While many admit that rural life is less exciting than its jazzy urban counterpart and that the job opportunities for a rural person are definitely less than those of his urban colleague, many also agree that the rural client is slowly emerging as a potent customer for marketing companies. And why not? After all, in sheer numbers, rural consumers present a large opportunity. This sector comprises 700 million of India’s billion plus population. And if a report by the Associated Chambers of Commerce and Industry is anything to go by, then the rural consumer goods sector will grow at the rate of 40 per cent whereas urban growth will be on a much lower pitch — 25 per cent. What is even more interesting is the fact that around 40 per cent of India’s total retail market of $280 million co-mes from the rural segment.
The rural customer has more purchasing power than you think! So how can companies target this potential segment? Says Saumya Chattopadhyay, head, Strat-egic Planning, Rediffusion Y&R, “Exhibitions and road shows definitely act as key platforms for targeting the rural customer.” Word of mouth has more significance for him than his urban brethern. “For instance, if someone from a village likes a product, you can rest assured that his family and friends will buy it as well,” says Chattopadhyay. Of late, the rural base is more exposed to IT and mass media, hence, their dependence on traditional reference groups is on the decline. As PR advocate and socialist Rita Bhimani, explains, “Today the rural group is as exposed to mass media as his urban counterpart is.”
However, advertisements targeted at the rural consumer must have certain qualities. This particular customer has a preference for bold colours and red and green are his all-time favourites. Ads must paint pictures in bold. His status symbols are also completely different from those of the urban customer: a large house, ownership of a large tractor, telephone and children’s education in cities represent his status symbols. “Yes, the rural customer, too, can be dedicated to his brand. He, too, has realised that brand switching can be a great risk.”
An interesting fact is that the rural sector has not been too affected by the global slowdown. Hence companies like Reliance, Coca Cola, LG and Mahindra have reported growth from rural sales. That has definitely offset an overall market slowdown. For Reliance Communications, the rural segment is definitely one to reckon with. Urban teledensity is near saturation point and if the company has to expand its sales, the rural sector is the best market to watch out for. However, it is prudent to remember that it will definitely be uneconomical to reach out to villages with a low population density. After all, limited physical access, scanty distribution channels and a low density of shops will make the marketeer’s work extremely difficult. One could look out for alternative modes of reach like village markets or haats. These markets are the nodal points of getting to the customer.
Experts like Chattopadhyay agree that the subscriber in villages will soon be the target of mobile companies. The subscriber base should grow to 500 million by 2012 and the base in these areas is expected to grow from 25 per cent to 40 per cent.
And if you are still in two minds, here are a few hard facts. Insurance companies have realised the potential of the segment and have come up with low-priced products to target consumers here. Consumer major GE has launched low-cost de-vices like a portable ECG machine in order to provide affordable healthcare to the rural population. WIPRO’s non-IT divisions have already registered a 20 per cent growth in the segment. LG Electronics expects that 45 per cent of its total sales in India will be from the rural sector. Even rural BPO companies like eJeevika want to exploit the pool of trained labour, particularly in services where the local language is needed. This is mainly because services are available at a lower cost. Of course, a higher retention of rural employees is an added bonus.
The author is a well-known industry watcher