According to you, which company has made a huge impact in rural markets?
The most enduring example is that of Hindustan Unilever, which has been targeting rural markets for over six decades. But, one company that has made a huge impact in rural markets in the last two decades is LG Electronics. The company had realized the potential of rural markets very early and started with a customized television set called ‘Sampoorna’, a made for rural-urban range of low-priced colour TV that was positioned just above the black and white TV of the same size. This helped LG penetrate rural markets with a prime-mover advantage.
To achieve bigger results, the top management decided to create a separate vertical with a dedicated management team and a separate distribution network. The result is there for all to see. Today LG is the market leader in the white goods segment because of its rural-focused service and distribution network.
With increasing penetration of television, do you think the relevance of BTL marketing will decrease?
For high-end lifestyle products, the rural consumers need a lot of convincing including the opportunity to see a demonstration or touch-and-feel of the product. While television can help create awareness, it is only BTL marketing which can help achieve the objective. However, if a company is targeting both urban and rural areas, television commercial will do well as it has to appeal to both the markets. However, pre-testing of such commercials in both markets is vital. Companies like HUL and Colgate Palmolive have understood this fact as is reflected in their creative for selected brands in their portfolio.
Where do brands go wrong while tapping these markets?
Over 75 percent of the corporates who are talking about going rural are not willing to invest in the long-term. They are not willing to walk the talk. By conducting a few van campaigns in a few districts of a few states for a limited period, you may achieve temporary increase in sales but you are not building your brand in such markets. Rural Marketing is expensive and unless you are willing to invest in the long-term you cannot successfully build a brand in rural India.