Marketers make hay in Rural India

11 May,2012

 

By Ritu Midha

 

There’s no denying the unprecedented push being issued by marketers in getting their brands to reach out to rural cities and towns. Most marketers, who earlier had shied away from reaching out to these markets, are now reviving their interest and want to be a part of the action in the so-called Rural India. Till recently, the interest was not translated into action due to various issues like lack of infrastructure, information and consumers loyalty to a few brands that braved adversities and made inroads into these difficult-to-reach markets. However, things are changing now and, to a large extent, the change can be attributed to information access and the penetration strategy adopted by the mobile networks, which were closely followed by handset marketers.

 

Harish Bijoor
Avinash Oza
Mihir Mody
Mayank Shah

As per Harish Bijoor, CEO, Harish Bijoor Consults, the rural consumer is just getting the taste of experimenting and owning, and hence a larger opportunity lies there. He elucidates: “I would segment the hinterland into urban, rurban and rural. The hunger deepens as you go from urban to rurban to rural. The opportunity for marketers therefore deepens as one penetrates further down this strata.”

 

There are a number of pull factors attracting marketers to these areas; one also shouldn’t ignore the emphasis being laid by the government in improving infrastructure and education levels across the country. Avinash Oza, Director Brand Communications, DDB Mudra Max reflects on this sentiment: “The government’s infrastructure vision of connecting rural with urban through construction of roads and rail network has led to migration, mobile working population, and better education – it has also provided an opportunity for marketers to reach out to rural areas, thereby increasing accessibility across categories. In addition to infrastructure, Doorsanchar Kranti (Telecom Revolution) has bridged the rural-urban divide via satellite cable, and DTH connections.” He, incidentally, believes that it is a crime to call them villagers – they are distant urbanites.

 

Presenting his outlook, Mihir Mody, Founder & CEO, Adwallz, said: “There is awareness and good spending power. Gradually these markets are becoming urban in attitude and awareness, thanks to the medium of television. Marketers, too, are exploring a new world in rural – FMCG and telecom success stories are now attracting other product categories… the sheer numbers are formidable.”

 

Marketers have taken note of this evolution, and there is an increased focus on rural markets across product categories. Mr Krishna Mohan, CEO, Sales, Emami Limited said: “The great rural-urban divide in household consumption patterns has reduced drastically. Bharat is indeed keeping pace with India when it comes to spending on most fast-moving consumer goods. Rural sales contribute more than 40 to 50 per cent of total sales in various categories for Emami. We have increased emphasis on engaging rural consumers. The market is huge with a lot of potential.”

 

Mayank Shah, Group Product Manager, Parle Products too is of the opinion that rural markets are indeed opening up, however there might be a difference in purchase behaviour and consumption pattern. He states: “In case of rural buyers, it is smaller units. Instances and opportunities of buying are less and they buy if the right quality is delivered at the right price.”

 

It is not only the FMCG marketer who is witnessing an increased awareness and demand, but also the durables and electronics sectors. Kamal Nandi, VP – Marketing & Sales, Godrej Appliances explains: “It is not only the towns in these areas which are seeking a metamorphosis, but demand in rural markets too has increased. Though it might still be the entry level products that are being sold there – the aspirations are high, and demand is increasing. For instance, we have seen remarkable growth in sale of single-door refrigerators in these markets.”

 

The consumerism in rural areas is being led by youth who are better connected, informed and travelled than the generation before. As Mr Oza stated: “Youth here are fast adopters, acceptors and can be termed as change agents. To reach households, the route is to bring youth on your side. Marketers can use youth by following ‘learning with livelihood’ model when they plan to penetrate hinterlands.”

 

Another trend that has shown marked improvement is penetration of media in rural areas. This has resulted in more number of consumers who are being exposed to brands and their promises. However, the success of a brand in rural areas, to a very large extent, lies in the retailer’s hands – and it is important for the marketers to win them over. Citing an example, Mr Oza said: “Each retail store has 3-4 shop boards. On my visit to Khandwa in Madhya Pradesh, I came across unique shop boards. One brand – Pariwar tea, even deployed shop boards with retailers’ photographs. This shows that Maslow’s hierarchy pyramid works the opposite in the hinterland.”

 

Beyond being in the good books of retailers, marketers have also realised the importance of educating consumers in these markets. The objective, of course, is to increase awareness levels and thereby consumption. Krishna Mohan stated: “The way forward is to help consumers, especially in the rural areas, to make the switch from loose to branded products or aid new consumption habits, either with novel products or new formats. We have embarked on a project called Swadesh, where Emami through its field staff would cover rural markets directly through dedicated organisation structure for rural operation.” He added: “Communication is another vital factor in ruralIndia. We need to reach out the consumers through innovative ways and create brand recall.”

 

Though a number of theories have been floating around on the scope that rural markets throw up for brands, what is certain is that this is where the action would come from – and obviously more moolah. This would be driven largely by consumers from these belts that are increasingly becoming savvy, have better disposable incomes and are ready to spend. However, at the same time, the consumer is discerning, price conscious and desires to take small steps. The need of the hour is to communicate to him in a right manner and offer him the right product in the right size – win him over by giving the right advice and see your brand grow. But it must be mentioned here that word-of-mouth or buzz marketing is still the key to a making higher purchase decisions. As one jilted consumer might lead to many being drawn away and that’s the last thing a brand might want to confront itself with.

 

Imaging: Rafiq, Photograph: Fotocorp

 

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