Assessing the Marketing for Rural India

By

Dr. Venkatesh Tamlurkar

Faculty Member
ICFAI School of Marketing Studies
4th Floor, Astral Heights, Road No.1, Banjara Hills
Hyderabad-500 034

Introduction:

In 2005, Hindustan Lever Limited had a contribution of Rs. 5,000 crore from the
rural market that was a whopping 50 percent of its total sales turnover. Another
large corporate house LG Electronics that had a total turnover of Rs. 4500 crore had
a share of 55 percent from the rural and semi-urban market. With such kind of
contribution from the rural India, corporate houses perceived great opportunity in
the rural markets and tapped the countryside to enlarge their market share.

Rural marketing is the much talked about subject for the business establishments –
especially the FMCG and the consumer durable industry. A large number of
companies have made a big headway by focusing themselves on rural markets. It
proved to be an opportunity rather than a problem for the marketers to concentrate
on rural markets and the poor. Many of them who had earlier ignored this segment
due to lot of investment requirements and low returns have again started foraying
into it and targeted the rural masses. They attempted all the feasible approaches to
sell the products to the rural consumers that met their lifestyles and living standards.
Several large companies like HLL, ITC, Coca-Cola, LG, Britannia, Philips, Colgate-
Palmolive etc., penetrated aggressively into the rural markets and spent heavily in
the rural areas. Some of them even invested money to create separate sales and
marketing teams exclusively for rural markets. They also appointed specialist
agencies who could advise them on rural marketing.

But all said and done, how far were the companies successful in offering their
products to the rural consumers? This remains a big question for the management of
these corporate houses. Most of the products purchased by the rural masses were at
times used for some unusual purposes other than what they were basically made or
manufactured for. Like the Godrej hair dye is used by the rural consumers for
applying on their buffaloes to make them look immaculate black before displaying in
the market for sale. Of course, if viewed optimistically, this in one way gave scope
for the companies to market their product in an innovative way and also push up the
sales figures further. But what about the fundamental purpose for which it was
manufactured? There is no correlation between the kind of usage of the product and
the application of the marketer's strategies. It is a disproportionate to the extensive
research that a company usually does before entering a new market or launching a
new product and the outcome it expects. This also gives scope to raise a query to
the marketer whether he had properly assessed his marketing strategies and the
basic requirements of the customers before planning his strategies. The company
needs to analyze this aspect before it proceeds further with dumping the products on
rural consumers and thinks of capturing the rural market in a big way by any means.

The Rural Market Scenario:

The rural markets offered a huge potential to the business houses because of their
enormous spread and rising consumer demands. Around the world, over 4 billion
people survived in rural areas that came to more than 60 percent of the total
population. In India also, the ratio of rural to urban population was slightly higher
than the world's ratio with 70 percent of them living in rural areas. They domiciled in
nearly 6,27,000 villages spread over 3.2 million sq. km. This growing affluence along
with good monsoon and the increased agriculture output, increased the total
disposable income of rural consumers to 58 percent with two-third of middle income
households being in the rural market. About 40 percent of the graduates coming out
of Indian Universities were from rural areas. As they are eager to earn more and live
better, their aspirations are similar to the urban youth. It is predicted by industry
analysts that by 2009 – 10, the urban households are projected to grow by 4 percent
while rural households are expected to grow by 11 percent. If the rural income rose
by 1%, then the buying power would correspondingly increase by about Rs. 10,000
crore. The colour televisions, refrigerators, air-conditioners and microwaves have
become a household sight in villages and small townships that was long thought of
as a luxury and domain of urbanites.

However, rural India had its own set of problems like illiteracy, early childhood
marriages, lack of access to birth control measures, poverty etc., that were
interdependent on each other. There are also large numbers of daily wage earners
and most of the people depended on vagaries of monsoon. Inadequate infrastructure
like non-availability of gas supply, frequent power cuts, improper sanitary conditions,
inaccessible areas were the other common sight of rural areas.

The paradigm shift:

In most of the rural areas in different parts of the country, there is considerable
awareness on various latest products that are available in the market. This has been
possible due to the penetration of cable and satellite channels that have brought
down the world at the finger tips of the common man. The media influenced the
mindset of the rural consumer to such an extent that people who had money started
purchasing the products unmindful of the costs, just to satisfy their needs as well as
their ego. But, the growth of rural market could be attributed to many other reasons
that in one way increased the sales as well as the profits of the companies. Some of
the important causes for the growth of rural markets are –

* The rise in disposable income of the rural families

* The economic boom
* Timely rains
* Rural population involved themselves in business other than agriculture
* Increase white-collar jobs in nearby towns
* Commercialization of agriculture
* Saturation of the urban markets
* Media penetration in rural areas (particularly satellite channels)
* Globalization
* Economic liberalization
* Revolution in the Information Technology
* Women empowerment
* Improving infrastructure

However, there was a significant role of the corporate enterprises simultaneously in

the development of rural market. Their timely intervention into the rural areas, their
appropriate planning, their perception and identification about the growth of rural
markets and the use of marketing strategies all have equally contributed for the
progress of rural markets. Even though corporate houses were hedged with so many
problems in the rural areas, they saw a galore of opportunities in the rural market
and converted all the pessimistic characteristics of the rural market into affirmative
attributes. They satisfied themselves with the availability of limited infrastructure,
saw a sign of prosperity rather than fear during the entry of competitors into the
rural markets, showed excitement at the availability of satellite channels in the rural
households, visualized their cash bells ringing with the increase in purchasing power
of the rural masses that came equivalent to their urban counterparts. They traced a
constant rise in the demand for those products that were once confined mostly to the
urban houses. But, blame it on the kind of awareness created by the companies –
people started using the products for other purposes as seen earlier.

In many villages, one can see today the alternate use of the products other than for
their actual purpose. People in the state of Bihar feed the cattle with Horlicks as a
health drink to fatten them! Similarly, people in Punjab use washing machine not for
washing clothes but to make frothy lassi in huge quantities! Animals are rubbed with
Iodex on their skins to relieve them from muscular pains after a day's hard work.
Paints meant for houses are used on the horns of cattle for easy identification and
theft prevention! The weavers in North India wear condoms on their fingers as
gloves to weave fine threads while its lubrication allows them fine control on threads
and protect their sensitive fingers! If companies felt happy with their increased sales
and profits through this means and thought that they captured the rural markets,
then it is time for them to review their marketing strategies. They should understand
that these results do not coincide with the application of the marketing tools and the
technical expertise that are generally used to satisfy the customers as well as the
company objectives. The implications of 4 Ps of marketing mix or the use of 4 As for
successful rural marketing have produced wrong results.

All companies usually claim that they provide the right product at the right place at
right price with right kind of promotion. Then why was a right product accepted by
the rural consumer used for different purpose? Why did he afford to spend either
much or less on the product that has not derived him the kind of benefit as claimed
by the manufacturer? Why did the place of offer differ than to where and to whom it
actually was supposed to be available? Why the right promotion has created wrong
awareness in the minds of the target customers?

There was something missing in the marketing strategies of the companies while
serving the rural markets. Otherwise, the results should have been more astonishing
where the sales turnover or the balance sheet would have shown much more than
what is presently achieved. Though, only few products were used by the consumers
in this way, that use might be the result of the accidental or wrongful application by
the rural consumers. The marketer's planning about the product and the
communication with the target customers should be perfect that produces the
desired results.
The Marketer's Plan:

If the marketer truly understands the needs of the rural consumers, he should strive
to provide them with those products and services that would meet their
requirements. The marketer has to focus on his core competencies like the
technological expertise to design the products for the rural masses. Companies like
Cavin Care who launched their shampoo in sachets, Britannia who conveniently
packaged its Tiger brand biscuits with low price tag are the best examples of
understanding the rural customer's needs and providing them with the desired
products.

The marketer's basic need is to understand the pulse of the rural masses and serve
them accordingly. The companies need to make proper assessment while marketing
for the rural India. This could most probably happen in one way by changing the
profile of their managers. As most of them are management graduates bred in urban
areas and are taught marketing principles and strategies applicable for the western
countries, there is a mismatch in their thinking and the requirements of the rural
consumers. Hence, hiring professionals who have expertise in rural marketing would
go a long way to improve the situation as they can truly understand the rural
traditions and cultures, understand the feelings of rural people before designing and
actually launching the product. It is very essential for the rural marketer to
understand the psychology of their consumers in terms of their usage habits and
shopping behavior along with their emotions and value systems. The integration of
both technological and managerial knowledge would help them to develop the
various marketing strategies for the rural Indian markets. This will further lead to
technologically superior, robust and low cost products that would be in resemblance
with the Indian tradition and culture.

The marketers may also consider depending more on traditional media when
marketing for rural consumers. This unconventional method acts as an effective way
to create awareness as mass media is unreliable as it is too glamorous and
interpersonal for the rural market. Uses of skits, magic shows, and education by
NGOs are some of the most preferred traditional media which the marketers can
usually use as it goes well with the tastes of the rural consumers.

Conclusion:

The rural India that has lot of money with it definitely offers a great potential for the
companies where the chances of outnumbering the urban areas in all aspects are
very high. But only those companies would survive at these places and win over the
rural consumers who can spend time and money on understanding the needs of
them and come up with innovative ideas.

The companies should also strive to give more focus to the rural market in order to
make it a market leader. This can happen only with the firm commitment of the top
management and extension of full support to the marketing personnel by each and
every department of the organization.