Case Studies

Scripting rural sucess with hypothesis

It has been observed that market research is less reliable in rural areas. Observation and ethnography work well and can get relevant insights.
Scripting rural sucess with hypothesis

Where accurate research data fails, hypothesis turns out to be the guiding light. This is what RK Sinha, COO of Godrej Consumer Products, has experienced. Of the 43 lakh retail outlets across India that Godrej Consumer Products caters to, 26 lakh are in rural areas, Sinha maintains that for every campaign, the first point marketers look at is objective. It’s followed by hypothesis, action, success criteria and time frame. Marketers seem to forget the hypothesis stage, and it is quite crucial when it comes to marketing in rural areas.

FIRST APPLICATION
Successful application of it occurred when Godrej launched Good Knight Fast Card in rural Uttar Pradesh. The hypothesis was that there was a need for an affordable solution to prevent malaria and dengue.

It first generated consumer awareness, sold to local retail outlets and monitored consumer offtake. Instead of getting direct data, as it is not always accurate, Godrej opted to know what actually happens in the market.

The company was able to succeed by checking the percentage of household awareness the product had gained. This was succeeded by the percentage of households that had tried the products. And finally, the percentage of retail outlets carrying the product. There was, however, no time frame.

GAIN
The insights Godrej gained were numerous. It has been observed that market research is less reliable in rural areas. So, observation and ethnography work well and can get relevant insights. While marketing to rural households marketers should keep eyes and ears open; and marketers or researchers need to have a 90/10 ratio (90 percent of observing, 10 percent talking). Co-creating products has also proved quite essential and product quality needs to be good to ensure high repeated purchase. This can help generate product loyalty before the product is launched.

WORD OF MOUTH AND RETAIL
The company also discovered that ‘word of mouth’ influences purchase, and it’s far more important than we think. The company’s rural campaigns allowed multiple experimentation simultaneously; several campaigns were run in parallel to judge efficiency and fine tune the marketing mix. It was done to test the hypothesis. It resulted to generating consumer awareness with demonstrations at village gatherings, and to look for promotion through influencers and free samples.

On the retail front, it is normal that many small rural outlets only carry one brand in a product category, so leaders build walls to protect them while challengers target entry, thus creating an intense war for shelf space. Outlets don’t carry the product category format, so enticing schemes to enroll outlets and thereby improving household trials are be necessary.

“If you can get 50 to 100 people talking about your product in a village which consists of 1,000 people, you’re likely to succeed. One result of having positive word of mouth is, higher the base, higher is the growth rate (network effect),” elaborates Sinha.

SERENDIPITY
If a marketer has allowed hypothesis in its approach then it will not be startled by serendipity, which, at times may not be aligned to the initial hypothesis. Such experience only helps develop ‘new knowledge’.

One example is Godrej powder hair colour. The new brand was launched at Rs 7. In one market, sales of the product was five times more than anticipated. But it was discovered that the black dye was used on buffaloes. The dyed animals were sold during that month and the ones that were more black generally sold for higher prices.
 

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