MS 611 IGNOU MBA Solved Assignment - Explain the role of Melas and Haats in rural distribution.

Explain the role of Melas and Haats in rural distribution. 

Ans

    Table of ContentsIntroductionRural India’s Traditional HaatsThe Big PictureAdvantagesFew Companies InitiativesConclusionReferences

Introduction The Indian rural haats were from ancient times. From barter system to modern transaction methods, every change were adopted by these haats. Though traditional, these Indian avatars of hypermarkets promise to drive marketing plans of companies as they eye the emerging rural market, accounting for over two-thirds of India's population, 56% of income, 64% of expenditure and 33% of savings

. Though the Rs 50,000-crore sales that these weekly rural bazaars collectively generate every year may just be a fraction (under 3%) of all rural private consumption expenditure (Rs 20 lakhcrore), their importance in rural life goes beyond salesAlmost every villager is a regular haat visitor, with over three-fourths visiting one every week. And two in every five visitors here are women. With the average distance between a haat and the nearest big town at 24 km (16 km in case of the most urbanised state in Tamil Nadu), these haats double up a shopping-cum-outing opportunity for millions of entertainment-starved rural Indians

 RURAL INDIA'S TRADITIONAL HAATS Rs 50,000 crore annual sales n Out of total footfalls around two-fifth are women Large haat, in a 10,000+ village, caters to 57 villages attracts 12,000 visitors daily Small haat, in a 5,000+ village, caters to 21 villages, average footfall of 5,600 a day 545 stalls appear in a large haat while around 327 stalls are set up in a small haat

6. 98% rural people are regular visitors to haats75% visit any particular haat almost every week Three-fifth come to buy specific products from haats despite the fact that similar products are available in their villages A buyer spends Rs 40 on purchase of FMCG products in a single haat day. It nears Rs 60 in UP and Maharashtra while is comparatively lower at Rs 22 in Orissa and AP

 The Big PictureLocation Of Haats5% 52%Temple Market Place35% 8%Bus Stop OthersSource:RMAI

8 States with max HaatsUttar Pradesh 10,380Bihar 4,993West Bengal 4,078Jharkhand 3,996Maharashtra 3,758Stalls in Haats(in percent)Source:RMAI

 Brand awareness for specific FMCG products sold at haats (%)Source:RMAI

FMCG products preferred at haats (%)Source:RMAI

. Sale of FMCG products per outlet on a haat day (Rs)

 Average number of visitors in a haat

. Source of purchase of branded FMCG for haat sellers

15. AdvantagesBrands rarely vie for attention because a shop in a rural area usually wouldn't have place for too many SKUs (stock-keeping units) They can build a strong rural base without much advertising support (like Chik and Ghadi, the shampoo and detergent brands). This could be due to product design and benefits as well as due to self-sustaining distribution/marketing modelsExpensive brands too can do well - contrary to popular belief, rural consumers believe in value for money and do not buy cheap products (Close up toothpaste, Marie and Tiger biscuits and Clinic shampoo are doing well due to deep distribution)

 Disposable surplus is not low in rural markets because the people there don't usually pay rent or spend much on food as grain and vegetables are from their own fields/homes. The number of middle-class households (those having annual income of Rs 45,000-2.15 lakh) are almost equal at 15.6 million in rural areas and 16.4 million in urban areas.Another opportunity lies in making effective use of the infrastructure: 3.8 lakh public distribution shops, 1.38 lakh post offices, 42,000 haats, 32,000 bank branches, 25,000 melas (exhibitions) and 7,000 mandis (agricultural markets)Large-format rural retail stores such as DSCL Hariyali, as well as IT initiatives like ITC"s e-choupal will help make inroads into rural markets

Few Companies Taking IntiativesMedimixFocused brand-building initiatives—like participation at community events such as “melas” (village fairs),“haats” (markets), street theater, van campaigns, and puppet shows—generate positive word-of-mouth and influence buying decisions. Medimix,” campaigned in mobile vans to promote its brand and give out product samples

 Colgate Distributed free sample and toothbrushes at these haats for awareness of oral healthTaken initiatives to circumvent the limitation in communication channels by innovatively leveraging non conventional media. Wall paintings cinema vans weekly markets haat fairs and festivalsPromote the product as a substitute for neem twigs, salt , charcoal etc in rural belt

DaburIn villages promote its hair oil as a substitute for mustard oil which village folks generally used.In rural UP & Bihar With SwasthyaChetnaAbhiyan project for DaburChyawanprashHealth camps set up for these haats so that health benefits are told to the customers coming there

.SonataSonata launched project Swades, aimed at changing people's mindsets and making them aware of the value of time in rural IndiaSonata watches were also displayed at local melas (fairs) and haats(markets)Gaily decorated mobile vans travelled around villages to generate interestTo customers, in the 20-to-35 year age groupSonata is talking to banks for micro financing, so that more people can afford to buy watch

ConclusionThe haat system demonstrates the Indian ingenuity of keeping product prices low. No high shop rentals, salesmen salaries or investment in display shelves and shop interiors. The fee for putting up a stall is a ridiculous Rs 5, whether you are a poor woman selling vegetables or a multinational selling consumer goods.More focus should be on better infrastructure on these haats like electricity, sheds etc.Companies will directly communicate to the huge rural masses with very less advertisement cost and their products are directly sold without much intermediaries .As income of rural people increase demand for branded goods will also increase rapidly 

The countries oldest tradition holds the key to rural penetration. The average daily sale at a Haat is about Rs.2.25 Lacs while the annual sales at melas amount to Rs.3, 500 crore.

In rural India, annual melas organised with a religious or festive significance are quite popular and provide a very good platform for distribution. Rural markets come alive at these melas and people visit them to make several purchases. According to the Indian Market Research Bureau, around 8000 such melas are held in rural India every year.Rural markets have the practice of fixing specific days in a week as Market Days when exchange of goods and services are carried out. This is another potential low cost distribution channel available to the marketers. Haats serve a good opportunity for promotion after brand building has been done at Mela.Also, one satellite town where people prefer to go to buy their durable commodities generally serves every region consisting of several villages. If marketing managers use these feeder towns they will easily be able to cover a large section of the rural population. Melas are organized after harvest season, so the villager has enough money, which he will be ready to spend. Demonstration at Haat is essential to convert customers at haats since their attitude is far more utilitarian than that of visitors to a fair.