Quality alone cannot sustain a product in the market. For any brand to create a success story, it needs to have a strong sales and service support system combined with an aggressive marketing strategy. Despite government efforts in propagating the use of solar energy, it has not yet been commercially rewarding for manufacturers of solar power equipment. So they have now taken up the reins to initiate unique marketing strategies to enhance the use of solar energy.
Sunday, June 12, 2011: Unique strategy
One such innovative marketing strategy is the village level entrepreneur (VLE) model, which is a new concept that manufacturers of solar products are focusing on. This model helps to scale up and market solar products at the grassroots level. Using this model, manufacturers can not only successfully test the market, but can also reduce the costs typically associated with a product launch. These VLEs play a vital role with regard to sales, product promotion, selection, field testing and trials.
In this model, the manufacturers identify distributors and entrepreneurs who are willing to do business in a village or in tier III towns and help them to increase the reach and penetration of solar products. Being an exclusive franchise of original equipment manufacturers (OEMs), these VLEs sell solar products in villages and small towns and earn commissions for every lead that they generate. “This model does not require huge investments and can be started at the micro level. Also, it is a self sustainable system, where a VLE can create more VLEs working under him and generate yet more business,” says Shubhra Mohanka, director, Gautam Polymer Group.
How it works
Under the VLE model, manufacturers offer their entire product range to the VLEs. They also impart technical knowhow and provide sales support backup along with marketing training to these entrepreneurs. The VLEs can then start introducing the products into the market on a trial basis, give demonstrations to potential buyers, and they can even rent out the products to rural buyers.
However, finance can be an obstacle for VLEs who want to start this business. Here, financial institutes like the National Bank for Agriculture and Rural Development (NABARD) come to their rescue. VLEs can approach NABARD and avail the benefit of the capital subsidy-cum-refinance scheme. Under this scheme, the VLEs can get a 30 per cent capital subsidy and a bank loan at 5 per cent interest (per annum) to buy different solar products from the manufacturers. Here too, the manufacturers play a vital role in supporting the VLEs. Backed by the manufacturers who meet the specifications of NABARD (such as a declaration of their total production capacity, listing out its accreditation and approval, past performance and experience, sales and service network, etc), the VLEs can easily avail the scheme. This scheme currently covers solar home lighting systems with PV module capacities ranging from 10 watt peak (Wp) to 200 Wp per unit.
“The VLE model creates a win-win situation for the manufacturers as well as small entreprenuers. Moreover, the end user gets a first hand experience of the product before making the actual investment, while the VLEs get their share of the profits and a sustainable business. The manufacturers, on the other hand, get a good distribution network along with wider penetration for their products,” concludes Shubhra Mohanka.
Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine