rural marketing

Time to Reconsider Marketing Strategies in Rural India

Rural consumers in India have turned brand conscious, trusting well-known names and buying products that align to their aspirations, according to a recent study.

According to Accenture’s report ‘From Touchpoints to Trustpoints: Winning Over India’s Aspiring Rural Consumers’, 71 per cent pefer buying branded products and 59 per cent see brands as “trustworthy”.

Citizens of Rural India have developed a strong sense of brand recognition over the years, Source: outlook

Citizens of Rural India have developed a strong sense of brand recognition over the years, Source: outlook

They also give 66 per cent weightage to brand image and functionality.

 The report also highlighted that decision-making among the rural shopper has undergone a shift. The impact of traditional influencers such as community leaders, village heads, local shopkeepers among others are losing their ground. Only one per cent and six per cent of village respondents said the key influencer for their last big-ticket purchase was the village head or the local shopkeeper, respectively.

Only seven per cent respondents said advertisement and celebrity endorsements have an impact on their final purchase decision. Of the respondents, 46 per cent claimed advertisements and celebrity endorsements have no influence at all and 47 per cent said it has limited influence but no bearing on their final purchase decisions.

 

Products endorsed by celebrities are hardly influencing their sales in the rural part of the country, Source: indiatvnews

Products endorsed by celebrities are hardly influencing their sales in the rural part of the country, Source: indiatvnews

Rather word-of-mouth recommendations from friends and family remain the biggest source of information in both planned and impulse purchases — bigger than television advertisements and company marketing campaigns. Research further suggests that rural consumers, even if they cannot do much about their bad experiences with products or companies, do not shy away from spreading the word. Almost 63 per cent of respondents said they tell others around them when they have a bad purchase experience.

 

Word of mouth still remains the biggest source of recommendation, Source: vincentwee

Word of mouth still remains the biggest source of recommendation, Source: vincentwee

The study included 10 focus-group discussions with rural consumers in 10 Indian states, a quantitative survey of 2,800 rural respondents in eight states, interactions with executives from more than 70 of channel partners and in-depth interviews with more than 40 business leaders.

“We describe how India’s rural consumers are changing on three key dimensions, changing in ways that defy long-standing stereotypes and outdated assumptions,” said Sanjay Dawar, managing director and India lead, Accenture Strategy, in the report.  

Given the roughly 850 million people living in 650,000 villages throughout India, most companies recognise that they cannot afford to overlook these consumers. Most businesses have tried to capture the rural market opportunity by building their geographic footprint — hoping that reaching rural consumers this way would guarantee a share of their wallet.

 

Source: techsangam

Source: techsangam

“Yes, physical reach matters, but it will not be sufficient in itself to ensure sustainable growth in the future. Companies will also need to make concerted efforts to connect “mentally” with the rural consumers to really understand how rural consumers are then using those insights to create more advanced experiences that build trust and loyalty with these consumers, at every step in the purchase journey,” said the report.

The report divides the rural consumer into four basket–traditionalist, steady climbers, young enthusiasts, and village elites. And companies will need to strategies according to these consumers.

One of the biggest drivers of growing rural demand over the past few years has been the rise in rural wages. Rural wages have recorded a sharp increase of 17.3 per cent during the period FY2009–FY2013. Some of the factors that have caused the spike in wages include government policies such as MGNREGA (rural employment scheme), a rise in minimum support price of food items, better realisations for food commodities in the international markets and increased participation of rural labor in construction industry. Spending on non-food items rose from 40 per cent of total spend in FY2005 to more than 50 per cent in FY2012.

 

Increase in the Rural Wages across the country have also increased the sales significantly, Source: bbcimg

Increase in the Rural Wages across the country have also increased the sales significantly, Source: bbcimg

Image consciousness also drives Aspirational behavior. Many rural consumers take immense pride in owning popular brands and believe that such ownership enhances their social standing. The survey indicates 15-20 per cent of rural households have purchased automobiles, consumer durables and personal gadgets in the last year. Among such households, 20-30 per cent plan to buy more consumer durables next year. Research findings indicate that there is a class of products that are in demand by rural consumers to satisfy the urge to establish their social status in their villages and meet their desire to live an urban lifestyle.

 

Rural consumers take immense pride in owning popular brands , Source: quickmagindiablog

Rural consumers take immense pride in owning popular brands , Source: quickmagindiablog

Nearly 42 per cent of the survey respondents indicated product upgrading as a reason for spending more in a category. These consumers are defying conventional wisdom which says that rural consumers care most about getting the lowest possible price and will settle for sub-standard offerings to get the best deal.

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