1. Ad-dendum by Raghuram Devarakonda & Vikram Rao: Reality of dealing with today’s rural consumer

Ad-dendum by Raghuram Devarakonda & Vikram Rao: Reality of dealing with today’s rural consumer

With greater disposable incomes and better net connectivity, today’s rural consumer will no longer settle for sub-standard offerings. Brands must hone their strategies to target this segment

Published: January 5, 2016 12:26 AM

The behaviour of Indian rural consumers is changing and it’s changing fast. A rural consumer’s expectations from companies differs from what it was a few years back. The value conscious rural consumer is now no longer associated with low prices. It’s more of a relative term which encompasses price, aesthetics and features of the products they are buying. If a company’s product doesn’t meet the criteria of a rural customer’s definition of ‘value’, their products are likely to go unnoticed by these consumers.

Meeting expectations

So what do companies need to do to keep up with the expectations of this new age rural consumer? To understand this, they will need to delve deep into their psyche to discover insights on how rural consumers buy and what influences their decisions. Today’s rural consumer is aspirational. Rising income levels, along with socio-economic changes and recent advances in technology, have triggered changes in how rural consumers make purchase decisions on what they buy and from whom.

A growing number of rural consumers have become brand savvy and believe such ownership enhances their social appeal. Besides, the purchasing power of this diverse market is growing. An increasing share of working women will also fuel growth in the future. These consumers are defying conventional wisdom that says rural consumers will settle for sub-standard offerings to achieve the best deal.

Today’s rural consumer is also better networked. With greater access to mobile internet, they are even more tightly connected to one another, offline as well as online. Better connectivity has empowered rural consumers to make more informed decisions about buying products. They are also more discerning in scrutinising product offers and share more information with their peers, seeking reassurance of the choices they make.

What businesses need to realise is they cannot treat all rural consumers alike. The influence of increasing incomes, the mobile and media revolution, better road connectivity and better education, means that companies will have to serve diverse consumers from traditionalists to young enthusiasts to village elites. A one size fits all approach will not work. Instead, a practical segmentation of customers to target high potential customer groups will drive a brand to achieve success.

Distribution excellence is indeed critical for success in rural markets. However, it will not be enough in itself to ensure sustainable and scalable growth in the long term, given how quickly rural consumers are changing. To win in this market, companies will need to develop more sophisticated consumer insights and let go of long held assumptions about rural consumers.The foundation of success in rural markets lies in building trust with the rural consumer. In the close-knit rural landscape brands that succeed are the ones who continuously invest in being relevant to the community. Rural consumers rely on their social networks to keep them informed and use this network to validate the brands they consider and the products that they ultimately purchase.

Ensure product functionality

Companies need to also address certain basic demands of these consumers. They are highly focused on evaluating product functionality as much as they are about serving their aspirations. In many ways, brands will do well if they build a strong case in ensuring product functionality and design relevance by investing in research to uncover key consumer pain points and insights in the purchase journey. A significant share of purchase decisions in these markets are triggered by product breakdown or obsolescence, rather than only aspirational needs.

In such a setup, influencing word-of-mouth through ground level activation and driving product trial prove invaluable, as rural customers are extremely practical buyers. An increasingly connected rural population means that marketers can now rely on investments in digital and mobile to overcome geographical challenges and support the momentum created by on-ground activations.

Market leaders in the rural market have evolved go-to-market models that work intrinsically with the rural social fabric. For example, certain companies have used women entrepreneurs to endorse and sell brands by integrating local influencers into the sales and brand promotion channels. Thus rural consumers can double up as  trade partners and companies in turn benefit by enriching the community.

Target key opinion leaders

Winning over key opinion leaders is important to penetrate rural communities. For example, young people are early adopters of technology and tend to be the key opinion leaders within rural communities, for mobile phones. Similarly, doctors for healthcare products, or progressive farmers for farm inputs could be tapped as opinion leaders. Additionally, women and children now play a more empowered role in purchasing decisions to buy goods and services.

In this market where trust is a key driver to success, it is not enough for companies to only sell a product. Upholding the product promise through design of long lasting products and after sales service determines the extent of product advocacy a brand will enjoy. Rural consumers do not hesitate to share unsatisfactory experiences with their social networks of when a product breakdown occurred or how a company failed to attend to a service need.

To gain wallet share in India’s rural market, companies need to meet specific imperatives at each stage of the rural consumer’s purchase journey. Rural consumers are waiting to be served — in new ways, and with new offerings. And they have decided which brands they will give their loyalty to. Forward-thinking companies now need to act fast to lock in these consumers’ loyalty.

Raghuram Devarakonda is MD, sales and customer service, Accenture Strategy and Vikram Rao is principal, sales and customer service, Accenture Strategy

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