Recognising a greater share of the rural markets to their revenues and higher consumption levels in those markets driven by government job guarantee schemes, FMCG majors Hindustan Unilever (HUL), Tata Global Beverages (TGBL) and ITC are strengthening their rural initiatives, which include direct marketing and brand activations.

?Our rural initiative Gaon Chalo?s footprint is being extended to eight more states this year,? said Percy Singaporia, managing director at TGBL. ?This is a self-employment scheme for women in villages. Under this scheme, over 70,000 sales personnel are going door-to-door, selling our products.?

Gaon Chalo was prototyped in a few districts of Uttar Pradesh to begin with and thereafter was piloted in some other districts in the state. ?As a model, the advantages are limited fluctuations in sales due to direct access to the rural retailers, cost-effective brand building platform and flexibility to address the complexities of rural markets,? he said. In the branded tea segment, TGBL has maintained a market volume and value leadership with 19.6% and 21.3%, respectively for fiscal 2012, according to Siganporia.

In the March quarter of fiscal 2012, the rural market grew faster than the urban market. According to market research firm Nielsen, rural markets grew at 17.2% compared with 16.5% in urban markets, reversing the trend in the December quarter, where the urban markets grew more than the rural.

On ITC?s rural initiatives, Hemant Malik, COO (trade marketing and distribution), said the company is expanding its direct reach in the rural markets given the growth opportunities and increasing consumer demands. ?We have now devised mobility solutions and have adopted the use of mobile technology for monitoring progress and instant information dissemination and collection,? he said.

ITC has also invested in in-store visibility in rural markets. ?We are leveraging the large format Choupal Haats in rural India for enhanced consumer engagement for our brands,? said Malik.

HUL, meanwhile, has extended its multi-brand rural marketing initiative Khushiyon Ki Doli, to cover Karnataka this year, in addition to the five states which include Uttar Pradesh, Bihar, West Bengal and Andhra Pradesh.

?We have trebled our distribution network in the last one year,? said Nitin Paranjpe, chief executive, HUL, announcing the company?s financial results in May.

?Through a multi-brand approach, Khushiyon Ki Doli helps to create a cost efficient rural activation module. It involves HUL?s personal and home care brands including Wheel, Surf Excel, Fair & Lovely, Sunsilk, Vim, Lifebuoy and Closeup,? said a company spokesperson.

To promote its coffee brand Bru, HUL is currently running direct consumer engagement programmes in rural areas of Tamil Nadu, Andhra Pradesh and Karnataka. ?Our team is using body-mounted DVD players to build the market across rural areas and small towns in these three states. Promoters go from door-to-door with free samples of Bru,? the spokesperson said.

As for the impact of these rural initiatives, the HUL spokesperson said the activities have demonstrated significant increase in awareness levels for the participating brands, thereby, leading to an increase in penetration levels.

?There is a huge opportunity in rural markets to convert consumers from loose tea to packaged branded tea,? said Nitin Mathur, an FMCG analyst with Espirito Santo Securities. ?Hence, focus of consumer companies is to improve the quality of the distribution in terms of reaching consumers directly. Direct distribution (through women) presents cross selling opportunity, with possibilities of getting more feedback from consumers. Moreover, companies can reduce distribution costs as well.?