Rural Retail Revolution COVERSTORY Rural Youth FEATURE ICICI PRUDENTIAL & RMAI 4 Annual Summer Project EVENT th JULY-2011 A quarterly publication of Rural Marketing Association of India THE RURAL MARKETING JOURNAL VOL-1 ISSUE-1 Presents A Report on Haats Rural Marketing Association of India For more details log on to www.rmai.in or write to: [email protected] / [email protected]Contact Address: Rural Marketing Association of India C/o. MART A-32, Sector -17 Noida – 201301/ Phone: 0120 – 2512140 / Mobile : 9716784444 The report captures the overall dynamics of a Rural Haat from thess perspectives- Haats as the Rural Marketing Hubs Haats as point of Sales and Redistribution Haats as Point of Communication It tries to undetstand the overall profile fo haats, behavior of FMCG sellers and buyers in haats of different states. The study puts a major focus on FMCG products and brands sold at haats across the country Perspective of a total of 1,260 respondents spread over 140 Haats across 7 states (Uttar Pradesh, Bihar, Madhya Pradesh Mharashtra, Orissa, Tamil Nadu and Andhra Pradesh) has been included in the study. The Rural Haats offer a ready made platform for all the national and regional FMCG and durable companies for not just selling but also promoting their products to a large set of rural habitants at one single place and this huge opportunity should not be missed at any cost.
Transcript
Rural Retail Revolution
COVERSTORY
Rural Youth
FEATURE
ICICI PRUDENTIAL & RMAI 4 Annual Summer Project
EVENT
th
JULY-2011
A quarterly publication of Rural Marketing Association of India
THE RURAL MARKETING JOURNALVOL-1 ISSUE-1
Presents
A Report
on
Haats
Rural Marketing Association of India
For more details log on to www.rmai.in or write to:
Contact Address: Rural Marketing Association of India
C/o. MART A-32, Sector -17 Noida – 201301/ Phone: 0120 – 2512140 / Mobile : 9716784444
The report captures the overall dynamics of a Rural Haat from thess perspectives-
Haats as the Rural Marketing Hubs Haats as point of Sales and Redistribution Haats as Point of Communication
It tries to undetstand the overall profile fo haats, behavior of FMCG sellers and buyers in haats of different states.The study puts a major focus on FMCG products and brands sold at haats across the country Perspective of a total of 1,260
respondents spread over 140 Haats across 7 states (Uttar Pradesh, Bihar, Madhya Pradesh Mharashtra, Orissa, Tamil Nadu
and Andhra Pradesh) has been included in the study. The Rural Haats offer a ready made platform for all the national and
regional FMCG and durable companies for not just selling but also promoting their products to a large set of rural habitants at
one single place and this huge opportunity should not be missed at any cost.
The Rural Marketing Association of India
Become a Member of
For more details log on to www.rmai.in or write to:
Contact Address: Rural Marketing Association of India C/o. MART A-32, Sector -17 Noida – 201301/ Phone: 0120 – 2512140 / Mobile : 9716784444
IN THIS ISSUE
On behalf of also conducted a rural marketing mini goods vehicles. Improved
RMAI I would course at SP Jain, MICA, FMS, Jaipuria internet connectivity, rapid spread of
like to apologize and other B-schools. TVs and mobile phones have led to
f o r t h e higher awareness levels among rural RMAI has also been active in enrolling inordinate delay c o n s u m e r s . C o m p a n i e s a r e new corporate members. We now in bringing out responding by designing appropriate have a total 52 members including this issue of The products for rural consumers. many big companies like Maruti, ITC, Rural Marketing
The growing interest in the rural Nokia, Hero Honda and others. Journal. This market is reflected in the proliferation happened because our editor went on
thThe 5 AGM of RMAI was held on July of conferences, seminars and training maternity leave and it took us a while 7, 2011 at Delhi. All existing office programs being held. A number of to make alternate arrangements. bearers were re-elected unanimously. them are conducted by event The office bearers for 2011-12 areThough the Journal was delayed, companies who lack knowledge on
RMAI was active during this period. the subject. They charge exorbitant
We organized a number of events fee from participants because their th main objective is to maximize profits. starting with the 4 Annual Summer
Unfortunately the quality of these Project Awards held at IIM Bangalore
programs is also poor. on September 23, 2010 sponsored by Rural markets continue to show robust
ICICI Prudential. This issue of the growth. Last year FMCGs grew by 17% Internationally the interest is more in Journal contains a detailed report on in rural vs 12% in urban. Durables grew the BoP segment of emerging this event. This was followed by our 29% in rural vs only 10% in urban. The markets. I was invited as keynote major event 'Third Bi-annual RMAI pro rural government initiatives and speaker to a Swiss funded event in Rural Marketing Works-Case Study schemes, rapid rural infrastructure Bangladesh on BoP innovation and Awards' held at a glittering ceremony development, eight good monsoons Inclusive Marketing. In March 2011 I on November 26, 2010 at PHD and two fold increase in minimum participated in an exclusive gathering Chamber Auditorium. An impressive support price for food grains have of 30 hand-picked Global CEOs in 175 participants attended the enhanced incomes and fueled the France on innovating for the poor. I am function which also had a good rural growth story. Last year alone a speaker at a session on rural and BoP presence from the media. The event N a t i o n a l R u r a l E m p l o y m e n t markets on July 29 at the China India was covered extensively by the media. Guarantee Scheme (NREGA) has put Consumer Insights Conference being This time we had a record 75 entries. an additional Rs 44,000 crore in the organized by Yale University, USA.The event was sponsored by h a n d s o f t h e p o o r. R a p i d
Crompton Greaves. We organized two electrification has led to enhanced Happy reading.
Rural Immersions Programs (RIP), one economic activity in rural areas. 70%
in Pune from January 17 to 19, 2011 villages are now connected by high
and the other at Delhi on March quality roads resulting in a spurt in sale
22&23, 2011. The program at Delhi of Hero Honda motorcycles, Maruti
had a record 32 participants. RMAI cars, and Bolero SUVs and Tata Ace
With changing consumption patterns and the increasing impact of the
urban society on the rural pockets of the country, the retail revolution is on the anvil.
Rural Retail Revolution
The veteran marketing guru, Prof. C.K. the employment, retail sector in India convenience stores, malls, multiplexes
Prahlad, has rightly stated, “The future is gradually inching its way towards and fun zones are fast dotting the
lies with those companies who see the becoming the next biggest sector in retail landscape. However, there is a
poor as their customers." Rural India is the industry. huge potential embedded deeper to
characterized by low per capita penetrate the rural market by The retail revolutionincome, low productivity, low literacy u n d e r s t a n d i n g t h e c o m p l e x In a playfield of 15 million retailers,
and low rate of industrialization along composition of a rural consumer. The with most of them owning small mom
with absence of basic amenities. The retailers find the rural physical and and pop outlets, we also have a
unprivileged class suffers a major geographical expanse daunting. It is parallel market of modern retail
setback due to lack of educational really a nightmare for any marketer to flourishing like never before. The total
opportunities that could empower address the needs of 600,000 plus number of rural households has risen
them and give them a ground to villages spread over a geographical from 135 million in 2001-02 to 153
confidently pursue economic progress area of over 3.2 million square mi l l ion in 2009-10 , g iv ing a
and overcome the debilitating effects kilometres, and that too hardly tremendous push to the rural retail
of low literacy and rigid social connected by all weathered roads. market. There is little room for conflict
hierarchies. The Indian rural retail about the fact that India presents a
potential is currently estimated to be unique case of consumption-driven
in excess of Rs. 1400 bi l l ion economy: while the US reels under
(approximately US$34 billion). The recession, where supply clearly
figure is likely to touch Rs. 1800 billion outstrips demand, India confronts
(approximately US$ 43 billion) in 2010 inflation, where Industry and retailers
and go up to Rs. 2400 billion have not been able to meet the
(approximately US$ 58 billion) by consumer demands. Over the last few
2015, according to a CII - YES BANK years Indian retail has witnessed rapid
Study on the Rural Retail Sector. transformation in many areas of the
India's rural markets are growing at business by setting scalable and
double the rate of urban markets and profitable retail models across
the retail revolution is going to act as a categories. Indian consumers are
catalyst. Retail, one of India's largest rapidly evolving and accepting Led by the rising purchase power, industries, has emerged as highly modern retail formats. New and changing consumption pattern, dynamic and fast paced industries
increased access to information & i n d i g e n o u s fo r m a t s s u c h as with several players entering the
t e c h n o l o g y a n d i m p r o v i n g departmental stores, hypermarkets, market. Accounting for over 10% of infrastructure, rural retail market s u p e r m a r ke t s , s p e c i a l t y a n d the country's GDP and around 8% of
Potential of Rural retail in India
The trends that are driving the growth of the retail sector in India are:Low share of organized retailingFalling real estate prices Increase in disposable income and customer aspiration Increase in expenditure towards luxury items
282.23 million to 288.12 million. The power,” he said. At present, size of the
growth of rural subscription (2.09%) is Indian FMCG market is estimated to be
higher than the urban subscription around Rs 1.25 lakh crore and is
(1.65%). The overall urban teledensity growing at the rate of 12 per cent.
has increased from 157.32 to 159.63 Traditionally, good monsoon plays a
and rural teledensity from from 33.79 major role in FMCG firm's rural sales as
to 34.47. agricultural output determine
farmer's income and consumption netindian.com power.
Hindu Business Line, New Delhi
The Indian Fast Moving Consumer
Goods (FMCG) firms are unfazed by
India Meteorological Department's
forecast that the country might
witness a below normal monsoon this
year, saying the sector will not be
i m p a c t e d a s d e m a n d a n d
consumption power are unlikely to
fall. “We expect normal monsoon,
good crop and therefore a good
agricultural season this time. So we
expect that demand will be better and
FMCG sector will definitely have a
good growth this year,” Godrej Group
Chairman Mr Adi Godrej told PTI.
Similarly, Emami Group of Companies
Director Mr Harsh Agarwal said there
is no need to worry over IMD's
prediction that rainfall will be below
normal this year at 95 per cent of
average. “Monsoon may be below
normal in certain parts of the country.
We don't see any major impact on the
sector as there will not be much of a
difference in the consumers' spending
Low rainfall fail to deter FMCG
companies
Rural Banking
unbanked areas. Around 300 licenses
are with the RRBs for opening new
branches with the recruitment of new
staff and about 300 licences are in the
pipeline.The satellite or extension
counters could act as subsidiary
channel of the nearest branch within a
radius of maximum 10 km. The bank
management should also consider
providing mediclaim and death due to
accident or murder cover for the staff
working in these areas.
Regional rural banks (RRBs) — which Telecom minister Kapil Sibal on Friday have been mandated to open close to announced a scheme is to provide 2,000 branches in the unbanked areas broadband connectivity to panchayati of the country by 2012 — have urged raj institutions, which will cost for certain subventions from the Rs20,000 crore in the initial phase. The Union Government. scheme will be completed by 2014, he
said.I n A u g u s t , 2 0 0 9 , t h e U n i o n
Government had directed 82 RRBs, This will mean gram sabhas at the working with the then highest rural village level will be connected with the
rest of the governmental system, network of 16,500 branches, to open opening up new avenues for delivery 2,000 more branches in the unbanked of services to the people, including e-area over the next two years. governance, e-education and e-
RRBs have urged the Government to medicine.allow some of these branches to be set
It is clear that the UPA wants to go to up as satellite, extension counters or elections with the achievement of a even mobile van branches. They have substantial, popular scheme in its also asked for subvention for opening pocket.
branches in the hilly or terrorist areas The scheme will be implemented at the initial period, “RRBs have so far through creation of a national optical
fibre network (NOFN). The Rs20,000 sent around 1,500 proposals to the crore funding will be drawn from the Reserve Bank of India for opening new universal service obligation fund branches. They have already opened (USOF).
more than 900 branches in the
JULY, 2011 JULY, 2011
SNIPPETS COVER STORY
Digital Rural India
holds great scanty. Rural retail market is at its The Indian rural market with its vast Many corporate houses in India, in nascent stage and it seems logical to size and demand base offers great addition to the foreign players are take early mover advantage. The opportunities to marketers. . Two-firming up concrete plans to tap the
potential is immense, but right now, thirds of countries consumers live in rural retail market. investment in rural retail market is
The following points reflect the very low as the focus lies on grabbing growth potential of rural retail market the urban marketin India: Rura l per cap i ta consumption of FMCGs will catch up with the current urban levels by 2017. According to experts, the FMCG sector in the rural area has displayed a growth of 40 % in comparison to 25 % in urban market.
Right now, one out of six rural
customers has access to organized
retailing or distribution. So, rural
retailing has tremendous potential for
growth.
A major part of “Bottom of Pyramid”
consumer class resides in rural
areas.
There is paradigm shift towards
higher value consumption among
rural consumers like from tooth power
towards tooth paste, from local
brands towards popular national
brands.
Though internet penetration in rural
areas is very low but concepts like m-
cash by ICICI bank is providing an
impetus to rural retailing as mobile
telephony has made its way into rural
market. Rural areas account for half the total
The Indian retail market, which is the market for television, tooth powder,
fifth largest retail destination globally, fans, pressure cookers, washing soaps,
according to industry estimates is tea, salt etc.
likely to grow from US$ 330 billion in Currently, the presence of modern
2007 to US$ 427 billion by 2010 and retail formats in rural areas is very
US$ 637 billion by 2015.
potential for retailers.
France 80
Japan 66
Malaysia 55
Brazil 36
Russia 33
China 20
India 5
85USA
Organised retail penetration level(in per cent)
Source:ICRIER (Working Paper No.222)
PRE-HOUSEHOLD CONSUMPTION IN RURAL INDIA WILL REACHTODAY’S URBAN LEVELS BY 2017
Average rural consumption per householdthousand, India rupees. 2000
Source: MGI India Consumer Demand Model, V1.0
Urban India2005E
1905 1995 2005E 2015F 2025E
113
4550
07
104
153
in rural areas and almost half of the
national income is generated here. It is
only natural that rural markets form an
important part of the total market of
India. India is classified into around
600 districts and 6,30,000 villages,
Called Sakshat in Sanskrit, meaning broadening and deepening the money sector banks of India, Corporation
personification, the tablet is aimed at market and to some extent the Bank and Central Bank of India to
college students and the rural Government Securities (GILT) market,” make rural India self- sustainable.
consumers. Gokarn added. The deputy governor Yo u t h E n t e r p r i s e f i n a n c i n g
said that the money market oriented programme will run through these Hindustan Times, New Delhi MFs witnessed a phenomenal growth. banks in rural parts of India. Under this
However, “GILT funds have registered programme, credit will be facilitated
a moderate growth. AUM under GILT is to young people, women and youth
less than half a per cent of the living in rural areas of India. While, the aggregate assets. Role of MF in the mentor ing , capacity bui ld ing ,
government securities market is not monitoring and evaluation to the rural The Reserve Bank of India (RBI) has
very encouraging,” he said. young entrepreneurs will be provided asked the domestic mutual fund
by the Commonwealth Secretariat. industry to come up with appropriate schemes to attract the savings of low-Agenciesincome groups especially in the rural
areas of the country. The Central Bank A Pune-based company has initiated a said that despite having a long history, new SMS newsletter service for the fund industry has assets less than mobile phone owners in rural 10 per cent of the country's GDP. Subir The number of telephone subscribers Maharashtra dedicated to local news Vithal Gokarn, deputy governor of RBI, in India increased to 861.48 million at for the last two years. This service said, “Role of mutual funds in the end of April 2011 from 846.32 r e a c h e s o u t t o n e a r l y 3 0 0 promoting saving at this point million at the end of March 2011, a communities spread across 25 continues to be insignificant in India. growth rate of 1.79 per cent, detailed districts in the state. And most Attracting low-income groups is the data released by the Telecom importantly it has become a source of only way to ensure participation of all Regulatory Authority of India (TRAI). income for the rural youth, who call categories (of investors) in the The share of urban subscribers has themselves 'mobile' journalists. They financial market as mutual funds marginally declined to 66.56% from are paid Rs Rs 3,000 to Rs 6,000 per clearly have a role in financial 66.65% where as the share of rural month.development.” He was speaking at the subscribers went up marginally from 7th Mutua l Fund Summit o f Agencies 33.35% to 33.44%. With this, the Confederation of Indian Industry (CII). overall teledensity in India has gone up He further stated that RBI regulates to 72.08 at the end of April 2011 from m o n ey m a r ket s , G ove r n m e nt 70.43 in the previous month, the Securities and the foreign exchange f igures show. The te lephone market. “Mutual funds have presence subscription in urban areas grew from The Commonwealth of Nations, an in the first two and therefore RBI is 564.08 million in March 2011 to intergovernmental organisation of 54 interested in the role MF play. Mutual 573.36 million at the end of April. independent member countries, has Funds have played an important role in Rural subscription increased fromcollaborated with two leading public
Attract savings of low-income groups:
RBI
New SMS service for rural communities
Telephone subscriber base hits a high
Two Indian Banks roped in for Rural
Program
JULY, 2011 JULY, 2011
SNIPPETSCOVER STORY
which can be sorted in different
parameters such as literacy levels,
accessibility, income levels, penetration, distances from nearest
towns, etc. Almost 70 % of India's
population hail from rural areas.According to the NCAER study, arketing in rural pockets is all
there are almost twice as many 'lower Mabout ensuring a personalised
middle income' households in rural touch, where personal selling plays a
areas as in the urban areas. crucial role. People, here, prefer face-At the highest income level to-face communication. However,
there are 2.3 million urban households given the huge divide between the as against 1.6 million households in rural and urban social matrix, the rural areas. younger generation brought up and
In urban India, the same is educated in cities is somewhat expected to grow from 46 million to 59 reluctant to explore the remote rural million. Thus, the absolute size of rural markets. Another major setback India is expected to be double that of suffered by the agrarian markets is the urban India. lack of infrastructure, which includes As organized retail in rural India awaits
facilities like schools, hospitals, the arrival of Reliance Retail, current
housing and entertainment centres. majors like ITC, Godrej and DSCL are
The huge gap in the standard of living expanding their retail operations by
leads to a dearth of experienced and setting up more stores, entering new
academically trained hands in the states and offering newer product
Indian villages. Some other reasons categories. A shift from selling agri-
which distance the talent pool from inputs will help these stores target the
these lucrative markets are:non-farming segments. It is a little
known fact that, while 25% of the rural
population is not engaged in agricul-
ture, it earns 50% of the rural income.
[ Ashish Gupta is a Research Scholar at
School of Management Studies, M N
National Institute of Technology,
Allahabad (India) ] By Ashish Gupta
Rural youth: A burgeoning workforceAbsolutely grounded in their roots and the socio-cultural matrix,
the rural youth holds tremendous potential and can be groomed
as perfect marketers
b) Most of the village roads are in bad
condition and driving a vehicle is a
strenuous activity.
c) The sales people travelling to
these destinations have no other
choice but to stay in small, sub-
standard hotels and have to put up
with problems like salt water, mosqui-
toes, unkempt and dirty rooms and
unclean toilets.
d) During the post-harvest and
festival season many shops are kept
open till late in the night and the
marketers have to spend long hours in
the market to generate business for
the company.
e) Further, a typical rural customer is
not in a hurry to buy things and
therefore the sales call takes a longer
time.
f) The tight work schedules leave no
room for the sales person's personal
life and in many cases their health
takes a back seat due to consumption
of unhygienic food.
g) The farmer leaves for the field
early morning and returns home late
in the evening. This implies that a sales
person has to start his day early and
a) The uneven dynamics of the rural
markets are highly scattered and are
spread over wide geographical areas.
The sales executives have to undertake
long journeys moving from one market
to other and have to cater to a cross-
section of customers who have varied
interests and mindsets. The public
transport facilities are poor in rural
areas, which call for a lot of commuta-
tion time for the sales person.
LG clubs with ITC for rural sale 2.1%. In April, rural drug sales grew by rumour…it's not even a rumour, it's a LG Electronics India will sell its prod- 28.6% against 12.4% and 2% in 2010 non-factual information. There is no ucts through retail subsidiaries of ITC and 2009, respectively, data from IMS question of Bata being taken over by Ltd and DCM Shriram to expand its Health Information and Consulting Adidas or anybody else. There is no reach in the countryside as the Services show. Though rural markets truth. If the market responds to our consumer giant hopes to nearly triple account for a modest 18% of the Rs performance, don't blame the its revenues in the next three years. 58,000-crore domestic drug market, rumour. Even when the Sensex was The company will spend Rs 100 crore drug firms and analysts expect this falling, Bata's shares were rising,” to push its products through ITC's e- segment to sustain the high growth Sinha said. The foreign promoters Choupal and DCM Shriram's rural rate and increase its share in the pie. currently hold about 52.01% stake in retail venture, Hariyali Kisaan Bazaar , Bata India.
Economic Times, Delhisaid LG Electronics India chief operat-DNA, Kolkataing officer YV Verma on Saturday. "We
have identified towns in 14 states that
have more than 50,000 people. The
strategy is to tap distributors of FMCG Bata India's outgoing chairman P M products, fertilisers and two-wheelers Sinha has an ambitious vision. Sinha, who have a dominant presence in who recently stepped down from Hoping to revive the cheapest com-these areas," Verma added. Bata, wants to see the country's best puter in the market, India has now
known footwear retailer growing its introduced the world's cheapest The Economic Times, Kolkata
turnover, which stands at Rs1277 tablet. A solar-powered, touch-screen
crore in 2010, four times within the computing device priced at 1,500
next five years. “My ambition, and my rupees (US$35; Dh128) was finally
board colleagues know about it, is that introduced into the Indian market this Pharma companies have seen growth we should be four times the current month after it was unveiled six months rate of their rural market sales dou- turnover within the next five years,” ago by Kapil Sibal, India's human bling on the back of aggressive Sinha said after the annual general resource development minister. It is marketing initiatives. Improved acces meeting. The ambitious plan, Sinha said to be the answer to $100 laptops to healthcare and rising incomes have said, would be achieved through developed by the Massachusetts seen a stronger perk-up in the organic expansion only. “The expan- Institute of Technology. The Indian underserved rural market over the sion plans as of now are all organic,” he version was developed by researchers past year. For the 12 months period said when asked if the plan factors in at the Indian Institute of Technology ended April 2011, India's rural drug any possible domestic acquisition. and the Indian Institute of Sciences, market grew 18.8% compared with Sinha also strongly denied recent considered the country's leading 10.9% in the previous year. This is a market rumours that a international technology institutes. The device is sharp jump from the growth rate in footwear major is planning a takeover being manufactured by an Indian IT the same period of 2009, when the of Bata, which catapulted its shares to company, HCL Technologies, with rural market had actually shrunk by a 52-week high. “It's totally a headquarters in the city of Noida.
Bata foray into rural markets
India introduces world's cheapest
laptop
Pharma companies gain a rural edge
JULY, 2011 JULY, 2011
SNIPPETS INSIGHT
the closing time is also not at his The rural youth could be trained to sales representatives under the
discretion. But the sales person who is undertake activities such as meeting control of super distributors for
based in towns reaches the rural key consumers and influencers like meeting the village merchants and key
market late in the morning and also t e a c h e r s , v i l l a g e p r e s i d e n t , influencers. Their expenses are
returns early to his base town at the Gramsevaks, conducting demonstra- shared between the company and the
end of the day. In this process, he tions with the products, arranging for distributors.
misses the target customers during display of promotion materials, c) Agricultural input companies morning and evening hours. participating in melas, liquidation of dealing in seeds, fertilisers and stocks from dealers and distributors
Considering the rural environment pesticides make extensive use of local and assisting in organising village and dynamics of the rural markets, youth to promote their products at meetings and publicity programmes. there are opportunities to select the village level. Most of these people Further they could be trained to local village youth and train them to have farming background and college prepare database of consumer promote the products and act as the education. They have good under-durables like TV, refrigerator, two local ambassador for the company. standing of rural buying behaviour and wheelers etc. The local youth have the advantage of are able to build up rapport with
knowing the language, local customs Many companies have taken the villagers even during the first visit.
and the psyche of the villagers. Being initiative of using local youth for brand They prepare a list of key farmers key
from the local area, they have access promotion in rural areas. retailers and meet them at frequent
to people and can meet them in the intervals during the crop season. They a) HUL has embarked on a massive village with no time constraints. The highlight product benefits and rural campaign using the concept of local youth takes pride in working for conduct demos to convince the hygiene as a platform to reposition its large corporations and they are able to farmers about the efficacy of these leading brand, Lifebuoy. The objective develop a good image about the products. They are paid monthly is to spread awareness about invisible company and products among salary and travel expenses and are germs and good health and hygiene villagers. Since the cost of living in the eligible for sales incentives on account practices among children, the carriers villages is low, the rural youth would of achieving the desired targets. of change. The targeted audience be willing to work for a lower compen-includes primary and middle school The marketers have to consider the sation. children, parents and key influencers following in selection, training and
like teachers, retailers and registered development of village youth.
medical practitioners. As per the
marketing campaign, a team consist-
ing of two persons designated as a) Age 20-35 years
Health Development Officer and b) Family background – preferably Health Development Assistant cover from agricultural family24 villages in a month. c) Command over local language
b) Marico uses the services of Pilot
1) Election criteria would include:
Considering the rural environment and dynam-ics of the rural markets, there are opportunities to select the local village youth and train them to promote the products and act as the local ambassador for the company.
Om Puri to revive panchayats Reliance Communication Targets through TV Rural Customers
Maxx to innovate for the rural
markets
Airtel launches Kannada handsets
`Grameen Mobile Kranthi' campaign,
he said that the next wave of explosive
cellular growth in the state is expected Om Puri, who moved to television Rel iance Communicat ions has to ensue in rural Karnataka. Even when it was not so popular among announced various initiatives to though Karnataka has 17 million Bollywood celebrities, may soon come increase mobile telecom and internet mobile users in general, the number of on the small screen with a rural-based penetration in rural India with the rural mobile users in the state was just show that will highlight the role of launch of three new initiatives known five million, accounting for just 13 panchayats in vil lages. ' I was as “BharatNet” plan, “Grameen VAS” percent of penetration in rural approached by the rural development and “M2M” (Machine to Machine) market.”ministry to be a brand ambassador... solutions for rural customers. Mr S P very soon I will work in a serial. We had Shukla, President Wireless, Reliance Business Standard, Mumbaia couple of meetings, it has something Communications quoted, “The Indian to do with rural development,' Puri, telecom wireless rural subscriber base who debuted on small screen in 1988 is now over 125 million. The next wave
with the comedy show 'Kakkaji Kahin', of telecom growth is emerging from
informed Puri. 'The idea of the show is rural India. With rural base expected Maxx Mobile Communications, one of
to create awareness among the to double in the next few years, RCOM the top three domestic brands in
villagers that they should exercise is committed to drive this exponential cellular handsets, plans to launch a
their rights and have panchayats that growth through innovative and new brand of handsets for the rural
are effective. The panchayats have ground breaking service offerings and markets, which will help it garner a
been given a lot of rights and also a lot tariffs.” share of the value for money segment.
of resources, which people in general “Our Maxx brand sells at almost a 100 Press Trust of India, New Delhishould be aware of and they should per cent premium to the grey market
demand their rights - whether it is Chinese handsets sold in India. There
cleanliness or employment,' he is a huge and distinct requirement for
added. The actor, who also worked as handsets in the rural markets which
narrator for the popular television Cellular service provider, Bharti Airtel we plan to address with the launch of a
show 'Mr. Yogi', was in the capital to Limited, today announced the launch new brand with sharper focus on
offer his support for 'Fools for Forest' of Kannada handsets and a strategic these markets which are growing very
campaign, an initiative by NGO Green t ie up with Ind ian Fert i l i zer rapidly,” said Ajjay Agarwal, chairman
Peace India, which aims towards Cooperative Limited (IFFCO). This is a a n d M D a t M a x x M o b i l e
saving the forests. part of its marketing strategy to cover Communications. Maxx is contemplat-
90 percent of Karnataka's population ing christening the rural focussed IANS, New Delhi by 2009 and to achieve deeper rural brand My Phone or Mera Phone and is
penetration, Venkatesh V, CEO, currently checking for trademark
Mobile Services, Bharti Airtel, availability for the same.
Karnataka, said. Announcing its
Financial Chronicle, Chennai
JULY, 2011 JULY, 2011
SNIPPETSINSIGHT
be met and promotion activities to be
carried outc) Liquidation of stocks from retail-
ers/distributors
The rural youth with proper training
could complement the efforts of the d) Minimum High School educa- company and distributors in exploring tion the rural markets and establishing the e) Interested in meeting people
products. In addition, consumers will and communicating to them about
have the pleasure of enjoying urban products and services
facilities in rural areas.
[ R . K r i s h n a m o o r t hy t e a c h e s
Marketing /HR in Management
Institutes in Mumbai and has formerly
worked as the National Sales Manager, a) Product knowledge- company's
Sandoz.]products and competitionb) Product buying benefitsc) Handling objections
On the job coaching.
a) Detailing the products to
consumers b) product demonstrations c) Organizing meetings of villagersd) Village level retailer calls
a) Area of operationb) Targets in terms of number of
villages and number of consumers to
4) Compensation includes monthly
salary and reimbursement of travel
expenses. There should be an incentive
scheme for completing all field
activities as per plan and achievement
of sales targets.
2) Training
Classroom
3) Work plan
population, though the urban CSR is
far worse than that in rural areas, the
fall in CSR in rural areas is around four
times than that in urban areas. Rural India still has a better CSR (ratio
of girls to boys under the age of six
years) of 919 than urban India's 902.
However, between 2001 and 2011,
rural India's CSR fell by 15 points as
opposed to urban India's four-point
decline, and the gap between the two
has narrowed. Haryana has both the
worst urban and rural CSRs. Nagaland
has the best urban CSR, while in rural
areas, the Andaman and Nicobar has
the best, indicating yet again that
tribal communities have a more
egalitarian attitude to girls than other
communities. The data also highlights
that growth rate of population in
empowered action group states,
including Chhatt isgarh, Bihar,
Rajashan and Madhya Pradesh, is
nearly three times more than rural
areas in non-EAG states like Punjab,
Kerala, Tamil Nadu. The growth rate in
EAG states in rural areas is 18.7% as
compared to 5.7% in non-EAG states.
Fears on the rampant use of pre-natal The new census data on rural and sex determination technology in rural urban areas shows that India is still areas have been confirmed with overwhelmingly rural, with close to census data indicating that child sex 70% of people still living in villages. ratio (CSR) fell far more sharply in census data released shows that 377 villages than in urban areas in the last million Indians, or 31.16% of the decade. population, now live in cities. This is up
from 27.81% in 2001. According to provision data on
By R. Krishnamoorthy
Sahyog's endeavours and the audi- Ltd's initiatives to spread formal Marketing Hub for FMCG Companies.
ence visibly empathized with Ankita financial services in rural Maharashtra Sandeep Nair of IIMB presented a
Jain when she was apprehensive by launching an e-card solution, Mann project on Brand Revival of Asataf;
about how the endeavour could Deshi Bank is India's first rural financial Mohit Sareen of S. P. Jain Institute of
continue once the students move on institution to get an urban co- Management & Research, Mumbai
from their internship. “The main aim operative license from Reserve Bank showcased a project titled 'Inclusive
of our strategy was to engage the of India. Based on the observation that marketing- Strategic business Plan for
women as both the consumers as well rural women are not comfortable with RUDI in Ahmedabad' and Nitesh Yadav
as the producers of the product.” said transacting at banks, and most from IIM Calcutta presented his
Ankita while elaborating her project. villagers are daily wage earners and project on 'Unlocking the rural
The strength of the approach lies in hence, are not able to visit bank, this opportunities in East India with Focus
creating job opportunities for women model is a first of its kind. on crackers & cookies category'.
and providing them with better Addressing the students before giving products, thus encouraging self-away the trophies and certificates of esteem, she added.excellence to the students present,
Ashish Sharma's project, which Professor Pankaj Chandra, Director
earned him a Silver, aimed at under- IIMB and Chief Guest at the Function
standing the impact of the marketing spoke about the importance of
initiatives in AP & Maharashtra rural putting 'the rupee in the pocket' of the
markets to influence the attitude of rural consumer. He added that when
Loose CNO consumers to branded the consumer and producer of the
CNO (Parachute). “Rural India is a huge product is the same, empowerment of
market especially with regard to the rural economy will happen. Praising
hair care industry since it is a good fit the students for their in depth
with the traditional values of hair research, findings and strategic
oiling” he noted while making his solutions, Professor Chandra congrat-
presentation. The purpose of his ulated all the winners saying that the
research was to understand and biggest victory lies in their passion for
analyze the rural consumer buying their chosen subjects/careers.
behaviour towards coconut oil and the Other projects presented during the ways to accelerate the conversion of awards function were those of Angad rural consumer from loose oil towards Singh Uberoi & Kuldeep Singh from branded coconut oils. Sadhana Centre for Management &
The Bronze award won by Amit Leadership Development, Pune &
Chhabra and Tanvi Dhamija was an Guru Nanak Institute of Management
initiative by HSBC Bank, to support Studies, Mumbai. Their project
Mann Deshi Mahila Sahakari Bank centered on a Study of Haats as
Residential programme in rural settings developing and field testing of creative concepts.
Consumerism on the rocky roads of Rural IndiaThe Indian rural market holds a huge potential for the consumer durable market, which has led to newer trends and growth opportunities
Try imagining the following situation: India's consumer market is riding the 2015, says an article published in the A ganesha idol decorated with glittery crest of the country's economic boom. Business Standard newspaper. gota (lace), Ganga jal, a small portion Driven by a young population with Although with the increasing cost of of rice, pinch of sindoor, well lit access to disposable incomes; luxury manufacturing (primarily sourcing of dhoop/diya, sweets and our pooja ki made affordable due to competitive raw material) translating directly into thali is ready (a platter with a number pricing and easy finance options, the higher costs for consumer, there is still of items needed to conducted a consumer market is painting an no significant downfall in the demand prayer). The stage is absolutely set to extremely potential and promising for the goods. The sheer, year on year usher in blessings and prosperity canvas for the future. numbers are a testimony to this. straight from the heavens. It's one of
The icing on the cake comes from the those days where everything is 70% of the population residing in rural different. Children have been awake and semi-urban markets showing an the entire night because of the estimated growth rate of 40-45% in excitement for the next day, neighbors the near future versus the urban are equally upbeat about the special counterpart with 9-10% year on year occasion, today mother is draped in a growth, says an industry report by special sari and is eagerly waiting for ASSOCHAM. Industry experts say that papa to come home. What is it? What rural market is soon to reach its is keeping everyone so restless? inflexion point. The built up will lead to
Standing at the door with pooja ki an explosion in the demand the way it thali, everyone waves at papa. Papa happened in urban markets in mid-enters the home and suddenly, 90's everyone walks past him to something
else, something that is hidden in a big
box. Then the grand unveiling happens
and we see a box which is filled with
“khushiyon ki thandak”. Narrowing the focus to consumer * It's the family's first refrigerator. durables, the scenario is equally * It's a milestone in their life. optimistic. The consumer durable * A symbol of their graduation to the
market is estimated to be INR 300 next level.
billion in the last fiscal year and is
expected to reach INR 500 billion by
Did you know?
O u t o f t h e 1 6 2 , 4 9 3 , 0 0 0 households in rural India, there are 150,078,535 households still awaiting the experience of welcoming their first refrigerator. Now imagine, if you were to sell your refrigerators to only 1% of these households. That makes 1.5 million units sold in rural India and comparing the same with urban India, 1% of households equate to slightly less than half of the rural households, 710, 230 units only. Key takeout: You know better!
The IIM Bangalore campus recently The Silver Trophy and cash Prize of Rs, saw corporate attendance by
played host to the 4th Annual Rural 15,000 was awarded to Ashish Sharma Crompton Greaves, Maruti Suzuki,
Marketing Association of India (RMAI) from IIM Lucknow for his project on Modi Tea and Dr. Reddy's, which
Awards for Summer Projects in Rural Understanding and Analyzing the triggered an exhaustive discussion
Marketing. An initiative of RMAI, the Attitude and Usage Behavior of Rural between the students and the
awards are presented to the best Consumers in Andhra Pradesh & representatives of these companies
summer projects by students from Maharashtra and developing a who recognized the importance of
some of India's most prestigious marketing mix for the rural markets. these findings on rural consumerism
Management Institutes and Business and trends. The third best Summer Project was Schools. This year the title sponsors that of Amit Chhabra & Tanvi Dhamija, The Gold Award winners Ankita and were IC IC I prudent ia l whose students of IIM Indore and Institute of Sobhit's impressive presentation on endeavours for rural empowerment management, Nirma University, empowering women at various levels via education were encapsulated in a respectively. The Bronze trophy and a stood out amongst all the projects of two minute documentary which was cash prize of Rs 10,000 were collected the awards. The students not only aired during the Awards ceremony. by their representative Abhishek observed and reported on the market Associate sponsor for the awards were Mittal of IIMB who presented the but were actively involved in imple-SOI, Live Marketing & Events. project and collected the award on menting inclusive marketing and
Ankita Gupta & Shobhit Jain from their behalf.
Indus World School bagged the Gold The winners were chosen by an Award Trophy and a cash prize of Rs eminent panel of judges who also 25,000/- for their project on selected the Top Ten Best Summer Developing and Executing a complete Projects this year. The panel consisted business model for an emerging of Harish Bijoor, one of India's top enterprise -Sahyog.Brand Consultant and Thought leader,
R.V Rajan, the doyen of Rural employing rural women throughout Marketing in India and Mithileshwar the value chain. Women's personal Jha, professor of Marketing, IIM hygiene, spreading awareness for the Bangalore .same and introducing sanitary
Professor Jha was also present at the napkins, hitherto a very urban
Awards Function along with the Chief product, into rural markets was an
Guest Prof. Pankaj Chandra, Director unusual but a welcome choice for the
of IIM Bangalore. The ceremony also project. It was heartening to see the
ICICI Prudential & RMAI present 4th Annual Summer Projects AwardsStudents from Indus World School bag the gold, while IIML, IIMI and Nirma University grab the three other top slots.
“The strength of the approach lies in creating job opportunities for women and providing them with better products, thus encouraging self-esteem”
Gold Award winner Ankita Gupta, Indus World School
“When the consumer and producer of the product is the same, empowerment of rural economy will happen.”
Prof Pankaj Chandra, Director IIMB
JULY, 2011 JULY, 2011
INSIGHT EVENT
Rural Marketing Association of India
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hence, lowering the bottom lines. But
the most important parameter
affecting supply side is the saturation
of urban markets. With a mere growth
of 9-10% in consumer durable
category, it is becoming increasingly
difficult for marketers to make profits
here. If you look at the urban purchase
dynamics, the consumer is moving
from being a first time buyer to a
replacer, making the task of brand
'consideration to purchase' even more
evolved and hence difficult. Rural
markets on the other hand pose a
huge base of households who will be
the first time category buyers. Now, if
you look at the refrigerator category,
the frost free(FF) and direct cool(DC)
split currently is 78:22 unit wise and
value wise 67:33. Although, FF is
growing at a fast rate, the numbers still
come from the direct cool segment
and primarily entry level refrigerators
(180-190 litre capacity, <10k price
bracket) indicative of the category
driven primarily by first time buyers.The factors leading to increasing demand side of the scale. And the
consumerism, especially in rural India, much smart consumer is asking for Taking a step back and knowing that all
can be explained by fundamental more now. the de-selling has been done for our
demand-supply concept. urban counterparts, I would like to However, the more critical aspect here First set of factors are the environmental highlight the issue that all the is to evaluate what's the story on the factors like changing lifestyles, marketers in the urban markets are other side of the coin. Now, if one increasing buoyancy in the economy, presently grappling with. April-June is looks at the supply side, factors like higher disposable income, increasing the time when consumers prepare for overcrowding of markets with more media penetration leading to higher summers and as we all know summers and more players offering product brand and choice awareness and made a quick getaway during this time with little or no differentiation, flexible purchasing options. All these and sales expectation took a serious directly lead to competitive pricing, factors together drive the hit. So right now, all the LGs',
Consumer durables are segregated into 2 broad categories:
Consumer Electronics • LCDs• Home theater systems• Laptops • Personal Computers, etc.
Consumer Appliances • Refrigerators • Washing Machines• Air Conditioners• Microwave Ovens• Dishwashers• Small home appliance
In approx. 162, 493,000 rural households following is the appliance
ownership/penetration.
Growth as we know it
The development of rural areas in a The innovative technology behind the Kirana stores doubled up as smaller potential manner and the aim of Swabhiman scheme made use of a Syndicate bank branches (Business pulling the BPL families out of poverty handheld device, a mobile phone and Coordinating outlets) BCO's through becomes a somewhat farfetched idea voice activation for opening a savings which money transactions were done without a proper banking set up in account. A villager sitting in his village directly into the accounts of BPL store. The Govt. of India is designing does not have to travel any distance to families.
visit the main branch to open his Spreading awareness about the account or for any other transaction. concept of banking locally in the This is by any means, a big leap in the villages; winning the confidence and banking arena for rural India. trust of the rural community to save
their earnings; obtaining loans with Insight Outreach, one of South India's the newly opened Syndicate Banks pioneering rural marketing agencies and encouraging them to fully utilize partnered with Sub K to reach out to its advantages were the main small vil lages and opened up objectives of the event. Nationalized bank branches. The fortnight long activity from 25th Feb to Va r i o u s c o m m u n i c a t i o n a n d 11th of March 2011 was a pilot activity marketing platforms including performed in three districts of merchandized vans , artists , Kurnool, Kadappa and Anantapur promoters, signboards and AV film covering a total of 65 villages of were employed by the agency to
new initiatives to ensure direct cash Rayalaseema region. In all, 65 spread awareness and to educate the transfers into accounts of people living branches were opened at local kirana villagers about banking.in remote rural areas and encouraging shops in these small – less than 2000 the concept of savings amongst the pop villages. The activity was well-received by rural poor. Sub – k, by Basix (Micro finance customers as was evident from the company) is one such move, which is large crowds that the activity pulled helping Syndicate Bank of India to and the leads generated, essentially open branches in the 'villages c a t c h i n g t h e a t t e n t i o n , unbanked' under the initiative communicating and retaining the “Swabhiman scheme “of Government message in the minds of the potential of India. customers. A Sub-K Kirana shopThe scheme was implemented to help nationalized banks to open a gateway for the rural India to bank. An opportunity that was never put forward to the villagers finally came into existence.
Bank with Kirana shops in villagesSyndicate Bank takes banking to the doorstep of the rural populace
A Sub-K Kirana shop
Villagers attending a Sub-K meeting and gaining insights into the new concept
JULY, 2011 JULY, 2011
INSIGHTINSIGHT
Source : IRS Qy 2010
the world are running from pillar to
post to clear off their inventories,
forget about gaining profits.
FM radio, once a medium limited to How do you see t radi t ional So yes, scenario is not as pleasant as the urban areas is gradually finding an advertising over activation led one would think in the 'saturated audience amidst the rural listeners advertising in rural? Is there a growth markets' of new India but I would say and is being used as a tool of mass pattern or a significant shift?in the long run, urban markets would
Many clients are using rural activation marketing, says Mr. Vineet Mittal be all about evolved material to complement their traditional (Business Head-Rural), Reliance possessions and for which the sellers advertising efforts aiming to bring in Broadcast Network Ltd in an interview would have to work even harder in experience and conversions at the Last with RMAI. coming up with differentiated Mile. My belief is that rural activation
products. But volume gains would Excerpts: is going to get a larger but not
come from rural India. What is the listenership pattern or necessarily at cost of traditional uses of FM in rural India? advertising. Activations will be more All these factors are suggestive of With FM, radio has become very
measurement led in terms of what makes the bottom of the popular in rural India. Youth, college
co n s u m e rs d i re c t l y to u c h e d , pyramid a more viable, sensible, going students are more hooked up to
sampling, conversions, leads etc.practical and most important their radio on their mobile phones.
profitable choice. So what are you Females also mainly listen to radio on You recently did a big event, titled Big
waiting for? Let's hit the road!their mobile phones. Same goes with Aasman, tell us about it ? And what males also, only few percentage of old was the concept behind it, if there Disclaimer: The opinion expressed in generation listens to actual radio. was any client participation?the article is by an individual and does However, in absence of a formal Our recent event 'Big Aasman' was not represent the views/opinion of survey, one can comfortably say that designed for women. It was about any organization the individual is almost 15% of the rural population is enhancing the lifestyle of women. Our associated with.hooked to FM. experts addressed them on varied
aspects like beauty tips, health, How successful has been activation in hygiene, cooking, career, tailoring, etc. rural? The women spoke to our experts and Activation in rural is very successful.
cleared their doubts. Sunslik was our Yes, it is indeed. Our strategy is going
key sponsor. Samsung was also to small towns. Big FM has 45 stations.
present. This implies that almost 20%
population is under direct coverage. Rural and small town India has been With the help of events in small aspiring for better lifestyle as villages, we amplify our own agendas exposure and urban linkages have by using radio. Ours is an established been increasing due to some key brand.
factors like mass media reach being It was done in the four cities near It's more about intent to be present increasing, migration and mobile Kanpur. Around 2000 to 2500 people there, rather than anything else. revolution. One key insight drawn was turned up in every town, making a the extremely high aspirational level total figure of 10000 attendants, of village women wanting to get approximately. married in a town/city. This led to the realization that there was a dire need Can event led advertising be the for them to be aware of new trends in permanent model or it needs to be spaces of var ious aspects of backed up by regular advertising? lifestyle...which served as the basis of Does it compliment main line or BIG Aasmaan, which was about supplement the brand image.enhancing lifestyle of rural and small Advertising always plays an important town women. It is a face-to-face event role. We are not here to displace any of where we get in experts from a larger the ex i st ing models , we are town across beauty, education, positioning our product to be durables, cooking, health, grooming considered as part of overall activation and women can get information in a mix. It is about deciphering a model non-intrusive environment as it is a all that would deliver best results for the women activity. What separates it brands. Once we prefect the model, from regular village level activations is scaling up is easy due to our media the promising response. Women owner infrastructure and costs can be themselves took out time to attend lower for brands as multiple non-s e s s i o n s w h i c h t h e y f o u n d competitive categories can participate meaningful. All other activations to an on the same platform. It addresses extent are intrusive which leads to challenges of frequency which is very casual participation and has lot of lacking in most of the highly successful spill over whereas we managed rural marketing programs.focused communication through our initiative. Mostly in rural clients, what we Multimedia approach of van activity in observe is below the line activity, 40-50 villages around the town, radio radio or mass media is not used. Why promos, print ads, outdoors, publicity is it so? Is it lack of data or ignorance?material like posters and leaflets were We try to pull lot of people outdoor used. through radio. We make use of The 3-day-long event in one town was hoardings and conduct meaningful done around 4 small towns, where we activity for the radio consumers. If you had a reach, and saw a participation of do relevant stuff, clients would 10000 women directly. Reach was actually ride on it. Radio, so far, has build through pre-publicity activities failed to become an intrinsic part of and word of mouth was created as it the Rural campaigns because the was a unique experience for the clients have been myopic. To be women. honest it is not all difficult, even
otherwise brands use a 360 approach How many people turned around? using same idea across touch points.
“Rural activation compliments traditional advertising”
