Although every company has realised it, very few are prepared to tackle this promising area effectively. It is not enough just to talk about the huge rural market. Corporates havent penetrated the market properly yet, says RV Rajan, executive chairman of Anugrah Madison advertising agency. Rajan should know, as he has been in the field since the 1970s. Rajan, who started life as an advertising professional in Mumbai, moved to Chennai in 1974 to start the southern operations of the advertising agency he was working for then.
At that point, Chennai hardly had any FMCG clients. As Rajan had handled massive campaigns for Madras Fertilisers, he was able to successfully bid and win the agri-inputs business of Shaw Wallace. He acquired a lot of skills in dealing with the farmers.
Till the middle of 1990s, rural marketing meant helping sell agri-products to the farmer. Rajan points out that Hindustan Lever, ITC and the tea companies had entered rural India successfully even during pre-independence days. But they were the exceptions. Rajan knew rural advertising was not limited to what he was doing. An invitation to lecture at the Mudra Institute of Communication in Ahmedabad gave Rajan the breakthrough he was looking for. The chief of marketing of Philips, who was attending the lecture, invited Rajans agency to do an integrated rural programme, which included the entire village (all ages, genders, and not just farmers) to promote Philips audio and video products in Tamil Nadu villages.
Rajan, who has written a book Courage my Companion, describes his exploratory trip to 25 villages in five selected districts in Tamil Nadu. He was taken aback to find televisions in hundreds of ordinary huts. During the visits, I could see the importance of women in the household, who were clearly empowered with knowledge, thanks to the impact of satellite television. Though they were illiterate as per the census definition, they seemed to be aware of the world around them and many had aspirations to acquire lifestyle products like a television to improve their status in the society.
It was clear to me that villagers who were innocent earlier had become more street-smart and were trying to assert themselves more and more.
With the research findings, Rajans team was able to put together a campaign that helped Philips register a growth of over 30% in TV sales in the Tamil Nadu market, in spite of the overall recession, especially in consumer durables during that period. Rajan today is one of the best-known names in rural marketing in the country, and he is a founder-member of Rural Marketing Association of India (RMAI), the industry body devoted to furthering the cause of rural marketing. The association has conferred the first ever RMAI Lifetime Achievement Award on him.
Rajan recalls the vast changes rural Tamil Nadu has undergone over the last decade. The telecom revolution has meant that the hold of the middlemen is coming down. The Internet is changing the way villagers think. Growing literacy is gradually creating a huge rural middle class. Aspiration levels are shooting up.
Pradeep Kashyap, another veteran rural marketer, founder & CEO of MART, the Delhi-based rural marketing consultancy, and the current president of RMAI, points out that in the next three years all Indian villages will have electricity, be connected by roads, have access to the Net, and have a mobile inevery rural home. He is convinced that the kind of retail revolution and the consumer-spending explosion that happened in urban India in the mid-nineties is waiting to happen in rural India by 2012. While rural marketing as a concept has arrived, most corporates are not quite prepared for it, he says. We dont want to make the effort to understand.
Kashyap says that as the rural population is three times the urban one, companies will be pushed into rural markets as three will be the magic multiplier that will drive them. However, to achieve success in rural India, one has to learn to think outside the box. MNC products will be too expensive to make an impact. There has to be a paradigm shift in the price performance of the products. The Nirma vs Surf battle will have to be fought many times over. The rural consumers are interested only in the essential function of the product, in its core benefit. They want soap only for washing and cleaning. They are not interested in its fragrance, shape and so on. If they buy an expensive soap, they will hoard it for months.
Those who have been studying rural markets feel that it is time to attempt product innovations and develop products for special rural needs. Rajan mentions pressure cookers, which resemble the vessels, handis, village women are used to, Ruf n Tuf jeans of Arvind and Asian paints Utsav brand. There have to be innovations in rural distribution. So far, rural marketing has meant only sales promotion efforts.
Innovation for the rural market has to be reversed. You cannot do R&D in American labs to introduce a product in Indian rural market, says Kashyap. R&D has to be community embedded, and start from the grassroots. In India, one also has to take into account that people and usage are different sometimes from district to district. Products have to be localised. Attempts have been made to introduce products catering to rural India. For instance, Nokias cell phone with a torchlight was meant for rural markets. Ajanta toothpaste is not an urban product. Britannias Tiger brand biscuits are also hugely popular in rural India. Then again, the experiments have been limited so far.
Management guru CK Prahlads famous bottom of the pyramid approach will have only a limited appeal, feels Kashyap. By creating a new consuming class from the low-income groups, one is taking income away from them. Marketing in rural India has to have a different mindset. You cannot look at the poor just as consumers. In rural India, everybody is a producer. They are wage labourers, handloom weavers, handicraft makers or artisans of some sort. Corporates should take their companies to the villages and help the people market their products. The approach has to be inclusive.