21 Sep 2022

Rural Visit Under Rural Outreach Program

School of Retail Management, SUAS organized a “Rural outreach and Retail study program” for MBA (SRM) semester 3 and BBA (BFSI) semester 5 students at Hatod on 19 September 2022. The students (total strength of 50) had first-hand experience of smart farming, rural finance, and rural retail as practical inputs for their courses. The program was organized by Dr. Jolly Masih in consultation with Dr. Siddharth Bajpai under the leadership of the Director, School of Retail Management-Dr. Kapil Rokade. The program has a fine-tuned blend of industry experts and rural outlook exposure. It was organized in coordination with Yara International, Agripast, Department of Horticulture & Food Processing, Government of Madhya Pradesh, and Bank of India.

The visit was conducted to fulfill the following objectives:

  1. To make students aware about the opportunities & challenges of agribusiness in India
  2. To understand the marketing mix (4 Ps) strategy of retail companies in rural areas
  3. To understand the smart agriculture and mindset of progressive farmers of Madhya Pradesh
  4. To perform a detailed & insightful discussion with government officials on various aspects of rural retail & rural banking
  5. To get acquainted with merchandising strategies of rural retailers & distributors of the agri-input product

The following activities were performed under Rural Outreach Program:

  1. Farmer Meeting: Visit started with an interaction with Mr. Ramkrishan Rathore, a progressive farmer using Artificial Intelligence based-smart agriculture approaches on a farm of 10 acres. Students were made aware of approaches of smart agriculture through sensors & drone-based farming systems, GPS fitted based tractor, drip irritation & automatic fertilizer mixing water tank for precision agriculture.
  2. Interaction with farmers: In second activity, farmers shared their knowledge with students about their increasing interest in E-commerce, digital platforms, Atma Nirbhar Bharat and other progressive schemes by government of India. Students of SRM, also demonstrated farmers “How to identify counterfeit products” through amazing live examples, like “Colgate (real brand) & Coolgate (counterfeit product). During this session a realisation came that lots of farmers a not aware about actual brand names, instead they try to identify brand name with colour, logos or symbols.
  3. Crop Show: ‘Bumper Crop Show Exhibition’ is a very popular agri-input product (e.g., seed, fertiliser, micronutrients, insecticide, pesticide) promotion strategy. Officials from Yara International showcased a healthy brinjal crop to farmers & students for the promotion of their agri-input product “Yara Vita” (micronutrient for vegetables).
  4. Discussion with Agri-retail company officials: Officials of the following companies mentioned below provided detailed knowledge to students about rural retail, logistics & supply chain and rural credit system:
    • Yara International
    • Agriplast Tech India Pvt. Ltd
  5. Rural retail & rural banking-based knowledge sessions: Various government schemes, subsidies, and loan & credit schemes were discussed in these knowledge sessions. Following government department officials participated in this session:
    • Department of Horticulture & Food Processing, Government of Madhya Pradesh
    • Bank of India

    All the officials were presented with a small plant from SUAS, to promote “The Green Planet” campaign.

  6. Rural retail visit: Rural retail has been predominantly unorganised for a long time. Haats, traditional bazaars dominated the rural retail landscape. Organised players started focusing on rural retail during the last four to five years. Initial efforts of organised players gravitate towards agriculture and agri inputs. Organised players are enlarging their focus area to other categories like food, apparel and durables. Secondly, increasing penetration of electronic media is fuelling the demand for branded products and customers are becoming conscious of lifestyle products. A recent study by Boston Consulting Group (BCG) and Confederation of Indian Industry (CII) has revealed that the Indian consumer market will grow almost 3.6 times between 2010 and 2020, and further that 24 percent of this number will comprise small towns and villages. In fact, small towns and rural consumers will become the largest market segment at 36 percent by 2020.

Hence, a very special focus of this rural outreach program was laid on student visits to rural retail shops, in order to understand the merchandise management, store layout, product assortment & distribution mix strategies.

The key takeaways from this rural outreach program were:

  1. Rural consumers of Madhya Pradesh were highly keen to adopt new farming technologies like Polyhouse cultivation, drip irrigation, precision agriculture, and smart agriculture
  2. Awareness about E-commerce, online shopping via different digital platforms, and social media marketing is increasing in rural pockets
  3. Most of agri-input companies use blended promotion techniques for most of their products-first step is crop show & farmer meeting followed by a Facebook campaign and marketing
  4. Word of mouth publicity is best marketing tool in rural areas
  5. Advertisement on Whatsapp groups of farmers is also yielding good results these days to many FMCG & agri-input companies
  6. Most farmers are aware about upcoming government schemes, loan & credit schemes but are hesitant to approach bankers and to get benefit of these schemes
  7. In coming years, agro-food processing companies will be taking lead in retail sector, since most of the government schemes & loan facilities are favourable to such industries
  8. The retail format dynamics: In the rural environment, there are some key retail formats:
  • Chemist
  • Large Kirana stores that sometimes play the role of a distributor
  • Medium-sized Kirana
  • Tiny paan kiosk-like outlets
  • Agri-input store
  • Farm machinery store

Most of the rural markets are small in size, scattered and most keep the banners, posters and wall painting of most famous brands to attract customer footfall. If customers are not awareness about which product they shall purchase, retailers sell them the local products (e.g., pesticide, insecticides) where profit margins are higher.

As per market research company A.C. Nielsen India’s rural FMCG retail landscape will grow from $12 billion in 2011 to $100 billion by 2025. In fiscal year 2020, the size of the rural FMCG market in India amounted to about 110 billion U.S. dollars. This sector had recorded significant growth rates in recent years and accounted for 45 percent of the country’s FMCG market. Rising income levels had led to a clear increase in non-food expenditure.