Rural marketing in India gets serious with the formation of Rural Marketing Agencies Association of India (RMAAI) in Mumbai today. This is the first ever association of rural marketing specialists.
R V Rajan, founder president from Anugrah Madison said, “ The association has been formed to improve and develop the cause of rural marketing and protect the interests of rural marketing specialists.”
According to Rajan, of the Rs 11,000 crore ad spends in 2004, a meagre Rs 500 crore was allotted to rural ad spends. This is in complete contrast to the revenues that major companies earn from the rural sector.
For example, more than half of the annual sales of Rs 11,700 crore of the FMCG giant Hindustan Lever comes from the rural market. Likewise, companies from the consumer durables and even telecom sector report increased earnings from the rural sector.
But the spends do not commensurate the earnings and hence the need for an organised effort in this direction, added Rajan.
The association is a mix of rural marketing divisions from ad agencies such as Ogilvy & Mather, Lintas and Madison on the one hand and rural marketing specialists such as MART, Impact Communications and Rural Relations on the other.
Rajan gave an idea of the association’s activities that would include developing benchmarks to measure return on investment on rural ad spends and marketing effectiveness.
Also, the association plans to undertake syndicated research in the field of rural marketing that will help advertisers understand their rural consumers better.
There are also academic offerings from the newly formed group to management institutes to conduct specialised courses in this emerging area of marketing.
The Indian rural market is pegged at Rs 125,000 crore annually, of which Rs 50,000 crore is the share of FMCGs followed by consumer durables which has a market size of Rs 40,000 crore.
RMAAI will kick off its first year with a rural marketing conference that is scheduled to take place between November 10 and 11, 2005.