Marketing in Rural India

While boosting profits quickly is no longer the essential parameter, Atmanand, MDI Dean of Executive Post Graduate Programs, believes that revisiting age-old management theories and sticking to basics is the most cost-effective marketing tactic.

The Rural Focus
The strategy taken by Hindustan Unilever Ltd. (HUL) to enter the rural sector, which has remained insulated so far, is a good one, says Atmanand. In states like Maharashtra, Gujarat, Andhra Pradesh, Delhi and Haryana, the company is expanding steadily by expanding their network of dealers and making themselves household names.

Of course, replicating the HUL model may be difficult for a startup, but it does serve as a valuable lesson in marketing: Dont put all your eggs in one basket. The entire gamut of white and brown goods has found a place in the rural market, driving several industries to actively explore it.

In the current scenario, companies should change their strategies for marketing. For market sustainability, we have to look at the rural markets. This would include products that have been especially designed for these markets at prices that will suit the sector, says Atmanand.

Tailor-made Products for Rural India
The company should provide rural folk with products and services that would meet their requirements. Take Cavin Care, for instance, which launched its shampoo in sachets. Also consider Britannia, which packaged its Tiger brand biscuits at a low price tag. Such companies obtained an understanding of the rural customers needs and provided them with the desired products.

Atmanands emphasis is clearly on parameters that change the dynamics of marketing a product. Rural markets offer a great potential to help India Inc. (which has reached the plateau of its business curve in urban India) bank on volume-driven growth. With a larger market to play with, virtually any marketing initiative can be cost effective.

Aspects that are seldom ignored are also key drivers in marketing. Some do not cost a penny, and the benefits are huge. Consumer satisfaction is very important. Gone are the days when products were sold solely on their brand name. Today, people want value for their money; they want the product to meet their expectations and utility. The company should focus more on quality and the consumer satisfaction index, says Atmanand. A consumer with a high level of satisfaction and a good image of your pro-duct is likely to be your best brand ambassador and proponent of your product.

Changing the Profile of Managers
Philip Kotlers theory of a short lifecycle of a product does not really hold good, as most products in India have a lifecycle of 2-3 years. Take, for example, a Maruti 800; one drives it for about three years before switching to a new car. A consumer wants a product that has resale value, Atmanand says.

Understanding the preferences of the rural masses is crucial, and your company manager could be the answer. Companies should hire managers who are familiar with rural India and are in sync with the demands and preferences of people in these regions. While management graduates are conversant with strategies applicable for the western countries, their mindset and training may not allow them to understand the requirements of rural consumers.

Marketing with the Help of Traditional Media
Traditional media would serve as a great driver to generate awareness among rural consumers. Skits, magic shows and educational drives by NGOs are among the preferred traditional media that marketers can use to good effect. These engage the interest of rural consumers and go a long way in establishing your brand in their minds.

Things are certainly changing. Consumer financing schemes, insurance schemes and promotion associated with delivering products to consumers will be preferred. Says Atmanand, Understanding the needs and desires of the Indian consumer, price competitiveness, innovation and R&D form the key to unlocking the potential of this vast market.

PROBLEMS IN RURAL INDIA:
Electricity shortage
Acute water shortage
Poor availability of transport
Inadequate consumer finance options

OPPORTUNITIES TO BE EXPLORED BY COMPANIES:
Can you make energy-saving products?
Can you provide a washing machine that consumes less water?
Can you provide easy access to the product?

Entrepreneur October 2009