Case Study: Where lanes have no names

Fortune Industries having a turn over more than Rs 400 Crore is manufacturing and
marketing hair care products including hair oil, shampoo, hair dye etc. The company’s
brand name ‘Sunshine’ is well established. The company has nationwide marketing
operations. The marketing structure of the company is as follows:

General Manger (Marketing)

Product Manager (3) Regional Manager(4)

(Hair oil/Cream, Cream, Shampoo, Hair dye)

Area Sales Manager

Territory In charges

Sales Rep.

During the last quarterly marketing review meeting, Mr. Malhotra, GM (Marketing) of the
company was concerned about the increasing competition and stagnancy in sales
volumes of the Sunshine range of products. During the discussions Regional Managers
and Area Managers were of the views that urban markets are getting saturated day by
day and company must go deeper into the hinterland to explore the potential markets.
Mr. Rathore, Regional Sales Manager (North) strongly advocated the philosophy “dig
deep and strike gold”. His Area Managers also seconded his thought and apprised the
participants that rural market is growing about three times faster than urban market. Mr.
Malhotra showed his agreement with the views of the participants and invited their views
for following issues:

1) How to enter into the vast and scattered rural market in a cost effective way?
2) What changes are required in marketing structure of the company?
3) What changes are required in sales force, distribution and channel
management?

The RM (West) suggested that company should enter into rural market in a phased
manner and prioritize markets as per population strata. RM (East) suggested for the
concerted efforts to tap the rural markets, and advised some changes in company’s
distribution channels. Currently, the company has appointed wholesale dealers (WD)
district wise, who are delivering products to the retailers. Company’s C & F Agent has
been arranging delivery of the goods to these WDs. These WDs are always less willing
to distribute products in distant towns & villages due to higher distribution cost, which
erodes their profits. The RM (West) suggested for a separate distribution channel for
rural marketing. The RM suggested for appointment of 3-4 super distributors (SDs) in a
state to carry out rural distribution of the products. He also suggested giving these SDs
more margins to compensate higher distribution cost. GM (Mktg), how ever, opposed the
idea on ground of higher channel /distribution cost which will squeeze the profit of the
company. One of the RM was of the view to have a separate & independent rural
marketing cell. Area Manager (North) stressed the need of appointing Rural Sales
Representatives (RSR) to penetrate rural markets.

Mr. Malhotra, GM (Marketing) was thinking hard how to use all these ideas to design an
effective rural distribution system & other rural marketing strategy to boost the sales of
Sunshine range of hair care products in the untapped rural markets. You being a smart
rural marketer must help the GM in designing an effective rural sales force & distribution
system.