At a time when foreign tractor manufacturers have flocked in to rural India, luxury car manufacturers have found their market, FMCG companies have forayed only to court more growth, it will be committing a grave mistake to overlook the sizeable rural markets of India.
But companies which have crossed their traditional domains to enter India’s rural market have to comprehend the nature of the market; the same rules they apply in urban markets may not work in rural. The old saying of When in Rome do what the Romans do holds true.
According to Adi Godrej, chairman of Godrej Group, there is good growth in rural demand, so we are increasing our rural penetration. The question is not where our products are found, but do we go through the wholesale channel or can we directly distribute? So the more direct distribution we do it is more efficient but it comes at a cost.
Mapping the changed behaviour is insufficient; the company has prepared a separate marketing strategy for rural markets for the year 2014. “We have a division specific for rural towns, where all product lines are sold through common distribution and marketing force. In Rurban division, where we cater to all towns, the focus has been on increasing distribution reach to uncovered geographies, and driving demand through influencer connect. While in Urban areas building brands through advertising is usually good enough, at Rural a lot of emphasis has to be on “show and tell” activities,” observes Salil Dalal, president of Rurban at Pidilite Industries.
Companies don’t restrict themselves to traditional marketing and advertising; they have been relying on digital as well as mobile marketing to target urban markets. One may wonder why they shouldn’t do the same for rural markets. With mobile phone penetration on the rise at a remarkable level in rural India, there is more to gain by relying on mobile marketing and advertising deployed to reach direct communication to end users and retailers.
If a smartphone manufacturer can sell only a million $500 smartphones in one of the Scandinavian nations of high purchasing power parity, then why would it remain hooked on when two-thirds of a 1.27 billion people can buy its $100 phone.
The positive figure is bound to grow as nothing can hinder the ever growing diverse taste among rural consumers. And this will be ensured by the deep penetration of tele-marketing, direct-to-direct marketing and other factors. And this diverse taste will expand towards real estate, auto mobile and electronic items, to mention a few. The rural consumer, who has largely satisfied basic needs for food and shelter, will spend significantly on construction. There will also be an increase in spending on improving the shelter quality, through new construction and repairs.