A Mobile Shop In Rural India – The Real Life MBA

We try to understand the business environment in villages and we get a brief idea due to topics such as Marketing to Bottom of Pyramid. Many marketers are identifying villages as the next place for FMCGs to be. In class, it made me cringe when city folks made blanket statements such as “women in villages do not go and shop, so no need to target them”. Or “Villagers are only concerned about food and electronic devices are a luxury to them”  So, I decided to interview a mobile shop owner in my village Munavalli  – a dusty, desolate place –in the state of Karnataka. It offered mobile phones and accessories for sale as well as repair, which was outsourced to third party in big cities. It also sold SIM cards. It had a photocopy machine which is used for in-house work as well as compliment the sale of SIM cards, since buyers would need photocopies to buy them. Services include top-ups, downloading songs, videos etc. Furthermore, they have license as Patanjali distributors and have stocked few FMCG products of theirs.

The Village Mobile Shop – Demand And Supply

It caters  to the rural class – which mostly consists of farmers and laborers. The shop has seen increasing demand for smartphones from this segment of late. Subsequently there has been increasing demand for internet top ups. Also, most of the customers are males, which is an exception considering customer profiles of other kind of stores in the villages.

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After the usual greetings and puns, I jumped directly to understand the sheer difficulty of maintaining low costs while tackling logistics and supply chain issues such as getting product, returns, service and repairs.

The owner – Anup Karikatti acknowledged the issue, but said that of late with the advent of computers and personal vehicles the issue is not much of a problem. It is becoming easier to estimate demand and also to get apt supplies. Most of the customers aren’t well acquainted with the products and services. It takes effort to drive through the value proposition as well as maintain cordial customer relationship in times of repairs, especially since majority of the products are low end and hence low priced. Since, it is not mass retail, they generally get the products when they go to the nearby towns from company outlets.

Next, I noticed dilapidated posters on the wall and asked how do they market their store. The obvious answer was via word of mouth. Since it is a family run business, few social activities are done and few programs are funded, especially religious. This helps indirectly. Also, posters help a lot, especially with pics since most items purchased here are uninitiated and rely on the seller making the customer understand the products. Since, the shop is next to State Highway, there is a lot of traffic movement.

Word of Mouth Marketing And Tackling Competition

I next asked about the competition facing them. I got to know that they were one of the first in the village, which has become a town this year, to offer such products, services. But recently there has been a spurt of competitors. Anup acknowledged the need for re-defining and innovating their proposition. But those things do not work well in such a system, which is primarily an informal sector. Most of the fancy marketing techniques go for a toss here. Such market environments require a lot of practical understanding and experience.

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I also noticed that a lot of customers tend to bargain. But apparently of late, they have standardized prices as well as service delivery to avoid hassles. A lot of things work out based on personal communication skills. For instance, if a product returned for repairs has not been delivered on time, which is not in their control, if you have a prowess in negotiation and convincing skills then you are good to go.

Effects of Demonetization

I had to ask about the repercussions of demonetization. Anup said that it is a great move. “Of course, many of us are facing issues. Especially in rural areas like here, where most transactions are currency based. But, it is fine if it leads to well-being of the nation. The government should have handled the situation better”. I noticed that due to low supply of hard cash, there is downturn of sales everywhere. Anup was accepting e-wallet payments, but they are extremely rare.

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About The Author:

niteen

A librocubicularist and a binge watcher with a knack for humour. Have variegated interests ranging from sports, movies, TV series, politics, history. I believe that causality is the supreme law of the universe. If happiness is an illusion, I love magic. My thoughts are stars that I can’t fathom into constellations. Part of the InsideIIM 2016 student team.

 

Niteen Bali

Student at Indian Institute of Management, Calcutta

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