Posts Tagged ‘Rural India’
India is one of the most challenging markets in the world which fooled big marketers and companies across the world. We have over 1500 Gods segmented into 350 broad categories, and we have a God for every single day of the week. There are 9.5 lakh pan shops, 638,667 number of villages, 612 districts, and 28 states in India. This is the country where you see a pan shop and Haagen Daz together, and a bullock cart and a Mercedes in the traffic jams. Indian market is very challenging and it really fascinates me as a marketer.A very large part of Indian population still lives in villages defining the Rural India.
Rural India is very important for many companies and there is tremendous increase in investments and strategies surrounding the rural markets. Rural India Market buys:
- 45% of all soft drinks
- 50% of motorcycles, TVs, cigarettes, washing soap, fans, blades, and a lot others.
Rural Market Opportunities
Few of the companies that are going bullish in the rural markets:
- HUL with its Project Shakti has already has a reach of 1.7 lakh villages, and aspires to reach 5 lakh villages by 2020.
- Indian Tobacco Company (ITC) has a lot of penetration in the rural markets and the eChoupals are a big hit in the rural market.
- Airtel is planning to reach around 2 lakh villages.
- Marico with its most famous brand Parachute has a reach of 1 lakh villages.
- Pepsi and Coke, the Cola giants, have a reach of 70,000 villages.
- Dabur, known for its Lal Dant Manjan and Hajmola, has a reach of 60,000 villages.
- Colgate with its Operation Jagruthi has a reach of over 60,000 villages.
- Mahindra & Mahindra sells most of its SUVs in the rural market.
Mahindra Shubhlabh is India’s largest exporter of fresh produce. Mahindra Shubhlabh engages with farmers in the production of export quality grapes, pomegranates, and apples aimed at delivering to domestic and international markets. It has a huge R&D facility in Pune to research on various modern seeds and saplings.
- Nokia 1100 with its torch is a very big hit in the rural market. It is a perfect example of understanding the needs of the consumer. Nokia realized the need for a torch in the mobile for the rural people as they walk in the dark streets and fields of the village. Nokia is set to release some low cost phones to tap more from the tier-3 and tier-4 markets.
There are other companies like Godrej, ParleG, Asian Paints, Yes Bank, Royal Enfield, ITC and Revlon.
Delivering to the rural markets is a real challenge to many companies. In fact, the whole dynamics of these markets are so different that you need to look at a different product mix containing the 4A’s instead of the traditional 4P’s of marketing:
Acceptability – Build what the consumer wants
Affordability - Make an affordable product
Availability - Distribution plays a key role in the rural markets
Awareness - Don’t promote the brand, demonstrate the product.
Top Media in Rural Markets
Dainik group is the leading newspaper in the rural markets. In the realm of television, we have the following in the descending order of penetration in the rural markets.
- Doordarshan has a reach of 97% of the rural markets in India.
- Zee Cinema which carries with the image of movies being the favourites of rural people.
- B4u movies
- Discovery Hindi
One of the key trends in the rural markets is people changing very quickly from cable to satellite TV. This is because of the hassle-free dish connection of the satellite TV. Most of the dish TV companies like Tata Sky, BIG TV, and Airtel are selling good in the rural markets too. Similarly, Revlon has come up with a lipstick for the rural markets and it is doing very good as against Lakme. This shows that there is huge potential in these markets and it is interesting to see how these trends will transform the lives of the rural people and in turn impact the Indian markets.
Last Friday, I was travelling back home in an autorickshaw. There are already five persons in the autorickshaw, and quickly a sixth person joined us. As he joins us in the autorickshaw, a Punjabi guy from behind said ‘yeh hey India !’. I felt that this autorickshaw epitomizes the complexity of India and the Indian Consumer quite beautifully.
The Indian Consumer market is a multi-tiered pyramid which requires multi pronged market strategies. India has roughly fifty percent of its population under 27 years of age. We daily hear about new day care centres, international schools, colleges, retail stores, restaurants, automobiles, cellphones, DTH, trends and technologies.
Understanding the ethos
It is true that Consumer India is flourishing, but at the same time Indian Consumer has his roots deep into his traditions. One example is we do love cum arranged marriages, which shows that the Indian Consumer will still give importance to his traditions, and astrology. This is what I call it as The Indian Way. If ten people visit India, they all may understand India in ten different ways. India is a nuclear power nation which doesn’t have proper roads in some places. It is the only country in the world where you can witness a buffalo, and an Audi or Mercedes travelling on the same road.
There are many Indias, as a marketer you have to find your India. Successful marketers came up with different offerings from one rupee packs, to family packs. Each of these will be delivered to different target segments and will need to be delivered using different distribution systems. Indian markets surprised many retail giants, for example when Colgate came with the Gel toothpaste, it primarily looked at the Urban markets and didn’t think about rural markets much. It positioned Colgate Gel as an urbane choice in its advertisements, but on the contrary it became a huge hit in the rural markets. Rural India discovered that the Gel paste came for a longer time and that satisfied the mother’s need for economy.
Local Strategy and Distribution management
Most of the global conglomerates use the same marketing and consumer behaviour axioms that worked for them in the developed world. I feel this is to be naive, because though India is one of the booming economic giants it still has its roots deep into cultures, and traditions. One needs to understand the ethos of your target population. I believe in India one should operate not with global strategies but with local strategies.
One of the challenges in India is the supply-chain management. Many giants failed and faltered because of the lack of understanding and coherence between their products and supply chains. Understanding the distribution life cycle, reverse supply chain is the key to succeed in India. Hindustan Unilever has been very successful in distribution in Indian markets.
Consumer India requires different solutions to different Indias, the key is to find your India and find your local strategy.