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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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Decoding the rural marketppppppppp

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.

Nikhil Sharma, Senior Consultant, MART

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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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) 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.

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

Rural channels of Communication

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

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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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.

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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!