Some Rural Marketing Myths

By R V Rajan, Chairman & Managing Director, Anugrah Madison (Nov 1, 2002)

The ORG MARG rural panel undermines many common marketing myths about rural areas

Marketing Myth1

We’ll lose to loose. Rural consumers aren’t worth bothering about since they buy loose, unbranded products rather than the branded variety.

Reality
A study showed a high preference for branded products. In as many as 18 categories, branded consumption accounts for 80% of their sales. These are not always national brands regional or locally manufactured brands still count. But this indicates the potential for national brands if they can find a way to package their offering to compete effectively.

Marketing Myth 2
It’s okay if you’re Nirma. Rural consumers will only buy really cheap mass market brands.

Reality
Obviously brands like Nirma lead, but another startling finding of the survey is that penetration of premium products is being reported even to the lowest income category.

The percentages may be very small, but (a) given the large universe, the actual figures may be significant and (b) any way any reporting is significant here, at least as an indication of the potential.

Another example : Lifebuoy is often seen as the quintessential rural brand when we think of rural consumers we probably have these images of brawny farmers scrubbing themselves with red cakes of soap near tubewells! Yet these days they could well be scrubbing themselves with Lux!

Like the comparatively high reporting for Pears. When rural consumers can afford it they want to experiment with brands (the Pears data are also influenced by the fact that all the information is for the winter). This is shown even more clearly when a traditional brand like Amrutanjan comes up against a modern one like Iodex. Amrutanjan’s sales are higher, but Iodex is gaining ground. Clearly, no marketer can afford to be complacent about rural consumption.

Marketing Myth 3
Rural consumers will take what’s given to them. Marketers often believe that if they have solid sales in rural areas, these are secure.

Reality
As Iodex-Amrutanjan shows, solid rural sales are often simply a function of a lack of choice. It’s true that rural consumers are quite loyal to some brands, with long established ones like Chyavanprash or some tooth paste like Colgate which have made efforts to build the brand in rural areas or in categories where taste plays a role, like coffee and tea. But otherwise, as toilet soaps demonstrate, if there is a choice and little brand building, rural consumers can’t be counted on to be blindly loyal. Price also plays a role here the higher the outlay, obviously the more cautious rural consumers will be about new brands. Where the cost is low, they are happy to shop on impulse.

Marketing Myth 4
One family, one brand. Marketers often expect rural households to be homogeneous in consumption there’s one brand for the whole household.

Reality
In many categories multiple-brand usage is a fact. Rural households aren’t homogeneous there are different influencers who may be each demanding their own brands. Pester power may be emerging, as children insist on their own brands of biscuits. If cost differences are not high, the family may not mind buying different brands to experiment with or to suit different tastes. (assuming choice is available in many categories only one brand may be available in rural areas). Even when price differences exit, privileged consumers may exist heads of the family or favoured sons who insist on a superior brand of soap or tea, or better washing powder for their special clothes. And there may also be “show” brands a better quality of tea or biscuits kept on hand for when visitors come.

Marketing Myth 5
Distribution drives rural sales. Rural marketing is only about distribution. Only if you can crack logistics and many companies can’t be bothered will you sell in rural areas.

Reality
Distribution is clearly the key to rural marketing. But it’s wrong to imagine that it is all that matters. Rural consumers aren’t cocooned off from the urban world. As urban areas spread, rural consumers are increasingly getting at least occasional access to markets in towns either directly, or through friends and relatives. Rural shopkeepers are also increasing the range of products they buy from urban wholesalers, or even other small retailers. There are itinerant retail formats like weekly haats and mandis, or travelling retailers. Whatever the means, rural consumers are eager to consume and if marketers won’t help them, they will find other ways.

These are few categories where rural distribution is still comparatively low or in the case of toilet soaps and washing powder where, even more interestingly, the range in villages may be too limited for the consumers but which is being made up for by consumption sourced from urban areas.