance #it$ t$e t$ree tier distribution structure. 1ften.$ese are $and delivered t$e ne?t day.+@.t$ey borro# money from t$eir group corpus and provide services to "-1* villages.s get matc$ing loans from rural banks to set up incomegenerating enterprises. or directly to customer – Manufacturers take orders for fake products t$roug$ personal visits or over t$e telep$one from big #$olesalersAretailers #$o deal in fakes. Mobile traders get t$eir stock of fake goods for purc$ases above Rs.$ey also leave sample of ne# fake products for test marketing.#$o come toget$er to form a mutual t$rift group. !** from mandis in nearby to#ns.$ese passengers book orders from #$olesalers and collect supplies from t$e manufacturer of fake goods.$e stockists take care of sub-distribution on t$e terms and conditions determined by t$e manufacturer or as agreed upon by t$e parties.or from t$e nearest kasba for smaller purc$ases. 3y and large.#$ere t$is concept originated.

to <ointly distribute a collective group of $ouse$old products in rural markets by s$aring distribution costs.2H spreading information t$roug$ group discussions 3H and motivating people to become life insurance agents t$roug$ counselling. 3arefoot Bgents 6e# insurance companies $ave taken t$e initiative of appointing barefoot insurance agents in order to penetrate rural markets. . . .          #ere used to move stock from t$e $ub to t$e spokes and after t$at auto ricks$a#s and cycles #ere used to cater to t$e re'uirements of rural markets. P:.usually in t#os and t$rees.t$at t$e leading company sells.$ese people take t$e left to t$e dealer to complete.cooperatives and fertiliser dealers could also be integrated into t$is model.$e solution for small companies is to tie up #it$ a leading company.for direct procurement of agri produce from farmers and for selling a range of products t$roug$ 7$oupal +agar. ITC.$e paper #ork.s Dis!ribu!i%n M%&e &. uses t$e rural distribution net#ork of Marico to sell Briel. 7avin.$e =+9 model is more appropriate for t$e Lo# P7+-@ig$ population density segment. .ide etc. Bgents are recruited on t$e basis of t$ree parameters C 1H direct personal contact. PD+. +yndicated distribution +yndicated distribution is a viable and novel approac$ to gain entry into rural markets.7 $as taken t$e initiative to reac$ rural consumers t$roug$ its e-c$oupal model for back#ard and for#ard linkages for its agri-related business.are used t$e distribution net#ork of Bmrutan<an pain balm for its 7$ik s$ampoo..$e golden rule is t$at t$e small company s$ould not deal in t$e same order to distribute products t$roug$ its distribution net#ork. 1t$er 7$annels @ero @onda Motors $as ** dealers all over t$e country. /nder t$is approac$. . >g.t#o or more companies come toget$er to form a syndicated trading organi2ation.from company dealers after providing ade'uate security deposits and display t$em outside t$eir premises for closing t$e sale.t$at already $as a presence in t$e rural market.$e company $as reported t$e emergence of an unofficial c$annel of distribution 5 village mec$anics. I&ea Dis!ribu!i%n M%&e +%r Rura 1n t$e basis of t$e e'uation Per 7apita +ales GP7+H J Bnnual +ales A Market Population.t$e ideal distribution model for rural can be depicted as follo#s C .$o#ever.local real estate agents and s$opkeepers.$e Pro<ect +$akti type of model best serves t$e needs of t$e Lo# P7+-Lo# population density segment consumers. . .