Local knowledge key for rural communication

Write Up which appeared in the Hindu Businessline dated 26.5.08 May 26, 2008

Rural focus: Mr R.V. Rajan, Chairman, Anugrah Madison Advertising Pvt Ltd, addressing the Business Line Club meeting in Sri Krishna College of Engineering and Technology in Coimbatore recently. – Our Bureau

Coimbatore, May 25

Rural markets, estimated at present to be around R2 lakh crore per year and growing at an annual rate of 15 per cent, have immense potential for growth but companies trying to tap this potential should have a clear understanding of the characteristics of the rural population while devising their communication strategies, according to Mr R.V. Rajan, Chairman, Anugrah Madison Advertising Pvt Ltd, Chennai.

The ‘look rural’ need has arisen because of proliferation of brands and high saturation levels in urban areas and due to greater awareness of brands in rural areas and the growing aspiration levels there, he said.

Speaking at a ‘CEO-Speak’ meet organised by the School of Management of Sri Krishna College of Engineering and Technology (SKCET), Coimbatore, in association with Business Line, he said while FMCG and agricultural sectors accounted for nearly 80 per cent of the R2 lakh crore per year rural markets, the rest came from segments like automobiles and consumer durables. What is significant about the rural markets is that the segment’s growth rate of 15 per cent per year is much ahead of the urban market growing in ‘single digit’.

Explaining how the “rural markets have arrived”, he said the number of Kisan Credit Cards at 41 million was nearly double the credit cum debit cards of 22 million issued in urban centres. Of the 20 million Rediffmail signups, 60 per cent were from small towns and they accounted for 50 per cent of the online transactions on Rediff online shopping site.

Mobile count

The mobile telephone connections have grown to 22.5 million in 2007 and every year, 7 million new mobile subscribers joined the list and a major share of the mobile telephony’s growth came from rural India. There has been a sea change in the quality of life of the rural population because of the easy access to information that has freed them from the clutches of middlemen.

Mr Rajan said while manufacturers faced stumbling blocks like inadequate data on rural markets, poor infrastructure and lack of understanding of rural consumers, people in the advertising field had some understanding and could help the corporates “connect with the rural audience”.

Hence rural communication becomes an “essential part of rural marketing”. But he said the corporates were only giving a “step motherly treatment” to it and rural marketing demands somebody with local knowledge, local flavour and who can connect with local audience. The rural market is also heterogenous and its tradition and culture varied from state-to-state and region-to-region and cracking the rural market is a `communication man’s nightmare’.

Non-farm income

He said the aspiring middle class is the target of the corporates in India today since a huge chunk of people is moving up in the income ladder in rural India. Earlier, 75 per cent of the income in rural areas came from agriculture operations but this has dropped to 60 per cent with the balance constituted by non-agricultural income. This showed that a lot of educated youngsters were opting for professions other than farming and this provided a regular monthly income to families that were earlier dependent on seasonal income provided by farming.

Mr Rajan said it was necessary for companies to understand the mindset of the consumers and what sells in one area may not find the same support in another. Rural buyers were conscious of the value of money and were not carried away by sales promos. Demonstration is a key element of marketing success in rural India since “seeing is believing”. Exposure to TV commercials has made the rural public aware of brands and created aspirations to acquire them.

regional brands

Referring to the growth of regional brands, he said some of the brands have grown into powerful regional brands from humble origins. But when regional brands try to go national, they find the going tough and need to have deep pockets to sustain themselves for a couple of years before they can make a profit.

Mr S. Subramanian, Principal, SKCET, Mr D. Rajkumar, Regional General Manager, The Hindu, Coimbatore, and Mr A.G.V. Narayanan, Director, School of Management, SKCET, spoke.