INTRODUCTION

Unlike urban markets, rural markets are difficult to predict and possess special
characteristics. The featured population is predominantly illiterate have low income
characterized by irregular income, lack of monthly income and flow of income
fluctuating with the monsoon winds. Rural markets face the critical issues of
Distribution, Understanding the rural consumer, Communication and Poor
infrastructure. The marketer has to strengthen the distribution and consumer
support strategies. The rural consumer expects value for money and owing to has
unsteady and meager status of weekly income increasing the household income
and improving distribution are the viable strategies that have to be adapted to tap
the immense potential of the market. Rural markets face the critical issues of
Distribution. It is uneconomical to access a large number of small villages with a
very low population density spread over a large geographic area. Social norms,
traditions, castes, and social customs have greater influence on the consumer
behavior in rural areas than in urban areas. Factors such as limited physical access,
low density of shops, limited storage facilities, need for a large number of
intermediaries in the distribution channel to reach the end customers, and low
capacity of intermediaries to invest in business make the tasks of reaching rural
consumers very complex. Retailing is the worlds largest private sector contributing
to 8% of the GDP and it employs one sixth of the labor force. The estimated retail
trade is expected to be 7 trillion US $. Many countries have developed only due to
retailing and presently there is a vast change in the retail industry. As far as India is
concerned it contributes to 14% of GDP and it is the second largest sector next to
agriculture which provides employment to more number of persons. Now according
to a survey, India is classified in to the fifth most attractive retail destination and
second among the countries in Asia. Worldwide it is ranked as fifth most attractive
retail destination. Retailing includes all activities involved in selling the products and
services to the ultimate consumers. So this is said to be the last person in the
channel of distribution.

1 RURAL RETAILING IN INDIA

India like most other countries has a very large network of local stores spread all
across India. It is not really a network since each store is individual or family owned
and has no connection with the other. It does however represent a network since
large consumer product companies like Unilever, Procter & Gamble, ColgatePalmolive, Cadbury, Coca-Cola, Pepsi and ITC uses them as their final point of retail
to the consumer. These small stores are very personal and have built strong
relationship with the local population. They are points of news and connection. They
offer credit to the local population and help out in times of crisis. They also have a
very good understanding of requirement of the local population and have very low
overheads enabling them to offer the best price for their products. However, it is

believed that the new retail chains will drive these small stores out of business (Gill
2007).
2DISTRIBUTION NETWORK FOR
BRITANNIA Britannia has 4 production or manufacturing outlets which are in Delhi,
Calcutta, Chennai, Rudrapur in Uttaranchal Gwalior which are owned by Britannia.
and employees more than 4400 people Besides its self owned units Britannia also
uses the facility of more than 60 contract points for biscuits breads cakes etc
where in the labor used for manufacturing is not owned by Britannia. but the
technology and raw material share provided by Britannia .the distribution network
for Britannia biscuits for Delhi. The first rung in the distribution network for Britannia
is the transport of the goods from the manufacturing plants in Delhi to the 2 CFA s
carrying and forwarding agents located at Neb Sarai and the other one at Mundka
care for depot The CFA maintain the inventory on behalf of the company and when
the goods are supplied from Britannia to the CFA s it is not considered a sale but a
transfer and therefore there is no change in ownership CFA gets commission on the
basis of transaction (i .e) on no of boxes held in the inventory CFA has to bear labor
cost and his godown cost . The cost of transport from the company to CFA is born by
Britannia itself And the cost of transport from the CFA to distributor is also borne by
Britannia only One of the reason that Britannia uses the facility for CFA is that
because of its wide spread sales all over India and with one production unit not
manufacturing all the variety itself so through the channel CFA Britannia manages
to save a lot of behalf of not having to pay central sales tax . So therefore for
example if 50 50 is manufactured only in Calcutta than it can be sent to the CFA in
Delhi as well as other state CFA without having to pay CST . The second rung in the
distribution network for Britannia are the authorized distributors and authorized
wholesalers as termed by a company representative. Because of the large number
of distributor already present in the network which are sufficient to cover the wide
regions Distributors have their own sales force labor transportation facility Each
salesperson allowed covering max of 40 outlets every day The reason is that it is
felt that it is not within human capacity to cover more than 40 outlets a day and if
done so then the salesperson might be exhausted enough and not spend enough
time on each counter required by him for building up relations with the shopkeeper
Distributors salesperson is the one who takes orders from the retailer and
wholesaler .He goes once a week to all the retailers and wholesalers in his territory
to take the orders and gives that order to the distributor Distributor assesses his
stock situation and all short stock is ordered to the CFA keeping in mind the
minimum order limits .The areas for the Distributors are divided in such a manner to
prevent overlapping if overlapping is found then penalty ranging from Rs11000 Rs
21000 can be charged to that particular distributor Max 4 of the total invoice bill of
the distributor is allowed as replacement by the company .