Posts Tagged ‘Rural Marketing’
Developing markets such as India are an important source of growth for Unilever. The company is adopting unique marketing approaches to increase consumption of its products in these regions, positioning itself as an ethical brand that benefits wider society.
Unilever’s Lifebuoy ‘Swasthya Chetna’ (‘Health Awakening’) campaign is one example. This educates people on the importance of health and hygiene in preventing diarrhoea and encourages them to adopt a simple hand-washing regime using soap. Swasthya Chetna is India’s largest ever rural health and hygiene education program.
Diarrhoea is the world’s leading preventable cause of death, killing 2.2 million people every year including 600,000 Indian children under the age of five. According to a study by the London School of Tropical Hygiene, washing hands with soap and water can reduce instances of diarrhoea by 47%.
Many potential Lifebuoy customers live in remote, rural areas which can be hard to reach through conventional media. Ogilvy worked with Lifebuoy to create a direct communication campaign specially designed to raise awareness among India’s largely rural and often illiterate population.
Lifebuoy health officers visited 43,000 Indian villages and schools over five years where they used product demonstrations, interactive visuals, competitions and drama workshops to spread the health and hygiene message.
The program is based on the simple insight that ‘visible clean is not actual clean’ which was brought alive through a special ‘Glowgerm’ UV demo. When held under ultra-violet lamps, glowgerm powder glows on hands washed only with water, symbolising germs on those hands, and does not glow on hands washed with soap.
The program has reached 110 million rural Indians since it began in 2002. Awareness of germs has increased by 30% and soap use has increased among 79% of parents and among 93% of children in the areas targeted. Soap consumption has increased by 15%.
The campaign received recognition for its innovation and effectiveness, winning Silver in the Rural Marketing Advertisers Association of India awards in 2006, and the grand prize at the Asian CSR awards 2007. It was also recognized by the Indian government who created a special edition postal cover dedicated to the campaign.
Clinic Plus is the second most sold brand of shampoo in the rural markets after Cavin Kare’s Chik shampoo. The following Clinic Plus advertisement is designed for the Indian Rural Markets. There is an animated character called Chulbuli. The advertisement is partly based on the small girl of the original urban advertisement. We see both the advertisements below
The actual advertisement for the Urban markets having the girl is:
The rural consumer behaviour exhibits certain behaviour unique to rural settings and this makes it important for marketers to understand rural consumers through appropriate research. Rural consumers, for example, tend to lead a more relaxed lifestyle compared to the urban counterparts and exhibit little urgency. Consumers in rural markets tend to have greater trust in products and services endorsed by the government and its agencies. They tend to be more brand loyal, as habits once formed are difficult to change and they tend to feel a pride in getting a good deal rather than paying premium prices for products and services.
The cultural values and norms have a strong influence in determining buying and consumption behaviour in the rural areas. There are restrictions on the type of food and the type of intoxicants that can be consumed in the villages. Similarly, women occupy a more traditional place in rural areas and therefore western apparel may not be accepted in the rural markets. However, the rural youth are open to any new ideas, and influenced by the urban consumption patterns.
Rural communities tend to be closer than urban societies and reference groups have a greater importance. Relatives and people from the same caste are important reference groups. Joint families still exists in villages although the trend is towards the nuclear families. In rural areas, the consumption is driven to a large degree by the occupation and income of the consumers. Low income levels and inadequacy of credit facilities also affect the consumption patterns. Another important factor that affects demand patterns in rural areas is the instability of the income of the farmers, which is linked to the seasonality of agricultural production as well as to the unpredictability of the harvest. Similarly, the landless labourers and daily wage earners get their remuneration on a day-to-day basis and therefore they purchase in smaller quantities of products at a time, mostly on a daily basis.
As compared to the urban counterparts, the rural consumers have different interpretations of colors, symbols, and social activities. As the exposure to mass media and information technology is increasing, rural consumers are being more informed about products and services and their dependence on traditional reference groups is waning.
Hindustan Lever Limited (HLL) is the largest detergent manufacturer in India. HLL is one of the few companies that targeted and delivered to the bottom-of-the-pyramid (BOP) markets very effectively. One of the key strengths of HLL is their distribution and marketing penetration in the BOP markets. HLL products are manufactured at around 100 locations around India and distributed via depots to almost 7500 distribution centers. HLL has the reach to all villages with atleast 2000 people.
Pricing for the BOP markets
HLL is known as the company that comes up with innovative products for which the poor are willing to pay for. In fact they base their product on peoples’ willingness to pay for the product. For example, let us consider the case of Lifebuoy. HLL does some initial market research and comes up with the requirement that the Indian rural population need germ kill soap. Now, HLL experts immediately don’t go to the laboratory and come up with the most sophisticated germ kill soap. Rather, they have a bottom-up approach which works well for the mass markets. HLL does market research to understand how much are people willing to pay for a benefit like germ killer. Considering the price to be the retail price, it evaluates its target margins it gives a challenge cost. Then it comes up with a business model which delivers that challenge cost.
Marketing and Communications Strategies
Everything seems good on paper, but how does HLL manage its competitors. The key strengths of HLL is its distribution channels available to deliver Lifebuoy at the price the market dictated. The sales and marketing strategies of HLL are based upon microfinance institutions, micro-credit lending, and rural entrepreneurship. One such project is the Project Shakti which started in Andhra Pradesh and expanded to 12 states in India.
HLL tied up with the Self-Help Groups (SHGs) and offered them products which are relevant to the rural population. A member of an SHG is selected as a Shakti entrepreneur, also called ‘Shakti Amma’ will receive stocks from HLL rural distributor. With some training from HLL, the Shakti entrepreneur sold those goods directly to the local village population. HLL witnessed 15% increase in sales from the villages of AP, which accounted for 50% of total sales of HLL products in AP.
An important reason for the success of this integrated marketing strategy for rural India is the consistencies of goals between HLL, the government units, and the NGOs. As Lifebuoy is targeted for socially desirable improved health goal, the other parties are happy to cooperate with HLL. This kind of integrated positioning, targeting, sales, marketing, and distribution strategy has given HLL a real edge over its competitors.