One of the important rural issues has been the lack of corporate and industrial development. It has always been noted that the rural India has never formed a major part of the target market of Indian companies, specially mainstream ones. But things are changing for these big shots now. Companies like Dabur, Tata, Samsung India, Godrej, Hero Honda, Maruti, Airtel DTH, Nokia and others are now reaching out to the rural India, which is now a major part of their annual income.
Armed with innovative pricing and smart marketing strategies, marketers are venturing deep into the hinterland looking for more buyers. And rural India is happy to be wooed. Four good monsoons, a loan waiver bonanza and rising support prices have increased liquidity in the hands of rural consumers and marketers can no longer afford to ignore them.
The numbers speak for themselves. Maruti Suzuki’s sales increased 10 per cent to 70,785 and Hero Honda’s sales jumped 23 per cent to 3.82 lakh units in May 2009 compared to May 2008. According to Euromonitor, 40 per cent of all refrigerators and washing machines sold have been bought by rural consumers. 60 percent of India’s annual gold jewellery demand comes from the villages adding up to a whopping 60,000 crore. Of the 43 million watches sold in India, 17.2 million are sold in villages and small towns, Rural India also accounts to 30 per cent of the Rs 900 crore hair colour market.
Corporates have launched their very own rural initiatives. Let’s have a closer look at them:
Dabur’s rural sales strategy covers villages with population of under 3,000 across seven states. The company has also moved beyond the traditional media options and directly engages with customers with ideas like a rural beauty and talent contest with Dabur Amla Hair Oil. [Rural sales: Rs 1,155 crore (approx), All India Sales: 2,310 crore]
Samsung India (Consumer Electronics). In a rural road show called Dream Home series, Samsung hosts four-day exhibitions in small towns. The company hires a place to showcase its products and engages vans to popularise the events. It offers various deals on its products and builds brand awareness through these events. [Rural sales: Rs 1,400 crore (estimate), All India Sales: Rs 7,500 crore (approx)]
Godrej Consumer Products focuses on haats and melas in the 17,000 villages where it has a presence. [Rural sales: Rs 418 crore]
Hero Honda, with its Har Gaon Har Angan seeks to build an ongoing relationship with millions of households in rural India through a network of 500 rural sales executives. The company set up a rural vertical in 2007 to approach this market in a focused manner and seeks to reach 25,000 villages by the end of 2009. [Rural sales: 14 lakh units, All India sales: 36 lakh units]
Titan (Jewellery Division): Gold Plus is the brand’s vehicle to ride the rural homes. The sub-brand has grown by 90 per cent in terms of demand and volume in the last four years. The company organises trips to its showrooms and factories to educate the consumers on gold purity and branded jewellery.
Maruti Suzuki’s Ghar Ghar mein Maruti focuses on Panchayat members or village headmen, as they are opinion makers. Persuasive information is shared with them on buying a car. Maruti has appointed over 3,000 resident dealer sales executives for rural areas, who are from the local community and reach out to prospective buyers. [Rural sales: Rs 2,078 crore, All India sales: Rs 23,085 crore]
Airtel DTH Services offers top ups and selection of movies in local languages. It has divided the market into three sizes- urban centres (C&S homes), urban-rural (TV but no cable homes) and no-TV-no-cable homes. Airtel accounts for 23 per cent of all the new DTH connections every month. [Rural sales: 3 lakh DTH connections (approx), All India sales: 10 lakh DTH connections (approx)]
Nokia LifeTools provides information to rural customers on weather, mandi prices and crops. [Rural sales: 16 mn phones per annum (estimates)]
So, from putting up banners in weddings to offering special incentives to married couples to convincing panchayat members on the benefits of certain products, corporates are moving to the villages, but the problem they still face is lack of customer acquisition. It would be interesting to see them tackling this problem.