Rural India accounts for about 50 per cent of India’s GDP and nearly 70 per cent of the country’s population. Since 2000, per capita GDP has grown faster in rural areas than in its urban centers.
The immense potential of the rural market can be realised if marketers understand this market. The huge untapped needs of the rural mass, the growing rural economy, and increasing media penetration and brand awareness make this market extremely attractive to marketers. The size of the rural market itself speaks of its potential. The market has been growing at three to four per cent per annum, adding one million new consumers every year.
Rural incomes are growing and consumers are buying discretionary goods and lifestyle products, including mobile phones, television sets and two-wheelers. Intensified competition in urban markets increases costs and reduces market share. The rural markets are therefore increasingly attractive in relation to urban markets. The automobile market brings this out clearly. Rajdoot motorcycles, Bajaj scooters find ready acceptance in rural markets as compared to urban markets where there is a proliferation of brands.
Unfortunately, there exists only the ‘practice’ of rural marketing and very few instances of understanding the rural ‘mindset’. Assumptions, generalisations and stereotypes replace insights and the extra effort needed to ‘think rural’. A starting point to making our understanding more ‘real’ is by breaking a few myths around rural consumers.
‘Deal with their challenges’ is the new mantra for brands that are targeting rural India. CSR and local issues are the best way to project a brand’s image in front of the rural audience. If brands want to inculcate loyalty among the rural population, offering a helping hand to deal with problems is their best bet.
Rural communication depends on two major factors – creating awareness and generating trials. The key to success to an effective rural marketing is that it should be firmly grounded in rural traditions, perspectives, mentality and values. It requires complete focus on local language, culture, customs and modes of communication. The price and discounts are not the sole parameters which drive purchase. The rural customer is increasingly becoming brand conscious. The marketers will benefit if they can make rural customers feel that they value them as customers.
Rural marketing isn’t going to create a dent in the marketer’s pocket. Conventionally, it looks like since the rural consumers are dispersed, reaching them is going to costly but case studies have shown that it takes 1/6th of the monthly advertising budget to do a quarterly campaign in any rural market, though results should be only expected post the quarter and investment has to be annual. We need to keep in mind that if you embed the rural markets, your reciprocation will also be long-term.
Since large parts of rural India are inaccessible to conventional advertising media, building awareness is another challenge. Hindustan Unilever relies heavily on its own company-organised media. Godrej Consumer Products, which is trying to push its soap brands into the interior areas, uses radio to reach the local people in their language. Coca-Cola uses a combination of TV, cinema and on-ground activation. LG Electronics uses vans and road shows. Philips India uses wall writing and radio advertising to drive its growth in rural areas.
Even today, a lot of corporate are very conservative in nature in making a foray in rural marketing. The primary reason being having limited operations and having not generated the profit needed to create economies of scale. Though there can be a lot of learning, which can be taken from the experience of the rural masters, the new entrants will need to make an extra effort to create a differentiated position for themselves in the rural marketplace.
Consumer preferences in rural markets have shown a paradigm shift over the last few years. Their consumption basket looks very similar to that of urban counterparts. Premium products are replacing basic versions and brands are making their presence felt. It’s time that rural marketing gets its due share in the pie of the advertising budget of any brand.
Gone were the days when a rural consumer had to go to a nearby town or city to buy a branded product. The growing power of the rural consumer is an opportunity for us to flock to the rural markets. At the same time, they also throw up major challenges. Gandhiji believed that India's future lay in her villages. It goes without saying that brands that can bring innovations in the marketing mix with rural markets in mind will take away the fortune at the bottom of the pyramid.
The author is President and Head, Mudra Max