RURAL

DISTRIBUTION

BY
AMIT GARG
DEEPIKA CHOUDHARY
REEMA SOLANKI
SHIKHA
WHAT IS RURAL DISTRIBUTION?

Movement of goods and services from the source

through the distribution channel, right up to the
final customer, consumer, or user in the rural area
is called rural distribution.
CHALLENGES TO RURAL
DISTRIBUTION:-
• Large number of small markets.
• Dispersed population and trade.
• Poor road connectivity.
• Inadequate transport facilities.
• Multiple tiers leading to higher costs.
• Inadequate credit facilities for rural
retailers.
Cont.…..
• Highly credit driven market due to less
income.
• Poor awareness level.
• Poor storage system.
BEHAVIOUR OF THE CHANNEL
• Credit facilities to customers.
• Pricing by the channel.
• Reason for stocking a product/brand.
• Seasonal pattern of stocking.
• Information source and influence on the retailer.
• Purchase source for the retailer.
• Channel credit.
• Purchasing cycle.
• Channel promotion.
TYPES OF RURAL DISTRIBUTION:-

1.TRADITIONAL CHANNELS.
2.NEW EMERGING DISTRIBUTION
CHANNELS.
TRADITIONAL CHANNELS:-
• LOCAL RETAILING
• HAAT
• MELA
• MOBILE TRADERS
• DELIVERY VANS
LOCAL RETAILERS
• Rural india accounts for 65% of the retail
outlets in the country.
• The average monthly sale per village shop
is less than rs.5000.
• These are small retail outlets.
HAAT
• These are periodic markets.
• These are the oldest marketing channels.
• They provide a first contact point for
villagers with the market.
• It is the means for distributing local
products and exchanging rural surplus.
MELA
• It is a low cost distribution channel.
• Melas are generally used to sell durables, high-
priced items and new products launched.
• These are some sort of assembly of small and
medium retailers who assemble to sell their
products to the large no. of visitors who visit
these melas.
• Over 25,000 melas are held every year all over
the country. Out of these, 5000 are commercial
melas, 2,000 are cultural melas and 18,000
religious melas.
MOBILE TRADERS
• It is an age-old, direct to home,
unorganized distribution system in rural
india.
• They sell variety of daily need products
and mostly local brands.
• They carry their products on bicycles,
mopeds, handcarts, or on foot.
• E.g- FMCG companies.
DELIVERY VANS
• Some companies use their own delivery
vans to reach customers. e.g- eveready.
• They take the products to customers and
retail outlets in every corner of selected
rural markets.
 NEW EMERGING DISTRIBUTION
CHANNELS:-
• Organize Retailing: Mahindra subh labh, haryali kishan
bazzar
• Cooperative society e.g warna bazar
• Corporate –SHG Linkage
• Satellite or Hub & spoke model/ coke pepsi
• Syndicated distribution
• Joint Distribution by Non-Competing Companies
• Nehru Yuva Kendra Sagathan Hatt Distribution model
• Petrol pumps
• Public distribution system
ORGANIZED RETAILING
COOPERATIVE SOCIETIES
• India has the largest network of cooperatives in
the world.
• Warna bazar and farmers services cooperative
societies function like mini super markets for
rural consumers, where consumables, household
durables and agricultural products are sold at
economical and reasonable prices.
• Warna bazar is a milk and sugar cooperative
society.
CORPORATE SHG LINKAGE
• SHG is a group of 10-15 women organized by
government bodies or NGO’s and they get loans
from rural banks to set up income generating
enterprises.
• The rapid growth of SHG movement in india has
provided a distribution model to the marketers.
• E.g- project shakti of hindustan unilever.
Satellite or Hub & spoke model:-
Hub and spoke model in coca cola
• Coke bottles were transported from the bottling
plants to the hubs (large distributors) and from
hubs to spokes (smaller distributors) situated in
small towns. These spokes then distribute the
stocks to village retailers who cater to the
demand in rural market.
SYNDICATED DISTRIBUTION
• Under this approach two or more companies
come together to form a syndicated trading
organization, to jointly distribute a collective
group of household products in rural markets by
sharing distribution costs.
• E.g- purchase of parley brands(thums
up,limca,etc) by coca cola india.
Joint Distribution by Non-Competing
Companies
• Companies having lesser distribution reach
in rural areas can collaborate with
companies already having wide network in
rural market.
• This type of tie-up can prove to be
beneficial as one can reach to large
number of retail outlets by utilising the
network and the other one can earn better
revenue.
CONTD…..
Examples-
• Samsung has tied-up with the Indian Farmers
Fertilizer Cooperative (IFFCO) for marketing the
hand-sets to rural consumers over a wide area.
• Motorola and Nokia have partnered with ITC e-
Choupal which gave them wider reach in rural
market.
• Godrej has tie-up with Jyothi Labs to use its extensive
distribution network for marketing Godrej Tea across
the country.
Nehru Yuva Kendra Sagathan Hatt Distribution model

• NYKS is a govt. organization which involves

young people as national service volunteers in
awareness raising campaigns,vocational training
programmes,etc.
• Here these ex-NSVs are used for the distribution
and promotion purpose in the rural customers.
• E.g- project DISHA by colgate.
Petrol pumps

• In india there are over 12000 petrol pumps

spread across the country.
• These pumps, in addition to selling petroleum
products,have also started selling consumables
like food products and toiletries,etc.
PUBLIC DISTRIBUTION SYSTEM:-

• It is a system of distribution for essential

commodities to a large number of people
through a network of fair prices shops or
ration shops.