Is there a business in rural markets

India lives in its villages.India lives in its villages.

Is there a Business Is there a Business in Rural Markets?in Rural Markets?

Pharma Marketing Conference, IDMA, Chennai, 19 May 2012.

Dr Surinder Kumar

69 %

69 %83 Crores of 121 Crores

Image: wikimedia

Image: Adam Jones

Image: Zenit

Image: Banana Chippy

Image: IndiaAfrica connect.in

Image: IndiaAfrica connect.in

91.21

64.67

0

10

20

30

40

50

60

70

80

90

100

Rural Urban

Census 2011, Number in Million

Image: Youthkiawaaz

8.64

14.72

0

2

4

68

10

12

14

16

Rural Urban

Census 2011, Number in Million

Image: Youthkiawaaz

56.0060.50

20

25

30

35

40

45

50

55

60

65

70

Rural Urban

Rural

Urban

Census 2011, Number in Million

Planned

Spent

Value in Rs. Crores

Investment on rural developmentSource: Rural Ministry Annual Report 2012

Image: The Viewspaper

Narrowing

rural-urban divide

Image: The Viewspaper

•Better income from farmingBetter income from farming

•Increasing income from non-Increasing income from non-farming avenues and emigrantsfarming avenues and emigrants

Narrowing rural-urban divide

•Industry projects in rural areasIndustry projects in rural areas

•Infrastructure developmentInfrastructure development

•Increase Increase inin literacy and awareness literacy and awareness

•Affordability of technology & white Affordability of technology & white goodsgoods

Contd..Narrowing rural-urban divide

Is there a Business Is there a Business in Rural Markets?in Rural Markets?

There a Business There a Business in Rural Markets!in Rural Markets!

isis

32.94 32.59 31.69 31.19

28.01 29.55 30.52 30.62

19.97 20.08 19.71 18.95

19.07 17.79 18.08 19.24

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Rural

Class II-VI

Metros

Class I

2009 201220112010

IMS March 2012

Contribution by Rural Market

Metro > 10 lacsClass 1 – 1-10 LacsClass 2 – 6 – between 20,000 to 1 lacRural –not urban

11686 13622 15291 173149937 12351 14728 169987084

83929513

105176766

74358725

10678

0

10000

20000

30000

40000

50000

60000

2009 2010 2011 2012

RURAL

CLASS II TO VI

METROS

CLASS I TOWNS

Contribution by Rural Market

IMS March 2012, Value in Rs. Crores

Metro > 10 lacsClass 1 – 1-10 LacsClass 2 – 6 – between 20,000 to 1 lacRural –not urban

11686 13622 15291 173149937 12351 14728 169987084

83929513

105176766

74358725

10678

0

10000

20000

30000

40000

50000

60000

2009 2010 2011 2012

RURAL

CLASS II TO VI

METROS

CLASS I TOWNS

Contribution by Rural Market

IMS March 2012, Value in Rs. Crores

Metro > 10 lacsClass 1 – 1-10 LacsClass 2 – 6 – between 20,000 to 1 lacRural –not urban

1977 (14%)

4350(20%)

2411 (15%)

4046 (15%)4293 (14%)

2957 (16%)

Image: Evelyn Simak

Image: Evelyn Simak

Road blocks…Road blocks…

Image: The Hindu Business Line

Inadequate Inadequate Healthcare SystemHealthcare System

Image: The Hindu Business Line

Image: Chattopadhyay

Image: Chattopadhyay

Lack of Awareness

Lack of Affordability

Image: Vrittiimedia.com

Pharmacy

12 KM

Image: Vrittiimedia.com

Pharmacy

12 KM

Poor AccessibilityPoor Accessibility

•Improve Healthcare SystemImprove Healthcare System

•Create AwarenessCreate Awareness

•Provide AffordabilityProvide Affordability

•Ensure AccessibilityEnsure Accessibility

Improving Healthcare System

•Partnering with government, NGOs and other key stake holders

• Training rural doctors and supporting staff

•Providing microfinance to doctors, retails, etc. to create healthcare infrastructure

Improving Healthcare System

Example

•MSD India launched Project Transcend, a program to train GPs on evidence based management of diabetes.•Sanofi Aventis’ PRAYAS, a program to meet rural India’s healthcare needs and to bridge the gap by training rural doctors, plan to train150000 doctors across India.

Creating Awareness

•Educating rural masses about safe and reliable remedies for common ailments

•Partnering with rural institutions and NGOs

•Making use of annuals fairs, weekly haats and mandis to spread awareness

Creating Awareness - Examples

•Novo Nordisk Education Foundation is undertaking massive diabetes control program that involves screening, spreading awareness and training doctors.

•SPARSH, a multilingual helpline for diabetics to support Januvia and Janumet.

•NPL had run ‘Teach more, reach more’ campaign to educate masses about epilepsy.

•J&J’s Mobile health for mothers helped many.

Providing Affordability

•Making medicine more affordable

•Rural healthcare insurance

•Training medical staff

Providing AffordabilityExamples

Arogya Parivar (Healthy Family), a low-profit social initiative developed by Novartis, proved to be a commercially sustainable program. It had achieved break-even within 30 months.

Pharmacy

12 KM

Ensuring Accessibility

•Company delivery vans

•Pooling of resources by collaborations

•Developing products suitable for rough storing conditions

•Mobile clinics and mobile pharmacies

•Post offices duplicating as pharmacies

Pharmacy

12 KM

Ensuring Accessibility

Examples

Ranbaxy and Pfizer have formalized an alliance with ITC to penetrate the rural markets for their over-the-counter (OTC) products.

Indian & Multinationals in Rural Markets

• Traditionally Indian companies, especially mid- & small-size, have better penetration in rural and class II-VI markets.

• Now multinationals (Indian & foreign) are becoming more aggressive in these markets.

• Mid- & small-size companies need to be proactive to exploit the new markets created by these companies and to protect their current business.

Challenges are what make life interesting; overcoming them is what makes life meaningful.

Thank You

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http://www.surinderkumar.com