RMAI Conclave 2015: Building the village, to build market share

"Rural is not a large homogenous mass of popular presumptions, one size doesn’t fit all," said Gurpreet Wasi, principal consultant, IMRB, speaking at the Rural Marketing Association of India’s (RMAI) 2015 conclave on the theme 'Navigating Future’. The two-day event kicked off on 8 May in New Delhi. 

 

Sharing research findings from a STAR 2015 study (Small Town and Rural), she touched upon the subject of engaging rural consumers at haats and melas. While marketers assert that this remains one of the easiest ways to tap rural consumers, almost half the people IMRB met for the survey had never visited one, revealed Wasi. “This means that the traditional approach of targeting rural during a haat or mela is not enough,” she said.

 

In the course of her presentation, she referred to 'India' and 'Bharat' being the same, another popular takeout of the STAR study, with villages becoming larger towns. This is aided by per capita income in rural India growing faster than it is in urban India, she reiterated. However, product penetration remains low, offering scope for marketers.

 

She offered some pointers for marketers to tap into rural markets, among which was the need to focus on community as a pivot for rural consumers. Wasi advocated financial inclusion, which would give them power to spend more; and a bottom-up process of building a village to build market share.

 

Concurring with Wasi’s thoughts on how rural is not one homogenous unit, Alpana Parida, president, DY Works, said that there are fundamental differences between urban and rural consumer, which if not identified, marketers will copy-paste urban marketing strategies in the hinterland.

 

“Rural market is not an urban market with a time lag. Drivers and behaviour are different. Motivations and aspirations are different,” she said. The speaker noted that the post-harvest season is when these consumers preferred to spend, living frugally through the rest of the year.

 

"Chinese goods have entered rural market in a big way. Rural needs innovation and products that are specific to them. Understanding the evolving rural consumer needs deep insight of their belief system. Magic price point is the great rural strategy,” she surmised through her presentation. 

 

George Angelo, executive director - sales, Dabur India, revealed how the FMCG player addressed the rural opportunity. He noted that 45 per cent of Dabur’s sales comes from rural markets, while the industry average is 34 per cent.

 

The key drivers for growth, according to Angelo, include increasing brand awareness and upgrading the rural consumer, rural income and improving road connectivity.

 

He, however, also highlighted the challenges of rural landscape that a marketer faces. The first one being many India’s residing within one India. “Rural is 2x more expensive when it comes to marketing cost when compared to urban market. You need to be sensible to define per capita sales from the market, and work backwards from there. Other challenges include the adoption of categories or converting user from using one brand to another, and moving consumers from using unbranded products to branded products,” he said.

 

On Dabur’s strategy that worked for the rural market, he said, “We classified developed and underdeveloped terrains out of 640 districts, chose 10 States that represented 72 per cent of FMCG rural potential in country; focussed on 312 priority districts and deployed field resources based at the village level.” 

 

This coverage was supplemented with brand activation and partnering with organisations to scale footprint in rural markets, and use of technology to expand reach in rural markets where 63 per cent of population is below 30 years and 50 per cent is below 25 years.

 

He added, “The various communication mediums have varying degree of low penetration in rural markets and hence, activation is the key to establishing brand.” He cited the example Dabur Lal Tel’s ‘Samajhdar Ma, Samajhdar Baccha’ campaign.

 

Angelo advised the marketers who wish to tap into the rural segment to define rural market, field resourcing depending on volatility of demand, understand the consumer, market to increase the level of category awareness, innovate, and price the product effectively.