Business Plan

for

www.ruralbazaar.com

Submitted by:

Jigar Rathod PG20095228

Neeta Gupta PG20095235

Submitted to:

Ms. Kavita Shukla

(Course Instructor, Rural Marketing)

IILM Institute for Learning and Management

Gurgaon
 Executive Summary

India is one of the developing countries. Though we are not at all behind any

country of the world in terms of technology, major part of India lives in villages.

Almost 70% of total population is rural. Our markets are flooding with latest

technology gadgets and high end products but still, our many villages are not

having electricity connections also. True potential of India is hidden into rural

market. This market was unexplored and untapped since many years but

saturation of urban market proved as a divider to let people think about rural

market. Most of the rural market is untapped because of the only reason i.e.

complexity of distribution network.

To meet challenges of rural India, our creative brain gave birth to a web portal.

We named our brainchild as www.ruralbazaar.com, the creative idea to serve

rural people with all kind of product at their doorstep at affordable rates. The key

features of our e-biz are as below:

 Connectivity for any smallest village present in any corner part of India

 Hub and Spoke delivery system to minimize inventory cost

 Web connectivity to central server for every village to register order.

 Purchase of agro products from villages only to sell it in urban market. This

removes middlemen to give maximum possible profit.

 FMCG, FMCD and Agricultural products all at one place.

  Microfinance to help villagers buy good products without worrying for

finance.

 Use of public transport when needed to minimize transportation cost

Though our business is taking its baby steps, profit margin will be lower in initial

stage but once grown, it will open whole new market for us to rule.
 Introduction

Till recently most of the companies used to treat rural markets as adjuncts to

their urban strongholds and rural consumers as a homogeneous mass without

segmenting them into target markets and positioning brands appropriately.

However it is beyond doubt that they treat rural markets as a dumping grounds

for low-end products basically designed for an urban audience. Over 70% of sales

come from middle class. The sector is excited about a burgeoning rural population

whose incomes are rising and is willing to spend on goods designed to improve

lifestyle. Also with a near saturation and cut throat competition in urban India,

many producers of FMCGs are driven to chalk out bold new strategies for

targeting the rural consumer in a big way.

This web portal is mainly prepared to provide better connectivity to Indian

villages in order to deliver those right products at suitable rates. Power of

simplicity will make web portal easy to use and Help firms to use villagers to

operate portals in their village.

 Statement of purpose

The main aim for starting this web site is to explore true potential of rural market

for creating potential market for our products. This web portal will provide easy

connectivity with interior villages and to serve people in the latest technological

ways to ensure complete convenience and service at affordable rates.

Objective

Our objective for starting this web portal is to provide right products to rural India

as per their need. This revolutionary step will help us in uncovering true potential

of rural India. Also, by removing mediators from currant distribution network,

gain maximum profit as well as provide non spurious products at very affordable

rates to Indian villages

 Business Development

The Business development for rural market will take place in 4 phases

Phase 1:

First step is to develop website and software to create necessary infrastructure.

This will act as a backbone of business.

“Web structure”

Company Profile: This section will consist of company logo and other details. This

section will help urban investors to visit company portal and provide them basic

information related to company work profile.

Contact Information: This section will provide contact details of Head office as

well as every node and store operator.

Product Catalogue:

This section will further expand to main 4 categories

 Agro Products: this section will show all available agriculture related

products and instruments.

 FMCG: This section will provide information related with consumer

goods like medicines, cosmetics, and other required items in day to

day life. This section will mainly help bulk buyers or local retailers to

order inventory.

 FMCD: This section will provide information for Electronic items,

mobile phones and other required items. These items will be

selected by need analysis of villages.

 Miscellaneous: This section will provide information regarding re-sell

products and other items available on discount rate for specific time

period.

The key feature of the web portal will be language support. We will try to cover as

many languages as possible for easy user interface. Website will be based on

visuals and 3D images of standard products. To make it easiest possible, we will

not include any other fields to be checked by user. Web page will show product
list. Operator has to select the product, insert required quantity and then press

submit to register order directly to main data server.

Every rural area will be covered under node. Node will be assigned to a semi

urban area which will act as a storage unit as well as control center for nearby

villages.

Process of order making and delivery:

 Customer will visit Rural Bazaar center of village

 Provide information regarding available products and their prices

 Select item, enter required quantity

 Server will give confirmation of order booking

 Store in charge will collect partial payment

 All data will be gathered for a node from all villages under that node.

 System will check for available items, and will send notification to head

office if any item is not available.

 Head office will transfer required item to node.

 Next day, Delivery van will pick up all ordered items and will deliver it to

respective villages by shortest possible route and collect payment from

store in charge.

Phase 2:

After establishment of proper distribution channel, company will provide every

village a credit limit, which will be used for microfinance or allow partial

payment for ordered items. Store in charge will be held responsible for

collection of money from their center on time. Failure of collection of money

will unable store in charge to give more microfinance. Company will make tie

ups with larger financial institution for loan. This loan will be distributed as a

credit limit among all villages.

Phase 3:

After gaining trust from villagers, company will apply third phase. By keeping in

mind this fact that Indian farmers are having small size of farms, company will

purchase agro products produced at low scale directly from farmers and sell it
to urban market. This system will help us to remove middleman from system.

This will ultimately benefit farmers. The collection of these agro products will

take place by delivery van. After delivering goods to village center, van will

collect agro products from that center and bring it to node for further

processing and selling to urban market.

Phase 4:

After establishment of market for company, next step will be tie up with large

scale manufacturers for purchase directly from company. Our company will

provide distribution channel to larger organizations. So, it will benefit to both,

manufacturer and our company. From this stage onwards, company will also

start selling old products. Company will purchase old electronic items from

urban area and sell it to villages. This item range will include mobile phones

and other FMCD products. This item information will made available in

miscellaneous category of web portal.

 The market

Target market for the company will be villages with population not more than

10000. These villages generally faces problem because of lack of proper

distribution channel. Also, many of the people lives below poverty line.

Microfinance and facility to sell agro products directly at local collection center

will definitely help rural people to gain more out of the company operations.

Test market for company operations will be Gujarat. Better road connectivity to

every village will help company for easy transport. Also, availability of resources in

villages of Gujarat will provide better customer groups in prior stages of company

growth.

“Gujarat Region satellite view”

Map showing main center and possible target villages of Ahmedabad region

Map showing main center and possible target villages of Rajkot region
 Competition

Company will face competition from local vendors at initial levels. Another very

important factor that needs to be looked at is the proliferation of spurious

products. Rural masses are illiterate people and they identify a product by its

packaging (color, visuals, size etc.). So it becomes very easy for counterfeit

products to eat into the market share of established reputed brands. The retailer

also gets a larger profit on selling the counterfeits rather than the genuine

products and hence is biased towards the fakes. Brands such as "Jifeboy", "Bonds

Talcum", "Funny & Lovely" etc., which are doing the rounds of rural markets, pose

considerable challenge to our company.

It becomes amply clear that rural India has to be the hot target in future for

companies as it presents a plethora of opportunities, all waiting to be harnessed.

Many of the companies are already busy formulating their rural marketing

strategy to tap the potential before competition catches up. With extensive

competition not only from MNCs but also from the numerous regional players

and the lure of an untapped market has driven the marketers to chalk out bold

new strategies for targeting the rural consumer in a big way. All biggies in the

industry be it HLL, Marico, Colgate-Palmolive or Britannia, are showing deep

interest in rural India.

 Strengths

 Easy web interface can be operated by properly trained villager.

This removes need of sophisticated terminal operator.

 Hub will act as a storage location for all nearby villages. Which

helps minimizing inventory

 Microfinance

 Direct delivery of products from urban market to doorstep.

 All category products available under one roof

 Minimum transportation cost

 Removal of middleman

 No spurious products

 Tie up with larger organizations will give better margin than other

wholesalers and distributors.

Weakness

 Low trust on company in prior stages

 High training and maintenance cost for software

 Upgrade of web portal may create problems

 Very low margins and profit level in first few years

 Marketing Mechanism

Phase 1:

Company will market web portal by Word of mouth publicity. Every village will

display nitrogen balloon along with company name. Store in charge will provide

information to people about company who will come to ask about company. This

information will spread by WOM. Opening of every store will be followed by

puppet show and movie show on projector for village people. This will help

company to deliver information to mass.

Phase 2:

In phase 2, company will start giving advertisement in radio and TV. Also, painting

advertisement on side of houses will help to spread a word for better marketing

of company. TV advertisements will show interview of our satisfied customers.

This will help us to gain more and more trust of villagers.

 Time Scale

3 months: software and web portal development

2 months: market survey and establishment of hubs.

1 month: setup of portal in nearby villages and training for operator

6 months: phase 1

1 year: phase 2

1 year: phase 3

Next year onwards: phase 4

Breakeven point: approximately after 1 year

(after successful completion of phase 1)

 Costing and cash flow

Amount Purpose

Rs.1000 Domain name

Rs.4000 Web hosting space

Rs.25000 Web development

Rs.60000 Hardware cost

Rs.30000 Training and Recruitment cost

Rs.20000 Hiring resources and incurred expenses

Rs.30000 Inventory

Rs.20000 Margin money for unexpected expenses.

Rs.60000 Delivery van

Rs.50000 Salary and security amount for unexpected expenses

Total: Rs.300000
THANK
YOU