For over 25 years, Pradeep Kashyap, Founder and CEO, MART, has been sharing his
knowledge at various CEO platforms, investor meets, marketing conferences,
academic institutions, and very recently he spoke at TEDx Events about MART as an
endearing organization and freedom from poverty. He has also spoken about rural
marketing, social marketing, rural transformation & innovation, business ethics and
leadership. We wish to share a few of these talks with you.
2. Pradeep kashyap, Founder & CEO MART, is known as the father of rural
marketing in India. He is recognized as a thought leader and is a regular
speaker at CEO forums in India and abroad. He has been Marketing
Advisor to Ministry of Rural Development and has served on Prime
Minister Office and Chief Minister Committees on rural development. He
is a World Bank and United Nations consultant. He was Chairman, Khadi
Commission National Marketing Committee and member of RBI,
NABARD and SIDBI national advisory committees.
He has worked in the private sector for the first 20 years with MNCs like
EXIDE, BOSCH & DENSO, and the next 20 years as a rural development
and marketing advisor. He has worked relentlessly to create tens of
thousands of livelihoods for rural poor through collective marketing,
public private partnerships and the 300 Gramshree melas organized in
75 cities for sale of rural products. He co-created Project Shakti with
Hindustan Unilever to appoint 46,000 poor women from micro finance
groups as company dealers. He has pioneered another low cost, last mile
rural distribution model by appointing village entrepreneurs on bicycles
for many FMCG and durable companies. He has also pioneered the
concept of ‘Inclusive Marketing’.
Mr. Kashyap was the only speaker from India at Cannes Lions 2008
among the 50 Global speakers that addressed the 2,000 participants in
France, where his topic was ‘Rural India: The Emerging Market’. He was
the key note speaker at an International conference in 2010 on inclusive
marketing in Chicago. He has also given talks at University of Cambridge
and London Business School, UK and was recently invited to speak on
‘MART – An Endearing Organisation’ and ‘Freedom from Poverty’ by TEDx
DECCAN and TEDx Knowledge City respectively. He is President, Rural
Marketing Association of India.
3. C O N T E N T S
For over 25 years, Pradeep Kashyap, Founder and CEO, MART, has been sharing his
knowledge at various CEO platforms, investor meets, marketing conferences,
academic institutions, and very recently he spoke at TEDx Events about MART as an
endearing organization and freedom from poverty. He has also spoken about rural
marketing, social marketing, rural transformation & innovation, business ethics and
leadership.Wewishtoshareafewofthesetalkswithyou.
Creating an Endearing Organization
Social Marketing
Case on MART
Inclusive Marketing
My 7 Big Thoughts for the Rural Market
Rural Game Changers
Ethics, Excellence & The World of Management
Managing India’s Rural Transformation
Making India an Innovation Hub
An Interview with the Emerging Markets Guru
02
06
12
16
20
22
25
30
34
38
4. 02
For the first 20 years of my professional life I worked
with 3 multinational companies in India. During this
period I acquired fair amount of material wealth and
creature comforts. But the inner richness was missing from
my life and a hollow feeling kept bothering me. It was
around the same time I met my spiritual guru. He
encouragedme toinquire into the purpose of life. The year I
turned 40, I decided with the blessings of my guru that I
should change the course of my life. I voluntarily opted out
ofthecorporatesectortoservethepoor.
In the initial years as a consultant to some NGOs and the
government I got the opportunity to travel the length and
breadth of this vast country and experienced rural poverty
first hand. I had lived all my life in a city and never seen such
abject poverty. This moved me. I realized I had to do
something about it. I decided to start a professional
organization to help create large scale livelihoods for the
poor. But having experienced the impersonal, ‘what’s in it
for me’ selfish culture of multinationals, I was determined
that my organization would offer a strong sense of
belonging and self-giving among its employees. I studied
the different types of institutions in society – government
organization,privatecompany,notforprofitNGO,andeven
theinstitutionofmarriage.Irealizedthat‘Family’istheonly
institution to which we continue to belong throughout our
lives.SoMARTwasestablishedin1993on‘Familyvalues’.
1. NoDesignations
In a family on one has a fixed designation. I am husband,
father, son, brother and more. So in MART too no one
hasadesignationandthereforethereisnohierarchy.We
areaflatorganization.
2. LifelongBelonging
No one leaves his family is our shared belief and we put
this to practice. On completing 10 years service in MART
every employee becomes a partner with 2.5%
shareholding gifted by the company. We have already
inducted 9 partners this way and in the next few years
my hope is that MART would become a fully employee
ownedorganization.Weareateamof100professionals.
In the last 5 years only 5 people have left us of which 3
have rejoined. Against the industry average of 7%
employees leaving every year, our attrition rate is less
than1%.
3. Transparency
A close knit family is transparent and shares problems,
joys and information with each other. At MART we have
taken transparency to an extreme. Every employee
knowseveryotheremployee’ssalary.
4. Caring
We celebrate all happy occasions of the family members
and reach out whenever any member has a problem,
including personal problems. Rajeev joined us two years
creating an
endearing organization
the MART story
August 30, 2011
5. 03
back as a management trainee. Last month his father
who was visiting his son from Patna suddenly developed
chest pain. He was rushed to hospital where he was
diagnosed with two completely blocked arteries. He was
advised immediate stents. The hospital admitted him
and advised Rajeev to deposit Rs 250,000 by the
evening. A distraught Rajeev came back to office and
broke down in front of his senior expressing his inability
to raise such a large sum of money at such short notice.
By the evening the money had been collected from
contributions by employees and deposited with the
hospital. The next morning the surgery was conducted
successfully.AfewdayslaterhisfatherreturnedtoPatna
from where he remitted the money which was returned
to the employees. I was away to Bangladesh when this
happened. On my return an emotionally charged Rajeev
metmeandsaid“HowcanIeverleavemyMARTfamily”.
5. CEOasHeadofFamily
The role of the Head of a family is much larger than the
CEO of a company. For example most professionals have
joined MART straight out of college and several of them
have got married while working with us. Many a times,
the father-in-law to be met me before meeting the boy’s
father, to check out career prospects of the “groom in
consideration”.
Pankaj an MBA worked with MART for 5 years but was
unsuccessful in finding himself a suitable bride, despite
persistent efforts by his parents. Reasons for rejection
were, the boy is neither in government service nor does
he work for a bank or a known private company. He
works for some small, unknown consulting firm. What is
this consultancy business anyway they would ask? So
Pankaj decided to leave us. He joined a well known
American organization and within a year found himself a
lovely bride. Mission accomplished he rejoined MART.
Four years into his second innings at MART he is the
proudheadofahappyfamily-HumdoHamaredo.
6. NoJobDescriptions
At home no work is considered menial. The same is true
at MART. We scrub toilets and wash utensils happily
when the cleaning person doesn’t show up. In keeping
with this philosophy we do not have any written Job
Descriptions at MART because we are ready to do any
workthatneedstobedone.
I am sure by now many of you must be thinking that whilst
this family approach may work for a small set up like MART,
surely large organizations cannot follow a family culture?
There will be chaos. Well Toyota and many other Japanese
companies follow the life time employment philosophy and
host employees wedding receptions because the company
considersitselfasheadofalargefamily.
Inanycasetherearenoteven7000largecompaniesinIndia
and together they employ less than 7% of the country’s
work force. On the other hand we have 30 million small and
tiny units, each employing an average of 7 people. If these
enterprises adopt ‘family values and culture’ in their
organizations we can hope to make 200 million employees
and their families happy. This will lead to a much happier
nation.
OurPurpose
Let me now come to our Purpose which is to help improve
the quality of life of the poor. Whatever we do at MART is
focusedaroundthispurpose.Itiscentraltoallourwork.We
have shown that if you are passionate about a higher
purpose and have a strong sense of family, even a bunch of
ordinarypeoplefromBgrademanagementinstituteslikeus
can deliver extraordinary results. Our clients include the
best Fortune 500 companies and the best development
agencieslikeTheWorldBankandUNorganizations.
TEDx TalkTEDx Talk
6. 04
A glimpse of few of our large scale livelihood
initiatives
• We co-created ‘Project Shakti’ with Unilever where
50,000 poor, rural women across 12 states have been
appointed as company dealers. These women have
doubled their family income and utilize the additional
earning on better healthcare and education for their
children.
• Webrought10,000tribalwomenfrom500villagesin6of
the most backward districts of Orissa into a ‘Collective
Marketing’ model. This initiative recorded a sale of 9
crorerupeeslastyear,significantlyenhancingincomesof
thesewomen.
Let me now come to our Philosophy which is enshrined in
our logo. The two arms of the letter M are two people
shaking hands which represent our commitment to
teamwork and partnerships. The heads bent forward
representourhumilityandrespectforall.
TheNewGenerationOrganization
Let us now look at the kind of organization we need in the
twenty first century. We all know every organization has a
mind but it also has a heart whether social or business.
NGOs have compassion but often lack strategic thinking
because of which their good work is not scaled.
Diametrically oppositeis the corporate sectorthathires the
best minds but these people lack compassion and are not
able to empathize with the poor. The government, with due
apologies often brings the wrong kind of heart and mind
and therefore does not create impact. Fortunately NGOs
are now talking about a business approach and are
therefore moving into the Business Mind Social Heart
segment. Similarly corporate are talking about CSR, green
and social marketing. Even governments are realizing that
they need to turn their approach the right side up. So the
new generation organization will have a Business mind and
SocialheartwhichiswhereMARThaspositioneditselfsince
inception. Business mind is required to deal with the
complex problems of modern society and poverty. Social
heart is necessary to empathize with the poor so that the
bestsolutionsarefoundtotheirproblems.
Let me conclude with the Characteristics of this New
GenerationOrganization.
• It will be built on Family values which will lead to higher
motivation, productivity and retention among
employees
• Byadoptingthephilosophyof‘whatisgoodforsocietyis
good for the organization or what is good for the family
isgoodfortheemployee.Profitswillcomefrompurpose
and passion and not from exploitation. These
organizations will believe if you live by a higher purpose,
profits will follow automatically. Let me share MART
works only for the poor and despite not receiving any
BusinessMindSocialMind
Social Heart Business Heart
New
Generation
Organization
New
Generation
Organization
CorporateCorporate
NGONGO GovernmentGovernment
Business Mind
Social Heart
7. Pradeep
Kashyap
grants from any source, we have been a profit making
company,yearafteryearsinceinception18yearsago.
• CEOs of these organizations will be Servant Leaders.
They will maintain a simple and modest lifestyle. Peter
Drucker, the legendary management guru advised
companies that CEO salary should not exceed 20 times
lowest paid worker. My salary as CEO is only 15 times.
During the Global economic meltdown in 2008 salaries
of many American CEOs were 200 times, reflecting the
greed of our times. Fortunately there has been a lot of
rethink since then and society is realizing that greed is
notsustainableandwewillseeanew,moreausterekind
ofleadership.
SpiritualOrientation
Spiritually teaches us we are all one. New generation
organizations will co-operate and not compete with others.
For the same reasons that we are all one they will share
knowledgefreelywitheveryone.
Emotional Quotient: These organizations will realize we
needemotionalintelligenceandintuitivewisdomforbetter
decision making. Such organizations will realize we are
humanbeingsfirstandmanagerslast.
05
9. IMS 2013
social marketing
valedictory address
March 16, 2013
Good afternoon. I spent the first 20 years of my
professional life in corporate marketing with 3
multinational companies. For the next 25 years I
have worked in BoP and social marketing. There may not be
many marketers globally who would have been fortunate
enough to work two decades each in corporate marketing
and social marketing. I also have the rare distinction of
having worked in most sectors -in the private sector for 20
years, with NGOs for 2 years, government for 3 years,
donors, academic institutions and as an entrepreneur for
thelast20years.
I have been closely associated with social marketing for
many years. I was Chairman of Khadi Commission
marketing. It is the world’s largest social marketing
organization providing part time livelihoods to 6 million
poor, has 8,000 retail outlets and a turnover which is the
same as Unilever in India. On behalf of CAPART I conceived
and started Gramshree Melas for sale of products made by
rural poor. 300 sales exhibitions have been held in 75 cities
making it the largest mobile social marketing system in the
world. My diverse experience of 45 years has given me a
reasonably holistic perspective to different kinds of
marketing. Over the next 45 minutes I will share insights
from my direct experience. I suspect what I have to say may
be somewhat different from what you have heard over the
lastdayandahalf.
In the 60s Prof. Philip Kotler defined corporate marketing as
satisfying customer need. Let us understand who is a
customer? She is an individual? Sure. But she is also a
member of a family and the community. And hundreds of
thousandsofsuchconsumersmakeupthelargersociety.So
it would be correct to say the primary purpose of corporate
marketing is to satisfy the needs of society through
individual consumers. The objective of social marketing is
also to satisfy the larger needs of society. I agree that in
Corporate marketing need is satisfied largely through a
product whereas in social marketing it is mostly through a
concept. Further corporate marketing is for economic gain
whereassocialmarketingisforsocietalgood.Butinessence
both use the same 4Ps or 4As framework of marketing. The
fundamental principles of marketing are the same; the
differenceisreallyinthedetailandapproach.
Further I am surprised there is a school of thought globally
which advocate that social marketing should be
mainstreamed. My question is mainstreamed into what?
Mainstreamed into corporate marketing? Well I do not
know about other developing countries but in India the
annualturnoveroftheFMCGindustryisaboutRs1.7trillion
whereas the annual spending of Central and State
governments on social sector schemes is Rs1.9 trillion. You
will agree these schemes could benefit from social
marketing inputs to achieve their objectives better and
create greater impact. So where is the logic of
mainstreamingthebiggerpiecei.esocialmarketingintothe
smallerpiece,corporatemarketing?
I now wanttodraw an analogy with rural marketing. For the
last two decades I have been the main crusader for the
cause of rural marketing in India. For the first 15 years from
1995to2010,Imadethemistakeofpushingruralmarketing
asaddontourbanmarketing.Evenmyfirsttext bookonthe
subject which came out in 2005 bench marked rural against
urban in all aspects. During these 15 years there were few
takers for rural marketing in the corporate world. In 2010 I
decided to change my approach and started telling
Corporate India that rural is the largest segment of the
Indian market and companies that ignored it would do so at
their own peril. My second book on rural marketing which
came out in 2011 I made no comparison with urban and
treated rural marketing on its own merit. From last year I
have become even more aggressive and now insist that
urban should be bench marked against rural because the
latter is bigger in size. Lo and behold, the interest in rural
marketing among corporates has grown exponentially. Last
year alone I addressed 150 CEOs across 6 cities of Mumbai,
Delhi, Chennai, Bangalore, Hyderabad and Pune. I was also
invited to address 10 Global investor meets in Singapore,
London,MumbaiandDelhionthebusinessopportunitiesin
rural India. I was a keynote speaker at dozens of seminars
07
Pradeep
Kashyap
10. and conferences organized last year. The lesson to be learnt
here is rural marketing got mainstreamed on its own merit,
notbypiggybackingonurbanmarketing.
The Fair Trade movement globally has been trying to
mainstream for the last 30 years but without much success.
The reason is simple. It has been trying to piggyback on
mainstream marketing without addressing the critical
issues of overpriced and poor quality products sold through
a limited alternate distribution network. Same is the story
of Social Marketing. The concept was introduced 40 years
back by Prof. Kotler. All these years it has been trying to
piggyback on corporate marketing. Both Fair Trade and
Social Marketing are making the same mistake I made with
Rural Marketing for 15 years. If we have confidence that
socialmarketingisrelevantforsocietywhichitis,weshould
treat it as stand-alone and I assure you it will get
mainstreamed. Let me share an experience here. Way back
in 1990 I taught the first course on Social Marketing in India
at IRMA, Anand. I was surprised why no other B-school
introduced this as an elective course? I am wiser in
hindsight. I now know why this course did not spread to
other institutes? Because I did not take the responsibility of
convincing faculty and students of other institutes that this
course was extremely relevant for a developing society like
India and hence should be included in the list of electives.
Aren’t International Marketing and Retail Marketing well
accepted disciplines of marketing? So social marketing too
can gain acceptance provided B-schools develop local
coursecontentandmoreimportantly,Indiancases.
In social marketing as indeed in corporate marketing the
customer or beneficiary must remain at the centre. The
objective of social marketing is to motivate individuals and
society to adopt a new practice or bring about change in
behavior. Love and caring is essential to achieve this
objective. Unfortunately the language of marketing with
phrases like grab market share and kill competition has
become the language of war. War cannot win us customers,
only love can. Prof. Kotler gave us the 4Ps of corporate
marketing and Prof. Sheth gave us the more customer
centric 4As of marketing. These have served us well. For
socialmarketingIproposeanadditionalsetof4Ps.
The first P stands for Purpose. Let me explain what it means
in the marketing context. All marketers know what product
or concept they sell, they also know its price, pack size etc.
Most also know how they market the concept or product
using appropriate communication packages and customer
engagement platforms like the mela, haat, SHG meeting
etc. But hardly any marketer knows why she is promoting
the product, concept or cause.If the Purpose or beliefis not
known how can a marketer be effective? Let me explain this
What, How and Why of business with an example. What do
Apple, Nokia and Samsung sell? All sell mobile phones.
Right? How do these companies make the products? They
use technology that is quite similar. Then Why is the market
cap of Apple many times higher than that of Nokia or
Samsung, it is in fact the highest among all companiesin the
world. If the differentiator is neither the product, nor
technology then what is it? Steve Jobs believed in
challenging status quo, in thinking differently. His Purpose
08
11. was clear - to delight the customer every time whether it
was with the ipod, smartphone or itunes. In a very small
way I may share that the Purpose of MART is to improve the
quality of life of the poor, whether through corporate
marketing or social marketing. Our Purpose is central to
every decision and action we take. The result is, despite not
having received any grant or monetary support since the
inception of MART 20 years ago and working only for the
poor,wehavemadeprofityearafteryear.
The next P stands for Passion. To establish a strong connect
with customers social marketers need to have passion and
feel compassion. We need to learn the language of love and
shun the language of war because love will attract more
customers to us. To understand their need and develop
appropriate solutions we should follow a bottom up, co-
creation process involving the beneficiary and the
community. Unfortunately social programs are designed by
senior bureaucrats in Delhi or in state capitals, people who
have no understanding or direct connect with the local
community. Further the program design is rigid and does
not allow flexibility which is essential for a vast country like
Indiawithsosuchregionalandlocalvariations.Thisonesize
fitallapproachisthemainreasonwhysocialprogramshave
not delivered desired results. The other reason is that a
systematic social marketing approach has not been
adopted to improve effectiveness in designing, planning
andexecutingtheseprograms.
09
Pradeep
Kashyap
12. The third P is about People, about beneficiaries and society.
What governments need to understand is ‘what is good for
society should be good for the government’ and not the
otherwayround.
The last P stands for Partnerships. Rural transformation is a
colossal task and requires effort from all stakeholders, not
just the government. We need to build strong partnerships
between government, NGOs and private sector but these
must be win-win partnerships where value is shared
equitablybyall.SoSocialMarketingisaboutpartnerships.
There are some differences between corporate marketing
and social marketing as mentioned earlier. Corporate
marketing follows a transactional framework. The seller
offers products which customers buy to satisfy a particular
need. Social marketing is far more complex because more
often than not it involves behavior change. In many cases
the beneficiary does not feel the need to change behavior.
For example people believe washing hands with water
before a meal is good enough and they do not feel the need
to wash them with soap. In other cases the new behavior is
seen to be beneficial but the person does not have the will
or motivation to bring about that change, for example
giving up smoking. In such cases the communication has to
be very convincing and compelling, it must invoke a strong
desire in the person to change a deeply ingrained habit. It
calls for action. Unfortunately most bureaucrats carry the
wrong perception that to deal with the poor professional
marketing inputs are not necessary. Unilever and KVIC have
the same annual turnover but the former employs
hundredsofMBAswhereasthelatteremploysnone!
Social marketing requires professionals with a Business
Mind, Social Heart approach as they need to feel
compassion for the poor. On the other hand corporate
marketing is all about Business Mind and Business Heart
where marketers develop aggressive strategies to grab
market share and seduce consumers to buy their brands.
Corporate marketing focuses on Profit whereas social
marketing focuses on People. Corporate marketing is about
Product,socialisaboutProcesses.Withthesedifferencesin
approach and attitude if we try to mainstream social
marketing into corporate marketing it will lead to a clash of
values.
10
13. thank you
I would conclude by saying that in India as in many
developing countries social marketing is a big business
opportunity and therefore deserves special focus. As it
requires a different mindset from corporate marketing it
needs a standalone status. Frankly it has not got serious
recognition so far because not many marketers know the
size and potential of the social marketing industry. I
sincerely hope some evangelists will emerge in the coming
years and they will create awareness about the importance
of social marketing in transforming society. I can assure
these evangelists they will enjoy the early mover benefitsin
socialmarketingasIdidinruralmarketing.
Government is the biggest customer of social marketing.
We need to ensure larger participation from rural
development, health, social welfare and other
departmentsof thegovernmentinsuch seminars tobeable
to convince government on the benefits of social marketing
for social change. As a beginning I would suggest BIMTECH
should circulate the recommendations of this seminar to
secretariesofrelevantgovernmentdepartments.
The summit has made a good beginning to sensitize civil
society and academics on the advantages of social
marketing. The effort cannot stop with just one workshop.
BIMTECH and other participating organizations should
collectively start a social marketingmovementbyopening a
dialogue with other academic institutions as also organize
one on one meetings with decision makers in the
government.
11
Pradeep
Kashyap
14. case on MART
Professor Ishwar Dayal*
by
Afteran engineeringdegree from BITS,Pilani in 1969,
Pradeep Kashyap served in three multinational
companies in marketing. He completed a one year,
part-time post graduate management diploma in 1974. His
last assignment was as Head of Marketing of a large
Japanese auto ancillary. The job required extensive
travelling and experience in widely different areas. Pradeep
was innovative in his job and was appreciated by his peers
and supervisors. Pradeep said ‘I come from a well- to-do
family and the job gave me material comforts. I was able to
construct a house in South Delhi at a young age of 29 years.
Butahollowfeelingkeptbotheringme’.
In 1980 he accompanied his wife to her family Guru’s
ashram. Pradeep had several discussions with the Guru
about the meaning and purpose of life, and was greatly
impressed by his ideas and the model farm and dairy in the
ashram. The Guru suggested that working for the rural poor
could be more meaningful. He explained that when you
work for money, you are alone but when you work for
others, the world works behind you. In 1987, the year
Pradeep turned 40 he resigned from his corporate job after
18 years in the sector. Initially he worked with an NGO for 2
years and thereafter as a Marketing Advisor to the Ministry
ofRuralDevelopment,GovernmentofIndia.Heestablished
MARTin1993.
For the next 10 years Pradeep and his small team worked on
minimal remuneration for several NGOs, Central and State
governments and donor agencies on poverty reduction
programmes for which he travelled extensively in rural
areas. Several families produced traditional handicrafts but
they had no knowledge of what products will sell or how to
access city markets. Pradeep undertook market research,
product modification and created a mela system for sale of
rural products in urban areas. This involvement of MART
with producers continues and has expanded over the years.
Because of their committed approach and deep
involvement in rural areas, MART is funded by many
agencies and often have been chosen in preference to
international and larger organizations. As an illustration,
MART is working as Livelihood consultant to World Bank
funded project in Orissa and Maharashtra to create large
scale, sustainable livelihoods for the rural poor in the
forestry andagribusinessareas.Earliertheywerefundedby
World Bank and Department of International Department
(DFID), UK on creationof largescale,sustainable livelihoods
for the rural poor in AP, Tamil Nadu and MP. One reason why
they are chosen over others came from an associate who
said, ‘MART is dedicated to the work they do. Technically
their approach is superior, they research the market
thoroughly to improve the lives of the poor, because rural
developmentistheirmission.’
In 2000 a corporate house approached MART to undertake
research for their product in rural markets. This was the
genesis of setting up a corporate rural marketing division.
Since then MART has worked with many Fortune 500 and
large Indian companies, in market research, product
development, go to market strategy and promotion
assignments. MART focuses on what people need, not
merely on sale of a product. They modify, or redesign, or
suggest alternate uses to the advantage of the community
aswellasthemanufacturer.
12
15. TalkingaboutthecontributionofMART,Pradeepgavesome
examples. He said 'we co-created Project Shakti with
Unilever where 50,000 poor rural women across 12 states
have been appointed as company dealers. These women
have doubled their family income and utilize the additional
income on better healthcare and education for their
children'.
‘We brought 10,000 women from 500 villages in 6 of the
most backward districts of Odisha into a Collective
Marketing model. This initiative recorded a sale of 90
million rupees in 2011, significantly enhancing income of
thepoorfamilies’.
‘IstartedGramshreemelasin1989forsaleofruralproducts
in urban areas by artisans. Three hundred melas have been
held in 75 cities. These have benefited 100,000 poor
producers and encouraged them to continue their craft in
thevillage’.
‘Whatever work we undertake from government or
corporateclients,ourprimaryfocusremainstheruralpoor’.
‘We have developed a last mile rural distribution model for
Colgate involving local youth on cycles as entrepreneurs.
We have promoted TATA corrugated roofing sheets through
haats’.
‘We have enabled development of low cost health care
products like baby warmers and ultrasound machines for a
multinationalcompany’
.
‘We have co-created a unique business model with
NOVARTIS in 5 states for treating TB patients in rural areas
by activating the private sector health delivery channel –
doctors, testing labs, chemists and local youth as health
entrepreneurs. Three million people have been exposed to
this programme and 12,000 patients cured over a 2 year
period’.
WithdedicatedmanpowerMARThasinnovatedandhelped
in creating a variety of services in rural areas. In this process
they have also created Public Private Partnerships to
benefitlocalcommunities.
Organizationalorientation
MART expands the nature of work around individuals who
have interest in that area. The approach of MART is that
projects should not be forced upon people. Rather project
leaders should choose the project. Once responsibility for
the project is decided, the person chooses his team and
handleseverythingthatisrequiredfortheproject.
Pradeep said that he wanted to develop an organization
where people are self-giving, they work to improve quality
of life of people and society, and are driven from within
themselves rather than wait for external motivation. He
wanted people to feel free, work in teams and learn from
oneanother,andhaveasenseofbelonging.
His experience of over 40 years in multinationals, business
and government repeatedly shows that managers tend to
develop an attitude of ‘what is in it for me’, competition,
secretiveness, groupism, maneuvering and work for
personal rather than organizational and social goals. His
experience of different kinds of organizations shows that
the only organization that ensures lifelong belonging is the
family.MARTismodeledonfamilyvalues.
MART has no hierarchy at work. When a project proposal
comes to MART, a group of two or three senior consultants
discuss it and depending upon the interest, knowledge and
experience, involve other colleagues. The Project leader
chooses his team in consultation with senior colleagues,
keeping in view the expertise that would be needed in
carrying out the Project. Once a team is formed, they take
overtotalresponsibilityoftheProject.TheProjectteamcan
discuss with anyone they wish or seek new knowledge
13
16. inputs. As a team works on the project, success or failure is
attributedtotheteam,notanyindividual.
Employees are free to move from one group to another and
approach any one for technical or personal help. Everything
beingopenandknowntoall,thereareno‘behind-the-back’
or office gossip. In case of personal differences, the
individuals resolve among themselves. In case anyone
violates the norm the effort is to discuss the problem with
him or her, and encourage him/her to learn from the
mistake.Inthelast5yearsonlyfiveemployeesleftMART,of
these3haverejoinedand theothertwowanttoreturn.The
average age of employees is 30 yrs, the oldest being 42 yrs.
Formany,MARTisthefirstjob.
MART works only one Saturday of the month where some
external expert is invited for a talk, followed by lunch for
everyone. If an individual wants to attend some training
programmeofhisinterest,MARTmeetshalfhisprogramme
fee. If the organization sends the individual for any chosen
program,allexpensesaremetbyMART.
There is no stigma attached to failure. Several colleagues sit
down to analyze the reasons of failure and genuinely try to
learn from the experience. This is seen as strength of MART
because they do not hide failures as people often do in
manyorganizations.
An employee becomes a partner after 10 years service and
MART gifts him/her 2.5 % share of the company. Pradeep
expects that over time everyone in MART will become a
partner and the company will be owned and run by them.
All decisions are taken in meetings where anyone can raise
an issue or problem. Everything is open at MART- salaries,
accounts,plansandallsuchmatters.
ReactionsofemployeestoMART
Some comments made by individuals in my interviews with
them about their work and life at MART. All the comments
are made without probing. In some cases I asked for some
events,situationtosupportabstractandopenstatements.
‘I had come to Delhi in search of a job. I was engaged in
some odd jobs, when a friend suggested I go and see Mr.
Kashyap. My first impression on meeting him was he was
totally unassuming, open and friendly. He shared his plans
and his vision, and I made up my mind thatI wanted towork
for him. He said that he had no opening but he will contact
me when he had one. My mind was made up and without
waiting for his call I called him within two days and told him
that I want to join. He said that he could not pay much
salary. I said I don’t mind. Soon after I joined we got a big
World Bank project, we have not looked back for work after
this project. I experienced professional and personal
growth and cooperation at work I had not experienced
elsewhere’.
‘Pradeep Sir is the caringHead of the MARTfamily and not a
typical, formal CEO in a company. He is always available
when you need him. I go to him for my personal problems,
besidesworkrelatedissues’.
‘He talks to people at their own level. It is easy to talk to him
aboutpersonalproblems’.
‘In every project I learn something new. MART has helped
mewidenmyinterest,Ienjoymywork’.
‘MART provides continuous scope for enhancing my
knowledge, innovation and experimentation with ideas.
We work on projects in a team. From day-one whenever I
talkedaboutmyhavingdonethisorthat,Pradeepcorrected
metosaythatachievementorfailureisoftheteam,andnot
thatofanindividual’.
‘The work environment is relaxed. There are few rules and
regulations imposed on us from above. Decisions are taken
inmeetingsbyconsensus’.
‘During my college days Mr. Kashyap had come to deliver a
lecture. After listening to him and going through the
website of MART, I decided that I wanted to work for this
organization. I was selected in the campus interview. After
joining, I found MART to be even better than what I had
imaginedittobe’.
‘Of all the places I have worked, MART has given me
maximum freedom to work, opportunity for self
development, respect, colleagueship and variety in work.
Eachprojectisdifferent’.
‘MART is a very open organization. We believe in collective
decisions and I am, like others, a part of the process. We can
express our views openly. We can disagree with a point
withoutfearofpersonalrisk’.
14
17. ‘MART helps us mature our thinking which makes me feel
goodaboutmyself.Itisgoodtoshareideaswithfriends.The
experience here makes you grow and gives you confidence
inyourself’.
‘Mr. Kashyap does not speak much but he knows what
everyone is doing. He listens to our personal problems
patientlyandresolvesthem’.
‘Comingtoofficeislikecominghome’.
‘Ihadapersonalproblemathomeandcouldseenosolution
other than resign from the company. Before sending a
formal resignation, I felt obliged to personally tell Mr.
Kashyap about my decision. He found a solution that had
notoccurredtome.Ididnothavetoleavethecompany’.
‘Whenever I approach anyone in MART with personal or
work related problem people co-operate. The other day I
went to a senior colleague who was busy completing a
*CaseiswrittenbyProf.IshwarDayal(doyenofmanagementeducation,hetaughtatIIMCalcuttainthe60s,wasseniorfacultyandmember
of management committee at IIM Ahmedabad when Ravi Mathai was Director. Later Prof. Dayal served as Founder Director of IIM
Lucknow), as a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.
Copyright is held by Birla Institute of Management Technology, Greater Noida. All rights are reserved. No part of this publication may be
reproduced, stored in a retrieval system,used in a spread sheet, or transmittedin any form or by any electronic, mechanical,photocopying,
recording, or otherwise without the permission of Birla Institute of Management Technology, Plot No. 5, Knowledge Park II, Institutional
Area,GreaterNoida,(NCR),U.P.201306
report. He put his work aside to discuss my problem and
resolvedit.ThisishowweworkinMART’.
MART has to grow in staff numbers and the expertise it
currently offers, and expand its geographical reach to
respond tochangesin rural markets.The strengths of MART
lie in its conceptual approach, knowledge-base and
dedication of its people. However, as the rural scenario
changes, MART may have to develop new skills, experiment
with new approaches, and remain one step ahead of other
organizations in providing cutting edge knowledge. MART
has started an internal dialogue on these issues. MART
believes its strength lies in the leadership and the family-
like work environment. The model is derived from their
conviction, belief and commitment to the organizational
attributes and the workculture. Experience suggeststhatin
an affiliative society like India, Western approaches have
generally failed to create the desired work culture. What
should MART do to sustain its culture while growing its
businessandstaff?
15
Pradeep
Kashyap
18. Good Morning Ladies and Gentlemen,
On behalf of MART and BIMTECH it gives me great
pleasure to welcome you to the Indian Marketing
Summit on the important topic of ‘Inclusive
Marketing’.
The Bottom of the Pyramid market has generated a lot of
interest among corporates in recent years. The reason
simply is that the 650 million people, each earning less than
a dollar a day collectively amount for 30% of India’s income
and consumption. They represent a 165 billion dollar
market. Some companies have quickly tried to tap into this
market by offering inferior or stripped down products at
reduced prices. Others haveoffered obsolete products with
no adaptation to meet usage needs of the poor. It is
therefore not surprising that not many companies have
been able to unlock potential of this low income market.
The real challenge is that though the total market is huge,
the per capita income is a paltry Rs 40 per day. As BoP
marketing looks at the poor as consumers only it cannot be
expectedtoincreasetheirincomesnorreducepoverty.
For the social sector the challenge is to increase incomes of
the millionsof poor engagedin the handicrafts,handlooms,
dairy and other sectors. The promotional agencies in these
sectors lack professional marketing support and hence are
unable to help the poor get better value for products made
bythem.
This brings us to ‘Inclusive Marketing’, an approach that
looks at the poor not only as consumers but also as
producers. This approach offers promise to add economic
value to goods and services contributed by the poor. It can
therefore impact poverty positively. ITC’s E-choupal is a
perfectexampleofinclusivemarketing.Thebusinessmodel
ensures that farmers as producers get better value for their
produce. Once their incomes are enhanced the model then
uses the same channel that was created for procuring
produce to push relevant goods and services needed by the
farmersasconsumers.
inclusive marketing
Keynote Address
16
February 22, 2008
19. As the chief mentor of the summit I therefore felt we
needed to ask some candid questions about the promised
benefits of inclusive marketing. Once the questions were
articulated we then decided on specific topics so that the
summit could engage in focused and meaningful
discussion.
Thecriticalquestionsweposedwere
• Whatcanmarketingdoforthepoor?
• How can poor be included in the free market system?
Andfinally
• CanInclusiveMarketingofferawayoutofpoverty?
Letusstartwiththefirstquestion
WhatcanMarketingdoforthepoor?
Governmentpoverty reduction programs assume thatpoor
are unable to help themselves and hence they are treated
as ‘beneficiaries’ who need a generous dose of grants and
subsidies for their income generating activities. This
traditional approach has not created sustainable solutions
because once the funding is withdrawn the activities
collapse.
On the other hand a market based approach focuses on the
poor as consumers and producers and on solutions that can
make markets more efficient, competitive and inclusive so
that BoP can benefit from them. The market oriented
approach recognizes that only sustainable solutions can be
scaledtomeettheneedsofthe650millionpoor.
Corporates are known to use marketing as an effective tool
to first understand the needs of consumers and then offer
appropriate products and services to fulfill their need at
affordableprices.Thechallengeinfrontofusishowcanthis
effectivetoolofmarketingbeusedtohelpincreaseincomes
of the poor and empower them. I am sure we can look
forward to some answers from the successful initiatives
such as the treadle pump and Grameen phone initiatives
thatwillbepresentedatthesummit.
If marketing skills of promotional agencies (Khadi
Commission Handicrafts & Handloom agencies) and NGOs
that are engaged in the non-farm sector are enhanced
these agencies will then be able to help the poor get better
valuefortheirproductsandhigherincomes.
How can the poor be included in the free market
system?
India’s GDP has been growing at an impressive 7-8% for the
last several years. The country is witnessing a significant
improvement in physical infrastructure such as IT and road
connectivity, tele-connectivity, warehousing, electronic
commodity exchanges and transport. This has opened up
manynewopportunities.
But BOP is often not integrated into the market economy
and therefore does not benefit from it. Engaging the BOP in
the formal economy must be a critical part of any wealth
generating and growth strategy. Let us take the example of
the labour market to explain this point. Two thirds of the
labor force is the BOP segment. Currently they earn low
wages and do not get regular work. Recent CII and Planning
Commission studies have identified Tourism, Construction,
Retail and Healthcare as high growth sectors. These sectors
canabsorbmillionsofworkersintheorganizedsectorofthe
economy provided their skills are upgraded at higher
incomelevelsandbetteremploymentbenefits.
17
Pradeep
Kashyap
Marginalized
Inclusive Marketing Approach
Producers Consumers
INCLUSIVE MARKETING
NGOs/Govt. Private Sector
Innovation
Co-Creation
Partnerships
Sustainable
Incomes
20. In the fastest growing services sector which now
contributes 60% to GDP if domestic servants, plumbers,
electricians and other service providers living in urban
slums form themselves into marketing collectives they can
negotiate better rates for their services. They can also look
at providing services to large contractors and builders and
thus enter the organized economy, something they can
neverhopetoachieveindividually.
The rapid spread of InformationTechnology will also ensure
greater inclusion of the poor in the market as they can now
have access to market information hither to the exclusive
reserve of the rich and powerful. For example the poor can
now access prices of commodities in different mandis
(agri-markets) through the new, transparent electronic
exchanges or receive this information through SMS on
mobiles.
Marketing cooperatives of small farmers will help them
achieve scale and will allow them to access bigger markets
and get better prices for their produce. The case of AMUL
thatwillbepresentedatthesummitisanexcellentexample
of milk production by millions of individual dairy farmers
and processing and marketing centrally under the strong
AMULbrand.
Corporates too stand to gain by engaging with the poor as
they can get skilled manpower for their growing businesses
and aggregated supply of raw materials and other produce.
Buttogetthisbenefittheywillneedtocommitresources.
Can inclusive marketing offer a way out of
poverty?
From the time economic reforms were set in motion in
1991, the gap between the rich and poor has only widened
and the absolute numbers of poor has not declined
significantly. Special efforts will therefore have to be made
to enhance incomes of the poor using inclusive marketing
approaches.
Public – Private partnerships is one such approach that can
benefit the poor. But it should be a win-win model that
offers benefits to all stakeholders equally. Such equitable,
market based models are more likely to be sustainable as
they utilize the best strengths of each partner. ITCs e-
choupal mentioned earlier and Project Shakti that was co-
created by HUL with MART are examples of successful PPP
models. In Project Shakti for example the SHG women
benefit because of the additional income they earn from
this business, the company has been able to reach their
brands to remote villages which was not possible earlier
because of high distribution costs. It has helped the
Inclusive Marketing is an
approach that looks at the
marginalized not only as
consumers but also as
producers/suppliers. This
approach uses innovative co-
creation and appropriate
partnerships offering promise to
add economic value to goods
and services contributed by the
marginalized. It creates
solutions that can make markets
more efficient, competitive and
inclusive. It can therefore
impact poverty positively.
18
21. government in meeting its objective of reducing poverty by
creating more livelihoods and NABARD has benefited
because the loan off take has gone up. Rural Business Hubs
ofthegovernment,DhristeeITkiosksandHPRasoiGharare
some new initiatives that will be presented at the summit
which will enhance our learning on this important area of
inclusivemarketing
The micro-finance model is one PPP initiative that has
achieved scale and sustainability because of the active
involvement of the different stake holders – the poor
themselves, NGOs, government and financial institutions.
Several learning from this successful model can be applied
tomakenewPPPinitiativessuccessful.
To conclude I believe enlightened corporates will consider
inclusive marketing part of their market development
strategy because as BOP incomes rise it will translate to
higher business growth for companies. For development
professionals inclusive marketing can help empower the
pooreconomically.
We have lined up a galaxy of eminent speakers from India
and abroad including some of the best marketing minds.
You will benefit immensely from their vast knowledge and
experience. I am personally grateful to each of them for
having honored my request to address the summit despite
your busy schedules. I would like to say a big personal thank
youtoallofyou.
The next two days promise to be exciting and packed with
new learning. We can look forward to getting some definite
solutions from the presentations, discussions and
individual interactions that take place during the tea and
lunchbreaks.
19
Pradeep
Kashyap
22. Rural Boom: By 2015 it is expected that every village
will be connected by an all weather road, every
1village will have internet connectivity, and a large
majority of homes willhaveelectricityand possess a mobile
phone. This significant improvement in rural infrastructure
coupled with agriculture reforms already under way we can
expect rural markets to reach inflexion point. This will lead
toanexplosionindemandthewayithappenedintheurban
marketsin the mid 90s as a result of easy consumerfinance,
a boom in the IT sector and steep increase in corporate
salaries. Companies are not anticipating this boom and
manywillbetakenbysurprisewhenithappens.
Reverse Innovation: Ever since the BoP concept was
introduced at the turn of the century many
2companies have tried to transform their business
models through single serve sachets, low cost production,
extendedmomandpopdistributionandNGOpartnerships.
But in the rush to capture the fortune at the base of the
pyramid, something may have been lost-the perspective of
the poor themselves. In my view most such initiatives have
failed to hit the mark. Pushing the company’s reformulated
or repackaged products into villages may indeed produce
incremental sales in the short term. But in the long term,
this strategy will almost certainly fail because the business
remainsalientothecommunitiesitintendstoserve.
For decades, MNCs have sold modified products in India, a
process widely recognized as glocalization. This strategy
worked reasonably well with the more affluent urban
consumers whose behavior is somewhat similar to Western
consumers.
.
my 7 big thoughts
for the Rural Market
20
23. With growing rural purchasing power and the three times
larger population than urban, companies will need to
develop appropriate products for this market. The
glocalization or minor modification will not work as rural
consumers are very different. This will call for a reverse
innovation approach, totally opposite to the glocalization
approach. This will involve a bottom up, community
embedded process of co-invention and business co-
creation. Such an approach will bring the company into
close, personal business partnership with BoP
communities. While creating enduring value for the
community, it will establish a foundation for long-term
corporategrowthandinnovation.
New price-performance paradigm: What the rural
market requires of products is delivery of decent
performance at very low cost. My advice to
companies is to aim for 75% performance at 50% cost.
Nirma or Ghadi washing powders are excellent lower
performance-low cost products compared to the global
Surf and Ariel brands. Rural consumers are interested in
derivingcorebenefitfromtheproductandtheselowpriced
brands essentially clean clothes adequately. Users are not
worried if these powders don’t have a softener or whitener.
The sachet as a solution of making the offering more
affordable will not work in the long term as the price still
continuestoremainhigh.
Innovative rural distribution: The biggest challenge
in rural remains reaching your product to 600,000
villages compared to 7,800 odd towns in urban. A
few new rural distribution and procurement models have
been innovated by ITC e-choupal and HUL Project Shakti.
But much more needs to be done in this area. One
possibility is the use of the social infrastructure being
created by government. For example there are over 7
million women’s micro-finance groups in existence and by
2015 the number of groups is expected to jump to 15
million. Thus 150 million rural women or 150 million of the
200 million total households in rural would be linked to self
help groups. Can this channel be used innovatively to reach
productsandservicestoruralhomes?
Dedicated Rural teams: Companies will need to shift
power to where the growth is by dedicating
empowered teams for the rural markets so that they
can develop their own strategies and products. A separate
3
4
5
sales force is also desirable as the regular force will avoid
covering the more difficult and small off-take rural markets.
MBAs from B grade small town institutes should be hired.
Not only will they work at much lower salaries but will stick
aroundastheybelongtothelocalareas.
Inclusive marketing: This is a new concept I have
created which goes much beyond BoP. Inclusive
marketing looks at the poor not only as consumers
but also as producers/suppliers of goods and services. This
approach offers promise to add economic value to goods
and services contributed by the poor. It can therefore
impact poverty positively. ITC’s E-choupal is a perfect
example of inclusive marketing. The business model
ensures that farmers as producers get better value for their
produce. Once their incomes are enhanced the model then
uses the same channel that was created for procuring
produce to push relevant goods and services needed by the
farmers as consumers. Government and the private sector
need to come together to promote inclusive marketing and
grow the size of the rural pie through the development of
reverse distribution channels rather than companies
fightingwitheachothertograbshareofthelimitedpie.
New Opportunities: Rural markets now offer a
numberofnewopportunities.
• Healthcare: Total rural spending on health care currently
is Rs 700 billion and expected to reach Rs 3.5 trillion by
2025, an impressivefivefold increase. Despitethe launch
of the National Rural Health Mission 80% of health
spendingwillbeintheprivatesector.
• Durables consumer financing: In the 90s consumer
finance became available easily which led to high growth
insaleofdurables.Ruralconsumerfinancehasbecomea
big opportunity only now with rapid electrification of
ruralhouseholds
• Banking: According to a World Bank study bankable
peopleinruralIndiais185million.
• Construction and Housing: Currently there is shortage of
40millionhousesinruralIndia.
In conclusion I would say the next growth will come from
the rural market and companies that ignore this segment
willdosoattheirownperil.
6
7
21
Pradeep
Kashyap
25. Iwould like to thank EEMA for inviting me to this event.
The theme ‘Time for Change’ is perhaps most relevant
for rural marketing. With your permission I will take the
liberty of being a little provocative in my talk because my
intention is to make you sit up and seize the big rural
opportunity.
Can anyone guess how big is the Indian rural economy in
terms of size or share of the total economy? Just the rural
economy of India is bigger than the total economy of
Canada. It is a one trillion dollar economy. Rural contributes
50% of India’s GDP. The 7,800 small towns with populations
below one million account for another 25% of India’s GDP.
Soruralandsmalltownsaccountfor75%ofIndia’sGDP.The
50 top cities account for only 25% of our GDP but attract
100% of the attention of marketers and event agencies.
Whatanirony?
Thereasonforthisisthereisverylittleunderstandingabout
the rural market. There are a number of myths which stem
from ignorance among marketers and agencies. The first is
that rural is a homogenous mass. Nothing could be further
from the truth. We have 28 states, 56 soci-cultural regions,
16 official languages, 4 major religions and varying levels of
literacyacross states.RuralIndia isthemostheterogeneous
market in the world. But unfortunately activation agencies
follow a mass population approach using a van. This does
not create the desired impact and the clientsoon loses faith
in the potential of the rural market. Later in my talk I will
share the concept of strategic activation and show how it is
very different from mass activation and can therefore
achievemuchbetterresults.Thesecondmyth isthatruralis
all about agriculture. So if the monsoon is weak we
conclude rural demand will be poor. The reality is that 60%
of rural income now comes from the non-farm sector and
services. So demand in rural India is not dependent only on
the monsoon. The third myth is that rural is all about
product marketing. The reality is that services including
retail, banking, insurance, education and health contribute
more to rural GDP than agriculture or manufacturing. The
fourth myth is that there is mass scale migration from rural
and very soon most people will start living in cities. The
reality is very different. Sixty years after Independence two
thirds of the populationcontinues tolive in villages.Evenby
2020 this figure will be 60%. So the majority of Indians will
continuetoliveinvillages.Thefifthmythisthatruralpeople
buy cheap products. The reality is that Clinic, an expensive
brand is the largest selling shampoo in rural and not the
cheaper Chic or Velvette. Same is the case with many
categories.Ruralpeoplebuyvalueformoneyandnotcheap
products.
Rural accounts for more than half the country’s sale of
FMCGs, durables, services or vehicles. If this be the case
then why aren’t more companies engaging agencies for
activation,awarenessgeneration,trialsandconversion.
There are many reasons. The first is that marketers
themselves have little understanding or knowledge about
rural markets. Remember when they attended Business
School years ago institutes did not offera course on rural
marketing. The other irony is that all consultancy firms give
strategy on urban markets only because their MBAs too do
not haveknowledge on rural. It is like the health care sector.
70%ofourpopulationlivesinruralIndiabut80%ofdoctors’
practice in urban India. Do you know that besides my
organization MART there is no full-fledged rural
consultancy organization in India that can recommend
distribution models, pricing strategy, communication plans
and other elements of go to market. So when a company
decides to enter the rural market it often invites MART to
conduct a one or two day sensitizing workshop on rural
marketing. Thereafter the company develops its plan of
action. The first step is to identify certain potential
geographies and then commission a market study to
understand the rural consumer, her purchase behavior,
lifestyle, brand usage and attitudes etc. Most research
agencies in India use numeric western tools for measuring
responses which are not appropriate when interviewing
illiterate rural people. The other problem is research
agenciesdo not havedeep knowledge of the rural sector. So
their findings do not givemuch direction tothe company on
go-to-market route. This is where things slowdown. The
point I am trying to make is that it can take a company up to
2 years before it is ready for the activation phase. Agencies
like yours can help to cut short this waiting period if you
23
Pradeep
Kashyap
26. have knowledge about rural and proactively engage with
the company during the planning stage of the activation
strategy. Otherwise your wait as a passive agency today can
be very long and frustrating? At this stage the question I
would like to ask all of you is what steps have you taken to
acquire knowledge on the rural sector? For example how
many of you are aware of the Rural Marketing Association
of India, a knowledge body. How many of you have
contactedourassociation?Howmanyofyouhaveattended
training programs on rural marketing? How many have a
copyofmybookonruralmarketing,astandardtextatevery
IIMandpremierB-schools?
Let us now examine the approach of agencies to rural
activation. For years event agencies have recommended
van operation as the only solution for all rural activation
needs. Have we made effort to innovate new solutions?
SadlytheanswerisNO.15yearsbackIconductedanational
study of haats, the weekly markets and found this platform
tobe appropriate for promoting rural brands bycompanies.
For the next 15 years, agencies recommended haat
campaign blindly to every client irrespective of the nature
of product, type of consumer or her shopper behavior. I
think agencies will have to play a far more proactive role in
evolving game changing solutions. This brings me to
strategic activation which by definition focuses on
unconventional and innovative solutions, unlike the one
size fits all van campaign. Strategic activation involves not
only targeted activation but in addition designing last mile
distribution models like Project Shakti that MART co-
createdwithUnileverwhere50,000individualwomenfrom
micro finance groups were appointed dealers in the
unreached <2,000 population villages. Or the bicycle
entrepreneur model we created for Colgate where young
men buy stocks from the nearest sub-stockist and sell in 20
designated villages and 4 haats on the basis of a permanent
journey plan finalized by us. Behavior Change
Communication, Experiential Marketing, Public Private
Partnership models are other aspects of Strategic
Activation. It also focuses on Affordability, Accessibility and
Awareness. Let me explain how strategic activation works
with the example of Asha Project weimplemented for Pepsi
which addresses iron deficiency among girls in the 10-16
age groups. We tied up with the government ICDS and
midday meal programs to create awareness and focused on
EDUTAINMENT in schools where girls were specifically
targeted. We appointed Asha workers as Behavior Change
Communication agents in every village to target individual
households.Theydistributedfreesamplestoinducetrial.
We set up last mile distribution by appointing
entrepreneurs in the 2,000+ pop villagesand linked them to
the company’s last leg distribution. In other words we
addressed many aspects of marketing through an
integrated approach. A post evaluation research showed
impressive results - 34% of target group tried the iron
fortified biscuit or puff and 95% of them made repeat
purchase. You will perhaps appreciate this strategic
activation approach has gone much beyond conventional
awareness generation as it includes behavior change and
distribution. This project wonus the WOW Gold Award. You
allknowbetterthanmethatBTLisgrowingoverATL.Inrural
it is largely BTL because of limited availability of electronic
and print media. And BTL is your core strength. So you have
a great business opportunity provided you enhance
knowledgeoftheruralsector.
Let us now see what companies are doing in rural. The first
fact is that nowadays the decision to go rural is taken at the
CEO level. Companies are therefore more serious about
their rural initiative. Let me give you the example of Hero
MotoCorp. Six years ago I was invited to address their top
management on the rural opportunity. The audience
included the Chairman and other members of the Munjal
family. They took the advice seriously and acted on it. Just 6
years later they have 2500 touch points in rural through
authorized representatives of dealers and 1,000 sales and
service outlets. The combined dealer sales force in rural is
around 10,000 people. Not surprising a whopping 45% of
their total annual sale of 6 million units comes from rural
where as six years back it was insignificant. The story of
Marutiissimilar.Threeyearsbackwhentheylaunchedtheir
rural initiative only 3% sale came from rural. Today they
have a workforce of 6,000 rural representatives who
network with Pradhans, panchayat members, small
businessmen and salaried people in villages. Last year 22%
of their car sales came from rural. Cadbury, GSK, Marico, LG
and a hostof others havea strong focus on rural now. It may
not be out of place to say that companies are perhaps more
proactivethan agencies when it comes to rural. Till a couple
of years ago MART used to follow up with companies for
work. Now more and more companies are approaching us
themselves.Theyaremuchmoreproactivenow.
In conclusion I would say the time for change is here and
now. If you want to fast forward the rural business
opportunity you should become the change you seek. My
advice - acquires knowledge, become proactive and
embracestrategicactivation.Goforit.
ThankyouandGodblessyouall.
24
28. We all live by some principles. I was fortunate to
have met my spiritual guru 30 years ago who
inspired me to live by high principles and
values. Values inspire in us the highest that we should do. It
is the job of a leader like a spiritual Guru or a CEO to inspire
inusthesevalues.
A little background about me and my organization MART
would help, as a number of examples in this article will be
frommylife.
For the first 20 years of my professional life I worked with 3
multinationalcompaniesin India - Exide from the UK, Bosch
from Germany and Denso from Japan. During this period I
acquired fair amount of material wealth and creature
comforts. But the inner richness was missing from my life
and a hollow feeling kept bothering me. The year I turned
40, I decided with the guidance of my Guru that I must
change the course of my life. I voluntarily opted out of the
corporate sector and since I wanted to understand the
social sector I joined a large NGO at just 10% of my last
drawn salary. I have been working for 20 years in the rural
sector and have not regretted my decision even once. Sure,
there have been times when I was not making enough
money but this was more than compensated by the inner
satisfaction I derived from my work. I have had the privilege
of meeting some of the best minds in the world and seen
somegreatandhighlyinnovativework.
Itoohavecreatedsomeinnovativemodelsofdevelopment,
particularly in the area of marketing. Had I continued in the
corporate sector I would have probably become the CEO of
a large MNC but would have continued to do repetitive and
dissatisfyingwork.IamgladImadethedecisionIdid.
In 1993 I founded MART, a livelihoods and rural marketing
agency, as a value based organization. Today, 20 years later,
we are a family of 75 dedicated professionals serving rural
India. We are a flat, non hierarchical totally transparent
organization – no designations, every staff member knows
each other’s salary or the fact that we submit detailed,
itemized consultancy budgets to clients. We are a team
based organization where all decisions are taken through
consensus. We are an employee owned organization where
on completing 10 years of service every employee
automaticallybecomeapartnerinthefirm.
Let us now come to Ethics. To begin with let us try and
understandwhatethicsis?
Ethics is the application of spiritual principles to human
behavior. So ethics involves living by (and not theorizing
about) the highest principles applicable to human behavior
onadailybasis.
WhatarePrinciples?
Principles are guidelines for human conduct. They are
fundamental and universal because their source is the
spirit. These principles have come to us from rishis and
sages who received them over centuries in meditation,
throughdreamsandasvisions.
Ethics can be understood at two levels. Steven Covey in his
book ‘Seven Habits of Highly Effective People’ calls them
Personality ethic which refers to the development of
personality, and Character ethicwhich focuses on evolution
ofhumancharacter.
WhatisPersonalityEthic&CharacterEthic?
Personality ethic includes public image, attitude, skills and
techniques. The effort here is to develop a more pleasing
and attractive personality with the objective of achieving
better social acceptability and greater material success.
This is the job of psychologists and personality grooming
experts who teach you better communication skills, better
social manners and personality grooming methods. These
are secondary traits and not primary like character.
Personality ethic results in quick fix solutions without
addressing the fundamental causes of human behavior. I
willnotbefocusingonpersonalityethic.
My concern is with character ethic which involves basic
principles of effective living – integrity, humility, courage,
fairness, patience and simplicity. These are value based
motives or ‘Lighthouse’ principles that govern human
growth and happiness. It is important to understand that
these fundamental principles do not change. Principles do
not react to anything; they do not depend on the behavior
ofothers.
ethics, excellence &
the world of management
26
29. Personal power that comes with principle centered living is
the power of self aware, knowledgeable proactive
individual,unrestrictedbytheattitude,behaviorandaction
of others or by any circumstances. Gandhiji never held any
position of power in the government in waiting, but he
wieldedmore power in politics than anyone else becauseof
his principle centered living. We accord the highest respect
to a spiritual master, even political leaders and royalty bow
to them, because they are centered in universal principles.
Highest power rests with the person with the highest
awareness.
WhatareSpiritualPrinciples?
The most fundamental principle of effectiveness is the
Principle of Personal vision: For this we need to know ‘Who
am I’. We should understand that we are not our body
because if we were then which part defines us –legs, hands,
brain or the heart? What happens to people with heart
transplants? Do they cease to be or do they assume the
persona of the donor? Further we need to understand that
we are not our feelings. If we were then which feeling
defines us? We are not our moods. We are not even our
thoughts. If we were then how come we continue to exist in
deep sleep when there are no thoughts? And the very fact
we can think about these things separates us from them. It
is self awareness that enables us to stand apart and
examine even the way we “see” ourselves. The continuous
effort has to be to expanding our self awareness which also
helpstofindourinnercentre.
Our centre is where we deal with our vision and values.
Spiritual dimension is your core, your centre, your
commitment to your principles. Meditation,
contemplation, enquiry into who am I are ways to remain in
touchwiththetimelesscore.
DreamsasOurInnerGuide
When your external action reflects your internal code you
are in alignment with your principles. This is how you gain
integrity. Integrity is important because without it you are
living with a sense of division within yourself. You will know
when you are not acting in alignment with your moral code
because your conscience will remind you of the difference
between what is ethically right and how you actually
behaved.Thevoiceofconscienceissodelicatethatitiseasy
tostifleit:butitisalsosoclearthatitisdifficulttomistakeit.
When we refuse to hear the voice of conscience in our
wakinglife,itoftenappearsasacriticinourdreamsatnight.
Dreams often show a mirror to our behavior by becoming
critical of us. For example if we have told a lie in waking life
our dream may create a situation where we are
reprimanded for telling a lie. We wake up feeling guilty
knowing well that we have tried to cheat on ourselves. Or
when we are going through an anxious phase in our life we
dream of reaching late for an exam or missing a train.
Dreams are the royal road to the unconscious. If we record
our dreams and make the effort to interpret them they will
guideushowtoconductourlivesethically.
When we make any commitment it is our conscience that
ensures that we keep it. So when we set a personal or
professional goal we must make a promise to our
conscience and set out to achieve it. Trust is cornerstone of
every strong business relationship. Without trust your
prospective customers won’t buy from you, your team
mates won’t listen to you and your family and friends will
runawayfromyou.
27
Pradeep
Kashyap
30. Information,Knowledge&Wisdom
A man of wisdom is a man of ethics. But how do we become
wise? I will explain in the next few paragraphs how
informationleadstoknowledgeandfinallytowisdom.
Information is something we read or hear about. For
example we dial railway enquiry to get the timing of
ShatabdifromJaipurtoDelhiortheTV newsinformsus that
it rained in Delhi yesterday. Information is essential to
conductour dailyactivitiessmoothly.But itdoes not impact
ethicsinanyway.
But when information is analyzed and understood it
becomes knowledge. This is the purpose of education. In
school and college teachers impart information and then
encourage us to use the tool box of analysis to transform
information into knowledge. So knowledge can be taught,
you can acquire it from external sources. And knowledge is
what you know you know. For example I know that I can
solve a particular mathematics problem because I learnt
theanalyticaltoolsinschool.
When knowledge is integrated with intuition, it becomes
wisdom, your experiential knowledge. Analysis as
described earlier and intuition are not substitutes of each
other,theyarecomplimentary.
We don’t receive wisdom; we must discover it after a
journeyof lifethatno one cantakeforus.Eachoneof us has
to undertake our own journey. The ultimate destination of
your life, if there is one is wisdom. Wisdom is the highest
and deepest degree of knowledge, insight and
understanding. It provides you with the broadest
perspective on life. They say when you find your wisdom
youarelivinginthe‘light’,thelightofthespirit.
Wisdom is not a state tobe achieved but rathera state tobe
recalled. You arrived on this planet with the boundless
wisdom inherent in all human beings; you only need to
access that place within you that connects you to the
infinite divine source. You are potentially as wise as the
Buddha or Aristotle-they have simply accessed places
within themselves where perhaps you have not journeyed.
ThatiswhyitissaidweareallbornapotentialBuddha.
Wisdom is not intelligence. Wisdom is much more. It is the
highest level of emotional, spiritual and mental evolution
where you synergize your deepest understanding with your
deepesteverydayactions.
Whatisintuition?
Intuition, extra sensory perception (ESP) or insight is when
we see things other people do not see. It is the ‘Aha’ or the
‘Eureka’ moment. Intuition is what you do not know you
know. Intuition is not what can be taught, you develop it on
your own. The word itself means to learn (tuition) from
within(in).
Our subconscious minds are our link to the wisdom of the
universe (the collective unconscious as described by Jung).
Our conscious thinking is limited, but our subconscious
thinkingwhenconnectedtotheunconsciousisinfinite.
WhyisIntuitionimportantformanagers?
At a management school you learn techniques and
concepts to develop your analytical brain. In real life the
executive does analyze, but he also needs to synthesize for
which he needs experience and intuition which as we
discussed earlier, cannot be taught. So the single biggest
challenge for a corporate leader is to develop the power of
intuition because intuition is the critical differentiator
between a good and a visionary leader. Ray Croc recalls in
his memoirs that he had this strong intuition that he should
buy the then unknown, few, franchised McDonald stores.
There was no logical or obviously analytical reason for his
decision. Today, we all know, it is the largest retail chain in
theworld.
As wegrowin our careers knowledge alone is not enough to
make complex decisions. Decisions such as should the
company enter the European or Asian market? Should we
partner a local company or go it alone? Should we hire local
managers who understand the local culture or send out
managers from the parent company who know the working
of the company well? These are decisions concerning the
future and knowledge alone is not enough to act. The
manager needs to have intuition or insight to foresee the
future.
HowtodevelopIntuition?
You can develop intuition through viewing issues
holistically. Intuition is enhanced through varied
experiences and relationships. Emotion is a strong element
fordevelopingintuition.Storytellingstirsemotion.
Intuition is developed by exploring and sensing beyond
what is visible and audible (sleep over things, sometimes
intuition comes through dreams). Intuition can be
developed by paying attentiontoour dreams. The language
of dream connects us to our unconscious where all
knowledgeoftheuniversepreexists.
Intuition is developed through total involvement with the
work. Women are more intuitive because they are more
emotionally involved in work. Contemplation, reflection,
meditation and long walks help the mind become quiet. A
quiet mind helps to see things the way they are and not the
way you would like them to be. At the crucial moment of
decision making, trust your intuitive brain and not your
analytical brain. Managers have to be intuitive, inclusive
andhumane.
28
31. Excellence
Let us now move the discussion to excellence. What is
excellence? Like life, excellence is a journey, a search for the
highest. That is why Tom Peters called his famous book ‘In
Search of Excellence’ and not the destination of excellence.
Excellence is a total quality movement. It is a process of
continuousselfimprovement.
My guru used to say you should bring the same level of
awareness and concentrationyou experience during prayer
to your daily activities. Every meal at the ashram was
preceded by Aarti in the temple. And after every meal we
washed the dishes. The Guru would say the awareness and
concentration you apply to washing dishes should be the
same you achieve during prayer. So level of awareness
equals degree of excellence. Total awareness or
enlightenment in other words leads to complete
excellence. That is why when we see something truly
excellent we say God must have made it. So the constant
effort must be to increase our awareness. Excellence is not
achieved by attitude alone, it depends equally on the
awarenessyoubringtothetask.
ExcellencethroughMentoring
Another way to put an employee on the road to excellence
is through mentoring where the junior has complete trust,
respect and faith in his senior, resulting in a strong,
instructional and emotional relationship. The two share
warmth, love and support like the bond between Lord
KrishnaandArjun.
I look for every opportunity to show and tell my team
members that I care for them deeply. These young people
have given some of the best years of their lives to help me
grow MART. I honor them for that. Their successes are my
success and we celebrate all successes. Similarly their
setbacks are my setbacks and I always offer my shoulder
andhandtothemintheirhourofneed.
When you strive towards excellence it does not help to
compete with others because you may be better than one
but worse than another. So are you better or worse?
Comparing yourself with a moving benchmark cannot give
you an accurate picture of yourself and it only results in
wastage of productive energy. So don’t race against others,
race against yourself. Resolve to be better today than
yesterday. This approach will get you out of competition
with others and put you on the fast track towards
excellence.
MotivatingforExcellencethroughStoryTelling
A big part of a CEO’s job is to motivate the team towards
excellence. To do that he must engage their emotion, not
just their mind, and the key to their hearts is a story. At
MART we have a tradition of celebrating staff members’
birthdays, weddings, annual increments and just about any
occasion. Most of my teaching and inspiring people are
done through stories I tell at these gatherings. Story telling
is a very personal, emotional experience and therefore
allows management ideas to get united with an emotion in
thelistener.
Many cultures have a rich tradition of parables, stories and
mythology to help common people relate to complex
subjects like character, honesty, sincerity and so on. In
management too, anecdotes and evocative stories can help
managers learn about human nature. These stories inspire
managerstoseekexcellence.
Another important truth is, for you to win, no one needs to
lose. We are conditioned to compete for scarce resources.
We are told to be best in our class at school and encouraged
tobefirstinsports.Thiscreatesascarcitymindsetandleads
to competition because only one child can walk away with
theprize.Allcompetitiondoesisfueltheillusionthatweare
allseparate.Butwhenweoperateatahigherlevelwebegin
to see the interconnectedness of everything, we all win.
Whenweworkinharmony,thereismoreforeveryone,Take
love, the more we give the more we get and our love bank
does not diminish. Or take happiness, or even knowledge.
Themorewesharethemoreitgrows.
Success in life does not lie in reaching your goals. It lies in
the personal transformation and inner shifts in
consciousnessandawarenessthattakeplace.
Having read my advice the question in your mind must be,is
it possible to practice what I have suggested in a
competitive, corrupt and greedy world? Well Ratan Tata
runs his multibillion dollar business on ethical principles, so
do Warren Buffet and Narayanmurthy and many others.
BarrackObama isa symbolof hope for humanity becauseof
his transparency and middle class values. If you are looking
for enduring happiness you should be prepared to lose out
on some material gains. Or you could follow a competitive,
aggressive and manipulative approach to seek short lived
gains but a life filled with stress and anxiety. I made the
choice to run MART and live my life on value based
principles.Youmustmakeyourchoice.
29
Pradeep
Kashyap
32. managing india’s
rural transformation
at IHMR, Jaipur,Keynote Address
February 26, 2013
Good morning. Respected Shri Vyas, ex-Director IIM
Ahmedabad; Shri Mehta, Former Chief Secretary,
Rajasthan, Dr Gupta, Director IHMR, faculty
members, participants and students. I am delighted to be
heretoday.
Iamfortunatetohaveworkedinmostsectors–first20years
in the private sector, next 2 years with a large NGO, 3 years
with government, as an academician, an advisor to donors
and an entrepreneur for the last 20 years running MART, a
for profit company. Hopefully I bring a more holistic
approachtoRuralTransformation.
Within India we have two countries, the less privileged
Rural or Bharat and the pampered Urban or Shining India.
Even after 65 years of Independence we have not been able
to provide basic facilities in rural India. 200,000 out of the
640,000villagesarestillnotconnectedbyroad,40%ofrural
homes do not have an electric connection, 70% do not have
atoiletand30%ofruralpopulationisstillilliterate.Thisisan
unacceptable performance by our central and state
governments. In the current decade we must ensure
provision of urban level of services in rural areas or what
PresidentKalampopularizedasPURA.
The primary responsibility of transforming Rural India is
with the government. It is evident to everyone that the
centralized, top-down model adopted by the country has
failed us completely. India is a huge country with wide
regional and local variations. As students of marketing I am
sure you have learnt that understanding the consumer is
fundamental to satisfying her needs. Secondly all
customers need to be segment using appropriate criteria
for effective targeting. Similarly in rural schemes for the
poor we need to segment and target clients and adopt a
decentralized, bottom up approach. The schemes should
allow for flexibility considering the wide regional variations
in our country. The unit of planning and implementation
must be the Panchayat. But despite The Panchayti Raj Act
having been passed 25 years ago, the capacity of local
panchayats has not been enhanced to handle finances or
plan local projects and ensure proper governance. Capacity
Buildingmustbetakenuponawarfooting.
Rural is spread over 3 million square kms and 6.4 lakh
villages.Toprovidebasicservicestosuchavastgeographyis
a challenging task. It requires a lot of discussion and brain
storming to arrive at innovative, cost-effective solutions.
But bureaucracies across the world are hierarchical. They
do not encourage brain storming and would rather go by
the rule book than innovate. Bureaucracy needs to change
its work culture and decision making processes. But that is
notthesubjectmytalktoday.
Civil society particularly the NGO sector is actively involved
in the rural transformation process. Till the 80s NGOs were
either in advocacy or in innovating appropriate, cost
effective models of delivery in livelihoods, education,
healthcare and sanitation sectors which the government
could then scale. For example the micro-finance self-help
group concept was developed by MYRADA in Karnataka.
NABARD took it up and spread it across the country by
promoting millions of SHGs over the last 2 decades. In
recent times more and more NGOs have got co-opted as
delivery agents for social sector schemes of state and
central governments. NGOs have thus compromised their
autonomy by becoming dependent on government funds
for their survival. This does not auger well for rural
transformation. Simultaneously many international donor
agenciesareplanningtoexitthecountrybecausetheIndian
economy is growing at a rapid pace and it no longer needs
external funds for development. This is threatening the
survival of professional NGOs that were dependent on
donor funds. NGOs face a challenge today. They will have to
reinventthemselvesperhapsassocialenterprises.
Social enterprise is a new, hybrid organization that has
emerged between the not-for-profit NGO and the for profit
private company. Many young, qualified professionals like
you are setting up social enterprises which are run as
efficiently as private sector companies but like NGOs they
work for the poor. MART is a good example of a Social Heart
Business Mind social enterprise. We work only with the
poor but have been a self-sustaining, profit making
organization for 20 years. Harish Hande of Selco is a social
entrepreneur. He has a PhD from the US and has set up a
solar lighting company to provide affordable lighting for
homes of the poor. Dr Devi Shetty’s Nirmal Hridalaya
hospital is a very successful, large scale social enterprise.
But these enterprises need funds for running their
ventures. NABARD and other funding institutions should
introduce schemes for funding different stages of social
enterprises from idea to pilot and commercialization. I
earnestly encourage some of you to start your own
enterprisesratherthantakingupajob.Beingyourownboss
is a great feeling though running a business is very
challenging. My work philosophy is ruling in hell is better
thanservinginheaven.
30
33. The Private sector is a recent entrant in the rural
development space largely through the mandated
allocation of 2% of profits for CSR. The problem with CSR is
that since it does not contribute to the bottom line of the
company, it does not attract serious attention of top
management. Often a non-performer is given charge of the
CSRfunctionbutweknowfindingsolutionstotheproblems
of poverty is complex and requires the best minds. CSR
initiatives hardly ever get scaled up. What we need to do is
to create sustainable business models at the bottom of the
pyramid. Project Shakti which MART co-created with
Unilever is a wonderful example of a win for all business
model. 50,000 poor women who have become dealers for
Unilever brands have doubled their family incomes. The
company has got deeper penetration into smaller villages
where these women live and sell door to door. Banks have
benefited because women have taken individual loans to
buy stocks and the government has met its social objective
of creating sustainable livelihoods for the poor. ITC e-
Choupalisanotherexampleofahighlysuccessful,scaledup
business model at the BoP. Had these initiatives been
implemented by the CSR department of these companies
they would have never got scaled up beyond a pilot. What
drives the private sector is profit. If the initiative also does
wellforsocietyitissomuchbetter.
The other way private sector engages with the poor is
through the Public-Private Partnership model. So far this
model has not really taken off because of the vastly
different work cultures of the two partner organizations.
Private sector is all about decentralized decision making
and efficiency, bureaucracy is about centralized decision
makingandplayingitbytherulebook.Thetwopartnersare
so busy trying to arrive at an acceptable working
arrangement that the poor have been forgotten in the
process. You are all students of marketing. You know
marketingis all about customer satisfaction. The PPP model
does not have the customer anywhere in the picture. For
years I have been advocating and actively promoting the
4Ps model of engagement where the fourth P represents
people, the local community. After all who is the
partnership for? If it is for the people they should be at the
centre of all partnerships. The starting point should be to
understand the needs of the local community and then
design the solution through a co-creation approach and
makethecommunitytakeownershipoftheinitiative.Thisis
criticalbecausethe private sectorwill surely withdrawfrom
the area at some point in time, so will the government.
When that happens the community will take responsibility
andtheinitiativewillnotdisintegrateashappensoftenwith
suchpartnerships.
31
34. I now come to another aspect of rural transformation, the
importance of the town. Villagers visit a nearby town for
various needs-mandi to sell produce, bank for money
transactions, and hospital for healthcare, college for higher
education and company dealer for tractor servicing as also
for purchase of durables. So a natural hub and spoke model
emerges where people from around 100 villages get linked
to the town. Rajasthan has 29 towns with one lac plus
population. Jaipur has the highest population of 31 lacs
followed by Jodhpur and Kota at 10 lac each. There are 8
towns between 2 and 5 lacs. Starting with Ajmer at5 lac and
down to Pali at 2 lac. These towns are spread all over the
state except Western Rajasthan which is desert area. The
state needs to create Centers of Excellence in these 8 towns
with world class infrastructure, skills training and
placement facilities. The centre should also provide
business and marketing support and make available funds
through banks to young people who want to start their own
businesses. This move will help to check migration to Jaipur
and Kota which are already crowded cities. Village youth
will come to these nearby smaller towns for acquiring new
skillsrelevantfortheirareasandoccupations.
Let us talk now about marketing of products made by the
poor. The weekly market or haat is the first market access
point. It is an appropriate platform for selling by the poor as
one has topay justa coupleof rupees toset up a stall and all
saleisoncash.RajasthanhashaatsintheEasternregionbut
none in the Western region because of low population
density. The first thing the state government needs to do is
to upgrade existing haats by constructing raised platforms
and shelters for seller stalls and drinking water, toilets and
bicycle stand for buyers. The government should also
examine feasibility for setting up haats in Barmer and
JaisalmerinWesternRajasthan.
I now come to something of direct interest and relevance to
thestudents.Didanyofyouknowthatthetotaloutlayonall
social sector schemes annually is Rs 190,000 crore which is
more than the annual turnover of the consumer goods and
durables industry at Rs 170,000 crore. These welfare
schemes involve behavior change whether it is hand wash
with soap before meals campaign, or AIDS awareness or
Polio campaigns. These schemes need to adopt Social
Marketing approaches for more effective outcomes. I feel
every MBA college should offer an elective course on social
marketing and governments need to be sensitized to take
advantage of this professional approach for implementing
social programs. I have defined the new 4Ps of Social
marketing
The first P in my 4Ps model stands for Purpose. Let me
explain what it means in the marketing context. All
marketers know what products they sell, the price, trade
discounts, pack sizes etc . Most also know how they sell
theseproductsintermsoftheUSPorvalueproposition.But
hardly any marketer knows why he sells these products. If
probed deeper some may answer Profit as the reason. But
Profit is an outcomeand cannotbe the Purpose. So it seems
the Purpose or belief or cause of marketing is not known to
most. If that is true how a marketer can be effective? In a
very small way I may share that the Purpose at MART is to
improve the quality of life of the poor, whether through
corporate marketing or social marketing. Our purpose is
central to every decision and action we take. The result is,
despite not receiving any grant or monetary support since
the inception of MART 20 years ago and working only for
thepoor,wehavemadeprofitsyearafteryear.
32
35. The next P stands for Passion. To establish a strong connect
with customers marketers need to have passion and feel
compassion. To understand needs of the poor and develop
appropriate products we should follow a bottom up, co-
creation process involving the consumer and the
community. Without Purpose and Passion rural
transformationisnotpossible.
The third P is about People or society. What we need to
understand is ‘what is good for society is good for the
government’ and not the other way round. So campaigns
and programs must be conceived using a bottom up, co-
creation approach involving the local community rather
than a top down, one size fit all approach of the
government.
The last P stands for Partnerships. Rural transformation is a
huge task and cannot be the responsibility of the
government alone. All stakeholders need to work in a
partnership, each bringing a set of skills which are
complimented by other partners to ensure a holistic
approachtoruraltransformation.
Let me end by saying you are fortunate to be starting your
working life at a time when India is tipped to become the
third largest economy by 2025 after the US and China. You
will enjoy the facilities of a modern country. But never
forget that the farmer, the construction worker or poor
workers in other sectors havestruggled in the heatand dust
of this greatcountry togiveyou a hot meal and comfortable
homes to live in. The poor have sacrificed their present to
giveyouacomfortablefuture.Youoweadebttothemandif
you give back to society you will ensure a better future for
theirchildren.HelpintransformingvillagessothatIndiacan
once again live in its villages as Gandhiji said but this time in
alittlemorecomfortandwithmoredignity.
Godblessyouall.Thankyou.
33
Pradeep
Kashyap
37. ood morning. I am delighted to be here among
students and faculty of the youngest IIM. I started
GMART, a consultancy firm in 1993. We have worked
with dozens of Fortune 500 companies including GE,
Unilever, Colgate, Novartis and John Deere and with several
donor agenciestoinnovate solutions for emerging markets.
My talk will therefore draw examples largely from our real
lifeexperiences.
The history of modern innovation starts with the Industrial
Revolution.Forthelast200years,Innovationhashappened
mostly in the Western world for the more affluent North
American and European consumers. The axis of innovation
hasstartedtoshifttotheSouthonlyfromthefirstdecadeof
the21st centuryas Western economieswent into a massive
slowdown and simultaneously the BRIC countries emerged
asthenewgrowthmarkets.
Coming specifically to India we find that the more affluent,
metro consumer uses products and brands similar to his
Western counterpart. So there is less scope for innovating
new products for this category of consumers. On the other
hand the bottom and middle of the pyramid consumers
have been left out of the innovation cycle all these years.
But with impressive GDP growth rate in the last 2 decades,
the country as a whole has started to move from poverty to
prosperity. The rural income pyramid which had a
significant portion of the population at the base will morph
into a diamond by 2020. By then the rural poor will shrink
from 400 to 250 million, simultaneously the middle income
wills well from 350 to 500 million and the rich will treble
from 50 million to 150 million. The 650 million middle and
high income people will show a great appetite for
consumptionandmanyofthemwillbefirsttimeconsumers
of brands. I see a huge opportunity for companies to
innovategoodsandservicesforthissegment.
The next reality we need to understand is that unlike the
West which is resource rich, has excellent infrastructure
and a small, homogenous population, India is a resource
scarce country, it suffers from poor physical infrastructure
and has a huge, heterogeneous population. So our
approach to innovation will have to be very different from
the Western approach. For example in India affordability is
the most critical issue. We will therefore have to develop
ultralowcostproducts.Mymantrais:
• 75% performance of global products at50% price (Nirma
vsSurf,NanovsAlto)
• More from fewer resources for more people or what is
calledfrugalinnovation(TataNano)
• Solutions around existing eco system (power outages,
poorroads,dustandheat)
The single serve shampoo sachet that sells at one rupee is
an extreme example of affordability. The one rupee price
includes the cost of product, cost of packaging material,
cost of transportation, and margin for the channel,
advertising cost and finally profit for the company. Such an
incredibleinnovationcanhappenonlyinIndia.
Innovation will have to be looked at 3 levels - Product,
Process and People. I call this the 3Ps framework of
innovation. Take the product first. Companies will have to
understand the eco system, usage and affordability to be
abletodevelopappropriateproductsfortheIndianmasses.
Tweaking existing products will not work. Products will
therefore have to be developed through a bottom up,
community co-creation process and not in R&D labs as has
been done in the West. The consumer will have to be an
integralpartoftheproductdevelopmentprocess.
We partnered Shell Foundation to develop an improved
cook stove for the rural poor. We worked closely with the
communityand learntgreattruths about cookingpractices.
All rural cooking is done sitting at ground level unlike in
urban homes where it is done standing on countertop.
Hence the height for the rural stove would have to be more.
The poor use all kinds of combustible materials as fuel –
wood, cow dung and agri-waste. Hence the stove will have
to ensure high thermal efficiency across all types of fuels.
The opening and design of the cook-stove mouth would
have to be optimized considering the different shapes and
sizes of cooking vessels used to ensure stability of rounded
bottomvessels.
All these insights could not have been gathered in an R&D
lab or indeed derived from our urban experience of
cooking. The improved cook stove has already sold half a
million pieces from the time it was introduced in the market
three years ago. Globally 95% of R&D funds have been
spentonproductdevelopment.Whilstproductisimportant
in India too, processes like creating awareness through
innovative communication or making product available in
remote village locations at lowest distribution costs are
equally important. I believe a lot of value is locked up in
processes. Companies in India will need to innovate around
these processes to unlock value and thereby increase
profitsforthecompany.
I now come to the third P or the People side of innovation.
At the outset I want to clarify that innovation is different
from creativity. Creativity is driven by an individual whereas
innovation is a team effort. And since our discussion is on
Innovation, it requires a high level of motivation among
team members; it requires the ability to work in a
collaborative mode, calls for a rigor in work as also an
35
Pradeep
Kashyap