It has always been a challenge for marketers to understand their rural consumers as most products are usually marketed keeping in mind the aspirations of the urban audience. But today, there is a huge change in the rural consumer behaviour and marketers need to understand this change in order to reach out to them effectively.
Keeping in mind, the challenges of this market, recently, a comprehensive study titled ‘RSCAPE’ was launched in collaboration with IIM-Ahmedabad, MaRs, Decision Point and the Geometry Global Encompass to help marketers target their rural audience effectively.
We caught up with PK Sinha, Professor, Marketing IIM-Ahmedabad, who shared the challenges of rural marketing, reasons why brands have not been able to crack the rural market, importance of pricing and more...
What are the current challenges of rural marketing?
There is a need to look at rural in a different manner which we are not doing. Brands usually say- ‘let’s have a rural strategy’ and they end up having the same plan for both the rural and the urban market. It is like a dark continent out there, which needs to be changed. The reason being, people are changing and they are changing in their own way, which is not similar to the urban audience. It is quite possible that when you look at them, they may look similar, because they may also be wearing the same clothes as we wear, but internally there is some big change taking place. Also more than the change, one needs to understand what factors are driving these changes.
Secondly, rural is not monolith. There is a large chunk of the market out there and the only problem we have is to reach the market. But many companies have actually been able to solve this problem as well. So if they have to grow now, how will they do it is the question which comes here. Distribution and advertising is not going to be a major driver of growth. Therefore, they need to understand the market and not the consumers alone. There is a need for brands to be more consumer-centric than being just market focussed.
Why are marketers finding it difficult to crack the rural marketing code?
If it is a distribution game, I don’t even have to go into the market. With the help of my distributor, I can take my product to my customers. So as long as your product is reaching the customers, advertising is creating awareness; people will come and buy your product. But the challenge which comes now is- how do I get more sales from the same store, or how do I sell more to the same customer whom I have been selling?
Brands need to immerse in the market to understand what actually drives consumption and not take a looking glass view which they have been doing till now, which is purely urban.
Where are MNCs getting it wrong?
First of all, let’s not get into the whole MNC Vs Indian companies debate. Consumers don’t differentiate between an MNC and a local brand, what they look for is value. Value here doesn’t mean cheap, it means if it caters to my need. So whether it is an MNC or an established brand, new or old, it doesn’t make much of a difference.
Which marketing medium works better for the rural market?
Advertising creates awareness and it creates curiosity, but the final decision is not based on advertising. There are so many other factors which actually influence a purchasing decision, like‘opinion leaders’. For that matter, very interestingly, we are finding that even the concept of opinion leader is changing. Who is an ‘opinion leader’ is a new find for us.
The access of mobile/not just smartphones has also changed the whole communication process in the rural market. The whole notion of darkness of media needs to be redefined. It is no longer TV which is the real medium there. There is no one channel which makes people decide, there are multiple channels through which information is collected.
With everything going digital, what is the scope for marketers to use digital for rural marketing?
If you are talking about internet, then it is actually a very minuscule part, not only in rural, but also in urban areas. The plain mobile phones, not the smart phones are also digital. It has huge penetration, one may not be sharing a WhatsApp message, but one can surely share a message. One of the interesting data is, by 2020 out of all the smartphone users which we will have, 30% will be from rural. Also with the cost of the smartphones getting cheaper, rural market is going to adopt smartphones at a faster pace.
Any particular marketing trend which we can expect from this market?
We can tell you the triggers but not the trends; the rural consumers are changing at a pace, which you can’t even imagine. The consumer behaviour has changed significantly in the last 10 years, due to better education, more money flowing in, improved access to roadways and greater penetration of smart phones. We all know that the rural market is different from the urban market, but one needs to mainly understand what the difference is in order to target the right audience. Marketers need to understand the aspirations of consumers and then build products accordingly. Today, what is happening is that they are making products keeping in mind the urban consumers, and then sell it at a point which is affordable and that is how most of the market has happened in rural India. But in future, businesses can’t grow in this way.
How important is pricing and packaging for the rural consumers?
Pricing will continue to be important. Even the urban audience is equally concerned about pricing. But the notion of pricing is something which one needs to understand. The problem is; if there are 5 brands in the market with the same pricing, how to choose from it. So far what happened is, a lot of brands were able to penetrate faster and therefore, their products were available. But now, if there are multiple brands available at the same price point then how to choose from it? In urban India, that is how people make choices. But for the rural market you have a very small set of brands, and in future, the brand which is able to talk to consumers and be relevant to them, will only stand out.