RURAL MARKETING: ROCKET SCIENCE OR A DESI FORMULA?June 27th, 2012 | Posted by in Articles and Opinions
What makes the dhoti-clad villager—sipping cutting chai on a chaupaal—an indispensable golden opportunity for the corporate giants? Why are suave city-based marketing personals struggling to formulate strategies to woo and tap such villages when they do not even fully understand their language?
The answer lies in the sheer market size of rural India. A 2011 news report in the Financial Express based on a study by Rural Marketing Association of India (RMAI) highlighted that the rural market accounts for over two-thirds of India’s population, 56% of its income and 33% of its savings. Further, rural India equals 12.2% of the global population and is therefore the world’s single largest high-potential market. It accounts for 53% and 59% of FMCG and durables sales in India, respectively. However, the key concern that confronts every marketer today is reaching the scattered landscape of six lakh villages or a population that is thrice as large as urban India.
A hidden opportunity: Haats or rural hypermarkets?
Weekly markets called haats are strategically located to cover a cluster of villages. They have become the epicentre of economic and social exchange in rural India and in doing so, provide a readymade solution to the problem mentioned above. In a report by RMAI, ‘Haats as marketing hubs,’ published in Financial Express in 2011, some interesting facts about rural India’s shopping patterns were revealed. India’s 43,000 haats generate annual sales of Rs 50,000 crore. Almost 98% of villagers regularly visit haats, while 75% of them are estimated to frequent a specific haat each week. Haats cater to anything between 21–57 villages and host footfall ranging between 5,600 to 12,000 visitors a day, depending upon its size. Anywhere between 327 and 545 stalls may be found in a haat. Two-fifths of total attendees are women.
Haats perfectly sync with villagers’ psyche of making a value-for-money purchase out of a variety of offerings. They offer a touch-and-feel experience of products and drive sales by word of mouth. The favourability of these factors for companies, along with brand awareness, low selling overheads, majority cash sales and redistribution opportunity have prompted telecom majors Nokia and Motorola to augment sales through village haats. Tata Shaktee, which offers roof sheets, has witnessed a 25% rise in sales after they devised a pilot project in 100 haats which comprised setting up direct selling stalls. Similarly, Tata Agrico has rural haats to thank for a significant expansion in their market share from 30–40%.
Festive melas and road-shows
The eponymous Kumbh Mela has become a favoured destination for MNC FMCG behemoths like Colgate-Palmolive that distributes free tubes of herbal toothpaste or for Hindustan Lever that markets its Lifebuoy soap. Similarly, Samsung’s road-show for its ‘Dream Home’ campaign constituted trips across 48 small towns in 100 days were aimed at augmenting brand awareness for its electronic offerings.
The road ahead
It’s high time that marketers evolved their notions regarding the emerging rural class in villages. From being aspirants of roti, kapda and makaan, to becoming brand and value conscious buyers, the rural consumer market is seeing sea-change. By communicating with consumers at the venues they frequent, marketers can hope to make their fortunes in markets beyond metros.