As per the recent census, 72 percent of Indians live in rural areas, approx. 6,43,000 villages, across the country. Demographic mapping shows that India is a young population; 20 percent of its population is below 9 years; 20.4 percent is in the age brackets of 10-19 years; 30 is above 29 years and below 60 years. By 2020, over 50 percent of our population will be below 30 years! Teens, teenagers, young adults and baby boomers! All growing up in a vibrantly changing society & economy, with no understanding of history, nor a sense of the direction of the future! Over 47 percent of the youth are women, & girls. The Rural Consumers, have over time, learnt, changed and evolved. They play a far more significant role in influencing purchase and buying decisions, for themselves and for their families. The Rural consumer segment, undoubtedly, is the future driver of growth in India, and marketers are mining Big Data and Analytics to figure out and map this vast diversity in Consumer Behavior, that will help them reap profits by selling their products and services.
Rural households are the fulcrum of Consumer behavior
The clusters of rural households and villages, that demonstrate similar characteristics, are the focus of Rural Marketing Strategies. The spending and consumption patterns of rural consumers, especially women, are rising with increasing incomes and exposure. Non-farm incomes are now about 60 percent of rural incomes. The Middle class is over 400 million people. Status conscious, they look for durability, functionality, and value for money in products and services. If you drive through Rudrapur in Uttarakhand (UA), or Bhavnagar in Gujarat, or Kotkapura in Punjab, or through Hapur in Uttar Pradesh (UP), and through many similar 500 small towns, spread across the Country, you will observe, young boys and girls, dressed in jeans, tee shirts, wearing sport shoes, carrying mobile smart phones, and music pods – perched on motorbikes, riding electric scooters, and displaying a general sense of having something to do! You will observe TV towers; shops displaying well known national and global brands; shanties displaying colourful packaged strips of snacks, candies and biscuits. Hoardings, and bill boards, bus panels and posters, banners and stickers, showing regional and national brand offerings from marketers galore.
Rural Malls showing popular Bollywood movies, while housing fast food outlets, and shops that sell durables, mobile phones, FMCG, readymade and shoes, jewelry and cosmetics. Verily the Rural landscape has evolved. And Companies such as ITC, Parle, Dabur, Mahindra, Reliance, Bajaj, Maruti, Pepsi and Coke, Phillips and Airtel and Vodafone, and so many more – have set up outlets in small towns, to penetrate the nook and corner, of this vast countryside. Cash registers are indeed ringing, and the jingles can be heard – rains, and agro-climatic conditions, notwithstanding! Who’s afraid of Drought?
Environmental Stimuli and Marketing Stimuli are in Sync
The youth wants to find an identity – there is motivation ; they are getting educated – thus they are informed; The TV, mobile and the Internet, exposes consumers, to products and services that lead to better quality of life – thus there is learning, information, and perception, that influences beliefs and attitudes. Villagers spend less on liquor and more on health and education. Less on gold and more on building better houses; less on borrowing and more on earning through agriculture and non-farm business. Girls study, get educated, take up jobs in sector such as, Retail, Insurance, Banking, IT, Health, Travel, Entertainment etc. Thus they are changing the historical culture and sub culture in Rural households across states.
Kerala, Gujarat and Punjab may lead the prosperity, but Bihar, Chhattisgarh and Orissa are not far behind! The educated ‘Bahu’, influences the rural family; reference groups led by NGO’s and SHG’s, are spearheading change, assisted by virtual technology. Financial inclusion and Micro financing initiatives are helping individual decision making amongst rural population. Consumer Behavior variables and determinants, as we traditionally know and study, are indeed ready for the garbage can! Maslow;s theory of needs, is of the past – even the slums must have a DTH TV, food or no food! And Big Data and Business Analytics are, albeit, knocking doors of the smart marketers.
Knowing own’s choice
How does a consumer decide he or she needs a product? How does a Company engage and converse with rural consumers and provide alternative choices? How are Consumers attitudes and beliefs formed and changed? How do Brands become habit and meet expectations? How do brands represent lifestyle and be the instruments of change? How do consumers experience the Brands, talk about them, spread the message, and become influencers and loyal to the Brand? Colgate and Lifebuoy stories are folklore, but rural consumers, have adopted many more categories.
Personal hygiene products such as Deo’s, (Rs 2,100 cr market), face washes (Rs 1,900 cr market – Nielson data), moisturizers, hair gels, fairness creams, hand wash, shampoos and conditioners, – are all to be found in the rural personal care basket. Rural consumers are willing to upgrade if they get the right value proposition! Godrej Expert range of hair colours is a case in point. Colour offerings were made in single usage packs, and pre-measured sachets, and the sales soared at an affordable price point of Rs 30/-. L’Oreal followed suit by offering a significantly lower value proposition. Future group is introducing ‘Think Skin’ shower gels at prices of toilet soaps. Mondelez India has more than doubled their rural penetration since the start of their journey – ‘kuch meetha ho jai’!
The grandfather uses a ‘ Neem Datun’; Mother uses Colgate toothpaste ; Son buys Close Up, while a Sensodyne tube can be seen, as well. Multiple Brands, same category, same household! Rural Consumers thus display different facets of Involvement – they endure Colgate, but try new products and services as well. ‘Chhota recharge’ from Vodafone has evoked a high response. Sampoorna and Cineplus, specially designed TV’s from LG, were the first low priced colour sets with Hindi and regional languages. ” Na Koi Jaat Paat, Na Koi Bhed Bhaav”, Idea-campaign led by Abhishek Bachchan, struck immediate connect with rural audiences. Branded and regional branded savory snack market is growing at a healthy 34 percent. Lays and Bingo pouches lie side by side, with Balaji Wafers and Bikano Namkeens packs at varying price points.
The Brand Mental Map of Chik Shampoo sachets spoke of Beauty, Economy, Genuine Fragrance and Healthy hair. Following this legendary initiative, Marketers are mapping behavior to get consumer attention; coaxing them to comprehend the value proposition; luring them to remember and accept their brands and buy them again and again. Line extensions and Value Marketing is becoming the name of the game. Brands try to neatly segment consumer needs through price touch points across layers of product features. ITC Sunfeast, Parle and Britannia follow this strategy for Biscuits; Bajaj and Hero segment for motorbikes; Maruti does it with Alto ; Mahindra leads with Bolero and Max. And can Coke, Pepsi and Dabur, be far behind with their Colas, Juices, and Lemon and Mango choices!
Unlocking of the Challenges
The New Consumer in Rural India, is posing, a huge challenge to marketers, because on offer is a difficult revenue model of very large volumes, modest prices, and high benefit expectations. There are Real Rewards for Innovators and Out of the Box thinkers here. Understanding consumers across geographies will depend to a large extent on the product-service need being addressed, in many markets at different stages of evolution, having to contend with changing distribution structures, the reach of E-Commerce, expansion of virtual and digital communication, varying aspirations and needs, and fluctuating incomes and capabilities, due to impact of Agro Climatic factors. Marketers have to understand that there is a ‘Shift’ in Consumer Behavior across segments ; learn the dynamics of horizontal segmentation in categories ; recognize the growing influencing role of the rural women ; take cognizance of the impact of infrastructure, Government schemes, Media, telecom, and mobile penetration.
The Market researchers must know that Rural Primary research, at this time, is at best transient, that consumers are likely to change their mind about products and services, faster than we imagine; that brand loyalty is no longer a given; that change and traversing roads less travelled, is the buzz words of the Gen-Nxt, whose aspirations are becoming increasingly homogeneous. And these emerging aspirations, of the rural youth, are fed by new consumption patterns – fast and packaged food, new shopping culture, the lure of fashion and beauty products, the ownership of durables and two/four wheelers, the romance with smart-phones with net and apps connectivity, new avenues of leisure and entertainment, and the desire for higher education, good health, and better quality of life.
The Rural Consumers thus present an ever growing potential market, but hey, “the slice is getting thinner”! The battles of the brands, will be fought, in the hinterland, eventually, with the bold and the fittest..The weak hearted will rue their experimental tryst with rural adversity..
Author: Prof CK Sabharwal, MD, Crop Health Products