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New hope: FMCG companies revive rural focus

19-July-2004
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New hope: FMCG companies revive rural focus

Even as the Budget put a key thrust on rural development and agriculture, major FMCG companies are now sharpening their marketing tools to woo the rural audience. With the result, leading advertising agencies are now planning to beef up the operations of their rural marketing wings to chart out fresh rural communication plans.

For instance, Godrej Consumer Goods Ltd is planning to design special plans to target rural consumers across the country. Says Godrej Consumer Goods Ltd executive director HK Press: “We’ll increase our focus on rural markets in all aspects of sales and marketing activities. Also, we will lay emphasis on the distribution and communication strategy in the rural markets.”

After the Finance Minster’s recent announcement, most FMCG companies will chalk out plans to woo the rural masses but the benefits will come much later. “As the Union Budget is a positive Budget, it’ll put more disposable money in the Indian consumers’ pockets. And this will encourage them to buy our products in the rural belts,” he adds.

Sharing similar views, Procter & Gamble executive director Ashok Chhabra says the Union Budget has announced steps to improve the lives of the rural poor in India. “Rural investment in the agricultural sector, which constitutes 70 per cent of India’s population, will not only improve the quality of life of villagers but also increase their purchasing power, which in turn will drive overall economic growth in the country,” he adds.

As a direct fall-out of the Union Budget, many advertisers will hike their adspends to connect with the rural masses in the next few months, comments a leading advertising professional in Mumbai. Endorsing this view, says Lintas’ Integrated Marketing Action Group president Ashish Bhasin: “I do believe that the total spends in rural communications will go up significantly in the years to come. This is not only because of the focus brought in by the Budget onto the rural areas, but also because of the fact that the entire rural economy is expected to do better in the years to come.”

On the impact of the Finance Minister’s pro-farmer Budget, Ogilvy Outreach Communications Network country manager Dalveer Singh opines that a Budget with thrust on rural development and infrastructure impacts the rich and affluent farmers immediately but takes long to really benefit one and all.

In sharp contrast to others’ views on the impact of the Union Budget, says Mr Singh: “Any developmental initiative always takes long if it is to do with the rural masses. A good monsoon impacts the rural rich as well as poor immediately and brings prosperity to one and all in the hinterlands. I don’t think the Budget will really change marketing strategies of FMCG companies targeting the rural masses.”

At present, Ogilvy Outreach’s key clients include, HLL, ITC, Kodak, Eveready and Castrol, among others.

Hindustan Lever Ltd, the largest advertiser in the Indian FMCG sector, has progressively strengthened its distribution reach in rural India, which today has about 33 lakh outlets, according to a spokesperson from HLL. “Since 2001, HLL is implementing Project Shakti, whereby women from self-help groups are made direct-to-home distributors of HLL. Our vision for Project Shakti is to scale it up across the country, creating about 25,000 Shakti entrepreneurs, covering 1,00,000 villages, and touching the lives of 100 million rural consumers,” he adds.

At present, HLL has about 6,000 sub-stockists and its distribution network, as of now, directly covers about 50,000 villages, reaching about 250 million consumers. Also, the company simultaneously uses the wholesale channel to reach its products in rural India.

In the final analysis, says an FMCG sector analyst: “Competition will soon hot up in the Indian rural market as major players are chalking out fresh marketing plans to push their brands.”

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