Be patient when you target rural markets: R V Rajan

The title of your book says Don't Flirt With Rural Marketing.Is that advice or a warning? If you were to choose one company that has done a fantastic job of marketing to rural India which one would that be and why?

The full title of the book is Don't Flirt With Rural Marketing: The Handbook of Rural Marketing. The first part is a warning and the second part has practical tips for people already into or planning to get into rural marketing.

The most enduring example is that of Hindustan Unilever (HUL), which has been targeting rural markets for over seven decades. But if I have to single out one company that has made a huge impact in rural markets in the last two decades it would be LG Electronics. It is an example of a multinational company, which realised the potential of rural markets very early and started with a customised television set called Sampoorna, a made for rural-urban range of low-priced colour TVs that was positioned just above the black and white TVs of the same size. This helped LG penetrate rural markets with a prime-mover advantage.

To achieve bigger results, the top management decided to create a separate vertical with a dedicated management team and a separate distribution network. The rural teams were given separate targets and promotional budgets. The result is there for all to see. Today LG is the market leader in the white goods segment because of its rural-focused service and distribution network.

The compelling case for the bottom of the pyramid has driven many small and medium sized companies to rural India. What are the infrastructure hurdles brands face while servicing rural markets?

First, I would like to disagree, with due respect to the (late) management guru CK Prahlad that there is fortune to be made at the bottom of the rural pyramid. More and more companies in India are realising that the fortune really lies in the middle of the pyramid. In fact, with the middle class burgeoning in rural India with greater purchasing power, the triangle has become a hexagon and every marketer's hope is to get a share of the mind of this growing aspiring, middle class in rural India. But it is not easy to penetrate this market because the rural folk are brand sticky. Unless a company is willing to invest in research and a separate vertical to concentrate on rural markets, it should not even think of going rural.

Having an activation programme, taking a few vans around select districts of a few states once in a while is no rural marketing. If you have the willingness to invest in the long term, any marketer with the right product can succeed in rural markets.

I don't agree that distribution is a hurdle to reach rural markets. All popular brands of HUL and a few other brands like Colgate are available in sachet packs in petty shops in the remotest villages. Not because these companies are physically reaching the villages. It is because their communication beamed through television is reaching the nook and corner of rural India, a demand is generated and the supply is effected by the local shopkeepers buying brands from the nearby feeder-markets and stocking the brand in preferred sizes. So if you reach the feeder markets and do effective communication, you can consider yourself having begun your foray into rural markets. But to reap the rewards you have to be patient.

How has the mobile revolution affected brands' reach and power to serve this market?

Mobile phones, with the ability to provide all kinds of information on finger-tips, have already affected the role of middlemen who have exploited rural folk for generations. Information rich IT systems are also helping to eliminate the traditional gatekeepers of village societies. These systems will help in democratising access to the rural folk and bridge the rural-urban divide.

Another challenge would relate to sensitising rural folk about climate change and its impact on society. Can you give us examples of brands that are doing this job in an exemplary manner?

Many companies dealing with agri-inputs are involved in such activities. One name that comes to my mind is the e-Choupal initiative of ITC launched in 2000 under which farmers were informed of not only the weather conditions but also the prevalent prices of their produce in different markets. Under e-Choupal, a host of other services have also been added over the years. Even some of the mobile service providers like Airtel have Apna Choupal; Vayalum Vazhvum is a mobile value added service being offered by Vodafone in Tamil Nadu, which offers updates to the farmer on several issues affecting his crops. Nokia Life Tools initiative is another service which has impacted the rural society positively in addition to building the brand.

Besides price, what other tactics work in rural areas? Have the triggers changed over the last five years or so? 

If a company can offer a brand that satisfies the needs of rural folk and promises value for money and if the message is communicated in their language and style effectively, chances of success are greater. While for FMCG brands the urban-rural divide is reducing, there is still a gap when it comes to consumer durables.

Even today, the role of opinion leaders is continuing to play an important part in the decision-making process for a consumer durables brand which costs a few thousand rupees or more. But it is not the village elders but the educated village youth, who are having a say in the choice of brands. Thanks to growing literacy and multiple choices of media, it is becoming easier to communicate with the rural folk. The concept of 'media dark' areas is a thing of the past.

What are the lessons entrepreneurs can learn from large brands such as Ghari or Thums Up that have successfully penetrated these markets? 

The lessons that a marketer can learn from regional brands are as follows: find a niche segment for your brand. Develop a product that fills a need gap and satisfies local tastes. Ensure that the packaging and pricing is right. Use a communication programme that creates empathy in the minds of the customers. Deliver the same through cost effective local media. My advice is to go 'bottom up' and not 'top down.' The success of brands like Ghari and CavinKare that started with a rural focus and are giving MNCs brands a run for their money proves the point.

What is your advice to international entrepreneurs working in low-income markets who are looking to establish their footprint in India? 

Before they enter the market, they must conduct a thorough study using the services of rural-focused research agencies to understand the potential of the market for their kind of products and then develop a rural strategy. I have met many brand managers who want to try out a pilot rural project in one or two districts of a state and based on the lessons learnt they would like to go national. If rural marketing was that easy, we would have more success stories than the hundreds of aborted rural attempts by several corporates.