c




  

` Rural India, about 70% of the total population, contributes almost 56% to the National
Income. The size of the rural FMCG market is 65,000 crores, and according to an estimate, the
average monthly rural household spend is around Rs. 250, of which, food articles constitute around
44% and OTC products constitute 4%. Live life Ltd is a leading marketer of Foods and Over the
Counter products in India. Its product portfolio indicates that the firm operates mostly in health
related products. But currently it lacks a scalable distribution strategy in its game plan and there is a
pressing need to leverage on its wholesale channel.

        of the consumer market based on several demographic

parameters including income, literacy, population and age was undertaken to better understand the
changing consumer needs. It is subsequently followed by the formulation of strategies based on the
characteristics of the consumers in the state, for example, which price points and pack sizes to be
introduced in which state.

It would be prudent to use the existing networks in the rural markets as our channels for
distribution. One such channel is the widespread network of non-financial institutions, i.e., money
lenders in the rural areas. Contacts with these moneylenders could be established at the feeder
town level by making use of wholesale channel. Then highly motivated ͚Sales Groups͛ can be formed
with the help of moneylenders, being the financers, would have knowledge about the credibility of
various individuals in a village or town. Around 5-6 such individuals would be selected to form a
Sales Group (  
). A characteristic of a Vikretha Samuha is that each individual in the
group will be held responsible for group defaults, i.e., joint liability. Each Vikretha Samuha will have
to cover around 2-3 villages and for every 10-12 Vikretha Samuhas, they would elect a Vikretha
Samuha Sanchalak amongst themselves, preferably someone operating at the feeder town level. The
Vikretha Samuha Sanchalak would monitor and coordinate with the Vikretha Samuhas under himas
well as with the Sub-distributors and at times would deal directly with the Super distributors. These
Vikretha Samuhas would not only distribute Live life͛s products, but also promote them in rural
areas. Vikretha Samuhas would address the issue of scalability empathetically.

As the government itself stated in july 2009 that it needs to include some sort of
supplementary biscuits in the popular   
  to provide additional nutrition to the
children, Live life can strike a deal with the government in order to provide small packed energy bars
or biscuits as a part of the scheme. And being a health oriented marketer, it can also conduct 
c! in various villages with the help of the local NGOs, comprising of health awareness programs
and related sessions. This will not only leave its mark as a successful social endeavour but also go a
long way creating its brand awareness among the rural masses. Also lots of other strategies are
discussed in details.

With the measures suggested above, we have addressed the issues related to scalability, and
have come up with a novel approach to leverage on the wholesale channel to not onlyeffectively
increase penetration of the products in the rural markets but also enhance the brand image of Live
life so as to establish itself in the rural market as a beacon light for others to follow.
 ã
c"

u c #  - With increase in purchasing power and infrastructure facilities in the
rural areas, the needs of the consumers are changing. It is imperative to better understand
the rural consumer͛s needs and behaviour.
u
  - Region-wise segmentation of the consumer market based on several
demographic parameters including income, literacy, population and age.
u c c 

 - Formulation of strategies based on the characteristics of the
consumers in the state, for example, which price points and package sizes to be introduced
in which state.
u   # 
 - Distribution strategies to leverage on the wholesale channel and
address the issue of scalability. To be able to bring about high degree of penetration in the
rural markets with relatively lesser costs.
u     - Improving the value proposition for each member in the distribution
channel.
u * 
 - Provision for promotional strategies to leverage on the wholesale
channel.
u c $ #
c - Measures to ensure there is a provision for consumer
feedback and market research.

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From the channel-wise food sales data of live life, we observe that general merchants,
mostly operating in Haats/Melas are the predominant source of revenue and hence are to be
considered before formulating strategies. The channel-wise OTC sales reveal the importance of the
whole sale channel, with analgesics being sold only by chemists and the antacids and pain balms
being predominately sold by non chemists. This leads us to the conclusion that the distribution of
Rahat and Roshan can be coupled with that of the food products to permeate the rural market,
while the distribution network of analgesics can extend only up to the chemist or government
dispensary level.

India has transformed from being an agricultural driven economy to a service driven one.
This has resulted in increase in purchasing power of the people and this growth in the economy has
uplifted the rural people as well. With substantial increase in the rural infrastructure and literacy,
their buying behaviour and needs have also changed. The rural consumers today not only consist of
individuals who are dependent on agriculture for livelihood but also people engaged in service
related activities. A comparable high proportion of demand for goods and services is observed
throughout the year due to the individuals involved in service related activities but a spike in
demand is observed after the harvest season because of the increase in the purchasing power in the
hands of the farmers. Due to the increase in the disposable income of the rural consumers and
better brand awareness, there is an increasing demand for larger SKUs in addition to the small SKUs,
which justifies the reason why rural consumers are going for the bigger SKUs of Hoshiar and
Baadshah.

Since Live life is expanding into newer rural markets, the price points and pack sizes to be
introduced should be dependent on the population and the disposable income in the hands of the
rural consumer. For example, if Roshan is introduced in a village with a population below 2000, it
highly probable that the high income group consumers would be less in number and so the demand
for SKU 20 grams sold at a price of 35 would be far lesser than the demand for 5 grams at 10 rupees.
Also new customers usually try out a product in small pack sizes for the first time. So it would make
sense to introduce pack sizes and price points according to the demographics of the region in which
the product is being introduced.

 


 

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u Novel strategies to leverage on the wholesale channel would enable Live life͛s products to
permeate the rural markets, making Live life highly profitable. This would position Live life as
a leader in the rural markets for the relevant categories.
u Efficient distribution strategies aided by appropriate promotion strategies, would increase
the brand awareness of the products among the rural masses.
u Setting up Vikretha Samuhas at the village and the feeder town levels would lead to
employment generation and the incentives provided to the best performing Vikretha
Samuha, would encourage more of such groups to be formed. Thus, making Live life popular
and enable it to earn goodwill.
u Being a part of the Mid-day meal scheme, Live life will become a household name and
would generate huge revenues. Health Camp initiative would enable it to connect with the
rural customers and its brand image would reach new avenues.
u The feedback channel and the social incentives will shape it into a better customer centric
model. The value added to every level in its distribution channel would reap tons of benefits
in terms of efficiency and effectiveness.
u Live life would soon become a force to be reckoned with all its innovative initiatives. The
other players in the market will follow in its footsteps.