The It was in 2002 when Aamir Khan created a stir among Indians nationwide. The catchphrase ‘Thanda Matlab Coca-Cola’ was everywhere and was an instant hit. The association between the actor and the brand proved to be successful. At a time when it was super arduous to create a place in the rural market of India, Coca-Cola became the market leader.
Before we assume a rural market to be one of the most drab, futile, and benighted markets, let us see what Philip Kotler, the father of modern marketing, has said about it. He defines rural marketing as the planning, execution, and promotion of the distribution of agricultural produce and rural products and services to create an exchange that satisfies individual and corporate objectives. Simply put, rural marketing is the buying, selling, and promotion of products in a rural market. It remains one of the most under-served and unexplored segment. India’s rural market, which accounts for nearly 70% of the country’s population as well as its consumer base, has been the engine of economic growth. The rural market in India is vast and fuelled by nearly 800 million people from the lower strata of the society.
While the rural opportunity dwarfs the urban market, it is even more difficult for brands to penetrate this segment. Unlike the established infrastructure of products and service distribution in the urban market, the rural market lacks these facilities, and it is expensive and demanding to reach this segment. Similarly, the rural markets are highly fragmented, extremely polarized, and diverse.
Another challenge faced by brands in rural India is the high level of competition. With the increasing number of brands entering the rural market, it can be difficult for businesses to differentiate themselves and be the cream of the crop. It often leads to price wars and aggressive marketing tactics that abate brand loyalty and diminish profits.
Cultural differences also pose a challenge for brands in rural India. Each region in India has distinctive customs, traditions, and preferences, making it vital for brands to tailor their marketing strategies accordingly. The inability to understand and respect these cultural nuances can alienate potential customers and damage the brand’s reputation. However, a rural consumer behaves very differently from the urban consumer. The needs and wants of a rural consumer are not tough nuts to crack but tough ones to cater to.
Rural consumers often exhibit distinct purchasing behaviours, buying patterns, decision-making processes, and brand loyalties than their urban counterparts. One of the most distinctive aspects of rural consumer behaviour appears to be their buying decision, and evaluation of alternative brands. However, the most noticeable feature of rural consumers is that they are very price-sensitive. They tend to look towards value-for-money products. Rural customers do not have the financial bandwidth to spend on anything but essentials. They invariably search for affordable and practical options to address their recurring needs. They generally go for word-of-mouth recommendations by community elders, families and friends over advertisements whenever they are about to make a purchase, making the decision process longer. They tend to show a higher level of brand loyalty than their urban counterparts. Lastly, lack of awareness and education among rural consumers presents a challenge for brands in rural India. Many rural consumers may not be familiar with modern products or brands. Therefore, brands must invest in education and awareness campaigns to educate consumers about their services.
It requires a significant investment in marketing and outreach efforts which can be a barrier for many brands operating on tight budgets. Thorough market research, segmentation, and creation of a target persona brings clarity to the advertising campaign. Marketers often adopt marketing mixes, comprising different communication channels according to the target segment to reach rural consumers. For them, the medium itself becomes the message. Traditional media sources influence rural consumers. For instance, community radio and oral communication (word of mouth) might influence their preference. Local advertising is another way of reaching the rural market.
Limited information access, and a smaller variety of available merchandise, compels firms to tailor their marketing approaches as it exploits the potential of rural markets by catering to unique needs and consumer preferences. It may involve building low-priced products with higher value, engaging local distribution channels or influencers, and developing advertisements that connect with the rural populace. Hindustan Unilever’s Lifebuoy soap is one such brand that has met this requirement for the rural market well. They realized that they needed to address some specific hygiene concerns faced by the people in the countryside. Therefore, HUL specially designed a marketing plan to make the product affordable for many poor households and provided health benefits as well. This campaign also involved educational programs and community activities to increase brand loyalty among rural individuals, thereby allowing their representative commodity to gain significant popularity within the rural marketplace.
The four ‘As’ are the blueprint of any rural marketing mix plan. The components of the four A’s are as follows;
Affordability: People in rural areas have lower incomes. They are mainly concerned with satisfying their needs and requirements. A ‘tried-and-true formula’ is small units of packages at a low price. The products or services to be marketed should be within the reach of rural customers. Pricing strategies account for the success of a product in rural areas.
Availability: Creating demand is not enough; a continuous supply of goods is also essential. With the fact that most of the rural people depend on daily wages and get their salary regularly, they are used to fulfil their needs on time. Supposing they do not get the products in rural markets, they will opt for other alternatives. The distribution ought to be so strong that the product is available to the consumer at the right place and time.
The examination of rural infrastructure and accessibility is crucial. It constitutes transportation, communication, distribution and external economic factors. They are responsible for creating a substantial impact on the buying behaviour of the rural customer. Many rural areas are difficult to access due to poor roads and inadequate transportation infrastructure, making it costly and time-consuming to deliver products to these areas. This logistical hurdle can limit the reach of brands and prevent them from tapping into the full potential of the rural market. The hub and spoke model and aggregate demand model are some of the many strategic distribution models that have helped improve the distribution system.
Acceptability: Rural consumers are rigid and fearful when using unfamiliar products. It is challenging to make them accept the idea of using your product or switching from brand to brand. A robust, multi-functional, easy-to-comprehend and a maintained rural product, makes the job easier.
Awareness: Although, rural customers have less access to the internet, media, smartphones, and television, their media consumption is high when given the sources. They seek entertainment in all forms and at all times. Usage of the correct medium easily creates awareness in rural areas.
Advertisements might not create demand, but they harvest it. They will reinforce the consumer preference for a particular product or brand in the rural market. Brands tend to rely on traditional forms of marketing, such as print and radio ads, transit media, fairs, and experiential marketing.
Brands that have succeeded in popularizing themselves among rural consumers have often adopted a down-to-earth story-telling approach. The brands focus on creating ads involving emotional storylines, with attention to regional cultures and languages. The latest trend in rural consumer behaviour is the greater purchasing power of this segment. Rural consumers have begun to shift from price-sensitive to consumption-led purchasing behaviour. The following campaigns successfully connected urban and rural consumers while understanding the distinct requirements and aspirations of the rural audience.
The rural marketing strategy of Coca-Cola focuses on expanding access and reaping greater profits in rural regions through several distribution and pricing methods; starting from making iceboxes and refrigerators available to partners on loan, to providing them credit facilities.
Coca-Cola established ‘Chota Coke’, a smaller version of the classic Coke bottle, to improve its accessibility in the rural market. They set the selling price of the item at a point that would be deemed affordable. The ‘Thanda Matlab Coca-Cola’ campaign also made sure that locals preferred Coca-Cola over other drinks to satisfy their thirst.
Hindustan Unilever Ltd (HUL), an FMCG company, created the ad ‘Khushiyon Ki Doli’, also known as ‘Caravan of Happiness’. It is one of the oldest and finest ads one has seen, to be working well in the rural marketplace. The campaign was launched to construct HUL in backward rural regions or towns as a measure of inclusive consumer connection to boost brand acceptance. The adverts included brands that belonged to HUL’s home care and personal care category. HUL conducted retail promotions, door-to-door selling, and free trials to build customer’s trust in the brand.
A recent example is the Antacid brand Eno by GSK, a British healthcare company. Despite being omnipresent across different strata of society, the big challenge for the brand was about growing further in rural pockets of the country. In September 2021, the brand activated a digital campaign on Facebook and Jio’s KaiOS platform, targeting the users of the two platforms in the core rural markets of Bihar, Jharkhand, Madhya Pradesh, Rajasthan, West Bengal and Orissa. According to the brand, it reached a 35 million viewership in a month. The company had to employ an all-new strategy, a first, for any brand on the two platforms to get these numbers. The process of doing this involved four steps – The brand first acquired the village pin codes through the data it owned. Then, using the India Postal data, it mapped the village pin codes to the Census of India. The next step was to match these villages with the internal business KPIs of the brand, to figure out the villages that needed to be targeted. They shared the pin codes with Facebook to estimate the number of active users on the platform and the extent of the consumer base. Initially, reaching out to rural consumers was a big task as it was equally critical to build communication that resonated with rural audiences. For the first time for Eno and a rare practice in the industry, a new DVC (digital video commercial) was developed and rolled out exclusively for rural consumers. This new DVC was not only true to the core philosophy of the brand for establishing superiority over other brands, but also a natural extension of the very successful ‘Gadbad Gadbad’ creative platform that Eno has been nurturing over the last few years. Speaking of innovation, Anurita Chopra, Head of Marketing, GSK Consumer Healthcare, said “Growing Rural Penetration is one the key strategic tasks for Eno, something most brands have struggled with because of the inherent challenges with traditional Media. Our idea was to expand our rural reach using the power of 4G Tech in markets we never had before. Engaging rural audiences with relevant and localized content is a key pillar of the campaign.” Therefore, through collaborative effort, developing stronger distribution channels and entering into local partnerships, businesses can access the rural market.
Brands in rural India face manifold challenges ranging from infrastructure and competition, to cultural differences and distribution issues. Overcoming these challenges requires a deep understanding of the market, and a willingness to invest time and resources in building brand awareness and loyalty among rural consumers. By addressing these challenges head-on and adapting their strategies to fit the unique needs of the rural market, brands can successfully tap into this vast and untapped market opportunity.
The rural market of India is a golden opportunity for businesses to expand their consumer base and take advantage of an enormously overlooked market. But to do so, there is a need to understand the rural customers to the bone, bridge the access and infrastructural gap, and devise marketing plans that target the specific sensibilities and tastes of the rural consumers. A rural market might be the right kind of challenge that opens up new doors to growth and simultaneously contributes to the greater economic dream of the nation.
Written by Shivaanshi Singh
Edited by Shruti Shiraguppi
