Marketers need to participate in rural growth

The Hindu – Business Line,(October 06, 2001)

The rural market presents a significant opportunity for marketers to sell their goods but they would need to influence and participate in rural growth. Delivering the keynote address at a seminar on ‘Rural Marketing for Competitive advantage’, Mr.D.Shivakumar, Business Head (Hair), Personal Products Division, Hindustan Lever Ltd (HLL), said rural demand could be influenced on four fronts – in access, awareness, attitudes and affluence.

Dwelling on these four aspects Mr. Shivakumar said access would have to be in terms of physical infrastructure as well as in access to the markets. The distribution channel in India is among the cheapest in the world and can be set up even with low literacy levels and with low investment. As the economy develops, more people will come in to distribution channel, especially from the rural areas, pointed out Mr. Shivakumar.

Concomitant to access, awareness levels would need to be raised in rural areas through media reach and literacy programmes. The last ten years have seen the reach of radio and cinema dwindle and that of television shoot up and exert a powerful influence.

Marketers would also need to make more on- ground contact with their target audience as well as in demonstration of products as consumers in rural markets rely on the ‘touch and feel’ experience, he said. Attitudes too would need to be moulded as rural markets set store by social norms. Higher literacy levels too influence attitudes to products and services that marketers have to offer.

Affluence in rural markets could come from real income growth, especially in families where there are multiple wage earners. Mr. Shivakumar pointed out that marketers would need to aid rural growth and one could then really see the benefits flowing.

He cited the shampoo sachet revolution as a good example of technology adaptation. It was in Thailand and the Philippines, two cash-strapped economies that the sachet was used to effect in market penetration.

Today, in India, 70 percent of the shampoo market is in sachets. Forty percent of rural workers are daily wage earners and have a daily purchase habit and could do so because of low unit price packs. Mr. Shivakumar said that in real terms because of these packs, shampoos cost less than 14 years ago.

Speaking on the rural markets of the future, Mr. Shivakumar said agriculture contributed 61 percent of the work force, where as only 16 percent was in industry, compared to 24 percent in China. He said there was a need for a structural shift in the market.

Globalisation would also have its impact on rural markets because of three aspects – information access, connectivity and governance.

It would influence farmers, youth and women. The globalisation effect meant that animal feed manufacturers, for example, need no longer look at a neighbouring state for supplies but could even look overseas.

Similarly, oil prices are influenced by developments in Malaysia or potatoes could be sourced at international prices. Mr.Shivakumar gave the example of Kerala’s fisherman whose first purchase of a durable was not a TV or a washing machine but a cell phone to be in touch with markets on shore after the catch.

As far as other target group of women goes, Mr. Shivakumar said woman’s literacy was a better predictor of growth contribution to poverty alleviation than men’s literacy. When financial needs and socio-cultural norms are flexible, more women could be found at work. Mr. Shivakumar said the rural markets would benefit if only the country’s current assets were leveraged greatly. A large, deeply entrenched postal system with 1.38 lakh rural post offices could provide communication links with the remotest corners, whereas a vast network of over 22,000 PHCs could be an effective focal point for educating and informing rural customers.

A well-established wholesale system could also emerge as an efficient and effective channel for distribution.

Earlier, inaugurating the seminar, Mr.N.Murali, Joint Managing Director, The Hindu, said rural marketing has taken centre-stage in the discourse on marketing.

Rural marketing has become the buzzword and agencies too have been forced to look at rural markets by their clients. Urban markets too have been saturated and marketers are forced to look at rural markets. Mr.Murali said it was a big challenge for marketers and they could not expect short-term gains.

Ad agencies involved in communicating to the rural consumers also cannot dumb down their communication to rural markets and would need to work out a comprehensive communication package.

The one-day seminar was organised by the Asian Media Information & Communication Centre in association with Anugrah Madison Advertising Pvt. Ltd., the rural advertising unit of Madison Communications.