Winning Rural India through head or heart

An eminent personality once asked a gathering- If you see a woman in a

village milking a cow, do you see an opportunity? Most did not reply and the
ones who did reply, replied in the negative. But that is exactly where Dr.
Varghese Kurien saw an opportunity and it gave birth to one of the most
successful organizations of India- AMUL. Actually, rural market offers a
great untapped potential and markets which requires an integrated approach
of marketing through balanced and judicious use of both head and heart to
win the rural market share. The squeezing margin and intense competition in
urban market has prompted marketers to turn towards rural market to prop
up their top line and bottom line growth.
Understanding the potential of rural market
LARGE POPULATION: 833 million Indians constituting 138
million households reside in 6,41,000 villages i.e. 68.84% of
population (Census,2011). The size of rural market itself speaks of
its potential.
GROWTH IN MARKET: The rural segment of the Indian
economy is growing at a pace of 8-10% per annum and expected to
add new consumption of USD 90100 billion over the period 20122017 to the current base of USD 240-250 billion. Per capita GDP in
India has grown at a compound annual growth rate (CAGR) of 6.2
per cent in its rural regions, since 2000.Rural per capita consumption
increased by 19 per cent annually in the period 2009-10 to 2011-12.
In the same period, spending in rural India touched US$ 69 billion. A
report by McKinsey Global Institute predicts that by 2025, annual
real income per household in rural India will rise to 3.6 per cent from
2.8 per cent of the last 20 years.
IT PENETRATION IN RURAL INDIA: Today's rural children
and youth will grow up in an environment where they have
'information access' to education opportunities, exam results, career
counseling, job opportunities, government schemes and services,
health and legal advice and services, worldwide news and
information, land records, mandi prices, weather forecasts, bank
loans, livelihood options. If television could change the language of

brand communication in rural India, affordable Web connectivity

through various types of communication hubs will surely impact the
currency of information exchange. As the electronic ethos and IT
culture moves into rural India, the possibilities of change are
becoming visible.
IMPACT OF GLOBALIZATION: The impact of globalization is
perceptible in rural markets on target groups like farmers, youth and
women. Farmers today 'keep in touch' with the latest information and
maximize both ends. Animal feed producers no longer look at
Andhra Pradesh or Karnataka. They keep their cell phones constantly
connected to global markets. Surely, price movements and products'
availability in the international market place seem to drive their local
business strategies. On youth its impact is on knowledge and
information. The marketers who understand the rural consumer and
fine tune their strategy are sure to reap benefits in the coming years.
INCREASING INCOME AND PURCHASING POWER: The
agricultural development programs of the government have helped to
increase income in the agricultural sector. These in turn have created
greater purchasing power in rural markets.
ACCESSIBILITY OF MARKETS: The attraction of a market
depends not only on its potential but also on its accessibility. The
road network has facilitated a systemized product distribution system
to villages. An increasing number of companies are supplying village
markets directly. Increasing direct contacts to villages helps product
promotion and availability of the product in the village shop.
CONSUMER BEHAVIOUR CHANGES: Increased literacy and
greater awareness in rural markets create new demands and
discriminating buyers. This is observed more in the younger
generation. In villages today, this segment of buyers consumes a
large variety of products, both durables and non-durables. There is a
visible increase in the consumption and use of a variety of products,
which is easily observed.

COMPETITION IN URBAN MARKETS: Intensified

competition in urban markets increases costs and reduces market
share. The rural markets are therefore increasingly attractive in
relation to urban markets. The automobile market brings this out
clearly. Rajdoot motorcycles, Bajaj scooters or Ambassador Cars

find ready acceptance in rural markets as compared to urban markets

where there is a proliferation of brands.

NEW EMPLOYMENT OPPORTUNITIES: Government

schemes like MNREGA and opening of call centres in rural areas
have created new employment opportunities in Rural India. Cooperative banks and Public sector banks are extending loans to rural
people, thereby creating job opportunities for them. Moreover, the
rural regions were home to 75 per cent of all new factories built in
India in the last decade and accounted for around 70 per cent of new
manufacturing jobs.
BETTER CREDIT FACILITIES THROUGH BANKS: With cooperative banks taking the lead in the rural areas, every village has
access to short, medium, long-term loans from these banks. The
credit facilities extended by public sector banks through Kisan Credit
Cards help the farmers to but seeds, fertilizers and every consumer
goods on installments.
IMPROVED EXPORTS DUE TO EXPORT POLICY: The new
Export Policy 2000 paves the way for open market (OGL- Open
General License System) status for agriculture. The World Trade
Organizations (WTO) Policy for agro-exports has increased exports
of Indian agricultural produce thereby increasing incomes of the
rural population.

REMITTANCES FROM INDIANS WORKING ABROAD:

These remittances are a sizeable contribution to growing rural
income & purchasing power.

MEDIA: Mass Media has created increased demand for goods and
services in rural areas. Smart marketers are employing the right mix
of conventional and non-conventional media to create increased
demand for products. The role cable television has been noteworthy
in bringing about the change in rural peoples mindset and
influencing their lifestyles.

Strategies based on strategic marketing (Head)

Customized and affordable product at convenient flexible time:-

Simplicity of product design is another key element to attract rural

population. Customized and affordable product catering to their financial
needs will be critical for this market. E.g.- Daily collection by BCs to the
customers at any time will give a great success in rural market.
Therefore, flexible banking hours at door step suiting the needs of the
Medium of communication focused on connecting the target group:Shri Ajay Kakkar, CMO, financial services Aditya Birla Group says,
"The messaging cues used in their communication are heavily skewed
towards urban audiences, their life style, aspirations, behaviours and
practices. For rural audiences, these messages are like pouring water
over a duck's back." The communication approach should be completely
different for the population in village backdrop. IndusInd Bank relies on
audio-visual campaign in the vernacular language and group meeting as
opposed to distributing pamphlets. Entertainments (like puppet
show/folk dance), free medical camps or promoting a beneficial
government programmes are one of the best ways to connect with them.
During Haats and at religious centres, the Bank tries to make the
audience aware of Government Sponsored Scheme like Pradahan Mantri
Jan Dhan Yojna and Kisan Credit Card. Highlights of Axis Bank's three
year old campaign including using local entertainment and drama forms
like Jhumar in Punjab or Bharvi in Gujrat and friendly comic books
published in multiple languages.
Selection of suitable language and medium:- Even if communication
originally created for urban markets is being used in rural, brands need to
localize to the extent possible. e.g.- communication for Mahindra's SUVs
is translated into 8 languages and runs across 30 regional channels and
publications. Even the helplines are localized.

Dressing to connect rural masses:-Simple and ethnic dressing

connects rural people whereas power dressing, English speaking

salesman wearing tie and blazer seems intimidating and disconnected to

rustic customer. Maruti in his emerging market outlets recruited nearly
10,000 local youths who spoke the local language and wear simple dress.
It strike a chord with local customers.

Focus on financial literacy:- Financial literacy camps in schools,

colleges, Haats in local languages with local salespersons will make
people aware about the benefits of various financial products provided
by financial institutions. It will create interest among rural people to shift
their investment towards non- productive assets e.g. gold jewellery to
productive assets. Similarly, Idea cellular in order to increase its mobile
internet usage among rural customers launched an initiative called 'Har
mobile Par internet' which was an extension to its ' no ullu banaoing '
campaign. This service provide step by step digital literacy lessons viaIVR(interactive voice response) a tutorial designed to teach consumers
how to access and use the net on feature phones. It was provided both in
multiple languages on a toll free short code.

Product development and marketing as per rural market

segmentation:- There are following four key rural consumer segments:
Traditionalists are the conservative rural consumers that rely on
conventional channels to make their purchase decisions. Necessity
drives most of their purchase decisions and they typically purchase
the cheapest offerings available, even if that means compromising
on features and aesthetics.
ii.
Steady Climbers aspire for a more comfortable lifestyle. They
want to enhance their social standing among their peers, and strive
to do so by buying branded products and offerings.
iii.
Young Enthusiasts, rural consumers aged 18-28, make extensive use of
digital technology and buy branded products to enhance their social
image. They powerfully influence the decisions of other consumers
segments.
iv. Village Elites are the progressive rural consumers, boasting high education
and awareness levels. They desire the best in product quality, features
and Aesthetics.

Financial literacy about technological products:- Lifebuoy

introduced Swasthya chetna programme, with their executives visiting
43,000 villages and schools in rural India over the course of 5 years.
i.

They spread awareness of washing hands, conducted product campaigns,

aired interactive Audio Visuals and overall hammered the importance of
a simple hand-washing habit. Similarly, establishing Tech learning
Centre in rural branches will enable the rural people to understand the
benefit of technological products i.e. ATM, mobile banking and it will
drive the people towards alternate channel platforms. Further, it will
instill confidence towards usage of the platform that it is safe, secure and
convenient.
Interactive and popular Advertising medium:- Rural consumers rely
heavily on word of mouth and suspect hype around unknown brands.
Integrated approach by using AIR(All India Radio), community radio
and mobile to reach and engage with the potential customers. It certainly
helps in repeat engagement and generating effective returns. Demo
branch- mobile van-local language-local people-success stories-benefits,
games-demos-street plays
Convenient Banking approach : In 2010, Hero MotoCorp was already
the No 1 bike manufacturer in the country. But the company wanted to
delve deeper into the rural market and thus, 'Service Har Jagah', a doorto-door servicing facility was born in India's small towns. It is a network
of customized bikes fitted with servicing equipment that go around the
country servicing customers' bikes in rural towns. The result, 7500
villages were covered each month and about 70000 customers were
attended to. The initiative is still ongoing. Banking initiatives like
Mobile banking, Bank Mitr & Business correspondent will help the Bank
to provide doorstep Banking and it will cover the particular class of
customers under the banking fold who are hesitant to the Bank due to
distance factor and cumbersome procedures.
BC model and Bank Mitr for low cost financial inclusion
approach:-Bank Mitr represent the banks concern and enable a bank
to expand its outreach and offer limited range of banking services at
low cost, particularly where setting up a brick and mortar branch is
not viable. Bank Mitrs, as agent of the Bank, thus are an integral part
of the business strategy for achieving greater financial inclusion.

Interactive communication approach:- Since rural consumers

typically lack the product awareness of their urban counterparts,

consumer education and generation of interest are mandatory first

steps for market creation. Non-conventional and interactive media
such as puppet shows, and live demonstrations in haats and rural fairs
have proven effective. Hindustan Lever ran a brand awareness
exercise called "Operation Harvest" that used the audiovisual media
and delivery vans to provide mobile entertainment in the form of
songs and film sequences, interspersed with the companys ads. The
company targeted 30,000 high potential villages with at least 2,000
people each and good road connections. The vans traveled to six
villages a day, distributing free product samples. The goal was to
promote product trials and identify key distribution and retail points
based on audience interest.
Creating influencer and opinion maker:- A leading producer of motor oil
and lubricants has leveraged similar media to support its field marketing
resources: its vans roam the countryside to shape demand and increase
penetration of its products among tractor and motorcycle users. The
companys demand generation strategy relies in part on promoting a mix of
premium and value-for-money brands. It also enlists influencer groups such
as well-respected mechanics and retailers to advocate for its brands.
Advertising & Sales promotional strategies in rural market
Role-plays by professional actor:-Shopkeepers selling Dabur India's
consumer products would now learn marketing through role-plays
staged by professional actors at their shops. As part of a recent
initiative titled Astra, advanced sales training for retail ascendance,
FMCG major has recruited 75 sales and HR managers across the
country who would educate over 2,000 distribution channel partners
of the firm about the complexities of sales and distribution through the
audio-visual medium. Dabur has a distribution reach of 25 lakh retail
outlets across the country. About 75 per cent of the company's sales
come from rural areas, hence, it has created the Astra training
consultancy module in five vernacular languages, Bengali, Tamil,
telungu, Malayalam and Kannada
Magic shows and skits:-Brooke Bond Lipton India Ltd (BBLIL)
markets its rural brands through magic shows and skits. Reckitt and
Colemen uses NGO's in rural areas to educate customers about
product benefits which establishes one to one communication
channels.

 Cinema :1. Films on products like Vicks, Lifeboy, Colgate and

Shampoos are shown in rural cinemas halls.LIC and Private insurance
companies have been showing short movies in rural theatres to create
awareness about life insurance.
Outdoor Advertisement:-Form of media which includes signboard,
wall painting, hoarding tree boards bus boards etc.
Direct Mail Advertising:Mailers for seed and pesticides to be sent as
per agricultural season.Direct mailers on consumer durables to be sent
during the harvesting season so that the farmers will have money for
purchasing the same.
Farm to Farm / House to House:Many LIC agents and companies
dealing with high value consumer durables have tried this approach
with success in rich rural areas.
Group Meeting:The Banker once in a week visit a village get the
villagers in school hall or Panachyat office and explain to the villagers
the various financial facilities offered by the bank.
Opinion Leaders:-Asian Paints promoted its Utasv brand of paint by
painting the village Sarpanchs house a few months prior to the launch
to demonstrate that the paint does not peel off and is an ideal
replacement of chuna.
The Melas:- It is estimated that over 20,000 melas are conducted
every year.Paint compaines supporting Pola fair in Maharashtra by
painting the horns of the bulls.Sonepur Mela, Vaisakh Purnima
Mela( Bihar),Navaratri Fair, Ambaji (Gujarat),Naucahndi Mela,
Ramlila Mela(UP),Kartik Mela, Gwalior Trade Fair( MP)
Haats:- ( On certain days of the week , both the sellers and buyers
meet in the villager to buy and sell goods and services).Parachut Oil,
Nirma washing powder and tiger brand biscuits have been promoted
through haats.
Audio Visual Van ( The van is a mobile promotion station having
facilities for screening films, slides and mike publicity.Nippo
batteries, Colgate India etc. makes extensive use of VANs.

Focus on Rural ATM/Micro ATM:-Banks are working on

establishing 'Rural ATMs' which will dispense currency notes of
smaller denominations to take care of the needs of the rural people.
Further, Micro ATMs carried by Bank Mitr will also provide the cash
to the rural people will ease the banking and biometric authentication
with receipt will boost their confidence. To encourage cashless
transactions, the State Bank of India and Ezetap tied up in June 2014.
The bank has deployed mobile point of sale (m-POS) devices, which
can be used to swipe and pay or as a chota-ATM to withdraw
cash.Nearly 4,000 of such chota-ATM devices have been installed in
semi-urban and rural areas since October 2014. An average of 1.2
transactions are recorded by the bank on these machines every day.

Advertising & Sales promotional strategies in rural market

Role-plays by professional actor:-Shopkeepers selling Dabur India's
consumer products would now learn marketing through role-plays
staged by professional actors at their shops. As part of a recent
initiative titled Astra, advanced sales training for retail ascendance,
FMCG major has recruited 75 sales and HR managers across the
country who would educate over 2,000 distribution channel partners
of the firm about the complexities of sales and distribution through the
audio-visual medium. Dabur has a distribution reach of 25 lakh retail
outlets across the country. About 75 per cent of the company's sales
come from rural areas, hence, it has created the Astra training
consultancy module in five vernacular languages, Bengali, Tamil,
telungu, Malayalam and Kannada
Magic shows and skits:-Brooke Bond Lipton India Ltd (BBLIL)
markets its rural brands through magic shows and skits. Reckitt and
Colemen uses NGO's in rural areas to educate customers about
product benefits which establishes one to one communication
channels.
Cinema: Films on products like Vicks, Lifeboy, Colgate and
Shampoos are shown in rural cinemas halls.LIC and Private insurance

companies have been showing short movies in rural theatres to create

awareness about life insurance.
Outdoor Advertisement:-Form of media which includes signboard,
wall painting, hoarding tree boards bus boards etc.
Direct Mail Advertising:Mailers for seed and pesticides to be sent as
per agricultural season.Direct mailers on consumer durables to be sent
during the harvesting season so that the farmers will have money for
purchasing the same.
Farm to Farm / House to House:Many LIC agents and companies
dealing with high value consumer durables have tried this approach
with success in rich rural areas.
Group Meeting:The Banker once in a week visit a village get the
villagers in school hall or Panachyat office and explain to the villagers
the various financial facilities offered by the bank.
Opinion Leaders:-Asian Paints promoted its Utasv brand of paint by
painting the village Sarpanchs house a few months prior to the launch
to demonstrate that the paint does not peel off and is an ideal
replacement of chuna.
The Melas:- It is estimated that over 20,000 melas are conducted
every year.Paint compaines supporting Pola fair in Maharashtra by
painting the horns of the bulls.Sonepur Mela, Vaisakh Purnima
Mela( Bihar),Navaratri Fair, Ambaji (Gujarat),Naucahndi Mela,
Ramlila Mela(UP),Kartik Mela, Gwalior Trade Fair( MP)
Haats:- ( On certain days of the week , both the sellers and buyers
meet in the villager to buy and sell goods and services).Parachut Oil,
Nirma washing powder and tiger brand biscuits have been promoted
through haats.
Audio Visual Van ( The van is a mobile promotion station having
facilities for screening films, slides and mike publicity.Nippo
batteries, Colgate India etc. makes extensive use of VANs.

Relationship Marketing Strategies for Building Customer

Loyalty (heart)
Make every customer interaction count:-Our first strategy to build

a strong customer relationship is to make every customer interaction

count. Each and every interaction with a customer is a gift and
should be valued.You can achieve that by setting up a focus group
made up of loyal customers. A focus group can be a vital tool to

getting into the mind of your customers and knowing their

needs.You cant just ask the customers what they want and try to
give that to them. By the time you get it built, they will want
something new. Steve Jobs
Follow-through on commitments and claims about products or
services:-We must deliver on thae promises made to the customer if
we intend to win the heart of the customer. False claims however
should be avoided at all cost as it can harm your credibility.
Offer benefits and product value that responds to the customers
desires:- Another positive step to building a strong customer
relationship is to offer value to the customer. Go all out to let your
customers know you are a stickler for quality.If you build a great
experience, customers tell each other about that. Word of mouth is
very powerful. Jeff Bezos
Treat customers as individuals who are respected and valued:- It is
very hard in terms of time and money to find one good customer.
Therefore, existing good customers should be respected and valued.
Courteous treatment will make a customer a walking advertisement.
James Cash Penny
Listen to customers:- Even complaints can be a gift if handled
properly and quickly. Be available and accessible when customers
have questions, concerns, or comments. Humans always look for
someone to talk to or share their problems with.
Continuous interaction with customers:- Banks should interact or
communicate with the customers consistently and take their feedback
with regard to their problems and complaints. Further,Banks have to
identify, analyze and solve the problems faced by the customers
while availing the services within a short span of time to win over
the confidence of customers.