Sources of Consumer Finance
• Traders: The predominant agencies that are involved in consumer finance are traders. They include sales finance companies, hire purchase and other such financial institutions.
• Commercial Banks: Commercial Banks provide finance for consumer durables. Banks lend large sum of money at wholesale rate to commercial or sales finance companies, hire purchase concerns and other such finance companies. Banks also provide consumers personal loans meant for purchasing consumer durable goods.
• Credit Card Institutions: These institutions arrange for credit purchase of consumer goods through respective banks which issue the credit cards. The credit card system enables a person to buy credit card services on credit. On presentation of credit card by the buyer, the seller prepares 3 copies of the sales voucher, one for seller, bank/credit card company and 3rd for the buyer. The seller forwards a copy to the bank for collection. The seller‘s bank forwards company. The bank debits theThe amountbuyer to receives monthly statement from the card issuing bank or company and the amount is to be paid within a period of 20 to 45 days without any additional charges.
(NBFC‘s):Non-bankingFinancial companies constitute an important source of consumer finance. Consumer finance companies also known as small loan companies or personal finance companies are non-saving institutions whose prime assets constitute sale finance receivables, personal cash loans, short and medium term receivables. These companies charge substantially higher rate of interest than the market rates.
• Credit Unions: A credit union is an association of people who agree to save their money together and in turn provide loans to each other at a relatively lower rate of interest. These are caller co-operative credit societies. They are nonprofit deposit taking and low cost credit institutions.
• Consumers financing covers a wide range of products such as cars, Televisions, washing machines, refrigerators, Air conditioners, computers etc. The products covered possess some distinct feature such as durability, sustainability, salability and serviceability etc.
The CEO would need to articulate a strong commitment to rural marketing, only then will the marketing team give its focused attention and sustained support to this growing market segment.
HUL has already created a separate rural vertical with a team of RSMs, ASMs, SOs and RSPs committed exclusively to servicing the rural market. Rural has been given separate
sales targets and the company is in the process of allocating separate sales promotion and advertising budgets for this market.
Retail and IT models
IT and connectivity impact the way business is done. Today with STD facility, the retailer can dial the town distributor instantly and fresh stocks would reach him in just a couple of days, because of better road connectivity.
Benefits of IT Driven business strategy
Ease of access
Layout, design, consistent themes Easy navigation
Access through multiple media
Higher use of non-textual information Multiple languages
Lower transaction cost.
• As the rural market is already bigger than its urban counterpart, there is need to develop a good understanding about it among corporate managers. For this to happen rural marketing should be taught as a subject in every business school.