rural-ps of marketing and a s to

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THE RURAL PS

emotionalcheap

What motivates us to buy any product? Is it fear of the dire consequences that we mightface if I dont have the product? Is it the emotional connect with the brand that makes me

buy the brand? Is it the guilt that if we dont buy the product, we might not do justice to thepeople we love? Or is it the greed for the feeling of pride that will overwhelm me after wepossess the product? But, do all these emotional triggers take a back seat and only play apassive role when I talk of rural consumers? But again, all rural consumers are notmisers. They all are not looking for the cheapest product; they are probably looking for themost value for money. It is not about a cheap buy, but a smart buy.There is more to rural marketing than just offering LUPs ( Low Unit Packagings ), reducinga products price or making an inferior product and dubbing the national advertisement invernacular. It might rather do more harm than good. It is very important to understand thepsyche of the rural consumer and modify the marketing mix so as to be fit to cater to therural demographics. Let us have a look at some of the companies, which, made the efforts

to understand a rural consumer, customized the offerings and revolutionized the ruralmarketing mix.

1)PACKAGINGThere are two reasons why a rural consumer prefers LUPs.a. Since they do not have a big dwelling place, they might not have place for storage.b. Many of them earn their wages daily so they cant spend in bulk.Let us look at some instances where some of the companies have taken up a strategicmove to introduce LUPs in the market.

HUL - Under operation Bharat, they introduced sachets of clinic plus, ponds, close upand fairness cream to make sachet buying a habit for these consumers. Seeing that therural retailers sell the cut lifebuoy cakes to the consumers, it came up with 75 gm soapcake and later launched 18 gm lifebuoy soap, priced at Rs. 2.


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Asian paints - It introduced oil paints in 250 ml packaging, to cater to the rural consumersneed to paint the horns of their livestock and to paint their buffaloes for selling.

Colgate - Understanding the paucity of space for rural consumers, it came up with capsfor their toothpaste sachets, to facilitate extended storage while usage of its product.

Rural consumers identify a brand by its logo and package color rather than the letters( attributed to the low literacy levels ). Hence the loud and bright colors on the packaging.

This has, though, not proved a deterrent for the imitation product industry, which hitch-hikes on the years of brand building exercises of the veterans.

Exhibit : Imitation brands in rural markets

2)PRODUCTCatering to 70 crores residents in 6 lakhs villages, where the habits, customs and culturechange every 100 kms is equal to catering to 2 demographically rich countries thousandsof miles apart. Customization of products to suit the requirements of such diverse

demographics, hence becomes logical. Many consumer durables companies have justremoved the value added features from their products and relaunched them in the ruralmarkets. (e.g. Refrigerators without frost free technology, LGs Sampoorna TV). Though,


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changing the product seems to be a time consuming and tedious exercise, it has broughtsome mentionable and fabulous results for the companies who have used consumerinsights to bring in these changes.

HUL - Let us see 2 examples of he forerunner in interpreting and gaining from insightsbringing in changes in its product range to cater to the profit storehouse.

Indias 16% contribution to the world population and 28% to worlds hair shows the lattersrole in accentuating the physical appearance of an individual. Indigence forced the ruralcommunity to use the same soap for hair and skin, since a Rs. 2 shampoo sachetcategorized itself as a luxury item for them. HUL, having taken a cue from this insight,introduced Breeze 2 in 1, a multipurpose soap for hair and skin !The premium positioning of Taj Mahal tea did not prevent them from launching Taj MahalJanata for the rural markets by using chicory and tapioca flour to decrease costs.

Arvind Mills - Being used to get their clothes stitched, the Rs. 300 price tag on areadymade entry level jeans was a major deterrent for the rural youth. None other thanArvind mills executed theinnovative idea of distributing ready to use stitch kits to the rural

tailors, priced at Rs. 195. Arvind mills sold 5 million kits in 2 years !!

Britannia - They launched Probisk biscuits which used soya proteins instead of milkproteins as its ingredient, hence making a biscuit cheaper without altering its nutritioncontent.Hawkins - Unlike in urban areas, the use of coal and wood madethe control on the flameof the burner difficult. To help the rural women avoid hand-burns and facilitate the handingof the pressure cooker, it came up with a new product with 2 long handles on both sides ofthe cooker.

Philips - The rural mindset of Sturdier the product, more powerful it is led to theirMahasangram campaign where they introduced larger and louder radios for ruraldemographics. diverse

3)PLACEComplexities galore in these distinctive, yet blended markets of rural consumerism. A ruralconsumer who takes 2 years to make a watch-buying decision definitely does not believein impulse buying of consumer durables, but timely availability becomes an importantfactor in their buying decisions for consumer goods. The following distribution structureenumerates various touch-points with respect to the rural consumers.Research shows that on an average the daily sales figure of a shady with average 314

outlets are close to a whopping Rs. 2 lakhs per day and that of an individual outlet is Rs.874. These rural supermarkets have the potential to challenge all the worlds K-marts andWal-marts put together in their size and sales !

HUL - Initiated Project Harvest, Project Bharat and Project Shakti (which utilized theconcept of self help groups) to extend their distribution to the villages with a population of2000, 1000 and less than 1000 respectively. Each state has one or two Carrying andForwarding Agents (C&FAs) who are assisted by Redistribution Stockists (RS), who arealloted a specific area and are responsible for the physical distribution of the products. RS,in the vans provided to them cover the areas allocated to them called Indirect Coverage(IDC). The frequency of the RSs visit to these IDC depends upon the kind of business

these IDCs generate.


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LG- This is a perfect example of a brand which has maintained a premium positioning inthe urban market and still has managed to cater to the rural markets. When LG launchedits Sampoorna TV range, it understood that shops in all the villages wont be profitcenters since a rural consumer usually buys such high-priced items from assemblymarkets or from the markets of nearby towns and cities.There are plethora of examples of co-operative societies ( Amul ), SHGs ( Shakti ), e-

Choupal, distribution in rural financial services, but i willrestrict myself to just touching the periphery of the topic and not dig deeper intothese models.

Exhibit : A village shandy in full bloom

City

Markets

Assembly

Markets

Haats and Shandies

Village Shops

Typically used for very few transactions

Used for purchase of durables, high value

items, agri inputs and farm equipments

Used for weekly purchase of householditems, e.g. soaps, cosmetics etc.(47000 in

number)

Typically used for daily, very low value, low

volume purchases, e.g. kerosene, matchboxetc.

source : Rural Marketing by TP Gopalaswami


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4)PROMOTIONWhen in Rome, be a Roman.ie. When in Rome, speak Roman. To make thePromotions/Advertisements in rural markets successful, we have to connect instantly withthe consumers. We just have to use the local dialect, but the psycho-graphic inclinationsthat a rural consumer has so long been trained to develop should be built upon. Thestrategy of shock-and-awe might not be as successful as a flighting teaser campaign that

sinks in easily. Also, a promotion that establishes an emotional connect will lead to returns,sooner than later.

CavinKare - Appreciating the cost-concern of consumers, it did a pre-launch campaignwhere it went to the village schools and gave a free head-wash to children and thenlaunched its chic brand at a meagre 50 paise per sachet. Consumers, having seen thelive results, liked the value proposition and hoarded the shops !Exhibit : Street plays and promotions by HUL

Exhibit : Non-conventional advertising

HUL - The company has continuously designed innovative promotions to reach the ruralmarkets.

Lifebuoy in its rural contact program called Lifebuoy Swasthya Chetna, where it spreadinformation on how washing hands can keep diseases away, targeted a population of 5crores in 15000 villages.


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HUL employed Health Development Officers and Health Development Assistants whowent to all the villages and educated the community through lectures and communitymeetings.They returned to the villages after 2 months, offered toys, badges and medals to childrenwho had made it a habit to wash hands regularly ( read saved Lifebuoy soap wrappers )and a certificate to the children who had won these badges most often.

2. HUL capitalized on the huge gathering of 70 million odd pilgrims ( read prospectivecustomers ) in kumbh mela - They showed people using an ultra violet wand where germsand dirt resided on their hands and how regular usage of soap can keep their hands clean.

ITC- The promotion done by ITC during its Hero cigarettes brand launch in 1993 isunforgettable. In a campaign extended to 3 days, on the first day a person just went oncycle or a rickshaw saying on a P.A. system Hero aa raha hai. On the 2nd day, anelephant draped in a large Hero logo embossed sheet and carrying a huge cut-out of thehero cigarette packet went through the villages distributing free samples of the product.And finally on the third day, a video van came to the villages playing popular movie songsto attract crowd. The campaign was so successful that the villagers actually started waiting

for an event to happen in those 3 days. It was done in u.p. and bihar in october 1993, andthe sales figure reached 175 million sticks in just a matter of months.There can be many such promotional exercises cited that companies have undertaken tocapture the mind share of a rural consumer. For instance, M&M organized nukkad nataksand used paintings on the well walls, since people gathered there. LIC has used vans andpuppet shows to sell its policies.. Asian paints painted the house of the Sarpanch and thepost office to show that the paint can stand against time and weather. Castrol tried to gainits consumers heart-share with its jaago jaago jug jug jiyo campaign aimed at motivatingthe villagers to get together the issues that bother them when their new brand CRB-pluswas not doing well in the rural markets.

CONCLUSIONCompetence of a corporation makes it stay in the market, its competitiveness makes itreach the rural markets and its Customer orientation helps it be successful there. Also,though the aim seems difficult to accomplish taking the initiative and opening the gates ofinnovation can make a corporation reap the benefits of the large and untappeddemographics of India.

4 A's of rural marketing

Adaptability

AvailabilityAffordabilityAcceptability

1. Commitment from the top management: This must be effective and

management must realize that it is long haul and an investment into thefuture, otherwise RM will not give long term results. He sites HLL and ITCexamples.

2. Getting a dedicated task force: RM requires a dedicated mindset

which many urban oriented MBA's do posses only if they have fire in

their belly to work as hard as possible to win the rurals and make themfeel the necessity to buy the product . Treating nicely , paying such


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employees well and giving them an indication of their career graphs inthe company.

3. Setting Clear Objectives: It is important to clearly define, in the early

stages, the goals for the RM initiative and whether the initiative is atactical effort to achieve increased sales in specific areas during specifictime or build strong equity for the brand in Rural India.

4. Understanding the Mindset of Consumers: Understanding of the

mindset of the rural customer is important for the rural specialist tocome up with a customized plan of action. The Rural market isheterogeneous with traditions and cultures that vary from state to state,even region to region in some cases. Most companies equate theirfindings from studies based on urban India to the rural segment andinitiate a strategy based on this. Experience shows that the attitudes,fears, expectations, aspirations, comprehensions of rural customers toproducts and brands are different from urban customers. Advantages ofsuch research are manifold because they give valuable ideas for new

product development to suit the market - (a case in point a refrigeratorwith a twelve hour battery backup to take care of the power outages inrural areas), or new methods of physically reaching out to rural folks,along with insights into the right communications strategy and delivery(media) strategy

5. Ensuring availability: In most cases, distribution is one of the biggest

nightmares; the task of reaching products to 600,000 plus villages is achallenge. TVC's have raised the aspirations of the rural customer andmakes him demand the product from the local shopkeeper, who thenbuys the required quantity from the nearest feeder, markets that he

visits regularly for his supplies. Hence feeder markets such as towns andvillages having populations of 10,000 to 15,000 initially must be providedfor to start the first steps towards RM

6. Evolving a Comprehensive strategy: A comprehensive strategy

involving multimedia (including mass media, where necessary) hasbetter results as compared to those one-off projects with limited goals.

7. Involve the Region: RM is a highly regional subject, with a company's

regional teams being specialists in their respective regions. Involvingthem from the word go to ensure ownership of the campaign by theregion, and also getting their insights and inputs in the development

implementation of the campaign is essential8. Developing full proof plan implementation: Conducting a pilot

survey in one district of a state to gain insights from it, before a nationalroll out of a rural campaign is not realistic. To get meaningful results,both in terms of impact and sales, the pilot must cover at least as fewdistricts' of the state, if not the whole state. The implementation planmust be as comprehensive as possible to ensure that all the elements tobe checked out are included in the plan. Implementation of any ruralcampaign requires meticulous ground level planning and a thoroughbriefing and training of the field level people before execution. Sufficient

time must be given to the agency to check out all the elements, beforegetting into the field


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9. Provide adequate budget: A decent budget could be spelt out by a

rural specialist, depending on the task and the region. If the budget islimited, it should not be spread thin by trying to look at too manymarkets. If a company feels that it has a bright future in rural markets orwould like to target the rural markets, then it is better to invest today sothat the early mover advantage is gained to reap rich rewards in the

future. But miracles should not be expected overnight, neither shouldhope be lost

10.Evaluating the Results: It should be done time to time to know that

the hardworking being done is in right direction or not.

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