The Coca-Cola University: Parivartan

FMCG companies in India are all looking towards increasing their penetration into rural markets. Coke, the world's largest non-alcoholic beverage company is looking at semi-urban and rural markets as its future growth paths.



The 'Parivartan' program- targeting retailers

Coke's new strategy involves training retailers in a program launched by the Coca-Cola University. In 2007, the company launched Coca-Cola University — a virtual, global university for all learning and capability-building activities.

The company calls this the "parivartan" program (meaning "Change" in English). Shop owners (traditional retailers) are given training on displaying and stocking products well. The goal of the innovative training program is to provide traditional Indian retailers with the skills, tools and techniques required to succeed in a constantly changing retail scenario.

Presentations (including audio/visual technology) in local Hindi language help small retailers (with stores less than 200 square feet in average size) to better understand the concepts involved. Each retailer also receives a Coca-Cola "Certified Retailer" certificate at the conclusion of the program.

The program, which debuted on Dec. 18 in Agra, will equip "mom-and-pop" shop owners with the skills, tools and techniques required to succeed in India's evolving retail landscape. All invited retailers attended the session, which allowed them to learn in a formal setting using leading-edge audio/visual technology and engaging presentations conducted in the local Hindi language.

Here are some of them: print a visiting card with your telephone number; around 80% of your business comes from 20% of your products, so build up visibility for these; try and display posters of discounts; organise a home delivery facilty; be courteous to your customers-SundayET. The content is structured around the four pillars of retail—customer, shop, stock and finance.

And this seems to be just the tip of the iceberg. The programme has covered 20,000 retailers in North India so far. “Based on their feedback we are developing ‘Advanced Parivartan’ that will cover issues like shop layout and location, display, basics of finance, knowledge of credit card transactions, people management skills, among others.

For Coca-Cola it’s a big pie. There are around 12 million retailers in the country, out of which kirana stores account for over 90% of the Rs 7,40,000-cr retail business in India. But a company official maintained that these retailers would not be pushed to stock Coca-Cola products through this programme. Some of these retailers don't even stock soft drinks.

The idea was supposedly born out of a meeting at the World Economic Forum in Davos around two years ago when Coke’s global chief met the commerce minister of India and suggested running the programme in India. Also, as a token of goodwill gesture, an accidental death insurance of Rs 1 lakh is being provided free of cost to all the attending retailers as a protection against any eventualities.

In bigger cities the company has conducted Parivartan programme in classrooms or by hiring hotels. The classroom Parivartan programme has been organised across cities in UP and Punjab -Agra, Ludhiana, Chandigarh, Amritsar, Gorakhpur, Lucknow, Bareilly, Haldwani, Bilaspur, Kolkata, Faizabad, and Rajamundry.

The ‘Coca-Cola University on Wheels’ has also covered small towns such as Hoshiarpur, Mukeria, Nakodar, Phagwara, Nawanshahar, Malerkotla, Barnala, Khanna, Moga, Jalandhar, among others. Going forward in the future, Coca-Cola’s plan is to scale up this initiative by taking it across India.

http://article.wn.com/view/2009/05/03/CocaCola_India_launches_CocaCola_University_on_Wheels/

http://economictimes.indiatimes.com/Features/The-Sunday-ET/Coca-Cola-India-launches-Coca-Cola-University-on-Wheels/articleshow/4477620.cms

http://www.casestudyinc.com/Articles/Coke-Strategy-Training-Retailers.html

http://www.thecoca-colacompany.com/citizenship/news_india_retailers.html

State Bank of India takes no-frills ATM to rural masses

India's largest bank is turning to one of the country's smallest technology companies for a new minimalist cash machine it hopes will solve the subcontinent's chronic financial services shortage.

State Bank of India (SBI) has 10,000 branches, the second largest network in the world, but struggles to reach the farming communities that make up 70 per cent of India's population.

About 85 per cent of India's workers are employed in the "unorganised sector" – where wages are paid in cash – and at least half do not have a bank account. Hoping to reach the underbanked masses, SBI is trialling a new automatic teller machine (ATM) that costs a tenth of the price of conventional models and is cheap enough to deploy in areas where the average transaction is 100 rupees (£1.25).

Built around a pared-down software platform and connected to a bank via the web, the Gramateller ATM makes do without the frills found on its Indian city cousins, such as the ability to make payments to the local temple.

Instead it includes features useful for country living. A fingerprint scanner provides an identification system suitable for a country where 70 per cent of the population is illiterate. It runs on just 60 watts of electricity – a fraction of the 3,000 watts required by a conventional ATM – to cut the cost of supplying backup power in areas where blackouts are common. The new generation ATM also emits far less heat, which means unlike a traditional cash machine, it does not need to be housed in an air-conditioned closet.

Moreover, though it will only handle a single denomination of currency, the Gramateller can take deposits and deal with dirty and crumpled notes – helpful, since rural users are often suspicious that crisp new cash is forged.

The machine has been developed by Vortex, a Madras-based technology start-up funded by a 2 million rupee (£60,000) investment from Aavishkar, a specialist "micro venture capital" firm that is backed by groups including Deutsche Bank. ICICI, India's largest private bank, is also piloting the technology while one of Indonesia's largest retail banks has told Vortex it will "buy as many ATMs as the company can build" – provided the Gramateller passes its current field tests.

"Manned branches are too expensive; conventional ATMs cost too much and are not equal to the challenges of rural environments," Lakshmimarayan Kannan, of Vortex, said. "We built the Gramateller to bring banking in reach of those not covered today."

Comparisons with developed economies suggest the market for the minimalist ATM is potentially massive. In the US, where credit cards are common, there is a cash machine for every 1,000 people. In India, where cash is still king, there are only about 30,000 machines in the entire county – one for every 43,000 people – and most are densely packed into big cities.

However, the Gramateller is only one of several "branchless banking" models being tested around the world. In the Philippines, for instance, Globe Telecom customers can operate electronic accounts through mobile phones and similar systems are being used across Africa. In India ICICI already uses microfinance institutions, which specialise in granting tiny amounts of credit, as retail agents.

Against mobile-phone based systems, the Gramateller may be relatively vulnerable to thieves. However, Mr Kannan points out that it will carry only about a fifth of the amount of money found in a city ATM. "There won't be a need to have very much cash in our cash machine," he said. "Actually, there are likely to be plenty of assets around it worth more."

Marico's Distribution Network

Marico's distribution width and penetration is acknowledged as one of the best in the industry and is a leverageable strength.
Every month, 56 million consumer packs are sold to about 1.8 million households through 1.6 million retail outlets spread across the country.
Marico's distribution network covers almost every Indian town with a population of over 20,000. The chart below depicts Marico's distribution network in the urban & rural markets:

Thus, 1 out of every 10 Indians is a Marico consumer.

Distribution Alliance:
Our distribution strength has been recognised by Indo Nissin Foods Ltd. through their association with us for the distribution of Top Ramen products on a national basis.

Rural Sales & Distribution:
Marico's parallel rural sales and distribution network ranks among the top three in the industry and contributes 24% to the company's topline.

Their infrastructure comprises 882 direct distributors, 153 super distributors, catering to 2393 small stockists and 4523 van markets. A dedicated team of Territory Sales Executives and Pilot Sales Representatives distribute Marico's as well as alliance brands through this vibrant network.

Sales Capacity:
They have made significant progress in the areas that enhance sales capacity. Quality of our distributors Quality and number of the distributor field force Upgradation in the role of the company's front-line sales force.

Technology (IT) in Sales:
Marico has been making investments in IT to ensure:
Supply Chain efficiencies
Availability of the SKU at the right distributor point,
at the right time in right quantities
Timely availability and reliability of Sales
MIS, which help in taking prudent decisions on a real time basis.

In order to reap maximum benefits from its sales and distribution network, Marico embarked on an internet-enabled application - MI-Net - to establish a network between Marico and its distributors through a web interface. This project is aimed at providing real time information on the status of various business operations between Marico and its distributors. This initiative is expected to provide business benefits in the form of increased penetration by the sales force, reduced communication costs, reduced working capital requirements, etc. The project went live on April 1, 2002 with connectivity to 330 urban distributors, who together account for about 3/4th of Marico's domestic turnover. The business benefits are expected to accrue over a period of time.

Socio Economic Classification (SEC)

A common classification that is used by marketers to describe the Indian population is the Socio Economic Classification (SEC). SEC is the classification of Indian consumers on the basis of two parameters: Occupation and Education of the chief wage earner (Head) of the households. The SEC classification, created in 1988, was ratified by Market Research Society of India (MRSI), is used by most media researchers and brand managers to understand the Indian consuming class.

According to the SEC, the Urban Indian households are classified on the basis of the two parameters Education and Occupation into SECA1, A2, B1, B2, C, D, E1, E2.

In urban households, SEC A1 include those with graduation/post graduate holding senior positions like CEO’s and Middle level managers and also those entrepreneurs having some college education and employs more than 10 staffs. The Rural Indian Households are classified into SEC R1, R2, R3, and R4. In the rural classification, the parameters are Education of the Chief wage earner and the type of the house.

The SEC classification helps the marketers to identify segments that have high consuming potential. The high potential types: A1, A2, the medium ones and the bottom of pyramid ones. The SEC classification is used by Media planners to decide the media which gives the client maximum effectiveness. The research team at the media houses uses the NRS and IRS surveys' raw data to identify the reach of the media in these SEC segments and uses this input for pitching their campaign to large advertisers.

Although this classification is popular for over 18 years, the classification has its negatives also since it takes only two parameters: education and occupation .This is based on the assumption that higher education leads to higher income thus higher consuming potential. However, we know that this may not be true always. A trader or a retailer with no qualification can earn more income than a Postgraduate executive, but SEC will categorize the traders/retailers not as SEC A1 or A2.

Hence Market research users council (MRUC) has devised another classification called New Consumer Classification System (NCCS) which calculates a Household Premiumness Index (HPI) which takes parameters like ownership and consumption of media services and products with other demographics.

Rural Opportunity: Comat Technologies

• Government Services (G2C)
– Pension Schemes
– Scholarship Schemes
– Government Issued papers
• Land Record, Birth Certificate, Marriage Certificate etc.

• Business Services (B2C)
– Credit and loans
– Education and vocational training
– Bill Payment
– Insurance
• Gold, Farm Assets, Crop
– Healthcare

• Business Services (B2B)
– Products/ Services for rural businesses

Comat is setting up the infrastructure in rural communities
– Karnataka: 800
– Haryana: 290
– Uttarakhand: 600
– Tripura: 170
– Sikkim: 45

• Comat has created a “Business API”
– Expand reach many states through single Business API
– Revenue share model
– No business outreach program required for customer access

Kiosks provide the services backbone
– Reliable ICT infrastructure
– Technology enabled Business process re-engineering
• G2C, B2C and B2B service fulfillment

• Kiosks offer a low cost distribution network
– Deliver multiple services through a single Kiosk
– Payment collection, storage and remittance are centralized

•B2B Services
– Order Fulfillment and Supply Chain
• Order placement for farmers and other rural businesses
• Order tracking / confirmation
– Affinity Program Announcements
• Product Launch Announcements
– Rebate Coupons delivered via kiosks
– Citizen Surveys
– Unregulated services
• PDS Allotment via SMS
• Issuance of Ration Cards

•B2C Services
– Mobile Prepaid Top up
• Launch 3 weeks ago; Revenue Rs 100K
– Exam Results via SMS
• Printed results delivered via kiosks

Comat is a Social Enterprise. Our decade of on-ground experience in working for various rural projects across the country makes us a top notch player in the areas of e-Governance, and ICTD (Information and Communication Technologies for Development). Their service offerings enable the Governments and Businesses get closer to the rural milieu. That's how they facilitate social impact and Energize Rural Economies. As a rural empowerment enabler, they continue to walk the talk...