Generic Rural Marketing
The Fortune at
the Bottom of the Pyramid
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Introduction:
Most
Marketers realise that India is on a cusp of momentous change. The economy is
vibrant, incomes are rising; and the habits, preferences and attitudes are
changing rapidly. But nowhere is this more evident than in rural India.
Literature Review:
There
are primarily three challenges that a rural marketer must overcome. The first
and foremost is the challenge of Reach- Rural India is small and scattered,
making them inaccessible or unviable,
sometimes both in unison. The second in line is consumer’s awareness. The
challenge doesn’t rest on the fact of awareness of the brand but it is the mode
of communication done to spread the right message. The third and by far the
biggest challenge in Rural Marketing is that of influence. The influence stated
is towards consumption and buying behaviour.
Research and Opinion:
Rural
consumers are fundamentally different from their urban counterparts and
different rural geographies display considerably heterogeneity, calling for
rural specific and region-specific strategies. In urban context it’s the
individual’s independent purchase decision call whereas in rural context
because of strong social structures, including caste considerations and low
literacy levels, community decision-making is quite common.
The
new influencers in 20th century arrived are liberalization and
global connectivity through media telecommunications, the information age and
increased education.
To
achieve success in the new market available in rural India, companies will need
to establish rural market- development programmes by innovating and adapting
products to suit rural operating conditions and by educating rural consumers
about new concepts relevant to the environment and usage habits that will
improve their quality of life. Rural Market distribution channel is a chained
distribution channel to reach the masses. The channel always doesn’t stop at 4
or 5 level and might dig deeper to 7 to 9 levels. Rural Market lacks a key
influencer in terms of information providence. To some extent mass media might
serve the purpose of achieving awareness and interest but for creating
conviction the consumer must have a face to face interactive communication medium.
The best identified mediums are face to face ‘below the line’ touch, feel and
talk modes at haats, melas, puppetry, jatras and mandis.
To
succeed in the rural market, companies will need to adapt from 4P’s of
marketing to 4A’s in their strategy
Awareness,
Acceptability, Availability and Affordability
In
the coming years, companies should not fight for a share of the limited rural
pie. They must join hands with the government to increase the size of the pie
by creating economic activity in villages through micro enterprises and
mainstream by linking them to large industries. The efforts create the much
needed affluence, resulting in greater purchasing power in our villages and
lead to greater demand for corporate products.
To
claim a larger share of the growing rural pie will call for a radical shift in
management thinking: from gross margins to high profit, from high value unit
sales to a game of high volumes and capital efficiency, and from the one
solution fits all mentality to market innovations. We also need to understand
that different companies might have different meaning attached to the word
‘rural’. LG electronics defines all cities except seven to rural/semi-urban
areas. A small innovation like Cavinkare’s chik shampoo became a huge success
in rural India. This shows the idiosyncrasies of the rural market as it was
believed that Shampoo is not at all used by the rural consumer.
It’s
just not innovation but also right strategic understanding of the sentiments
and cultural attachments inducted in rural areas that is also important.
Henko
failed in Maharashtra. Why? It sound like "Hey Nako" which means No,
giving the brand a negative connotation in Marathi. Dabur's health tooth powder
containing Tulsi failed. Why? Tooth powder meant spitting the tulsi out which
was considered sacrilege in the rural areas.
Conclusion:
It’s
quite surprising and shocking as well that many organisations and companies
haven’t realised the full potential of rural markets. In India, Companies are
still concentrating on middle income households. 75 % of our population
currently resides in around 6 lakh villages. Rural markets comprises of around
15 crore households. Spending of a rural consumer on education to health varies
considerably from urban areas. Managers tend to differentiate urban and rural
markets only based on purchasing power which is a recipe for disaster. Income
of a rural household is grossly seasonal and highly unreliable. Rural markets also
suffer from a lacklustre infrastructure i.e. electricity and roads. The
problems are inherent in a rural distribution system. This shoots up the cost
of selling a product in rural areas. Therefore, promotional cost in rural areas
is the biggest challenge for rural marketers. There is also a difference in the
social and cultural behaviour of rural and urban people. Consumers have
different tastes and preferences based on the socio and cultural factors
prevalent in those areas. Rural customers also take a longer time in getting
influenced by a particular brand because of a conservative outlook. Companies
have to be patient with their brands when catering to the rural market.
Any
company that understands the needs of a rural consumer and tries to come up
with innovative products that can provide value for money will be able to
penetrate the rural markets effectively. Products have to be made specifically
for rural areas. In the past, Companies have tried to force products which
became successful in urban India to rural India but this strategy has quite
clearly failed. Success of brands like Cavinkare illustrate that the rural
consumer is not averse to changes.
Contributed by:
Saahil Sharma and
Manisha Nair,
PGDM (2013-15), Goa
Institute of Management
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