MART Rural Solutions has been busy campaigning for Colgate in rural hinterland of Uttar Pradesh. Through the rural marketing and distribution network set up by MART, 500 youth volunteers from the Nehru Yuva Kendra are promoting the brand and selling it at a Haat and two villages per volunteer per day.
Following the successful implementation of the model, MART is now getting ready to take the brand to the villages of Andhra Pradesh.
Speaking to exchange4media on the sidelines of a seminar on Rural Marketing and Communication in Chennai, Pradeep Kashyap, MD, Mart Rural Solutions, said, “The challenge was to figure out how to bring down the cost of rural distribution. A van would cost Rs 3,000 per day and is unviable because in each geographic sub-unit the potential is not so much”.
The economics of the system is beautiful in its simplicity. The stipend of those taken on for the programme started at Rs 1,500 per month, and they are also entitled to receive a margin from the generated sales.
The pilot project was carried out in April-May 2005 and was scaled up in June. Once the sales started picking up, the stipend was brought down to Rs 1,200 and is expected to stabilise at Rs 900 per month. By which time, the youth would become part of the Colgate sub-stockists’ system and would come under the company’s supervision.
The volume of sales of each volunteer is presently Rs 700 to Rs 1,000 per day. Of this, Haat sales, which are directly to the end consumers, fetch margins of 7-8 per cent as here they can sell as close to the MRP as possible.
Each volunteer also covers two villages a day, selling to retailers with a margin of 3-4 per cent. “We expect the sales revenue per volunteer per day to touch Rs 1,000 to Rs 1,200 per day,” added Kashyap.
The project covers almost all of Uttar Pradesh, with a presence in over 60 districts. With the success of the present project, MART is all set to take Colgate into rural Andhra Pradesh next.
The company is also close to creating a similar rural distribution network for Godrej Sara Lee’s Good Night mosquito repellant in Uttar Pradesh. The pilot for this has been carried out by the company and Good Night, too, will enter rural Andhra Pradesh soon with MART’s distribution support on the same model.
MART works on a model where post stabilising the operations in a year, it moves on after handing it over to the company. “In the said one year, we’re setting up all the systems necessary to make it work. The MIS, the supervision, Haats, and the works. After this period, the youth will become part of the company’s extended network,” said Kashyap.
The volunteers and their bicycles are branded with colours and logos of the brand, adding the dimension of publicity to the distribution exercise.
The markets covered in Uttar Pradesh were those not serviced by Colgate, and constituted villages with populations of 2,000 to 3,000. In the case of Good Night, the profile of villages would be different and even those with a population of around 5,000 would be part of the chain, according to the MART MD.
Currently, the company is also setting up ‘Rasoi Ghars’ or community kitchens for HPCL’s 5 kg gas cylinder offering. So far, MART has set up 400 of the targeted 700 such ‘Rasoi Ghars’ across select districts of Uttar Pradesh.
While HPCL provides the gas cylinders, stoves and platforms in a package worth Rs 8,000, the local community was required to provide the room. A pilot project has been carried out in Madhya Pradesh’s Sagar district and Cuttack in Orissa.