Rural Marketing:

Hidden PotentialBy: Vinay Solanki,

IIM-Ahmedabad

Rural markets accounts for 20% of total revenue for 65% of firm surveyed by Accenture.

Zenith Research: Market grew 25% in 2008 and expected to reach US$ 425 billion in 2010-11 with 720-790 million customers

2000 2011700750800850900

760

850

World Bank Estimates

US $577 BillionMcKinsey Projection by 2027

742 mn consumer

138 mn households

6.38 lakh villagesClass # of Districts % of Mkt ShareA 22 17.8B 39 20.5C 54 20.4D 86 23E 154 18.3

Thompson Rural Market Index

URBAN MARKETS RURAL MARKETS

Buying Power

Increasing disposable income Access to plastic money

Slower rate of Income Growth Low Buying capacity

Primary Needs

Utility and appearance. Lifestyle and social status.

Utility. Enhanced standard of living.

Accessibility

Malls & Showrooms. Maturing logistics and fulfillment.

Small retail stores and limited events.Logistics a BIG challenge

Income Pattern

Regular monthly income Predictable spending pattern.

Cyclical income Cannot plan ahead.

Culture Nuclear families. Diversity & duplicity of demand

Joint families + Cultural effect Fewer decision makers.

Brand Loyalty

Price sensitiveNot brand loyal.

Utility sensitive.Hard to acquire but brand loyal

How to Segment? As per Govt. of India, agriculture makes 1/4th part of GDP. Rural population is increasingly getting employed in industries (local factories) and services (business correspondents, insurance agents)

• Climate: Southern warmer areas vs. colder northern regions• Culture: Plays a KEY role in product selection and choice. Apparels, food, taste, peer

selections all play a influence here.• Infrastructure: Densely populated and emerging infrastructure vs. sparsely

populated poor infrastructure

• Farmers, industrial workers, daily wage earners, small business owners, artisans, homemakers and students.

• Income Level: Drives affordability and price-value proposition.• Exposure to Literacy: Influencers – School going kids & educated family members. • Family Size: Large families may become bulk or frequent buyers, word of mouth is

quick in large families.

• Proximity to Town: Villages in radius of 10 km of a feeder town.• Event Based: Melas, Jatra, Weddings, Processions, etc.. A wedding index with a

prediction model and others • District Level: Thomson Rural index based 355 districts will be less complicated &

cost friendly than 6 lakh villages.

Rural Uniqueness

Occupation

Geographic

Demographic

ATL: District level mass marketing. Uniform strategy (Pepsi, Surf, Parle-G) vs. differentiated strategy (Horsepower, Packet Size).

BTL: Differentiated products with indirect promotions Higher investments. Ex: HUL promotes Lifebuoy Active, Lifebuoy Gold, Lux, and Liril.

Medium: TV, Radio, Newspaper, etc. still active medium in rural areas. Cinemas, weddings, SMS, district level events and schools can be tapped.

SMS: Rapid mobile penetration Target ads in local languages via SMS. NO-SPAM but educate to raise awareness.

Weddings: Sponsor weddings – Food stalls, Banners, Kiosks. Soft sell without taking away the focus.

Schools: Students can be influencers. Effective way to increase awareness.

Big Fish: 85000 large villages having 40% rural population and 60% consumption capacity.

Club Deliveries: Leverage technology such as SMS to check availability. Plan and club nearby villages delivery schedules at the sales point itself.

Buy anywhere Pick anywhere

Pan India reach for FMCG and Durables firms. Feeder town or semi-urban areas as distribution hubs and India Post deliver to villages .

Way Forward

CONCLUSIION No longer hidden but clearly visible potential. Design customized solutions to tap this immense potential. A win-win strategy is the need of the hour.

“SELL in RURAL INDIA”

RURAL FIRST APPROACHConcentrated effort – No One Size Fits All. Village Entrepreneurship

THANK YOU !!

Masters of Rural Markets by Accenture

http://www.slideshare.net/Kiranprasad153/rural-marketing-16110382

Rural Marketing Potential in India by Anil Kalotra

http://www.data.gov.in/keywords/nsso

http://zenithresearch.org.in/images/stories/pdf/2012/March/ZIJBEMR/17_ZIJBEMR_MARCH12_VOL2_ISSUE3.pdf

References