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Transformative Marketingin Selling to Low Income Consumers
e oupa xper ence
8th Global Marketing Dynamics Conference
Jaipur, 25th
July 2011S. Sivakumar
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Some Successful Strategies
in Selling to Low Income Consumers
Shared Access. No need to Own
Buy Now. Pay Later
Feature Stripped Products
All of these target a larger share of the small wallet
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The Transformative Question
Can we actuall do somethin about
increasing their incomes?
S. Sivakumar
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That takes us to the Next Question
S. Sivakumar
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Arent they entrepreneurial enough?
Of course, they are!
(eg. Small farmers of India)
They do work quite hard
They assume a lot of riskThey absorb new technologies & innovate
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Then why are their incomes low?
Given who they are, where they live, andwhat their profile is
their access to markets is constrained
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And, what are those constraints?
Fragmentation
Most of them are small (average < 1.5 Ha)
They do not have bargaining power
Dispersion
Heterogeneity
They live in hinterlands (600,000 villages)
Access to real time information difficult
Each has a different circumstance
Personalised solutions not available
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All of this is further compounded
by weak infrastructure
Physical Social Institutional
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How do these manifest at a
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Example 1
Farmers incur avoidable additional logistics costs
Example: Farm produce selling Video
Price discovery at consolidation points after quality check
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Example 2
Lemons Problem on Quality front
Quality not objectively factored into pricing
Flow of information & market signals blocked(intermediaries act as Principals)
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Example 3
Product identity lost along the supply chain
Indiscrete aggregation of product along the chain
to maximise value at individual legs
(intermediaries act as Principals)
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Example 4
Low farm productivity
Agri extension is delivered as a last mile solution
Lack of timely availability of production inputs(information, knowledge, credit, farm inputs, insurance)
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e oupaThe new solution, factoring all these challenges in
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The ITC eChoupal Solution 1
Quality factored price discovery in the village
Video 1
Video 2
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The ITC eChoupal Solution - 2
Bypasses traditional intermediaries in info flow
Yet, leverages their capability in flow of goods & cash
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The ITC eChoupal Solution - 3
Product identity preserved through the chain
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The ITC eChoupal Solution - 4
First mile solutions for crop management
Combined with access to farm inputs
Video
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ITC eChoupal Delivery System
ITC
Virtual Collaboration Meta Market
Sanchalak
Digital Infrastructure Walking Distance
SamyojakPhysical Infrastructure Tractorable Distance
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Impact of ITC eChoupal
Farmers got empowered with more choices
Mandis reformed to stay competitive
More private sector players entered agribusiness
Higher farm incomes through productivity & prices
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Whats in it for ITC?
Cost competitive sourcing of agri commodities
Lower Costs
Value added products & brands
Rural markets access fee from other companies
Platform Business Opportunity
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Thank you
S. Sivakumar