Rural Marketing Case Study

Colgate `Disha’: The BOP Distribution Strategy ( PPP)

(Group 2)
 Why do you think the youth entrepreneur was chosen as a channel partner? Who or what
other form of distribution can be chosen in their place in your team’s opinion? Why, give a
5-point comparison chart with 2 other closest alternatives for the same job?
2 To reach the BOP market in below 5000 population villages, MART decided to hire local youth from
different sources including the Nehru Yuva Kendra Sanghathan.

The process used is as follows: The process used is as follows:

Map the uncovered

territory 1 2
Introduction of Sharing journey
Ques. 1 self as a Colgate plan and visiting
last mile channel
Identify, select, recruit partner
on fixed day
and train youth
3 4
Promotion of Placing posters
Allocate territories Colgate products at Shop
 Why do you think the youth entrepreneur was chosen as a channel partner? Who or what
other form of distribution can be chosen in their place in your team’s opinion? Why, give a
5-point comparison chart with 2 other closest alternatives for the same job?
3
At the Haat, activities include:
 Ensuring an optimal vantage point for location of stand
 Setting up branded umbrella on cycle and display of stock
 Communication on oral hygiene practices, differentiating between fakes and
genuine
 Colgate products.
Ques. 1  Offering of samples and product trials
 youth
The Sale isoflinked
Colgate
to theproducts
nearest company stockist and buys stock on cash, usually weekly. The
entrepreneur margins are approximately 3% selling to village retailers and approximately 8%
selling directly to consumers at Haats, creating a weighted average margin of 7%.To sustain the
entrepreneur interest in the business an initial stipend of Rs. 1500/- per month was fixed. This is
reduced, on a sliding scale, over time as the business grows, but is not completely eliminated to
retain some degree of control over the entrepreneur.
 Why do you think the youth entrepreneur was chosen as a channel partner? Who or what
other form of distribution can be chosen in their place in your team’s opinion? Why, give a
5-point comparison chart with 2 other closest alternatives
N
r pay ew en
for the same job?
Lower billiitty a energy
fe (affo rda i nd
4 a
s or fo ) perspect
a
In our opinion the youth entrepreneur was chosen as a channel partner because: -
f t ive
n
It’s lace ime
p er
p
ex

Ques. 1
Workforce
i lity diversity Em
tab p; br ploy
d ap am ty an er
A & g il i d
A
 What were the key success factors of project DISHA?
5
OBJECTIVE

• Touch the lives of rural woman and establish a model for broad based
replication.

• Provide woman and girl with the skill and knowledge that will help them
Ques. 2 secure employment or start their own business.

• Support the Govt. of India Flagship skill development initiative through

policy, research and development support service.
 Colgate Strategy
6
The existing distribution structure, as depicted in The diagram, allowed direct
access to the Inhabitants of 5000+ population villages. Colgate Wished to
penetrate deeper and achieve a Distribution spread of villages with 2000
Population. They had tried experimenting with Different models; none worked

1. Distribution - model created a viable distribution structure for Colgate in the

Ques. 2 below 5000 Population villages to access BOP segment as desired .
2. Rural Orientation - Increased entrepreneurship possibilities were creating by
setting an Example without displacing Rural youth.
3. Promotion of Genuine Products - promotion of the genuine brand by an
authorized partner to village consumers
4. Other Benefits - It is a low cost model targeted at high sales volumes through
access to large Concentrated crowds at Haats and by serving the larger
requirements of village Retailers
 Results at glance
7
In 2005, the initial year of implementation, the 28 identified districts contributed
to a total of 2% of rural sales for the state. By 2006, this figure had grown to 6%
and, by 2008, it had jumped to 9% of the state’s rural sales.

Ques. 2
 Do you think this model in sustainable and scalable? Can it be replicated by other players?
What could be the possible point of consideration for others? Give arguments to support
your choice.
8
The model is sustainable because of the following reasons:

Enhanced market Reach

Ques. 3 Decreased sales- force cost

‘Cash & Carry model’

 Do you think this model in sustainable and scalable? Can it be replicated by other players?
What could be the possible point of consideration for others? Give arguments to support
your choice.
9

The model is scalable because the model has
been able to help the company reach the
untapped consumers, thereby, increasing the
market share. The model would help the
Ques. 3 company in increasing the market share even
in the further times to come by its deep-
penetration competency. With this model,
Colgate would be able to cater to a greater
number of villages with less than 5000
population.
This approach will help the company to
decrease cost of developing the market in the
longer run as well as help the entrepreneur to
earn more and would make his self-esteem
higher so as to be regarded as the
“authorized distributor”.
 Do you think this model in sustainable and scalable? Can it be replicated by other players?
What could be the possible point of consideration for others? Give arguments to support
your choice.
10
One major consideration in the model for other players can be:

 Colgate identifies young players in the village and encourages & motivates to develop
the market.

 On the contrary, competitors can find big players of the village selling similar kind of
Ques. 3
products. This will lead the young novice entrepreneurs to be drawn away by bigger
players in the market.

Therefore, the company has to adopt an entrepreneurial as well as an “entrepreneurial

turned distributor” based model in order to save its market and grow in the same.
 Which OTHER product categories and players (give at least 2, both from different categories) can
replicate this model for Rural Distribution? Give explanation for your groups views?
11
1. Baby Diapers ( P&G):

P&G can replicate the Distribution model of Colgate by taking steps –

 At first they should create a distribution structure for below 10000

population villages as the customer base of the product is very low.
Ques. 4
 By implementing cash and carry business model which refers to
a business model that virtually excludes all credit transactions,
requiring up-front payment for all goods and services. It definitely
supports the retail industry in a positive manner and the benefit will
definitely pass on to consumers.
 12
2. Antibacterial Soap (Dettol):

Dettol can replicate the Distribution model of Colgate by taking steps:

for lower middle income countries, the share is slightly higher.

 Selling smaller packs and lower price points-like its 35-gram soap
Ques. 4 priced at Rs. 7.

 Using cooperative societies to sell the product at a lower price will

help Dettol capture the market easily.