Consumer Engagement in Rural Areas _Sankar A

8/13/2019 Consumer Engagement in Rural Areas _Sankar A

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Strategies for Consumer

Engagement in Rural Areas

By

Sankar A

Market ing

2014batch

12020841044


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Rural Environment

What drives the consumer?


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Rural Consumer Drivers

Past Drivers of Rural Marketing

Low Cost Rural consumers cannot afford high priced products

Outreach need to get their places in whatever manner

Earlier, feature stripped some products and brought theprice low or converted them to unit packs made companiessuccessful to some extent

Current Drivers of Rural Marketing

Deeper consumer engagement no different from any other part of the world

this shift is occurring very rapidly

Strong consumer engagement is the mantra that

company need to take away on rural marketing


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Rural consumer growth

Rural Indian market continued to grow at 20% every

year for the last 5 years there are various reasons

Income Growth

Crop diversification moved a lot more out of grains,oil seeds into things like horticulture, vegetables and

fruits

This led to higher incomes to consumers, because

60% of all rural incomes are directly linked with

agriculture

Others have significant overlap with agriculture

Even in traditional crops the prices have moved up.


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A lot more money is moving into rural India

market distortion in some businesses

People earning in urban areas and send back there

It started with a loan waiver which recycled a lot of

money

Rural employment guarantee

65,000-70,000 crores of money is being put in the hands

of rural people even in the labour level led to income

growth

Better connectivity

In roads, telecom led to education moving into nearby

urban areas and allowed to working in enhanced


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Fundamental ChangeAspiration

30 years ago village people says this is what my fate!

. But now, I can have a better quality of life

There is a aspiration on part of people to get a quality

life. This new aspirations would want to trigger more

incomes for rural people

Even though income is one part of driver, Aspirations

creates a virtuous cycle saying that companies better

connected to market now.


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Issues in Rural Marketing

Consumer Types15% of rural people- likeurban upper middle class

for strategizing no needto look at too much

85% of peoplestrategizing need tobe tailored for each

segment


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Remaining 85% of Customers - real big oppourtunity

But strategies need to be tailored separately

Addressing this market is really difficult because once

again rest of this 85% can be classified further

To solve this issue in this segment,

we have to create virtual cycle by combining withaspiration and growing income

the whole ability to raise income and getting the people

to spend also in company hands

So, there is very little left for exogenous factors

therefore it is possible to create those kinds of virtual

cycles


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Virtual Cycle

RaisingIncomes

IncreaseAspirations

Improvequality of

life

IncreaseOpportunities


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Rural Consumers = Western Consumers

Behavior of Indian rural consumer is same as that of

western urban consumer

Behavior Western Consumers Rural Consumers

Driving Distance Long drive by car tooutside malls

drive out possibly in atractor 30 miles for mandi

Bulk buy Since the drive is long Because of my income

level, at this point of time

its far lower so maximize

my buy is the mindset

Savvy Savvy - because of

information available

Wallet size is small,

people apply a lot of

mind


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Strategies for Rural Engagement

1. Contextual Products and Services

Any product idea, any service idea that can contribute to

raising productivity, enhancing incomes, and reducing

transaction costs for people are called as contextual

products and services

Micro-finance -contribute enhancing incomes and createenormous business opportunity

Mobile Phones - it can directly contribute in enhancing

incomes by eliminating information asymmetry, by reducing

transaction costs

Agri Cash flow related products - Since 60% people are

linked with agri

Energy related productspower is not regular, 4-6

hours/day. Also there is voltage fluctuation in any area

Products which are very relevant for this market is the first


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2. Leveraging Technology

Best of the technology has to be used to create productsand services for these markets

Remote Delivery: 600,000 villages that we have inIndia that are obviously spread far and wide. Crop management and productivity and dealing with the

specific problems is fundamentally changing and thats

the kind of opportunity in leveraging technology

Personalized solutions: agricultural extensions need tobe delivered to individual farmers in terms of for this

specific problem. We can use mobile phones for this For Healthcare and educationwe need to use remote

delivery and again personalized solutions

Operations effectiveness : Technology helps ineducation, healthcare, agri operations


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3. Co-opting local people

Co-opt people from the local communities into your business

models, they make up for missing institutions

Minimizing Cost- Men: Need to create appropriate

engagement through some people who either as lead

consumers, who are our transaction intermediaries To engage with rural consumers, we need to transact at much

lower cost because their income level are 1/3rd or 1/5thof

urban people

Leveraging Social Connectivity: rural India is otherwise also

culturally

Leveraging Social Connectivity: Rural India is also

built as communities culturally like in urban social

media


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4. Creating New Business

Business models where these rural consumers can get access to

products and services for which they dont need to pay in full willbe more successful

New Value Chain

We need to integrate them in our value chain

By using various agricultural extension models, we need toraise productivity of a farmer by cutting costs for production,the income for the farmer is still higher

So we can sell products in a profitable way

Third Party Pace

Rural is about volumes and what we have is a future market

We need to pay for that - Mobile phones, for personalizedextensions and in all the business models that we use thefarmer pays nothing, is third party

A holistic model where it is profitable and yet it is a lower cost


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End to End Solution is important

Rural Consumer is not simply looking at a product

A product is part of a solution that the consumer is

looking for

rural person is able to access all of that solutions To start with from a partner companys point of view

where this platform is provided first that insight as to

what is the real need of this person

develop and test that product

demonstrate and sample that product

communicate about that product and distribute

Documents

Consumer Engagement in Rural Areas _Sankar A