According to the survey done, there is a limited demand for solar lighting and water pumping

amongst the rural populace. The governments desperation is to increase its energy options in
rural areas. So, solar companies are now finding this new emerging market lucrative for solar
energy. The rural markets are not presently very promising, but the market will turn out to be
very lucrative for companies who are into the production of solar lanterns and low cost solar
home power systems. The rural market for solar PV will be more than 2 GW in the next three
to four years. The number of solar water heating systems in rural India is also projected to
grow at a CAGR of about 22 per cent by 2013.
Demand for off-grid products
The solar off-grid user base in rural India has grown in 2011 due to various Central and state
government programmes, and industry experts forecast the demand to rise even further.
Though these same experts feel that the authoritarian and support mechanisms need to
improve for companies to capitalise on and encourage solar energy effectively. The rural
population needs to be educated and awareness should be generated prior to this market
accepting solar products. States like Bihar, Jharkhand, West Bengal, Uttar Pradesh, Madhya
Pradesh, Gujarat, Rajasthan, Chattisgarh, the North Eastern states, Orissa and some parts of
Jammu and Kashmir have started promoting solar energy in rural areas.
Now, keeping in mind what the rural populace can afford, only cost effective solar products
will have an opportunity to penetrate the rural regions. Ensuring affordability and ease of
access to products is what would lead to greater market penetration. With the ambitious
programmes of the Ministry of New and Renewable Energy (MNRE) to deploy off-
grid/distributed renewable power and decentralised renewable energy systems for rural
applications, the demand for solar off-grid products will definitely see significant increase in
the near future. However, that plans to cover 1000 villages with solar power by 2022 requires
substantial government financial support, which may come as grants to meet the initial capital
costs. This should be separated from the target of 20 million households to be covered with
solar on-grid power.
Solar street lighting systems, home lighting systems, lanterns, solar cookers, solar pumps and
solar water heating systems are the most popular applications in rural India. But the actual
need is far beyond what the current demand suggests. With water pumping for irrigation
purposes and energy requirements to preserve agricultural produce, a huge demand for solar
energy based appliances and equipment will emerge from rural areas. Generally, DC home
lighting systems are being sold in rural areas to increase rural productivity, it would be
appropriate to offer a system that can take the load of the computer and the TV, in addition to
lamps and fans.
Reasons for insignificant penetration
Despite government initiatives and various schemes, the penetration of solar energyoff-
grid and on-grid still remains insignificant. This could mainly be attributed to a lack of
knowledge about the dynamics of the rural market and perhaps a misconception that non-
metro markets are inherently risky. In order to crack this market, it is vital to develop a
critical understanding of the rural lifestyle. This inability to understand the rural market has
led to a general lack of interest and enthusiasm among companies to cater to it; which is in
itself a major hurdle in the adoption of solar products and systems.
Another reason hampering the adoption of solar off-grid solutions and products relates to
what rural communities can afford. Companies offering products based on what the rural
population can afford. Also, the main requirement in the rural pockets is for a basic lighting
system and a small fan. Here, the aesthetics of the solar product is not what a buyer looks for.
A rural buyer looks for a durable and affordable product. Offering the end user finance on
favourable terms is a necessity for off-grid systems and products as they involve high upfront
investments. Manufacturers also face a major challenge while developing affordable solar
products for the rural market. Keeping their target customers in mind, companies like Sujana
Energy, Kotak Urja, Vikram Solar, Saur Orja and Aplab have developed solar lighting
solutions and solar backup systems. The main objective is to provide people with quality
products for a fair price. In particular, a solar lighting solution, which has both portable and
fixed lights, can have a large market in rural and urban areas. The governments recent
endeavour to subsidise and open up the market (like reducing the customs duty for solar
lanterns) has also been a positive step towards lowering prices for the rural population.
There can also be an alternative with a combo solution, which can light a couple of lamps,
run a computer, a fan, and if possible, a TV, along with a mobile charger, should be the right
solution. Such a system, with a government subsidy of 30 per cent and financial assistance
from Regional Rural Banks (RRBs) at reduced rates of interest, will not only improve the
lifestyle of the rural people but will also substantially increase their productivity. Once
productivity increases, they can easily afford these systems.
Currently, creating products that include the right technology to enhance efficiency,
that are durable and yet affordable, is proving to be a challenge for the manufacturers. This
not only requires extensive R&D, but also heavy investments, which may not be affordable
for the manufacturers.
CHALLENGES:
Distribution Network Design:
When a company decides to sell its products and services in a rural emerging market, one of
the most important decisions it will make is the design of its distribution network. While a
company operating in a developed market needs to carefully consider its distribution network
design in order to achieve profitability, companies operating in rural emerging market face
particular challenges because of the low density of the population and poorly developed
transportation infrastructure. Now we see continuous escalating inventory costs and
impassable transportation infrastructure, it may seem an insurmountable task to distribute a
product or service in a rural emerging market. While many companies have failed at
distribution in this context, others have succeeded, and we can learn from their distribution
network designs. The key points companies should focus on when designing their rural
distribution networks in emerging markets are as follows:
1) The company should choose the distribution network model that is appropriate for the
product or service it is selling.
2) While continuing to meet the customers needs, the company should aggregate
consumer demand into central locations as much as possible in order to decrease
inventory and transportation costs.
3) The company should consider taking advantage of rural entrepreneurs to facilitate
last-mile product delivery and sales.
Distribution Network Logistics:
Rural marketing logistics involves planning, implementing and controlling the physical flow
of goods, services and related information from point of origin to point of consumption. Once
a company entering a rural emerging market has determined what type of distribution
network it should use, as described above, its next challenges lies in creating an effective
distribution network on the ground. The main problem is, the logistics capabilities it needs
may not currently exist in the market, or, if they do, that the companies providing logistics
capabilities may be highly disorganized and ineffective. To add to the problem, the company
will also be under pressure to keep its costs low in order to facilitate the low prices that rural
customers need.

Affordability: Rural consumers in emerging markets from making a purchase are lack of
substantial and consistent household income. By better understanding the size and patterns of
earnings in rural emerging markets, companies can design both products and purchasing
schemes that help unlock the enormous purchasing potential of populations in rural emerging
markets. There are five price and payment schemes that have been used successfully by
companies in rural emerging markets. Companies should choose the affordability scheme that
the best meets the financial needs of both the target consumers and the company itself.
1) Small and Cheap: The small and cheap scheme seems to work best for FMCG
products that can be consumed by customers immediately. When designing consumer
durable goods for emerging markets, even if the durable goods are relatively
inexpensive, they may still cost too much immediate and spontaneous purchase by
BoP consumers.
2) Small-Payment Financing: A payment scheme that has worked well for some
companies selling consumer durables is small-payment financing.
3) Self Help Groups: Another method that companies have found to work well in
reducing the probability of default among BoP consumers is the concept of a self help
group (SHG). A self-help group (SHG) is a village-based financial
intermediary usually composed of 1020 local women or men. A mixed group is
generally not preferred. Most self-help groups are located in India, though SHGs can
also be found in other countries, especially in South Asia and Southeast Asia.
Members make small regular savings contributions over a few months until there is
enough capital in the group to begin lending. Funds may then be lent back to the
members or to others in the village for any purpose. In India, many SHGs are 'linked'
to banks for the delivery of microcredit. SHGs were initially made popular by
Grameen Banks micro financing program in Bangladesh as a way to help poor
consumers (and almost always women) save money and obtain credit from financial
institutions. In the SHG model, individual women in the group take out small loans,
and the entire group is responsible for making sure the loan is paid
42 Foguel and Wilson 2003 back on time. If one woman defaults on her loan, the
entire SHG is penalized. Because of the close social contact of the women, and the
resulting peer pressure to be responsible with money and pay back loans on time,
SHGs have proven to be a successful model for lending money to the rural poor.
Lack of Brand Trust: Building public trust is a valuable step in creating a reputation for
outstanding customer service. Like, how brands are perceived within the marketplace is a
central part of marketing efforts. Setting sights on short-term gains could put off consumer
trust. Focusing too much on quarterly results or investors leads to the lack of a customer-first
culture that clients notice. Similarly, a lack of transparency makes it extremely difficult for
people to trust organizations. Clear communication and simple services make it possible for
consumers to see the value of products and make organizations appear more open and honest.
Lack of Education: Education is a basic necessity. It prepares, widens and allows exposure
to the entire world through the mind. A sound education implies better quality of thought,
which results in superlative quality of life. In India almost 90% of the schools are located in
the villages. Independent studies show that over 91% of the rural schools at elementary level
are controlled by the government. Education is a portal for betterment. Understanding
education in India without delving deeper into the sector of Rural Education would leave our
perception incomplete.
The essential goals of providing education in the rural sector of India:
To create a platform for education to rural dwellers.
To encourage children to pursue and continue studying higher. education/further
studies/ jobs
Provide learning, guidance and wisdom to scholars looking to research and develop
education.
Experimenting with new methods of teaching.
Developing new systems of assessment.
Creating a learning environment that fosters intelligence, a thirst for knowledge and a
stress-free space to be nurtured.
That said, the problems that education in the rural sector faces
Monetary benefits and incentives are little or non-existent. Incomes are meagre and
barely sufficient to maintain. This subsequently leads to poor attention spans for
teachers and by default, the students suffer.
Lack of infrastructure is another driving concern. Most educational centres lack
basic facilities for teaching and activity such as computer labs and play-grounds and
in some cases, even clean toilets.
Inadequate transport facilities and options for students from neighbouring or far off
places.
After Sales Service:
After-sales support is a service that is provided after merchandise or services have been sold.
Most after-sales support involves a guarantee, warranty, upgrade or repair service. Some of
the after sales customer supports include an ongoing relationship with the original equipment
manufacturer (OEM) throughout the life cycle of the product or service, while other
warranties are under time constraints.
Closing a sale is the first step to increasing sales, not the last. Providing good after-sales
service shows customers that you want to build a long-term relationship with them, earn their
loyalty and keep their business. Many successful businesses use after-sales service strategies
to consolidate sales, build customer relationships and grow their profits. Providing after-sales
service keeps customers coming back to us and encourages them to refer the business to
others.
After-sales support encompasses a wide array of services that cater to consumers. It is
designed to assist a customer in using a product correctly, which could generate repeat
customers, develop brand loyalty among customers and ensure customer satisfaction. The
after-sales support provisions for a consumer can include training on the use of the product,
updates for software, scheduled maintenance or provisions of materials or parts, repair and
servicing, money-back guarantees, or warranties for replacement in case of damage or
defects.
The various types of after-sales support may consist of the following:
Technical Support/Help desk: Assistance with technology merchandise like PCs,
software products, mobile phones, televisions and most electrical or mechanical
products
Customer Support: Includes services that help the customer with the product
Automated Customer Service: Provides assistance 24 hours a day and is available
online
Support Automation: Includes online knowledge bases like forums in which to ask
questions, proactive support such as 24/7 monitoring for alarm systems, and
preventative support that generates solutions through questions, logbook files or
configuration changes.
After-sales support includes customer support and customer service, which is standardized by
the International Customer Service Institute. Today, after-sales support continues to be an
important tool for both consumers and manufacturers. A customer expects a cost-effective
and reliable after-sales support service especially in the case of rural customers.
Manufacturers also rely on consumer satisfaction to maintain business and sales. Without a
good after-sales support service, a product can be difficult to sell.
STRATEGIES ADOPTED TO ENTER RURAL MARKET:
Present Marketing Strategy: First lets see how rural peoples are aware of solar offering
products:
Govt. has tagged up with solar offering companies and provided villages Solar Street
Lights. From here peoples are aware of these products but not fully (aware).
If in a home there is any one educated he brings Solar product then people came to
know about the Solar Offering Product but not fully (aware) again.
According to a survey Royal Institutions of Chartered Surveyor RICS yet 59% of the
rural peoples are unaware of Solar products and those who are aware of solar products
only 13% of the them are having solar products.
This low share of the product is due to low distribution and low market
communication.
If we take an example rural areas where there is low electricity ,literacy ,low income
people cant afford TV which is the biggest track used for communication by solar
product companies.
New Marketing strategy:
Basics : It includes product planning , promotion and its distribution and much more.
For what Segment: Targeting rural peoples who are depend upon the agriculture. As
now a day people are moving from rural to urban but those who are in the rural areas
are mostly depended on the agriculture product.
At what Price : Price should be vary from product to product. Company is having a
very good variation of product from high range to low range. Some of the special
package should be offered that can be in the budget.
With what Communication: Now Companies should also get tagged up with each and
every Panchayat so they can directly come into contact with rural people. As Rural
people are mostly influence by Panchayats this will play a critical role. Publicity can
be brought by advertising through their public announcements.
What Distribution: Presently we have more than 5000 retail distributors across India.
But if they are offering solar products targeting rural peoples they must have their
retailers point in a village. It is quite not possible to have single retailers point in
each and every village but they can tackle this issue by having one retail outlet for 4-5
villages, because neighbor villages are mostly very much connected and they dont
have much distance. Weakly visit can also meet the demand.
Product planning : Product can be in small pack e.g like shampoo companies are
coming up with pouch for rural peoples same like that we can come up with small
pack also.
Penetrating rural areas needs unique marketing strategies like arranging road shows, the
innovative display of products, education of customers, etc. Here are some of the strategies
adopted by companies who are catering to the Indian rural market.
Generating awareness: Creating awareness about the products is the foremost requirement in
rural markets. For solar products to attain wide acceptance, it is necessary that the rural
populace is educated about the benefits of solar power in comparison to the daily use of
kerosene lamps. Using road shows, sales vans and go-to-market campaigns are some of the
methods that can be used to educate and generate curiosity among the users.
Local engagement: Installing solar products offers great employment opportunities for rural
people. Any market strategy must include local engagement in order to be successful and
sustainable. Appoint local people or entrepreneurs as small distributors in each village or
hamlet and distribute lanterns through them. Then ensure people payments are made on time
and they, in return, earn a percentage of the profits based on their output.
After sales service support: Off-grid solar projects are not viable without robust post
installation maintenance facilities. Unless a company is able to put in place a strong service
channel, the possibilities of growth are limited. A business models success eventually
depends on the ability to earn the trust of the end user, which depends on the post sales
assistance. Since the livelihoods of many rural customers are critically dependent on the solar
products, the company will have to respond to every breakdown as quickly as possible. Also,
the quality of customer service influences the customers willingness to pay for the service.
As rural consumers are not educated, they desire a service provider who provides regular
repair and maintenance services rather than a mere seller who doesnt have a good grievance
redressed mechanism.
Cost effective schemes: Companies should understand the price sensitivity of consumers in
rural areas. Hence, cost effective schemes are suitable for rural markets. Leasing the products
on the basis of hourly requirements is an option that could be considered to meet the needs of
this market. Also, arrangements should be made for rural customers to get the benefit of
micro finance schemes.
Quality products: Proper training and information is a prerequisite for a product in any
market to be accepted. Companies should offer high quality products that are durable, have a
long life, and are resistant to bad weather and extreme climatic conditions.
Employee training: Small distributors should stock some spare parts with them with which
they can make immediate repairs. But to do so, companies should ensure quality and provide
proper training to their distributors. Most distributed and decentralised energy solutions suffer
from poor performance due to a lack of proper maintenance. Companies should address this
through training provided to the villagers and by designing a well structured maintenance and
support system.
Good product design: The products design should take into consideration the users needs
and living conditions. Intelligently designed products which take care of all practical issues
(other than deliberate abuse) will ensure that the requirement for any service is minimal.
Since there are electricians and artisans with practical knowledge of these systems,
establishing a service network with local involvement is feasible.