14

December 2009

The Challenges and Opportunities of Marketing in Rural India

By Jagadeesh Krishnamurthy
Marketers in India have been flirting with the idea of rural marketing for some years now. There was a spike in the space in
the early parts of 2009 when budgets were under scrutiny and
marketers wanted to extract the maximum RoI from every campaign. Barring a few long-term campaigns from FMCG and agribased brands, companies have always kept rural marketing as

the second straw in their basket. In an effort to understand what

exactly is rural in India and how its potential can be maximised by brands, EVENTFAQS spoke to a cross-section of rural
marketing veterans at the recently-concluded Rural Immersion
Programme, organised by the Rural Marketing Association of
India (RMAI) in Pune.

Defining the Indian rural market

The definition of the word rural in a market like India is very
amorphous. There are multiple versions of the same idea, which
are followed by different entities. Even in the rural marketing
space, there is not one concrete definition. Different brands
define rural according to their product and service offerings. In
a diverse market like India, which has a population of more than
1.17 billion people (estimate till July 2009), the urban-rural divide
is quite significant. According to various studies, around 12.2
per cent of the worlds population lives in rural India, which also
indicates that 29 per cent of the worlds rural population lives here.
As per the 2001 census, 72.2 per cent of the population lives in about
6,38,000 villages scattered throughout the country. The number of
people living in each of the Indian villages also varies considerably. It
is found that most of the Indian villages have a population of less than
1,000, while there are only a few villages where more than 10,000
people live. With such a widespread array of consumers, marketers
have been finding it difficult to penetrate this vast audience, at
least to the extent that they have managed in the urban markets.

Pradeep Lokhande,
Founder-Director, Rural Relations

If the marketer is focussing on 75,000 villages

(pop. above 2,000), he can cover almost all of
the Indian rural audience.
Defining the rural consumer from a rural marketers perspective,
Pradeep Lokhande, Founder-Director, Rural Relations, said, There
is no consensus among rural marketers to define rural India. It

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December 2009

Decoding the rural marketppppppppp

Nikhil Sharma,
Senior Consultant, MART

Explaining the presence of various opinion leaders for different

categories even in rural markets, Lokhande pointed out that
women, children, the Sarpanch, village elders, teachers, religious
leaders, self-help groups and youth clubs were important
influencers for the rural consumers. In this vast country which
is the cornucopia of several cultures, disparities exist even
among consumers within the same state, but settled in different
regions. Hence, it requires a much more detailed understanding
of the target audience and customisation of the communication
for a rural market as compared to an urban audience, which
can be classified according to a limited number of factors.

In rural India, consumers are not brand-loyal, but

their purchase patterns can be termed as brand
stickiness. So, more brand awareness and
presence in the markets will influence the
purchasers.
differs from company to company, sector to sector. According to
me, a household whose 50 per cent of the income is generated
from agriculture can come under the definition of being rural.
Further defining the parameters for identifying the appropriate
market, he elaborated, For a rural marketer, it is not commercially
viable to reach out to villages that have a population of less
than 2,000 people. Of the 6 lakh-plus villages in India, roughly
only 13 per cent (75,000 villages) of them have a population
above 2,000. Most of the rural audience in the smaller villages
come to shop at a nearby haat or travel to a nearby bigger
village. Hence, if the marketer is focussing on those 75,000
villages, he can cover almost all of the Indian rural audience.
Sharing a similar point of view, Nikhil Sharma, Senior Consultant,
MART, said, According to the data received from Census 2001,
there are hardly any shops in the 2.3 lakh villages. As a medium
of promotion, haats are very relevant for almost all brands since
they provide a medium to engage an average of 4,600 people.
Moreover, 17 per cent of Indian villages account for 50 per cent
of rural population in India and 60 per cent of rural wealth.

Lokhande also observed that rural India has progressed from

the popular perceptions, and owing to public as well as private
options, there is considerable progress in the communities, both
economically and socially. Government schemes like the mid-day
meal scheme and National Rural Employment Guarantee Scheme
(NREGS) have increased the availability of disposable income
among the rural consumers. Moreover, younger generations
are looking at alternative sources of income to supplement
the income generated through agriculture, he elaborated.
Lokhande noted that there was a high disposable income
among select rural consumers owing to the subsidies provided
by the Government, which are not available for the urban
audiences. Highlighting the typical areas of expenditure for
a rural consumer, Sharma said, These days, most of their
money is spent on education, followed by land purchases. A
progressive farmer will aim for a better house. Mobile phones
and motorcycles, which are considered luxuries, come next.
Stressing that the brands were not doing much with regards to
promotions in the rural markets, Sharma pointed that brands
needed to have a sustained marketing plan for rural markets
as opposed to urban markets where irregular campaigns
are sometimes successful. In rural India, consumers are not
brand-loyal, but their purchase patterns can be termed as
brand stickiness. So, more brand awareness and presence

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December 2009

in the markets will influence the purchasers, he explained.

Communicating to rural audiences

Right communication is the key to any successful marketing
campaign. In rural markets, it is especially important to get
the right tone and approach for the communication strategy.
Sharma observed that while activations will help in generating
desire and action, support from other media are also
required for creating awareness and interest about the brand.

through small one-off activations in some corner of the country

and move on, which might yield immediate results but cannot be
replicated when they come back after a couple of years. Similarly,
brand managers also think that if they change the language, the
communication plan will work for rural audiences across the
country. They are sadly mistaken. It has to be customised for
each and every segment of the audience spanning the country,
as the attitude and aptitude of the consumers are different.
Observing that media has not penetrated rural regions well
enough the way it has been in urban areas, Samir Gupte,
Country Head, Ogilvy Action, explained the importance of the
media used for communication. He pointed out that various
parts of the country could be classified into regions that were
media-dark, media-grey and media-live. He said, According to
the IRS, rural Maharashtra has one of the highest media reach,
with 51 per cent of the state covered. States like Bihar, Madhya
Pradesh and Uttar Pradesh only have media coverage of 23 per
cent, 35 per cent and 30 per cent respectively. (Source: IRS)

Emphasising the importance of demonstrations as a key element

for successful marketing campaign, RV Rajan, Chairman,
Anugrah Madison, and Founder-President, Rural Marketing
Association of India (RMAI), pointed out that analogies worked
better for the audience. Customisation is the key for any brand
communication. It cannot be a Vanilla translation of the brand
message; it has to be thought-through, and ensured that the
translation is communicating the right brand message, he said.
Explaining the need for a long-term plan for rural marketing,
Rajan added, Despite, the obvious return on investments from
the rural markets on a long-run, corporates are guilty of giving
the space a step-motherly treatment. Brands do have sustained
marketing campaigns for urban markets. Similarly, it is important
for them to have sustained strategies here as well. However, brand

RV Rajan,
Chairman, Anugrah Madison,
and Founder-President, RMAI

Despite, the obvious return on investments

from the rural markets on a long-run,
corporates are guilty of giving the space
a step-motherly treatment.
managers aim to maximise their contribution to the company

As a brand manager, one has to bear in mind that media

reach is not equal to connect. In addition to this, many
parts of India do not have electricity for major parts of the
day. Therefore, the actual reach of your communication
strategy is actually much lower than the estimated media
reach. Moreover, on-ground rural media is used mainly as a
supplement or a complement to other media, Gupte added.
In such a scenario, Gupte noted that in the absence of
a robust conventional media, anything and everything
that could be used in rural areas to communicate could
be termed as media. Differentiating it as static and
interactive, he defined the rural channels of communication
based on the necessity for a brand during the campaign.

Rural channels of Communication

Highlighting the need for a robust BTL communication

strategy, Rajan noted the need for differential treatment
for urban and rural markets. Along with customising the
communication for them, it is also important for brands to
customise their product offerings. These insights can only be
achieved after qualitative research. Hence, it is important for
a brand as well as the agency to test the communication
plan exhaustively before embarking on a national scale.
Agreeing with Rajan, Gupte also stressed about
the importance of research while deciding on the
communication plan. It is important for any brand to test
the campaign before as well as after it is executed to

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December 2009

Task based selection of media

Samir Gupte,
Country Head, Ogilvy Action
understand and measure the audience consumption patterns.
Sandip Bansal, Country Head, Xpanse Asia, accused marketers of
forgetting the basic marketing principles while investing in rural. He
said, It is a basic marketing principle that one has to understand the
audience before communicating the brand message. Barring a few
organisations that have long-term plans, not many brands actually
invest in understanding who they are communicating their messages
to. They believe that if it works for the urban audience, a similar plan
will work in rural too. This is clearly not the case. Rural marketing is
a high-risk investment which is more sense-led than science-led.
importance of research while deciding on the communication
plan. It is important for any brand to test the campaign
before as well as after it is executed to understand
and
measure
the
audience
consumption
patterns.

It is important for any brand to test the

campaign before as well as after it is executed
to understand and measure the audience
consumption patterns
Sandip Bansal, Country Head, Xpanse Asia, accused marketers of
forgetting the basic marketing principles while investing in rural. He
said, It is a basic marketing principle that one has to understand
the audience before communicating the brand message. Barring
a few organisations that have long-term plans, not many brands
actually invest in understanding who they are communicating their
messages to. They believe that if it works for the urban audience, a
similar plan will work in rural too. This is clearly not the case. Rural
marketing is a high-risk investment which is more sense-led than
science-led.

Promoted as Indias largest agriculture-based show, Kisan was held

from December 14-18 at the International Exhibition Centre, Moshi,
near Bhosari, Pune. In its 17th edition, the exhibition had around 1.25
lakh visitors from several parts of
the country. Targetted at progressive farmers, organisers of the fair were aiming at enabling direct communication channels among farmers
and agri-product developers spread across the country,
through the event as well as an online portal, Kisan.com.
An initiative from the organizers, Kisan Samvaad has
been operating for the past six months to engage farmers across India during the months preceding the event.
Niranjan Deshpande, whose brainchild is the fair, noted that participants had been traveling from distant
parts of the country each year to attend the event. He
said, We have farmers not just from the neighbouring states of Maharashtra, but from other states too.
In fact, last year we had a few farmers coming from
countries like Bangladesh and Pakistan, he added.

field of agriculture. The exhibition also allowed agri-product developers to create mini-fields to showcase the benefits of their produce to the visiting farmers.

Along with the product and service stalls, organisers also

arranged a film festival for farmers, on modern technoloThe exhibition arena is spread over 20 acres of land, with gy in agriculture. Supplementing the film fest was a book
over 200 companies displaying their latest products in the fair.

December 2009

18

Understanding the Indian rural

RV Rajan, Chairman, Anugrah Madison Advertising
Pvt Ltd and founder President, Rural Marketing Association of India, recently
unveiled his autobiography
called Courage My Companion. Chronicling his life
from his childhood to his
peaks as a rural marketing
expert, Rajan talks about
his trials, tribulations and his
passions that kept him going through his journey of
life in this book. He was recently awarded the Lifetime Achievement
Award by RMAI.
Following are excerpts from the books chapter titled - My Life. Rajan describes certain challenges faced while working with clients to
promote their brand in rural markets and the solutions derived therein.
To help develop effective communication packages (for Shaw Wallace), I started travelling extensively in the interiors of Tamil Nadu
and Andhra Pradesh, where Shaw Wallace products were popular.
I accompanied their sales force, meeting farmers and dealers. As
part of the exercise, I spent time at dealer outlets, observing the
purchasing habits of the farmers visiting the shops. I would go into
the fields, shooting pictures of crops at different stages.
I remember a particular visit accompanying the audiovisual (AV)
van in the hill districts of Kodaikanal. The evening came and the
projection team took out the 16 mm projector and positioned it
in such a way that the feature and the promotional films could be
projected on the white wall of a house. The strong breeze that
persisted made it difficult for us to put up the special screen we
had brought with us!
As the time approached, there was a lot of excitement and a large
crowd had gathered. But as the show progressed, I realised that the
audience constituted of 80 per cent children and the remaining
were men and women who were not the target audience of the
products we were trying to promote. Some of the farmers who
were expected had not turned up, as they had gone to sleep after
imbibing the millie (country liquor) after a hard days work in the
field.
The same picture was painted in the other villages where we had
our shows. But the reports from the van crew talked about the success of the shows based on the number of people who attended.
I was appalled and it got me thinking.
Haats or chandies (weekly markets visited by people from 20 to 30
villages nearby) held on the same day, time and venue every week,
was a great opportunity for marketers interested in rural marketing to promote their products. Though a few companies such as

Hindustan Lever, ITC, Brooke Bond and Aspro were already utilising
the haats for their promotional activities, the idea that I came up
with for Shaw Wallace was a magic show to be performed by a
trained magician.
Using magic shows per se was not unique as the cigarette companies were already using the idea to promote their products in
city markets. The difference for Shaw Wallace was in blending the
product story with the magic trick. I also explained to our client
that conducting several shows in a day at the haats not only helped
us reach a focused target audience of farmers but also helped us
reduce the cost per contact.
IMRB had conducted a benchmark study and a post study before
and after the campaign. While the results were encouraging, the
effort also taught us some useful lessons, like not to promote more
than one product at a time and ensure that a company representative accompanied the team to answer farmers doubts.
Later, when I bagged the farm tyre division of MRF and handled its
bullock cart and tractor tyre accounts, I applied the lessons I learnt
to have a slide-and-tape presentation at the weekly haats of the
Uttar Pradesh markets, promoting the bullock cart tyres.
In a typical van journey, operations start from one end of the State
and proceed to the other end without adequate time for the van
crew to rest and recoup or contact their families for days together.
This trend led to frequent disruption in the programme due to illness of the staff or even vehicle breakdowns. In the absence of
STD facilities, the news of a breakdown reached the headquarters
of the company, much later, resulting in a tremendous waste of
resources and time of the executives visiting the van operations
for surprise checks.
I developed a plan under which the whole programme was centred
on a district headquarters or a feeder market town. As soon as the
van reached the town, the crew checked into a hotel and reported
to the leading dealer of the town who was roped in to supervise the
programme. The journey cycle was such that the haats to be visited
were within a 50 to 60 km radius from the town. Every morning, the
van would proceed to the pre-determined site, have the show and
return to the hotel that evening so that the van crew could rest and
recoup. Besides, as they could be located during those ten days, communication between the families was possible.
And if there was any change in programme because of any unexpected development, the lead dealer was kept informed so that if and
when the company executives came for surprise checks they first
checked with the dealer and proceeded straight to the village concerned. The whole process helped in vastly improving the performance of the van crew besides drastically reducing the wastage of time
and resources. Though this kind of journey cycle plan is very popular
these days, at that time (thirty years ago) we were the pioneers. Besides, cellular phone technology today has made a major difference in
communication between the field team and the management!