If the red carpet rolled out by Indian companies for rural consumers is getting longer by the day, the reason is simple: estimates show Bharat will account for 60 per cent of the consumption of fast-moving consumer goods (FMCG) in the country in the next three years.
But reaching out to this market is tough as only about half of the rural population has access to conventional media such as Press, TV and radio. Most of the national publications are not available in rural markets, and even the regional media is accessed by only 6 per cent of the total target population.
So what do companies like Dabur, Hindustan Unilever, ITC, Maruti, Hero Honda etc do to be seen and heard in rural markets? Dabur CEO Sunil Duggal says direct engagement is the only way out to increase consumer connect where India lives. “We realised we need to move beyond traditional media,” he says.
The realisation made Dabur go off the beaten track when it launched the Dabur Amla hair oil, after market research showed that almost 80 per cent of the rural population uses loose mustard oil. The company’s rural sales strategy covering villages with population of fewer than 300 across seven states includes a beauty and talent contest called ‘Banke Dikhao Rani pratiyogita’. The activity, named after its brand ambassador Rani Mukherjee, provides an interactive platform, and the winners are given a chance to become entrepreneurs. Dabur Amla hair oil has seen a strong a 20 per cent year-on-year growth.
Others are not far behind. Realising that 40 per cent of all refrigerator and washing machines sold this year have been bought by rural consumers, companies like Samsung India have launched rural road shows called ‘Dream Home series’ – four-day exhibitions in small towns. Rural India now accounts for a fifth of Samsung’s total sales.
FMCG major Hindustan Unilever is using ‘jatra’, a 400-year old form of folk theatre in West Bengal, to woo villagers. The jatras have made Clinic Plus a household name in West Bengal and the idea is to seamlessly integrate the brand communication with the story of the play. This is in addition to the company’s other much-celebrated rural marketing programme called Project Shakti.
S Sivakumar, chief executive of ITC’s agri-business division, agrees: “Marketing in rural India has to be through below-the-line activities, developed along with local distributors for better connect and cost effectiveness as rural is not a homogenous segment.” ITC operates through local village managements, using its e-Choupals.
Naimish Dave, director for FMCG and retail practice at OC&C Strategy Consultants, feels that in future more companies will take to such innovations. “Currently, companies are focusing on penetrating the rural market and reaching out to maximum number of outlets. With the growing consumer brand consciousness, companies will need to focus on rural-marketing campaigns. Therefore, in future, there will be a shift from a complete distribution-led growth to a mix of distribution and marketing-led growth,” adds Dave.
Insurance companies have realised this fast enough. Anisha Motwani, marketing head at Max New York Life Insurance, says there’s an issue of trust with private players. So it becomes necessary to engage with them at the local level through community programmes. Max New York is also in talks with some schools to sponsor trophies for the best student of the year.
ICICI Prudential Life Insurance goes in for interactive street plays to educate consumers and has partnered with state e-governance projects like aponline.com (Andhra Pradesh) and emitra.com (Rajasthan) to enable consumers renew their policies in their kiosks. It has also partnered with Suvidha Infoserve to help policyholders make their premium payment at over 3,500 Suvidha outlets.
Pratap Bose, COO, Mudra Group, (Bose also oversees Terra, rural marketing arm of Mudra), says FMCG and auto companies spend a substantial chunk of their ad budget on road shows, outdoor advertising, fairs and weekly bazaars.
Consider Maruti. Over the last two years, the contribution of rural sales to Maruti Suzuki’s total volume went up from 3.5 per cent in 2007-08 to 8.5 per cent in 2008-09. It targets key opinion makers at the village level, like Panchayat members, for brand promotion. A Maruti Suzuki spokesperson adds, “We organise regular rural sports events, mandi events and Gramin Mahotsavs. We also do SMS campaign for Gram Panchayat Members.”
Two-wheeler major Hero Honda uses its ‘Har Gaon Har Aangan’ programme to reach out to opinion leaders in rural areas through a network of over 500 rural sales executives. Almost 40 per cent of its total sales happen in rural markets and the company wants to strengthen this by reaching out to 25,000 villages by the end of this year.
Others are doing the same. For example, Godrej Consumer Products, which has come up with a winner – Godrej No 1, a soap brand – plans to increase its village reach from 17,500 to 50,000 over the next two to three years.
There is nothing however to beat word-of-mouth publicity in rural areas. It’s no surprise therefore that school masters and panchayat heads are fast becoming the best brand ambassadors for India Inc in rural India.