RCF in talks with rural retailers for tie-ups

State-run Rashtriya Chemicals and Fertilisers (RCF) is in talks with some leading private sector rural retail chains for innovative marketing strategies and for trading in new arenas.

RCF, which last year entered into strategic alliance with rural marketing companies such as ITC e-Choupal and Godrej Aadhar, is planning to rope in more such retail chains to enter into trading of cement, pesticides and seeds.

RCF, which is one of the largest domestic fertiliser and industrial chemical manufacturers, is in discussions with regional retail players such as the DCM Sriram Group for an alliance in South India and with Triveni of Uttar radesh.

“We are also talking to Hindustan Insecticides (HIL) to offer their entire pesticide range to farmers and with two to three cement manufacturers for strategic marketing alliances to offer cement through our network and reach. Though margins are thin in trading business, it contributes to our growth and product basket since the needs of the rural markets are changing,” said J Kohareswaran, director (marketing) of the Rs 5,243-crore turnover company.

Further, the company is planning to take up floriculture as another area of diversified business, utilising the surplus land available at its facilities. A Yes Bank report estimates that India’s rural retail market is expected to grow by 29 per cent to Rs 1.8 lakh crore by 2010, thanks to rising incomes and changing consumption patterns.

Kohareswaran said the marketing initiatives include soil testing and field demonstrations, undertaken in association with the expertise of rural retailers. The farmers will get scientific advice and training in modern agricultural practices to increase productivity through such programmes and the increase in turnover was mainly from the acceptance of such initiatives. The firm carried out over 4,000 field demonstrations during the 2007-08 period, alone with ITC e-Choupal.

RCF, which achieved the highest ever turnover during last year with a quantum jump of 46.17 per cent from the previous year’s Rs 3,643 crore, had 43 per cent of its revenues from sales of traded products.

Triveni Khushali Bazaar: Rural Retail

Triveni Khushali Bazaar (TKB), a rural super store chain of Triveni Engineers and Industries Ltd, plans to nearly double the number of its outlets by March 2008 to 80, as organized retail takes off in the country’s rural pockets.

By 2009, it plans to have a total of 200 stores. The chain currently has 45 outlets that sell agricultural implements, diesel, fertilizers, and consumer goods to the farming and rural community.

TKB has the majority of it's stores around 35 of then in Uttar Pradesh. During the visit to one of their outlets in Hathras, western UP a flavour of their model was obtained.

The store is present just on the outskirts of the town of Hathras and the main visible category is Grocery. They also sell Agri-inputs, cycles, tyres etc.








The Customers
This concept should have been very successful, since the town (rural) customers do not have too much variety and options in the local market. A survey on the income group showed a good portion of local businessman and government employees with household incomes in the range of 10k to 30k per month.

But still the store has not done well and the daily average sales is only in the anges of 15,000, which is very dismal in comparison with local town retailers.






Communications
The main reason for this could be the very poor Marketing Communication practices followed by TKB. An example of an inefficient visual merhandising is shown here. These are how the promotional offers displayed instore. The store also has very poor visibility within the local town. A new establishment should advertise aggressively in order to pull new customers to visit its store.