Sunday, May 21, 2006

Approach to Rural Marketing

We had a great discussion on Orkut - FMCG Marketers Community - on Rural Marketing. Also i was going through an article by By TARO W ( Team) - "Ten Step approach to rural marketing". I found some points really relevant.

Titled Don't Flirt with Rural Marketing, the presentation analyzed the current scenario and offered useful tips for marketers to help build their brands in rural India.

Except for a few like HLL with their Project Shakti and ITC with their E-Chaupal, which are rural initiatives with clear long term objectives, RM still means a van campaign, a few badly made commercials as commented by Anugarh Madison Advertising CMD RV Rajan.

Different organizations classify rural differently.

1. For companies into durables, it could range from places with population of less then 500,000
2. While for the FMCG industry it would imply places with populations of less than 50,000

Why companies are hesitant to go for Rural Initiatives

  • While many companies do commence RM initiatives, most end up with road-blocks in the pilot stage itself because of reasons ranging from operational, to inadequate budgets, for the pilots themselves - that most often what is being tested is not the final representation of what needs to be rolled out later
  • Only Rs 5 billion is spent annually in India towards RM as opposed to Rs 130 billion (and the number is growing year on year) allotted to mass-media, especially television. Rajan says that clients are reluctant to spend money in RM because there is no established yardstick to gauge the efficacy of RM initiatives, as is the case of TV and press which have TRP and NRS/IRS data which help in decision making. According to Rajan, the RMAAI plans to address this issue by undertaking studies to develop some guidelines in this field
  • Most companies have no long term strategy or RM team or RM budget, Rajan argues, because no manager is willing to stake his career by thinking long term when his survival depends on mandatory quarterly results. This has resulted in the ratio between abandoned and successful RM projects being high

Successful Regional Brands

  • Cavin Care Chik Shampoo
  • Meera Herbal Powder
  • Fairever Cream
  • Anchor (100 per cent vegetarian toothpaste)
  • Gadi detergent powder
  • Dandi Namak
  • Power brand soaps in the south

Reason for success of above brands

  • Most of them identified a segment which was vacant in terms of product and area of operation
  • They all started in small concentrated markets, appealing to the local ethos and aspirations of the targeted area
  • Their communications, be it a simple radio spot or a wall painting or a theater film, touched a chord in the target audience
  • Most importantly, their policies were flexible and they could adapt to the fast changing market situations

Rajan has evolved a ten step approach to counter the many myths and problems that come in the way of RM and exhorts every company that has RM plans to follow. They are:

  1. Commitment from the top management: This must be total and management must realize that it is long haul and an investment into the future, otherwise RM will not give long term results. He sites HLL and ITC examples.
  2. Getting a dedicated task force: Rajan says that RM requires a dedicated mindset which many urban oriented MBA's don't possess. He suggest hiring of the RM team from students from RM institutes like IIRM or students with fire in their belly about RM from second level institutes, those who have taken RM as an elective course. He also advocates treating and paying such employees well and giving them an indication of their career graphs in the company. He reverts to an old saying - You pay peanuts, you get monkeys.
  3. Setting Clear Objectives: It is important to clearly define, in the early stages, the goals for the RM initiative and whether the initiative is a tactical effort to achieve increased sales in specific areas during specific time or build strong equity for the brand in Rural India.
  4. Understanding the Mindset of Consumers: Understanding of the mindset of the rural customer is important for the rural specialist to come up with a customized plan of action. The Rural market is heterogeneous with traditions and cultures that vary from state to state, even region to region in some cases. Most companies equate their findings from studies based on urban India to the rural segment and initiate a strategy based on this. Rajan says that his experience shows that the attitudes, fears, expectations, aspirations, comprehensions of rural customers to products and brands are different from urban customers. Advantages of such research are manifold because they give valuable ideas for new product development to suit the market - (a case in point a refrigerator with a twelve hour battery backup to take care of the power outages in rural areas), or new methods of physically reaching out to rural folks, along with insights into the right communications strategy and delivery (media) strategy
  5. Ensuring availability: In most cases, distribution is one of the biggest nightmares; the task of reaching products to 600,000 plus villages is a challenge. TVC's have raised the aspirations of the rural customer and makes him demand the product from the local shopkeeper, who then buys the required quantity from the nearest feeder, markets that he visits regularly for his supplies. Hence feeder markets such as towns and villages having populations of 10,000 to 15,000 initially must be provided for to start the first steps towards RM
  6. Evolving a Comprehensive strategy: A comprehensive strategy involving multimedia (including mass media, where necessary) has better results as compared to those one-off projects with limited goals.
  7. Involve the Region: RM is a highly regional subject, with a company's regional teams being specialists in their respective regions. Involving them from the word go to ensure ownership of the campaign by the region, and also getting their insights and inputs in the development implementation of the campaign is essential
  8. Developing full proof plan implementation: Conducting a pilot in one taluk in one district of a state to gain insights from it, before a national roll out of a rural campaign is not realistic. To get meaningful results, both in terms of impact and sales, the pilot must cover at least as few districts' of the state, if not the whole state. The implementation plan must be as comprehensive as possible to ensure that all the elements to be checked out are included in the plan. Implementation of any rural campaign requires meticulous ground level planning and a thorough briefing and training of the field level people before execution. Sufficient time must be given to the agency to check out all the elements, before getting into the field
  9. Provide adequate budget: A decent budget could be spelt out by a rural specialist, depending on the task and the region. If the budget is limited, it should not be spread thin by trying to look at too many markets. If a company feels that it has a bright future in rural markets or would like to target the rural markets, then it is better to invest today so that the early mover advantage is gained to reap rich rewards in the future. But miracles should not be expected overnight, neither should hope be lost
  10. Evaluating the Results: The three areas that should be studied to understand that impact of a Rural campaign, according to Rajan are: Brand awareness, Brand Conversion, Increase in sales

Rajan concluded by saying that RM is a marriage, which to be successful needs sustained efforts and long term investment in terms of the company's resources to keep it going. If it is treated as a flirtation or a one-night stand, the results reaped will be temporary and unsustainable.

Any new Approches?


Blogger sohail Ansari said...

Dear RM Marketer report writer,
I have a question that in Paksitan and India most of the population is illiterate in rural areas,whereas population welfare also needs focus on the same area,so how could you go to this market for the Social Marketing purpose especially Spacing in children,child and mother health awareness?

Best Regards,
Sohail Kamran

September 29, 2009 10:43 AM  

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