A way towards rural markets

We have all realized by now that India is on the cusp on momentous change. The economy is vibrant, incomes are rising, and the habits, preferences and attitudes are changing rapidly. And it’s not less evident in rural India as well.

There are three major challenges that a rural marketer must overcome.

1. Reach

2. Awareness

3. Influence

Markets in rural India are small and scattered, making them both inaccessible and unviable. However ensuring that your product is available is just the start. Large parts of Rural India remain media dark. Low literacy rate and poor infrastructure add further as limiting factor. But it is important for organizations to understand that it should not let it hamper them even as others overcome it with innovation. Economic and technological progress is making it easier to communicate with a rural audience. The challenge however lies in engaging with the rural population, understand them and develop a communication that connects with them. However the biggest challenge in rural marketing is that of influence. Across product categories, rural penetration and awareness remain low. And the need is not just to reach or communicate but to actually influence consumption and buying behavior. However apart from the above three challenges, some other minor hurdles on the road are:

1. Languages and Dialect: The number of languages and dialects vary from state to state, region to region and probably from district to district.

2. Low per capita income: Even though about 33-35% of GDP is generated in rural areas it is shared by 74% of the population.

3. Prevalence of spurious brands and seasonal demands: For any branded product there are a multitude of ‘local variants’ which are cheaper, and therefore more desirable to the rural segment.

4. Traditional lifestyle: The rural consumer values old customs and traditions. They often do not prefer change.

There have been many innovative projects which have attempted to address these challenges. A few are listed as below:

Marketing to Rural India: Cavinkare (My Favorite)

Multinational companies sold products in big bottles and not in sachets and they sold only from fancy stores. They did not look at the small kirana stores, nor did they look at the rural market. When Chik entered the market, Velvette Shampoo was being marketed aggressively by Godrej. They went to the rural areas of South India where people hardly used shampoo. They showed them how to use it. They did live demonstration on a young boy and asked those assembled to feel and smell his hair.

Next they planned Chik Shampoo-sponsored shows of Rajniknath's films. They also distributed free sachets among the audience after these shows. This worked wonders in rural Tamil Nadu and Andhra Pradesh. After every show, the shampoo sales went up three to four times.

But a scheme became extremely successful -- they exchanged five sachets of any shampoo for a Chik Shampoo sachet, free. Later, they altered the scheme -- started giving one free Chik Shampoo sachet in lieu of five Chik Shampoo sachets only. Soon, consumers started asking for Chik sachets only. The sales went up from Rs 35,000 to Rs 12 lakh (Rs 1.2 million) a month.

Brand Activation by Sangeeta Bhabhi: P&G India

After a two year long push into the hinterland, P&G has come up with a new addition to its marketing strategy in the form of a character called Sangeeta Bhabhi, a dedicated housewife. The personality was conceived to push P&G’s leading brands, Tide and Head & Shoulders as a dual proposition called ‘kamyab jodi’ in rural areas of the country. After much deliberation over the eight to nine categories that P&G operates in, marketers picked the detergent brand Tide and shampoo Head & Shoulders as the focus in this particular rural initiative.

More than 100 villages in central UP were covered as part of the pilot stage of the ‘kamyab jodi’ initiative. The exercise involved teams narrating Sangeeta Bhabhi’s story, an educated married woman, who highlights the benefits of using the two brands. The particular style was used to communicate the value add proposition of the brands. Tide being a value added brand priced higher than the regular brands, the challenge was to communicate it to the target audience on the benefits of using a brand superior in quality.

Through this initiative, P&G is attempting to generate user trials for both SKU pack size as well as satchets. it is understood that after studying the initial response to the pilot programme, the company is planning to roll the initiative further to cover nearly 5,000 villages across the state of UP. Also, to ride on the demand generated from this exercise, P&G is simultaneously beefing up its distribution network to ensure reach and availability of the products. Surely, P&G’s hoping Sangeeta Bhabhi will tide over the competition. And also keep her head firmly over her shoulders.

Reaching rural villages through Project Shakti: Hindustan Lever

In 2001 HLL initiated Project Shakti in Nalgonda district, Andhra Pradesh, to provide microcredit and to train women to become direct-to-home distributors through self-help groups in rural areas. As an extension of this project, HLL set up Internet kiosks— commonly referred to as “iShakti”—in these rural areas to disseminate information in local languages, including material on health education. Today Project Shakti has spread to 15 Indian states, reaching 85,000 villages in 385 districts through 20,000 female entrepreneurs, or “Shakti ammas.” The distribution network formed by these female entrepreneurs could in the future distribute condoms in rural areas. HLL estimates that by 2010 the network will grow to around 100,000 trained women covering 50,000 villages.

A true innovation through e-Choupal: ITC Limited

e-Choupal is an initiative of ITC Limited, to link directly with rural farmers via the Internet for procurement of agricultural and aquaculture products like soybeans, wheat, coffee, and prawns. e-Choupal was conceived to tackle the challenges posed by the unique features of Indian agriculture, characterized by fragmented farms, weak infrastructure and the involvement of numerous intermediaries. The programme involves the installation of computers with Internet access in rural areas of India to offer farmers up-to-date marketing and agricultural information. At the same time ITC Limited has obtained benefits from the programme:

1. elimination of non value added activities

2. differentiated product through identity preserved supply chains

3. value added products traceable to farm practices

4. e-market place for spot transactions and support services to futures exchange

There are presently 6,500 e-Choupals in operation. ITC Limited plans to scale up to 20,000 e-Choupals by 2012 covering 100,000 villages in 15 states, servicing 15 million farmers

Other Rural Marketing initiatives: Dabur, Amul

Some Interesting Siteshttp://cb.hbsp.harvard.edu/cb/product/604016-PDF-ENG

ibef.org/economy/ruralmarket.aspx

etstrategicmarketing.com/smJune-July2/art6_1.htm

Reference: Web Sites: wikipedia, icmrindia.org, rmai.com, echoupal.com, etc

Books: The Rural Marketing Book by Pradeep Kashyap and Siddhartha Raut

Rural Marketing in India by Ruchika Ramakrishnan