Rural Marketing

Group No. 9

Usha International’s Silai School

Case Study

Group members
Harshal Thakur – 20182069
Prathami Gore – 20182111
Sana Shaikh – 20182144
Sarthak Arora – 20182165
Dhwani Vyas – 20182162
Case –

Usha International Ltd is part of the Siddharth Shriram group which

owns the brand, USHA. The brand has become a household name in
India. A review revealed that although the company’s product were
available in small town with sub-dealers and retail, the company’s
direct than one lakh. The company realized it was not tapping into its
biggest market, the rural consumer. The company makes household
and kitchen appliances, fans, engines pump sets and electric pump
sets. The sewing machine continues to be the largest selling item of
the company.
The company realized that it did not have enough rural coverage and
wanted a method to reach rural women. It devised two strategies:
hire enough representative to cover new markets that had sprung up
in rural areas which also involved rural women it its best-selling
product.
It launched a pilot and a small team was constituted to spend three
months in the Gorakhpur Region in Uttar Pradesh to understand
markets and Geographies, with the aim to visit all the towns which
had a population below one lakh. The team collected market
intelligence, estimated market potential and brand share and studied
the primary distribution network. The research showed that 95 per
cent of consumers prefer to purchase from small towns, instead of
travelling long distance to larger town. It also found that rural
consumers were aware of most brands and wanted quality products
at reasonable price. As a consequence, the company realized that it
was necessary to have an authorised representation in small-town
markets.
A rural initiative was launched in Uttar Pradesh in April 2013, called
“Project Sampark”, to reach out to consumers in 648000 villages and
7500 small towns. The idea was to ensure brand presence and
product availability at the last mile.
Project Sampark helped the company reach out to over 400000
households by 2013. It has subsequently conducted over 2000 rural
haats and reached 10 lakh rural customers. The company appointed
a team of ‘rural business officer’ to do an in-depth study of the rural
markets and set up network of more than 3600 authorized retail
dealer (ARD’s) stocking all USHA products. This helped reach the
brand in remote markets.
Within one year of the project’s inception, the company attained a
leading position in eastern Uttar Pradesh in terms of sale growth.
ARDs actively promote USHA’s products by strategically tying up with
other companies and undertaking development activities such as
haats, melas and working with SHGs. ARDs are appointed in every
small town and are trained in-product features so that they can
recommend the right product to consumers. They act as a one –stop
shop where consumers find all product lines displayed.
This resulted in sales of USHA products increased by almost 40 per
cent in rural markets. Rural India Continues to remain the focus for
the company, which aims to cover all 7500 towns. The rural business
team has also identified another set of 800 places in rural India,
which have the potential and are the business hubs for many villages
nd rural consumers, The company plans to expand its rural retail
format ‘ Usha Joy Stores’ in rural pockets and Tier-IV towns with
population of less than 50000 reports Business Standard(2016).
To reach village women, it adopted a unique initiative, that is, to
partner with NGOs to set up Silai Schools in some of the country’s
most remote and rural corners. Under the model, women are given a
sewing machine and are imparted with sewing skills to earn their
livelihood and become financially independent =. They generate
income by stitching clothes and also serving up their own Usha Silai
Schools. They charge a fee from new learners, do job-work in the
community and also earn from repair of sewing machines.
The Silai Schools have helped village women tailors operating out of
their homes become confident and economically liberated. In Dewas
district, 15000 women have been liberated from scavenging and 50
women are being are being rehabilitated through tailoring with
financial support of UNDP and technical support of Usha
International Ltd. (UIL). Across India, HIV-positive women,
transgender and the disabled are being rehabilitated through Usha
Silai Schools. Till the end of 2014, there were 5542 Silai Schools in the
country, with Rajasthan leading 519, followed by West Bengal (467),
Uttar Pradesh (446) and Madhya Pradesh (403). Based on the UIL
Syllabus, the trained teacher teach others for a fee that varies from
Rs.30 to Rs. 300 a month. The Silai Schools have raised the self-
esteem of women within their own family and in the community.
Many women who did not have any say in their family are today key
decision-makers.
Question

Q1. Comment on the future of rural marketing in the lights of this

case study.
 Rural marketing is a process that consist of developing and
empowering people in rural communities through capabilities
enhancement and social innovation to facilitate a two way marketing of
economic and socio goods between rural and urban case.
 This case talks about how Usha has worked towards capabilities
enhancement which lead to developing and empowering rural
communities.
 Usha realized that 95% of rural population preferred buying products
from their town or nearby town and did not prefer travelling to bigger
towns to purchase their products, so it focused on the ‘A’-Availability
out of 4A’s. It started the SILAI School thereby promoting ‘A’-
Awareness of a product which priced ‘Affordably’ as is it was highly
acceptable by the rural consumers.
 Out of the 3BOP strategies companies should focus on 2nd and 3rd ones
co-creation of production with the help of rural consumers and
investment in social business.
 Unless the consumers aren’t reachable and if they aren’t aware about
the products/services of the companies they have no ways of
purchasing it.
 By developing a bond between companies’ offerings and consumers,
sales can be boosted, companies can enjoy consumer’s loyalty and they
can gain consumer trust and acceptance.
 Q.2. Is the way forward converting into social business? Is there
an alternative?

 BOP strategy 3 says- Go beyond, co-creation of products to

changing the very approach by companies towards marketing-a
complete change in purpose and mindset of companies and
investment in social business.
 This is the highest level a company go upto. By doing so, not only
the rural people will benefit but also the companies. Capability
enhancement of rural people and by doing social innovations or
social business, the companies will open the gates for the
unserved or underserved millions of rural customers.
 If the companies succeed in connecting with these rural people
and build their trust, then the sales of the company will pick up
and so the standard of living of rural consumers will improve as
they will get access to so many products and services.
 Best way to attract rural population is by showing them that the
company cares for them, is aware about their problems will
solve their problem.
 Connecting with rural consumers through social business is a
great way of entering and/or sustaining in rural market. Another
strategy is BOP2- Co-creation. But investment in social business
is a better alternative amongst these two as it helps in
empowering rural consumers.

Q3. What are the benefits to companies of empowering rural

consumers?
 The potential of rural market is visible when we consider two
factors:
1. The general rise in the level of prosperity as people move
away from agriculture and find other employments
2. Large government investments and schemes for rural
areas.

 The general rise in the level of prosperity has bought in two

dominant shifts in the rural consumption patterns.
 First, because of lifestyle marketing, people want to use the
products that are used in urban marketing.
 There is also an element of conspicuous consumption, as people
want to show their neighbors that they are modern by
consuming the latest products and brands. Second, better
communications and branding have caused a shift in preference
for branded goods.
 That is the reason that rural markets are said to represent huge
opportunities. The factors that have contributed to some amount
of modernization of villages are:
 Large Population: According to the census 2011, 833 million
people, representing more than two-thirds of Indian population,
live in villages. This population is also increasing annually. More
over, these consumers are underserved, that is many companies
simply do not have a presence in rural market. This attracts
companies who see an immense opportunity as urban markets
are saturated.
 Market growth :According to a study by India Brand Equity
Foundation (IBEF), 2015), per capita Gross Domestic Product
(GDP), In India has grown at a compound as annual growth rate
(CAGR) OF 6.2 per cent in its rural regions since 2000.

 Rural per capita consumption increased by 19 per cent annually

in the period from 2009-10 to 2011-12. In the same period,
spending in rural India touched US$69 Billion.
  The market has been growing at 3-4 per cent per annum adding
more than one million new consumers every year.
 Impact of globalization: Improved global information is also
providing rural areas an exposure their productivity and earn
better prices.
 Increase in income and rural indebtedness: Dependence on
agriculture is decreasing due to people finding alternative
livelihoods and also because of the development and social
security programmers undertaken by the government. This has
resulted in an increase in income in rural areas and a consequent
increase in purchasing power.
 Accessibility of market: Improved roads and communications are
changing Indian villages. They are improving access to villages to
sell produce on the one hand and for providing market access to
companies on the other.
 Improved literacy and awareness: Due to increased literacy and
education as well as greater awareness in rural markets , there
has also been change in consumer behavior. Rural customers are
no longer willing to accept inferior products and are gradually
becoming discriminating buyers.
 Mainly, the companies can benefit by educating and empowering
rural people so as to increase their standard of living which will
ultimately lead to rise in income so they will purchase the
companies products and these consumers will eventually be
responsible for the companies profit generation.
 Empowering rural communities may also mean formulation of
salesforce within that rural community. In either ways companies
will benefit by empowering rural consumers and the rural
population as a whole.

Q.4. Is Gandhian economics the way forward?

Gandhian economics is a school of economic thought based on
the spiritual and socio-economic principles expounded
by Indian leader Mahatma Gandhi. It is largely characterized by
rejection of the concept of the human being as a rational actor
always seeking to maximize material self-interest that underlies
classical economic thinking. Where Western economic systems
were (and are) based on what he called the “multiplication of
wants,” Gandhi felt that this was both unsustainable and
devastating to the human spirit. His model, by contrast, aimed
at the fulfilment of needs – including the need for meaning and
community. As a school of economics the resulting model
contained elements of protectionism, nationalism, adherence
to the principles and objectives of nonviolence and a rejection
of class war in favour of socio-economic harmony. Gandhi's
economic ideas also aim to promote spiritual development and
harmony with a rejection of materialism. The revival of the
economy is made possible only when it is free from
exploitation, so according to Gandhi industrialization on a
mass-scale will lead to passive or active exploitation of the
people as the problem of competition and marketing comes in.
Gandhi believes that for an economy to be self-contained, it
should manufacture mainly for its use even if that necessitates
the use of modern machines and tools, provided it is not used
as a means of exploitation of others.it is the quality of the
human being that has to be raised, refined and consolidated. In
other words, economic planning is for the citizen, and not the
citizen for national planning. Everybody should be given the
right to earn according to his capacity using just means. Gandhi
has often quoted that if mankind was to progress and to realize
the ideals of equality and brotherhood, it must act on the
principle of paying the highest attention to the prime needs of
the weakest sections of the population. Therefore, any exercise
on economic planning on a national scale would be futile
without uplifting these most vulnerable sections of the society
in a direct manner. a distinction is to be made between
'Standard of Living' and 'Standard of Life', where the former
merely states the material and physical standard of food, cloth
and housing. A higher standard of life, on the other hand could
be attained only if, along with material advancement, there
was a serious attempt to imbibe cultural and spiritual values
and qualities. Human needs and wants are infinite. And rural
population has purchasing power. They too are shifting their
consumption preferences from local items to branded items. In
this era where, companies are pushing their products in the
markets and even investing in social businesses or co-creating
products with the rural people, it will be difficult to adapt to the
Gandhian economics.