Memoirs of Tomorrow

Analysing The World Food & Fuel Situation, It's Impact and Avenues For Growth

2008-06-02T11:36:00.001+05:30

Let’s face it, the global economy is reeling; it is tottering under the pressure of two most pressing demands from humanity; Food & Fuel. With the fissures between the developed and the developing worlds closing on, scampering for every last bit of resource available is never before. Lifestyle has been a major catalyst behind; developed world led by USA has been trying hard to maintain its wasteful living standards, on the other, developing countries like India and China, egged on by their new found riches are creating additional pressures on world supplies of food & fuel. If you think the present scenario is short term, here is a small did you know for you:

The Food and Agricultural Organisation (FAO) warned that the present stock of world food would last only for 57 days [1]
World inventories of rice have fallen by nearly 50 % from a record high of 147.1 million tonnes in 2000/01 [2]
Between March 07 & 08, the world food prices have jumped 57 %, Cereals, which are major consumable of world’s poor notched an increase of 88% [3]

And, above all,

The world decreased poverty by about 0.68 % annually starting from 1984. But at the current rate of annual poverty increase induced by rising food inflation the entire global 22 year improvement in impoverishment will be completely erased by 2012.[4]

4 years, just four years to throw us back to the levels of poverty as witnessed in 1984. Shocking as it is, it is true as well. The heat is on and the projections maddening. Rice, a staple for about 3 billion people around the globe, a big majority of which are from the developing world, now has the potential to rake the biggest humanitarian catastrophe, food riots. It is estimated that the world will need an additional 50 million tons of rice a year in the years to 2015, about 9 percent more than current production. Of this, Asia will account for 58% and sub-Saharan Africa - 21%.[5] Just enough to cause food riots and hoarding campaigns.

The rising food prices, though is a recent phenomena, and presumably (what one might think of as the first underlying cause) India and China are to blame. This is only a fraction of what the realityholds. The existing price trends reflect not only that shortfall in production as opposed to consumption; they also reflect an attempt to rebuild the stocks, thereby putting even greater pressure on demand relative to supply.^{^[6]} Further, the present scenario is simply not a by-product of demand supply interactions. Another factor that did not get sufficient coverage is the rising attractiveness of the commodities sector to the investors. The recent financial market turmoil has exerted enough pressures on investors to look for avenues with higher returns. Commodities with high expected rates of return in contrast to money market instruments have attracted investors. Speculative trading in agricultural commodities has grown dramatically. Several big investment banks have launched agricultural commodity index funds, as they look for new areas to make profits in following the credit crunch. The result has been enormous fluctuations in market prices that do not appear to relate to changes in fundamentals such as supply and demand. Four years ago $10-15bn was invested in agricultural commodities funds - now that figure is more than $150bn. Wall Street investment funds own 40% of US wheat futures and more than one fifth of US corn futures.

Given the situation at hand, the leading lights of the world have now a task to burn the midnight oil. From Oil, which traded a $ 33 a barrel just about a year back, is all set to leapfrog the $150 threshold, after which it is supposed to stabilise. During last year, the escalating oil prices pushed up the cost of food production dramatically, as a result, fertiliser is up more than 70%, fuel for tractors and farm machinery is up 30%, pesticides, which depend on oil, are rising too[7]. Two countries majorly are behind this, China & USA. India, which is the world’s fifth largest consumer of energy accounting for 3.9% of world’s annual energy consumption is heavily skewed towards coal (about 50%) and oil & gas (about 42%), with hydro (6%) and renewables (1 – 1.5%) contributing for much less.

In a period of just about 10 years, China has increased its oil consumption by 86%. From 4.2 million barrels a day in 1997 to 7.8 in 2007, and projections now point to 8 million bpd in 2008. While the domestic supplies remained more or less static at about 3 million bpd, China today imports nearly 4 million barrels a day. On the other hand, USA consumes 21 million bpd and imports 13 million bpd. It is US consumption which sets the pace in international oil markets. Given the Chinese competition, both USA & China are competing for access to overseas supplies, thereby edging up prices. Of course, shrinking oil output from such key producers as Mexico, Russia and Venezuela; internal violence in Iraq and Nigeria; refinery inadequacies in the U.S. and elsewhere; speculative stockpiling by global oil brokers are other factors to blame.[8]

Analyzing Food & Fuel Price Shocks[9]

World Bank’s food price index climbed 57.5% in the first quarter of 2008 relative to the corresponding figure a year ago. At the same time, energy prices have also been on an upswing, with the World Bank’s oil price index growing by 66.5% in the first quarter of 2008. This cascades to developing Asian economies’ growth and inflation prospects. The rise in oil prices is critical in analyzing food price increases since fertilizer prices, which are highly dependent on petroleum and natural gas prices, move in tandem with energy prices.

Since food carries a large weight in the CPI of many of the Asian economies, global food price increases translate to higher prices in developing Asia. Considering both the Global oil price increase along with the world food price increases, it is estimated that

The regional inflation would rise by 2.38 percentage points in 2008. Consequently,
The private consumption is expected to shrink by 1.38 percentage point
In order to prevent inflation from spiralling uncontrollably, the government would raise interest rates, according to ADB estimates interest rates in developing Asia would go up by 2.79 percentage points, and as a result
GDP growth in developing Asia is estimated to shrink by 1.41 percentage points in 2008 and in 2009 by 4.15 percentage points

Fiscal Impact of the Rising Food and Oil Prices

Given the poverty considerations in many developing countries, governments run food safety programmes, these programmes, heavily reliant on subsidies from the government aim at providing subsidized food to consumers and providing subsidized fertiliser to farmers. Rising food and oil prices are directly adding to the food subsidies in food importing developing countries and in other countries the governments are under pressure to increase procurement prices in order to give right price signals to farmers and generate a larger supply response. In the context of India, assuming the government has to raise the procurement prices by 10, 20 and 30 percent respectively, it is estimated that the budgetary cost of this higher procurement prices would be in the tune of 4%, 9% and 13% respectively.

Impact on Procurement Prices in India

The Way Forward

The present stalemate, though long term, is not without a solution. It is highly recognised that the developing world, now, commands an impressive growth prospects. Agriculture, which is fraught with rudimentary production practices in such regions, is one such sector that can not only support local economy but also help improve world food situation. It has been estimated that the World Food Program has a shortfall of about $ 755 million in its funding and given the slowdown in the world economy, pegging such a gap is nearly impossible. On the other hand, there has been a rise in the number of countries such as United Arab Emirates, Norway, Saudia Arabia, Kuwait, Singapore, China and Russia which owing to their oil exporters’ status lends them an ability to maintain Sovereign Wealth Funds in G-8 economies. These countries have nearly $2 Trillion tucked in sovereign wealth funds for investment abroad and as much as 35 countries, now manage $3 Trillion through such funds. Even if, say 1 % of this amount is invested in areas where agriculture needs support in form of R&D for raising productivity, infrastructure development and modernisation of farming practices etc much of the world’s problem can be solved. Africa is one such region.

[1] The Daily Star: Managing Food Crisis

[2] Reuters

[3] FAO

[4] HuffingtonPost: Bird Flu, Rice and Gas Guzzling

[5] Bloomberg: Rice May Withstand Climate Change, Top Scientist Says (Update2)

[6] Asian Development Bank [ADB]

[7] Guardian: FAQ: The five factors that are driving up costs

[8] LATimes: The U.S. and China are over a barrel

[9] Food Prices Inflation in Developing Asia; ADB 2008

Easily Bypass Copyscape's 10 Search Per Month Limit

2008-04-02T20:43:00.001+05:30

Ok, you've done as much as you can to deter plagiarists from copying your content, but putting a Copyscape banner is just as good as giving the profile link to readers. They read and go on. Genuine bloggers, when they will use other's text, will link back to the original source. On the flip side, unscrupulous among us would just use other's text in full and pose it as.....you know how - their original masterpiece!

Copyscape, though a good resource to check copies of your work on the web and keep plagiarists at bay, comes with a handicap of just 10 free searches per month. Consequent to which, one has to pay $.05 per search. If one is not willing to pay for the service, the quota gets over well before the task is begun.

Here is a hack to bypass this limitation, all we need is Google very own cache search services. Just run a query to get the cached version of your post / blog on Google.com.

cache:http://your post/bloglink

All you have to do now is to copy the link in the address bar and paste it in search box on Copyscape homepage.

The only consideration is that Google should have cached your post.

I must say this, I don't know how long or how many queries one can make this way. I just discovered it today. And, don't worry if you see your blog/post as the first result.

Don't know why, but I feel guilty for copyscape people, I hope they find a roundabout to prevent misuse and preserve their income flows. Guess I have been spoilt by Google's priceless freebies, so much so that I want everything for free.

Slideshare Presentations for Offline Use

2008-03-24T11:49:00.001+05:30

Every once in a while when we need some good information on business, economy or any sector, we use google. More specifically we use google file type searches. Another information resource that I now frequently resort to, includes Slideshare, especially this section on slideshare

But then slideshare is very network intensive and though I run on a broadband, its no better than a dial-up. As a result, I prefer to download these presentations for my offline reference. Moreover, several users of slideshare (me included) do not allow downloading presentations from slideshare. As such rendering us to refer back to the site again and again.

This hack, which though is crude & time consuming, is a way to get these presentation for offline reading. Here's how

(1) View the presentation in full screen
(2) Print Screen
(3) Open Powerpoint --> Select slide & Paste
(4) Save the ppt

We will have to manually do this for every slide in the presentation. In the end all the slides would be visible as jpegs in the presentation. Obviously, these slides cannot be edited. Thats it.

The resulting presentaion can be heavy in size, just in case you would like to share the resulting presentation via email, you may right click on any slide --> view picture toolbar --> compress pictures, as shown below.

In my experience, if we first save these pictures as jpegs and then use MS Paint as mentioned in this post, the resulting images are even more lighter. Using these images in powerpoint would rather make the ppt file size much lesser.

Author's Note: It is pertinent to claim that we do not encourage plagiarism. This hack or call it a roundabout, is for people, who like me, run on very slow networks, as a result, refering back to site everytime we need some info, becomes a big pain. Needless to say, if any one from the slideshare team reads this, putting a watermark, at least in the full screen mode would deter free-riders from deriving undue benefits from other people's hard work.

----------------------------
You may like to read on:
Easily Resize Image, Reduce Image Weight & Without any External Softwares &
Easy Way to Manage Google Search: Enhance Search Productively

Perspectives on Retailing in India and Rural Marketing V

2008-03-20T07:43:00.001+05:30

Continues from previous post here. This is the fifth and the concluding part to a series of posts posted during last 5 days. Previous posts can be viewed by clicking Label Thoughts in the extreme left column of the blog. The middle column, where you see Recent Posts for now will automatically populate with the posts in this series as well as other posts in my Thoughts archive.

The India Context for Proactive Marketing

The glaring fact that the proportion of agri-dependent population in total rural consumption expenditure is almost the same as the population not involved in agriculture.[1] Nearly 75 per cent of the rural population is dependent on agriculture, this indicates that much needs to be done to improve their consumption levels. This is also where the opportunities for pro-active marketers lie. An opportunity to improve the productive capacities of people and consequently derive benefits out increased consumption, and thereby, expanding the scope of marketing to creating the potential of rural markets.

The foremost task ahead of us is to strengthen our agriculture sector, more importantly, agriculture marketing. Agriculture in India still is in primordial stages with rudimentary production activities starting right from sowing to marketing. These include low capital availability, unbalanced fertilizer use, low seed replacement rate, poor yield, inadequate post harvest value addition, mass production of undifferentiated product not in sync with market needs, imperfect markets, multiple intermediaries substituting for infrastructure adding to costs and wastages. The current scenario does not portend well for agriculture growth, income generation and consumption expenditure. Bringing farmers to the forefront and helping them improve their earnings is an opportunity, which is going to have profound impact on the future of rural markets. And, this is where the challenge for a marketer lies.

Agriculture Marketing Scenario in India

Agriculture Marketing System is the critical link between the farm production system on one hand and the non-farm sector, industry and the urban economy on the other. In an ideal case the agri-marketing system is expected to facilitate not only the physical transfer of agri produce but also price discovery at different stages and dissemination of price signals. An efficient agri-marketing system would ensure increase in farm income, widening of markets and resource use optimization.

The agri-market scenario in India is far from ideal, it is laden with challenges, which encompasses both infrastructure and technology. These drawbacks to name a few, include, poor and unreliable infrastructure, fragmented supply chains with multiple intermediaries, outdated, inadequately maintained and inefficiently utilized processing technology. As such rendering agri-marketing practices undeveloped and unproductive across all the platforms where rural buyer-seller exchange transactions take place. These have been covered in the following section:

Rural Haats: Haats or Rural Primary Markets are estimated around 47000 in the country and of these, 75 per cent are held weekly, 20 per cent twice a week and 5 per cent daily. These haats, predominantly located in interior areas serve a large number of farmers, it is estimated that almost 90 per cent of the total marketable surplus in remote areas is sold through these markets.[2] Rural Haats are also a place where daily necessities like soaps, utensils, clothes etc are sold. However, rural haats disappoint in terms sales of spurious goods, no guarantee of quality, sale prices being higher than maximum retail price, clutter & congestion of markets and non-availability of supportive services[3].

Wholesale / Assembling Markets: There are about 7557 wholesale / regulated markets scattered across the Indian states. The sale purchase process in these markets is governed by the Agriculture Produce Market Committee (APMC) Act, which empowers the state governments to set up and regulate wholesale and regulated markets. In practice, from the farmers’ viewpoint, the Act has several inconsistencies that include restrictions on direct marketing of produce, setting up of private mandis, commission charged by the agents across the markets and commodities and non-uniformity with respect to loading/unloading charges (at present the Model APMC Act 2007, has provisions that allow such practices and check the irregularities, the Model Act is still to be adopted by respective state governments). As a result, farmers are not able to derive optimum benefits in the current status. It has been estimated that the effective realization by farmers on crops ranges between 30 – 40 per cent; various intermediaries appropriate the rest across the agri-value chain. The mandi are further marred by poor physical infrastructure, as a result, as much as 7 per cent of grains, 30 per cent of fruits & vegetables and 10 per cent of food species end up waste due to poor handling. It has been estimated that the inefficiencies in the present set-up result in an estimated loss of Rs 500 billion.

Inadequate Infrastructure in Wholesale / Regulated Markets[4]

Covered or open auction platforms exist in only 2/3rd of regulated markets
Only 1/4th of markets have drying yards
Trader modules, viz. shop, godown & platform in front of shops exist in only 63% of markets
Cold storage units exist only in 9% of markets
Grading facilities in less than 1/3rd of markets
Farmers’ resting facilities 50% of the markets
Basic facilities like internal roads, boundary walls, electric lights, loading & unloading facilities, weighing equipments etc. not available in nearly 20% markets

Vulnerability of farmers with respect to farm operations (a topic, which separately requires an in-depth analysis) and poor agri-marketing scenario negatively impacts their income generation capabilities and further affects their consumption. Proactive marketing strategies, effectively try to tackle these shortcomings by offering him good quality inputs, services like soil testing, best practices, price information and so on, thereby increase his chances of deriving optimal benefits from farm operations. Proactive marketers, then utilize the enhanced purchasing power of farmers by offering them products and services to improve their standards of living. These strategies have been successfully employed by organisations like ITC, DCM Shriram and Godrej through their initiatives e-choupal & Choupal Sagar, Hariyali Kisan Bazaar and Godrej Aadhar.

During recent years, agriculture sector has witnessed a flurry of activities from corporate sector, which has expressed interest to offer an integrated bundle of services ranging from technical help in agricultural package and practices, supply of inputs and so on. This has been a result of a slew of reforms measures, notably being amendments to the Agriculture Produce Market Committee (APMC) Act, that now provides for direct marketing of agri-produce, setting up of private mandis / yards and contract farming within the wholesale/regulated markets. Further, the Act makes provisions for rationalization of the license system and market fee, development of marketing infrastructure, organised retail and establishment of terminal and futures markets by the private sector. Yet still, the private sector though encouraged to make forays into the farm sector and develop appropriate agri-marketing strategies, faces numerous challenges, viz. lack of open and transparent price discovery mechanism and trading, restrictive marketing practices in some of the wholesale market / mandis, weak infrastructure and credit inclusion. These factors often act as hindrances for the companies to scale up their operations and also impinge upon farmers, who fail to derive expected benefits from direct sale and purchase.

As a result, the ongoing agri-reforms agenda must ensure that the inadequacies of the current marketing set-up be removed and that the free play of market forces is promoted. Two issues, that need careful consideration in this regards include (i) enabling appropriate linkages to improve crop productivity & price information flow and (ii) avoiding wastages by developing the entire supply chain i.e. sorting and grading centres, warehouses, temperature and humidity controlled warehouses, cold storage's, temperature controlled transport up to consumer location.

Conclusion

It is time that all the stakeholders redefine their roles. While the government should expedite the progressive reform measures that it has introduced, the corporate sector should come forward and contribute to enhancing the productive capacities of the rural populace. We have already alluded to a few innovative programmes. It is time that the corporate sector in conjunction with the government scales up these efforts. This is important for tapping the vast latent potential of the rural markets. Further, it is only through such a collaborative approach that the fruits of growth would percolate to the lowest strata and we as a nation can move forward in attaining today’s foremost public policy objective i.e. inclusive growth.

[1] Growing Rural Retail, Financial Express, November 25, 2006
[2] Report of the Sub-group on Agriculture Marketing Infrastructure for XI Five year plan on Agricultural Marketing Infrastructure & Policy required for Internal and External Trade, Planning Commission, October 2006.
[3] Growing Rural Retail, Financial Express, November 25, 2006
[4] Mr U K S Chauhan, Joint Secretary (Marketing) and Agricultural Marketing Advisor, Department of Agriculture & Cooperation, Ministry of Agriculture, GOI at National Conference on Emerging Platforms for Agriculture Marketing, September 20-21, 2007, FICCI

Perspectives on Retailing in India and Rural Marketing IV

2008-03-19T07:19:00.001+05:30

Continued from previous posts, Part I, Part II & Part III (will open in new window)

Marketing to Rural Consumers – Proactive Approach

Another point of view that redefines marketing as a set of activities that influence the environment by playing a part in its development. It is important to mention that the considerations and actionables as mentioned in BOX 1 remain the same regardless of the marketing strategy an organisation pursues. The only difference lies in the approach. Cost, income and access issues are also important considerations for proactive marketers, but access assumes enhanced significance. Reaching the un-reached, calls for collaborations whereby stakeholders benefits are ensured without much strain on the financial resources. A better example of such a strategy would be the venture of Telenor[1], a Norwegian Telecommunications Company in Bangladesh.

Box 1

Considerations

Actionables

Cost

Development of low cost processes for offering quality goods and services at cheaper prices

Income

Marketing and sales programme to match erratic incomes

Access

Initiate collaboration with existing players / networks

Starting out in 1997, through a joint venture with Professor Mohd. Yunus of Grameen Bank, Telenor established two separate entities, one a pure commercial model: Grameen Phone and the other with a social objective of catering to the poor, namely Grameen Telecom. Grameen Phone, which broke even in 2000, is now the second largest taxpayer besides being one among the largest private business companies in Bangladesh. It commands a subscriber base of as much as 16.48 millions at the end of December 2007.[2] Grameen Telecom, which is non-commercial, is also a profitable venture by accounting for more than 10 per cent of Grameen Phone revenues. Grameen Telecom has created more than 1,00,000 micro entrepreneurs, also known as Village Phone Ladies, who provide phone services in unconnected villages, thereby allowing people to easily connect and save on by avoiding costly trips to towns. Such a strategy not only has resulted in gains for Telenor, it has also helped empower several people by offering them a regular source of income.

Moving a bit further into the past would let us know the reasons behind the success of the venture. NORAD, which is the Norwegian Agency for Development had invested in development of fibre-optic network for internal communication of the Bangladeshi railway system, this network was not being used to its full capacity. Telenor was able to procure this important constituent at very cheap rates. Further, since venture had a social arm, Telenor was able to access cheap funding from ADB, IFC, NORAD and the Commonwealth Development Corporation, effectively lowering the cost of capital to Telenor. And most importantly, collaborating with Grameen Bank, the brand that it is, brought in the much-needed trust not only from the government but also from the populace of Bangladesh. Bangladesh has become one of the most profitable growth markets for Telenor.

Such a strategy that redefines marketing, specifically in rural areas, essentially involves improving the productive capacities of producers as a seller of goods and services and in turn transitioning him into a productive consumer of goods and services. The perspective to empower rural producers essentially covers the all exchange relationships in rural scenario. These relationships have been depicted in the matrix.

Cell I to III in the matrix covers all types of exchange relationships that occurs in a rural scenario, it is essential to note that the above framework recognizes rural populace not only as consumer of goods and services (as is predominantly emphasized in popular culture) but more importantly as the producers of goods and services. Recognising the above would help us realize the potential that the rural population has. This is where the real opportunity for marketing lies, the opportunity to increase the productive capabilities of rural producers both in intra-rural and rural seller – urban buyer exchange / transactions.

To be Concluded in next post though an India specific perspective on Proactive Marketing.....

[1] Seelos, Christian and Johanna Mair; “Profitable Business Models and Market Creation in the Context of Deep Poverty: A Strategy View”; IESE Occasional Paper. October 2006
[2] Source: Wikipedia; retrieved as on February 21, 2008.
[3] Rural Buyer Seller Matrix; Vaswani L K, Rajesh Aithal, Debasis Pradhan, G Sridhar (2005), International Conference on Marketing Paradigms for Emerging Economies, IIM Ahmedabad

Perspectives on Retailing in India and Rural Marketing - III

2008-03-18T07:27:00.001+05:30

If you are coming here for the first time, I'd suggest you to read the first two posts in this series. For others, welcome back. To put things in perspective, by now, with the two servings in this series you have already read about trends in retailing in India & how rural markets are an essential ingredient for retail growth. The second post dealt with why rural markets are gaining prominence. This post essentially classify retail operations in rural areas in to 2 categories, viz, Proactive and Reactive.

Needless to say, these are my opinions, you may or you may not have divergent view.

Perspectives on Rural Retailing

Employment, income & consumption trends are now becoming sufficient portends for organized sector initiatives in rural areas, yet still, reaching out to rural consumers is not as easy as it seems. Retailing in rural areas is fraught with challenges like inadequate & poor infrastructure and erratic incomes, hence call for separate marketing strategies to cash in on the potential that rural markets have. These marketing strategies can be generally be classified in to two types: Reactive and Proactive.

Reactive marketing can be termed as pure retailing as they focus on the consumption needs of the people. Proactive marketing, on the other, focus on productive capacities of the people, how these productive capacities can be enhanced so as to increase the incomes of the consumer and consequently the consumption of goods and services. More so, reactive marketing, in crude terms, focuses on tapping the potential that rural areas have. Proactive marketing, rather, lays stress on creating this potential.

Marketing to Rural Consumers – Reactive Approach

The commonly understood notion of marketing is that companies market to segments, which have the potential for profit; in other words, the environment (i.e. demography, infrastructure status, income levels etc) influence marketing. This influence is in the form of redesigned products or services that would cater to taste, preference of the target population and most importantly offering these products and services at levels affordable by people. Marketing essentially invokes restructuring of product lines by taking into consideration the above and further by cost rationalization & realignment of supply chain. These interpretations have been further reinforced by examples of marketing practices initiated by HLL and later on followed by others, which included appointment of redistribution stockists in every market to feed smaller or more remote customers, card board light delivery boxes etc. A rather nascent example of marketing being guided by environment is 3A Bazaar[1], which presently operates out of Uttar Pradesh and Punjab. The idea behind 3A Bazaar is that rural people do have disposable income and do not mind spending it for better quality products. 3A Bazaar follows a very simple modality, every morning five vans stuffed with nearly 13000 items ranging from food items to FMCG & clothes, worth Rs 2 – 2.5 lakhs, visit its neighboring villages, roughly about 700, some once a week and others once a month. 3A Bazaar effectively tries to tackle some of glaring deficiencies of rural India, which include, absence of adequate infrastructure, inability to push sales on a regular basis due to restrictive incomes available with rural people and problems of attracting people from neighboring villages unless some promotion activity is undertaken. The average daily sale of 3A Bazaar is about Rs 8 - 10 thousands. 3A Bazaar has been considerably successful in tapping the rural marketing potential.

Wipro GE Healthcare[2]: Wipro Ltd and General Electric Co. have joined hands to introduce a wide array of high-end medical technology products in India at a fraction of their global costs. These products targeted mostly at rural population include digital X-rays, computed tomography devices, portable ultrasounds, and maternal-infant care etc. Through this initiative Wipro-GE are trying to address three basic parameters for serving the rural consumers, which are, cost, mobility and ability to run on limited power. This assumes enhance significance as a result of the fact that only 24 percent of rural areas have health care facility, further as much as 90 percent of these are manned by sole practitioners, creating problems of reach (which adds to consumer costs and service delivery). The launch of a mobile unit Cathlab on Wheels, where GE Healthcare had partnered with a leading Bengaluru based cardiologist, registered more than double the patients from rural areas primarily due to reduction in costs by as much as 50 percent and comfort of medical facility nearer to home, thereby saving time.

Rs 5 Sachets of Fortune (edible oil)[3]: Adani Wilmer, a joint venture between Adani group and Wilmer International, has recently announced that it’s flagship brand Fortune (Soybean oil) is set to roll out in sachets of Rs 5 each. Such a move according to Adani would help them make inroads into rural India. Soybean oil presently occupies 40 per cent of the total edible oil market in India valued at Rs 75000 crore. Fortune, which occupies the leading position in Soybean oil market at 25 per cent, in Rs 5 sachets is expected to further consolidate the brand in the market. Soybean oil is 30 per cent cheaper than Sunflower oil. Such a move is in line with the assertion that consumers prefer better quality at lesser price. Incidentally, Bunge India, the owner of Dalda, was the first to initiate such a strategy.

In all, reactive marketing strategies focus on addressing three basic parameters while reaching to rural consumers, these include, cost to the consumer, income of the consumer and accessibility issues. Many of the policy prescriptions like Bottom of Pyramid essentially revolve around these issues and much research has been undertaken to understand the psyche of this class. A new terminology, The Next Billion[4], goes on to suggest 6 potentially striking factors of this market, these include, their being smart shoppers with fluctuating incomes, domestic constraints, unfamiliarity with many products, their search for trusted advice and their demand for respect. Reactive marketing strategies as such reflect the presence of an aspirer class, a segment, which is willing to consume what urban India does and emphasizes on ways and means to serve such consumers.

Continued in the next post with Proactive Marketing.....

[1] Retail on Wheels in Rural India
[2] ‘In India, for India,’ GE Health eyes rural market, The Mint, November 07, 2007
[3] Edible oils shampoo their way into sachets, Business Standard, December 11, 2007
[4] Decoding the Next Billion Consumers, Boston Consulting Group, November 2007

Perspectives on Retailing in India and Rural Marketing - II

2008-03-17T07:26:00.001+05:30

Continued from previous post.....

Emerging Trends from Rural India

Employment: Non-farm activities in rural areas are witnessing a rise in entrepreneurship and employment, which are growing at a faster rate than urban areas. These trends can be seen in the findings of the Fifth Economic Census 2005, excluding crop production and plantation, which puts about 25.81 million enterprises (61.3 per cent of total enterprises) operating out of rural areas. These rural enterprises are clocking an average annual growth of about 5.53 per cent and employ more than 50 million people (51 per cent of the total). Further, rural enterprises are recording an average annual growth of 3.33 per cent in total employment, which is higher than that of urban enterprises. What is striking about rural enterprise is the rising level of entrepreneurship, which is indicated through low number of hired workers (presently standing at about 2/5 of total persons employed).

Income: There are as many middle income and above households in rural areas as there are in urban and almost twice as many lower middle income households as there are in urban areas. National Council of Applied Economic Research (NCAER) projects that middle and high-income households in rural areas would grow from 80 million households to 111 million households by the end of 2007. Nearly half the 145 million rural households earn between Rs 1000 – 5000 per month[1]. Further, rural BPL trend is registering a decline over the years.[2] as shown in the table below

Percentage of Population Below Poverty Line[3]

	*1973 -74*	*1977 -78*	*1983*	*1987 -88*	*1993 -94*	*1999 -00*	*2003 -04*
Rural	56.4	53.1	45.7	39.1	37.3	27.1	21.8
Urban	49	45.2	40.8	38.2	32.4	23.6	21.7
Total	54.9	51.3	44.5	38.9	36	26.1	21.8

Consumption: Rural Consumption patterns are suggesting a shift from sustenance driven consumption through a near parity between amount of expenditure on food and non-food items. Further, rural consumption expenditure is growing at nearly double the rate of urban consumption expenditure growth. The 61st round of the National Sample Survey (NSS) report 2004-05 on consumer expenditure in rural and urban areas reveals that the average monthly per capita consumption expenditure (average MPCE) in rural areas to be Rs 559, a bit more than half of urban India. Further, about 5 per cent of the total rural population has MPCE of Rs 1155 or more and another 5 per cent has MPCE in the range of Rs 890 – Rs 1155. Rural consumption expenditure, when compared over the two time periods of 1999-00 and 2004-05 indicate an increase of 7.81 per cent, which is substantial when compared with urban consumption expenditure that grew by just 4.32 per cent.

Another interesting feature of the findings were that the pattern of rural consumption are now showing a near balance between the amount spent of food items and non-food items. While food items account for 55 per cent of the total consumption expenditure, non-food items like fuel & light, clothing & footwear, education, medical, miscellaneous consumer goods, conveyance, other consumer services and durable goods accounted for 10, 5, 3, 7, 6, 4, 4 and 3 per cent respectively. Until 2000, food consumption expenditure accounted 62 percent of total consumption expenditure. It is worth noting that there has not been a fall in the real expenditure on food, indeed per capita real spending on food has grown by over 3 percent. At the same time, non-food items registered an increase of 17 percent over a period of five years since 2000. Certain other trends have been briefly covered below

Rural India is also increasingly recognized for Rising Awareness Levels and its Consequent Influence on Lifestyle, this is primarily being led by development of telecommunications, exposure to televisions & media and rise in literacy levels that are dramatically affecting rural perceptions. As a result, rural India is registering Changing Consumption Patterns; which is again being catalyzed by the transition towards varied economic activities like manufacturing, fisheries and services. With this changing economic scenario, rural consumers are not only becoming more aware about the availability of a large number of products but are also willing to try out brands.

Continued with III post here

[1] Raj, S John Mano & P Selvaraj, “Social Changes and the Growth of Indian Rural Market: An Invitation to FMCG”; 2007

[2] Chandramouli S, “Innovations as Cutting Edge Solutions in Rural Marketing” at Rural Marketing Summit; FICCI- 2007
[3] Source: Government of India

Perspectives on Retailing in India & Rural Marketing

2008-03-16T11:27:00.001+05:30

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This post is part of a series of posts on Retailing in India and Rural Marketing. keep coming back for updates!

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By the year 2011, 1200 hypermarkets and 3000 supermarkets would function across India. Retail, which will be rapidly transforming the Indian landscape during this period, would be attracting an investment of as much as US $ 25 billion, more than 12 times that was invested during the last one decade. Most of this growth is estimated to come from greater than 1000 tier II towns of India.[1] In fact, Indian retail has elaborate plans for smaller cities and towns, several reasons, as indicated below have been cited for this.

Striking features of Indian Retail[2]

At Subhiksha, 40 per cent of revenues and space come from cities that are not state capitals.
At Vishal Megamart, 80 per cent of revenues come from tier II and III cities
Around 70-75 per cent of visitors end up buying from retail outlets in smaller places, whereas, in large cities, it is around 50-55 per cent
Retail Operations in smaller cities result in extra 3 – 4 percent margin

Retail Outlook[3] (US$ Billion)

While these are familiar statistics, which one encounters frequently in news dailies and popular writings, there are enough motives to believe that retail growth projections will be fructified within time if not before. Several reasons, notably liberalized economy, easier availability of goods etc have been assigned to all the developments that we are witnessing today. Yet still, it is the India growth story and the way it impinges upon us in form of income, consumption and demand of goods and services that is the raison d' être for such trends.

The India Growth Story

Strong macroeconomic fundamentals combined with vigorous growth define the first decade of the Indian economy in twenty first century. An exceptional growth rate of nearly 9 per cent, which surpassed expectations on most counts, reflects a robust macroeconomic scenario. Investor friendly climate and innumerable domestic opportunities makes India an attractive investment hedge. This distinctly upbeat confidence is further reinforced by an investment upsurge across sectors in the economy.

The transformation of the Indian economy synonymous with the hallowed Hindu Rate of Growth to the new land of opportunities, though almost a dream run, has been brought about by the robust performance of the industry and services sector, which together contributed more than four fifth to the nation’s GDP in fiscal 2007, with their share standing at 26.4 and 55.1 per cent respectively. Agriculture, with a share of 18.5 per cent in 2006-07 accounts for remaining of the GDP.

These developments consequently are being reflected in the rising per capita income, which has been growing at an impressive rate. The per capita income, which stands at $797 during fiscal 07, has nearly doubled since the start of this decade (at $460 in 2001-02). At the end of the current fiscal year 2007-08 the per capita income is expected to rise to $1000.[4] It is further expected to double in nine years[5] if the current rate of GDP growth is at least sustained if not surpassed. As a result the disposable income, which is growing at 10 to 12 per cent[6] is having profound impact on the demand for consumables and makes India a huge and growing market.

Retail Scenario In India[7]

One can contend that such projections predominantly refer to the urban marketing potential; rather rural India would be affected in insignificant terms. In fact, some believe that organized retail’s attraction with rural India has been slow. As has been indicated previously, organized retail is fervently trying to expand its reach beyond metros, but barring a few, is limited to tier II and III cities.

Retail sector in India is estimated at US $ 280 billion[8] and organized retail, which forms a meager 5 percent of the retail pie (US$ 14 billion), is poised for a huge growth in coming years.[9] Besides increasing disposable incomes, as cited above, the other factor that drives this growth is the potentially strong rural consumer market.[10] In another independent analysis, Technopak[11] has estimated the absolute size of Indian retail market at around US$ 324 billion with rural-urban split ratio of 55:45, pegging rural market at around US$ 178 billion. Technopak’s previous analysis[12] states that rural market consumes as much as 53 percent of FMCG and 59 percent of durables in India.

While the figures on market size and growth potential vary depending on the source one refers to, there is one thing that cannot be ignored, which is, the large untapped potential of rural markets and which the organized players are trying to tap in their different ways. These claims can be viewed in the context of emerging employment, income and consumption patterns in rural areas.

Continued with the II installment here & III post here (will open in new window)

[1] India Retail Report 2007
[2] Bigger growth: smaller towns next stop for organized retail, The Mint, December 27, 2007
[3] Technopak retail Outlook, October 2007, Volume I
[4] “Per Capita Income May Rise to $1000”; Economic Times, November 5, 2007
[5] Eleventh Five Year Plan (2007 – 2012); Volume I: Inclusive Growth; December 2007
[6] Dr Ajay Dua, India Retail Report 2007
[7] Winning with Intelligent Supply Chains, Ernst & Young, 2007
[8] Ernst & Young, 2007
[9] Planning Commission, Government of India
[10] Ernst & Young, 2007
[11] Technopak retail Outlook, October 2007, Volume I
[12] “Growing Rural Retail”, Financial Express, November 25, 2006

Managing Lifehacker RSS Overload

2008-03-15T14:26:00.001+05:30

One of the blogs that I make sure to read on a daily basis is Lifehacker. Not only because its excellent but also because I don't want to exert myself with RSS overload. Lifehacker updates too many times in a day.

Moreover, several things, like MAC OS X and Linux related stuff doesn't help as I do not use them. All such posts add to my RSS exertion, if I do not clean my reader regularly. At least for now, I just need windows related stuff. Perhaps, if I could just filter the unwanted from the lifehacker feed.

Of late, I have been tinkering with Yahoo-Pipes a bit. So I tried my hand at that. In fact filtering lifehacker's RSS feed for my purposes was fairly easier than I thought. Yahoo-Pipes is a great rescue!

Here is how I got through this.....

Step I: Fetch the feed on the pipes dashboard, expand the items in the debugger and look for category. Expand the category, what we would find, are the tags assigned to the post.

Step II: Once you know the tags, drag the filter operator on to the dashboard and permit as below. (Note that, lifehacker has too many tags, but Windows, Mac OS X and Linux are common)

That's it, we are done. You can look for other tags and accordingly pipe a totally different feed. In this case, the pipe will only allow feeds where category matches the post tags. We can either stop here or tweak it further. In fact, I just wanted to restrict Mac and Linux related post and not the several other post which are neither Windows, Mac or Linux specific.

Just to allow other posts, I would once again fetch the lifehacker feed on the dashboard, then use the filter operator to block the posts tagged Mac OS X and Linux. Then join the output of the two by using the union module and then use unique module to block duplicate entries. This pipe can be viewed here

In fact, Yahoo Pipes are extremely useful for blogs that do not give label feeds. Categories in pipes would identify the labels. Once we know this, rest is cakewalk.

Easy Way to Get Cricket Scores Online

2008-03-04T15:12:00.003+05:30

Most of us in India, live cricket. Cricket runs in our blood. When there is cricket, we put that before food & job. Yes, that's the way we are.

Now, if you are at work, in all probabilities, you would be accessing live scores from rediff.com. As you can see there is a small refresh button, which has to be continually pressed for getting updated scores. Sometimes, this is very harassing. But, there is a round about, if we use Opera web-browser.

Here's how we do it,

Right click on the score page, in menu under Reload option, we have Reload Every-->

Select any time interval you want, I use a custom time interval of 10 seconds between two successive reloads. Enable this, and you are done.

The score page will automatically reload (or refresh) after time expires and you will get updated scores and most importantly spare yourselves of manually refreshing the rediff cricket score page everytime.

Easy Way to Manage Google Search: Enhance Search Productively

2008-03-02T14:32:00.001+05:30

Of all of us who use Internet, almost everyone would visit Google every once in a while. In fact, if we count the number of queries on Google by us, it would out-number the "O's" in Google :)

Anyway, with every passing day & with the amount of information being indexed by Google, the search process is bound to get complicated. More so, finding the most relevant, would now become a Herculean task in itself.

Some of us do employ tricks to narrow down are searches, these include file-type searches, site specific searches and so on. Many such tips & tricks can be found on Nitin Pai's Web-log Techtracer, here & here. Some of them were news for me. For e.g.: A file type search query would be like

(search terms) filetype:pdf / doc / ppt and so on or

(search terms) site:abc.com / .edu / .net and so on

Still, such a process is lengthy for me. Why not shorten our search process even further! We can, if we use Firefox.

We all know about the search bar in the top-right corner of the Firefox window. Mozilla provides us with some custom search plugins.

We will just design a few custom search plugins for us. These plugins would save us from typing extra parameters in Google search query. Every search plugin would take care of specific Google search patterns.

In the end, we only have to select the right Google Search Plugin and type in the query, leaving the rest to Google.

I am including a few of these Google search plugins, which I use. You may also like to use them, feel free to download the Google Search Plugin. All you have to do is to save these plugins in Program Files --> Mozilla Firefox --> searchplugins. After you do this, restart Firefox & we are ready to use these custom Google Search Plugins.

Save any plugin you like!

For Scholars: Google provides 2 very good services, viz, scholar.google.com and books.google.com. So, instead of opening the respective sites first, we just need to select the relevant search plugin and type in the query. Below are some plugins:

Google Book Search	PDF Search
Google Scholar Search	MS-Word Search
Google Educational Site Search	PPT Search

For Movie Aficionados: In order to know about show-times of movies or read reviews, we have to log on to movies.google.com. The following Google search plugins for Firefox, let us know about the same in a jiffy.

Google Movie by Show-times in Your City Plugin (for e.g.: Movies in New Delhi)

Google Movie Review Search Plugin (for e.g.: Review of The Matrix)

For Frequent Travelers or For Arranging Business Meetings: Several times in our workings we have to call overseas, ignorance about the time gap between the two countries may lead to embarrassing situations. Further, when traveling such info is of great use. Google again has come to rescue

Google - Country Time Search Plugin [ for e.g.: New Delhi Time ]

Google Weather Search Plugin [ for e.g.: New Delhi Weather ]

Miscellany Google Goodies: No further need to log in to images.google.com. Just use the plugin here. And further, get the definitions on anything by using the Google Define plugin.

Google Images Plugin

Google Define Plugin

Google Experimental - Straight from the Google Labs: A few experiments that Google is dabbling with right now is the Timeline search, which basically deals with the available history over anything. (for e.g.: This is a time-line search on humans). Or may be just like we use labels on our blogs, get results in the similar fashion from Google. (for e.g.: This is a Left Hand Contextual Search on Humans)

Google Timeline Search Plugin

Google Left Hand Contextual Search Navigation Plugin

Hacks / IT Productivity Tips: If you are tech savvy, or look for hacks to improve your online experience, you might every once in a while log onto blogs like lifehacker, digital inspiration and so on. I use a Google Custom Search Engine, which sieves relevant information from some of my selected blogs. Helps me a lot and saves me much time. Below is the Firefox Search Plugin for my custom search engine. Save it, you may find it useful. I keep on adding sites to it, as and when I find a good one.

Productivity Tips Plugin

Once again, all you have to do is to save these plugins in Program Files --> Mozilla Firefox --> searchplugins. After you do this, restart Firefox & we are ready to use these Custom Search Plugins.

Easily Download Songs which are Restricted for Download from Esnips

2008-02-13T15:50:00.002+05:30

Update: Apparently, this hack does not work any more. Esnips is now embedding flash player to play songs.

While we have already seen a trick to download a song from esnips without registering or even signing in to our accounts. Yet, still with the advent of the new audio policy, uploaders can restrict download of songs.

While there is a dilemma within me on downloading restricted songs from Esnips as I would be encroaching upon the privacy of the uploaders. However, I also feel that it would have been right if the uploaders allowed downloading songs provided it was not used for commercial purposes. It would have been easy for most of us, as we seek zero commercial gains from downloading songs, what we seek is access to songs which are unavailable in our areas for purchase. Had it not been peer sharing, I would never have got access to one of my favorite groups Toots & the Maytals, I could never find them anywhere in New Delhi.

Anyway's, enough rambling, here's the tweak to get un-downloadable songs from Ensips. Simply follow the steps in the previous post, but in the last instead of saving the song, just open it. What will happen is that the inbuilt media player on your OS will start buffering the song.

Let the song finish, when done, just go to your temporary internet files folder, where you will find the mp3 files with the exact file name as mentioned on the site.

Moreover, the reason behind letting the inbuilt media player buffer the song, is that if you let the player in the site play it, you might have the file in the cache, but it will have something like id:23256sdf as the file name which will make it difficult to find.

Just let media player handle it, you'll have the mp3

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You may also like to read on: Easily Download Songs from Esnips

Easily Resize Image, Reduce Image Weight & Without any External Softwares

2008-02-10T10:13:00.001+05:30

In case we use a DSLR, we all know, higher the resolution of camera, higher is the image size. Now, if we want to show these images on web-sites, probably we all know that lower we keep the image size (in terms of weight), faster would the site load.

While we can do image resizing through a variety of softwares as mentioned on fortysomething, but image resizing & image weight reduction can also be achieved without any external software and without any visible loss in image quality for web-sites. Our good own MS Paint is all we need. Here's how, but don't forget to have a back up of the images for future reference

Select any image ---> right click ---> edit ---> Save

We would see the magic right away with out any visible loss in quality for web-site purposes. I used this technique to reduce image size for some images that had been taken with a Nikon D70s. The resulting images were 80 % lighter (in weight), the dimensions remained the same and with no loss of EXIF data.

Further, if we reduce the dimensions of the image, the resulting image would be even lighter. In the above steps, just press CTRL+W after edit and insert about 40% in the stretch value.

But then, this is not enough :). How fast and how productive we can become in this? Well, the answer would depend on your installed RAM. In case, you have good amount of RAM (256 MB is slow, higher is better), just remember these steps, Select multiple images with mouse, right click, edit and

CTRL+W (stretch value about 40%) --> CTRL+S --> ALT+F4

Happy hacking!

You may also like to read on: Easiest Way to Send Inline Images in Emails

Easily Download Songs from Esnips

2008-02-09T13:48:00.003+05:30

Update: Apparently, this hack does not work any more. Esnips is now embedding flash player to play songs.

Esnips is a huge repository of songs, which most of us refer to when needed. Of late Esnips has come out with a new audio policy that leverages uploaders to restrict the download of songs.

Here is a way out.

We suggest use of Firefox, not only because it is better but also Firefox along with the excellent addon AdBlock Plus does all the trick. And you also need not be signed into your account to do this. Lets see how..

Open any music file on Esnips. If you have AdBlock Plus enabled we'd see something like below just above the player.

The Area in red above shows a notification by AdBlock Plus, which perceives it be an advertisement. Just click it, the AdBlock preferences dialogue will open up (as below) and would give the direct link to the file. Copy this link (highlighted with red) and cancel the preferences window.

Just paste this link in the address bar of the Firefox and press enter. We'd see as below, rest we all know what to do....

I trust this works, though I have not used this extensively.

Have fun downloading songs, but keep in mind that we have to respect the privacy of people who only wish to share their music for listening online. Even though the next post would specifically deal with how to download songs, which still could not be downloaded. Moreover, I have a moral dilemma on this.

So long, till I mull over my future actions.

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Update: Find a way to Easily Download Songs which are Restricted for Download from Esnips

Easiest Way to Send Inline Images in Emails

2008-02-08T10:21:00.001+05:30

Every once in a while we receive emails that have images in them, these images rather than being attachments are inline i.e. part of the message body including the texts. While there are several ways to achieve this, yet still the problem lies in the fact that most of the email clients are configured to block external images. As a result we see a message like below on opening the mail.

~~For peo~~For people like me who regularly send picture emails of the latest trips, it becomes extremely frustating as the person may or may not see the pics. Here's a way which ensures not only avoiding such notifications for inline images but is also very easy.

I use MS Word and Outlook for this purpose.

Step I

Create a table in a word document and insert pictures in table, you can use your imagination to decorate the table with available styles in MS Word. Once we are done with this, click the E-mail button, which is just besides the print command button.

Step II

Click the E-mal command, you'll find something just like Outlook, just fill in the details and send. That's it :)

I have been using this method for some time now and have been successful avoiding the display images notification for inline images. Of-course we'll have to configure Outlook with the our email accounts.