Sell value not cheaper brands, this is what HPCL did with its Rasoi Ghar concept
So you thought that selling to rural India means selling cheap and inferior stuff? Well, think again. A few years ago, when state-owned HPCL made its first attempt to target rural consumers, it met with resistance. The problem was two-fold. First, the fact that consumers in rural India (used to cooking on chulhas and angithis) did not really see the need to switch to LPG cylinders and secondly they did not have the purchasing power to buy a connection of LPG at Rs.1,600 and then shell the refill cost of Rs.270. Realising this gap, HPCL teamed up with rural marketing agency MART and came up with a novel idea of Rasoi Ghars to make women experience the benefits of LPG (clean, convenient and safe) and dispel myths associated with LPG. Rasoi Ghar was a strategic marketing effort of HPCL to extend LPG use throughout rural households in India.
Targeted at the Bottom of the Pyramid (BoP), Rasoi Ghar is a community kitchen set up in villages where women come to cook food. While HPCL contributes cooking stoves, LPG cylinders, utensils, cooking counter and water and appoints a woman from the Self-Help Group (SHG) as a caretaker, the local Panchayat contributes a room (10 x 10 or bigger) for the kitchen. Women bring basic materials and pay (Rs.3 for half hour) for using gas and take away cooked food home. The caretakers’ role is to collect money, order refills and keep the premises clean. BoP non users experienced the advantages of clean, convenient, safe and non-polluting LPG without having to buy a connection. Once they are satisfied, many decide to buy individual connections subsequently. Says Pradeep Kashyap, Founder, MART, “On behalf of HPCL, MART has already rolled out over 1,600 community kitchens in 2,000-plus population villages in half-a-dozen States, where women from the poorer sections can experience the convenience of cooking with LPG in a pollution-free environment.” What’s more, to address the affordability issue, HPCL introduced a 5 kg cylinder with initial connection cost of Rs.800 and a refill at Rs.95. While evaluating the Rasoi Ghar initiative in UP, NCAER found that there was 82% acceptance of Rasoi Ghar by the people, 85% users use Rasoi Ghar twice a day and 6% of the dropouts have opted for individual connections. HPCL’s strategy seems to have worked out as among the users 20% are intending to install individual LPG connection in near future. “Once all the women realise the benefit, ease, safety and health aspects of cooking on LPG and the easy finance helps them get their own connection, HPCL will uproot its fixed assets in terms of the community kitchen and move it to the next village for a similar exercise,” explains S. V. Shahni, Executive Director, HPCL. What’s more, rural women who have saved time by using these kitchens utilise in productive activities, better child care, domestic chores and have more leisure time at hand. Encouraged by the success, Ministry of Petroleum has also put together a proposal to open around 80,000 Rasoi Ghars across the country.
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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So you thought that selling to rural India means selling cheap and inferior stuff? Well, think again. A few years ago, when state-owned HPCL made its first attempt to target rural consumers, it met with resistance. The problem was two-fold. First, the fact that consumers in rural India (used to cooking on chulhas and angithis) did not really see the need to switch to LPG cylinders and secondly they did not have the purchasing power to buy a connection of LPG at Rs.1,600 and then shell the refill cost of Rs.270. Realising this gap, HPCL teamed up with rural marketing agency MART and came up with a novel idea of Rasoi Ghars to make women experience the benefits of LPG (clean, convenient and safe) and dispel myths associated with LPG. Rasoi Ghar was a strategic marketing effort of HPCL to extend LPG use throughout rural households in India.
Targeted at the Bottom of the Pyramid (BoP), Rasoi Ghar is a community kitchen set up in villages where women come to cook food. While HPCL contributes cooking stoves, LPG cylinders, utensils, cooking counter and water and appoints a woman from the Self-Help Group (SHG) as a caretaker, the local Panchayat contributes a room (10 x 10 or bigger) for the kitchen. Women bring basic materials and pay (Rs.3 for half hour) for using gas and take away cooked food home. The caretakers’ role is to collect money, order refills and keep the premises clean. BoP non users experienced the advantages of clean, convenient, safe and non-polluting LPG without having to buy a connection. Once they are satisfied, many decide to buy individual connections subsequently. Says Pradeep Kashyap, Founder, MART, “On behalf of HPCL, MART has already rolled out over 1,600 community kitchens in 2,000-plus population villages in half-a-dozen States, where women from the poorer sections can experience the convenience of cooking with LPG in a pollution-free environment.” What’s more, to address the affordability issue, HPCL introduced a 5 kg cylinder with initial connection cost of Rs.800 and a refill at Rs.95. While evaluating the Rasoi Ghar initiative in UP, NCAER found that there was 82% acceptance of Rasoi Ghar by the people, 85% users use Rasoi Ghar twice a day and 6% of the dropouts have opted for individual connections. HPCL’s strategy seems to have worked out as among the users 20% are intending to install individual LPG connection in near future. “Once all the women realise the benefit, ease, safety and health aspects of cooking on LPG and the easy finance helps them get their own connection, HPCL will uproot its fixed assets in terms of the community kitchen and move it to the next village for a similar exercise,” explains S. V. Shahni, Executive Director, HPCL. What’s more, rural women who have saved time by using these kitchens utilise in productive activities, better child care, domestic chores and have more leisure time at hand. Encouraged by the success, Ministry of Petroleum has also put together a proposal to open around 80,000 Rasoi Ghars across the country.
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
TSI exposes b school ranking scamsters Mahesh Peri of Career 360 and Premchand Palety of C fore. - For Complete Sting Operation Video Click Here
Pioneer Exposes the fraud called Mahesh Sharma and Mahesh Peri of Career 360 and Barbel Schwertfeger of mba-channel.com
IIPM: An intriguing story of growth and envy
Prof Arindam Chaudhuri of IIPM on MF HUSAIN
IIPM Related Links
IIPM 3-year full-time Integrated (MBA BBA) Programme
IIPM 2-year full time Programme (leading to the award of the MBA degree from IMI)
Exclusive In chat with Society Magazine - Prof. Arindam Chaudhuri
