India’s rural markets have evolved, and it apparently has created a rush, leaving many to scramble for shares. But the scenario also demands that marketers adopt different strategy keeping in mind the customer profile, culture and tradition, demography, competition, and the capacity to adopt technology. The need has made mapping of rural markets a crucial task for researchers. For example, in Punjab, as crop management practices are quite advanced, delivering high yield, that farmers can pay cash even for very expensive pesticides and fertilizers. On the contrary, their peers in UP are less aware, and spend less on crop protection, rendering them to depend heavily on subsidies. On the social front, women in Gujarat are active participants in business and family activities, whereas in MP and Chhattisgarh, where the society is rather patriarchal, women exercise little freedom while choosing products and brands.
With the spread of education, increased media penetration, unceasing mobile revolution, the thrust of micro finance and banking services, and advanced agribusiness, to mention a few, rural India has emerged a future battleground for economic growth. It will also create 500 millions middle class by 2025. The challenge before the Government and the business community is to prepare for the emerging demand and the aspiration of rural youth.
Next Destination: 500 Small Towns
Today small towns across the country are seething with energy; from being feeder points they have become the hub of economic activities. C&F agencies for FMCG, durables, tractors, automobile and two-wheelers to water pumps, to mention a few, are all becoming the nerve centers of these towns. Cable TV, DTH, DVD, and internet connectivity, at the same time, enable promotional messages to reach every household, ensuring that the road is clear for marketers.
Appropriate And Suitable Products
Companies have learnt the universal lesson that they cannot shove urban ideas into rural mouths. Products have to include frills free models. Innovation such as NOKIA’s Asha, MicroMax’s products , Godrej’s Chotakool, LG’s budget TVs, and many more manifest the need to offer functional products at affordable prices.
Ensure Availability of Products
Easy said than done, companies and their distribution channel partners are not always able to make products available as well as visible in rural, when required. This has resulted to supply chain management attempting to cope with the huge geographic challenge of touching 643,000 villages. Strengthening of C&F agents, reviewing Distribution Hub and Spoke models (HUL super stockiest, operation streamline), structuring clusters for market penetration, and isolating pockets ready for future growth are the tasks at hand. Additionally, with 3G and 4G connectivity on the anvil, e-commerce will also become a potential driver.
Digital Marketing will Engage Youth
The digital revolution has gripped the nation. Almost every rural person carries a mobile phone, or a smartphone, and people are increasingly spending time on the internet. With 520 million smartphone users by 2020 and 1,145 million broadband users, 620 MB/month average usage, digital marketing will be an effective way to connect with customers. This will help marketers engage with customers about their products and services, and collect product feedback, and also the opportunity to identify consumer behaviour. Underlining this prospect, brand managers are gearing up to increase their spending. The trend also manifests the fact that the new medium has become a challenge to traditional media like TV, print and cinema, and also highlights their losing appeal in rural areas. Non-traditional media, such as Mobile Vans, Mobile Traders, events and road shows, and more, are still effective ways to connect with rural audiences, however, digital platforms will be the nucleus of communication.
Much has been said about capacity building for rural inclusive growth. Industry has to design business models which will deliver inclusive growth; the one that creates opportunities for manufacturing, servicing, and selling at rural levels. PepsiCo, Godrej, Reliance and others have benefited through contract farming and farm-to-town distribution models. Programs like HUL’s e-Shakti and ITC’s e-Chaupal have also been designed to empower rural women, educate farmers and encourage e-transactions of taxation and commodities exchange. The moves are just the tip of an iceberg.
Agriculture is the Driver
Technology will rule the roost here. Biotechnology and new offerings in irrigation, soil conservation, nutrition and crop protection will change the state of agriculture. Genetically modified crops, mechanized agriculture, and other scientific practices will guarantee the combined results of increased yields, quality and the ability for farmer to get better prices. So, marketers connecting business with agriculture is a rational idea.
Reorient Organization and Rural Vertical
Urban managers sitting in air-conditioned rooms are ill-fitted to operate in rural areas; they do not understand the rural mindset, do not speak their language, and thus are not one of them. Companies must structure themselves as rural-centric organizations with relevant skill development and training. Using haats and melas, digital platforms, and integrated communication strategy, they must provide rural-ready value propositions in their products and services. They must be the partners in the rural economic growth, and employ people who can relate to rural audiences and are passionate about this very exciting country within a country.
Author: Prof CK Sabharwal, Managing Director, Crop Health Products