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Pitch Exclusive: Have we cracked the rural puzzle?

23-June-2011
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Pitch Exclusive: Have we cracked the rural puzzle?

“There’s too much of lip-service”
Amit Tiwari, GM, Country Head Media, Philips India
The most important thing today is to understand and differentiate the psyche of consumers in rural and urban market, which most of the people here have not been able to crack. The need today is to understand their particular requirements and then accordingly shift your marketing strategy.

If you got a decent penetration level, it gives you an aura, which helps sales to happen. There has been lots of talking in front of camera, but not in terms of actual implementation. After the saturation of urban market, marketers think that rural market has become the base for everything. But that would not work. Because, you have each market with very unique requirements, the product requirement also varies depending on geographical existence of the market.

“It’s a fallacy to think that rural is cheap”
Hemant Malik, COO, Trade Marketing and Distribution, ITC FMCG
I think the challenge is about ‘reaching’ to rural areas. May be your communication can reach out to rural consumers through mass media, but how do you make sure that your product reaches them? Shopkeepers’ ability to invest in a range is limited in rural areas and hence they can’t keep all products. Big Bazaar can place 25 types of biscuits, but a rural kirana shop can’t place much numbers. Therefore, what model one can create to reach rural market comes at a cost.

Keeping in mind the different needs of the rural market, marketers today have to be ready with different solutions at different price points. But for me, it’s not that lower price is for rural. Rural is cheap and urban is rich is not correct.

“Many brands haven’t prioritised rural yet”
Nadia Chauhan, Joint MD & CMO, Parle Agro
Many brands have not prioritised rural yet. Keeping in mind the Indian geography, it is important for brands to have a proper distributional channel with products customised for that market, such as Frooti in 2.50 ltr packs. Lack of good roads and logistics are big obstacles. Once that is in place, we will be able to crack the rural puzzle.

 

“Rural needs a bottoms up approach”
Anisha Motwani, CMO, Max New York Life Insurance
The rural market is segmented and spread out. A marketer needs a bottoms up approach rather than top down in these markets. Also, one needs to think at micro level while planning for rural markets.


  

“Rural is a game of distribution”
Sameer Suneja, Managing Director, Perfetti Van Melle India
Rural marketing has a long way to go. The rural market is exploding no doubt about that; yet it is more of a distribution game than an overall marketing game. I don’t think there is enough work being done specifically on rural marketing. Also, because it is quite complicated to reach from a logistic point of view.

 

 “Rural consumers too are wealthy”
Ajay Kakar, CMO, Financial Services, Aditya Birla Group
Rural marketing in itself is different marketing. TV has brought the whole world to the doorsteps of people even in the remotest areas. So consumers in rural India today are no more traditional farmers. They have got wealth and they are also evolving as demanding consumers. So, we should not look rural as ‘gaya gujra’. We should not look at rural marketing as charity to people living in villages, but it is a real business opportunity for marketers today.
 

“We don’t know Bharat well”
Milind Bade, GM, Marketing, Bajaj Auto
Most of us (marketers) today have a good understanding of India, but we don’t have a good understanding or knowledge of Bharat. FMCG brands are somewhere on this road, but the rest of the marketers are still on the learning curve. Most of the brands are trying to work on the reach factor, but I don’t think there are any specific products for rural markets outside of FMCG.
 

Our Take
With nearly 15 crore households and three times more population than its urban counterpart, rural India may seem to be a goldmine of opportunities for marketers.

According to ASSOCHAM, rural demand for FMCG products is expected to grow by 50 per cent as against 25 per cent in urban markets by 2012. Soaps, detergents, cold drinks, consumer durables, toothpastes, batteries, biscuits, namkeens, mosquito repellants, refined oil, and hair oil rule the roost. This is the result of surging income levels and proliferation of media. Some companies that are going bullish about rural markets within FMCG include HUL, ITC, Dabur, Godrej, Britannia and Marico, among others. Of late, telecom, retail and automobile are experiencing greater penetration owing to rise in consumption patterns fueling demands and margins for marketers.

However, it is certainly not easy to enter the market and capture sizeable chunk of it without proper distribution network and distinct marketing strategies.

Bottlenecks such as lack of infrastructural facilities, organised retail and extremely fragmented buying potential, cripple marketers in reaching out to rural India. Marketers thus need to understand and differentiate between the consumer psyches of rural consumers vis-à-vis urban ones, and plan accordingly. The need is to customise and innovate; for instance, Nokia 1100 with a torch was a big hit. Though rural is evolving, marketers will take time to crack the rural puzzle.

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