Rural Consumers

Understanding Rural Consumers…

Defining Rural Markets…

India

Urban28%

Rural72%

Some statistics

28 states & 7 UTs

593 districts, 5464 Tehsils

6,38,365 villages

5,161 towns & 384 urban agglomerations

Total population – 1,02,70,15,247

Male population – 51.7%; female population – 48.3%

65.38% literacy

Definitions…

Rural and Urban Areas

• The conceptual unit for urban areas is a 'town', whereas for the rural areas it is a 'village.' The classification of an area as an urban unit in Census of India 2001 is based on the following definition:

•All places declared by the state government under a statute as a municipality, corporation, cantonment board or notified town area committee, etc.

•All other places which simultaneously satisfy or are expected to satisfy the following criteria:

• A minimum population of 5,000; • At least 75 per cent of the male working population engaged in non-agricultural

economic pursuits: and • A density of population of at least 400 per square kilometer (1,000 per square

mile)

• Any area, which is not covered by the definition of urban, is rural.

And others…

Reserve Bank of India: Locations with population up to 10,000 considered as rural & between 10000 and 100000 as semi-urban

NABARD - All locations up to a population class of 10,000 is to be considered as rural

Consumer Durables Companies - Rural market is defined as all locations having population up to 50000.

Consumer Expendables Companies - Rural is all locations having population up to 20000.

Other Companies - Rural markets start from the areas where their direct distribution channels ends.

The ground realities!

Define rural consumer…

Defining rural consumers…

Largely working as farmers or agricultural workers – and rest?

Have limited education

• This leads to linear and simple thinking, abstract logic tends to go over their heads

Either live in joint (extended) families or have only recently formed nuclear families

Continued existence of an oppressive and rigid caste system, particularly in rural areas

The man and the woman wake at 5.00 - 5.30 a.m., while the children wake up at 6.30 to 7.00 a.m; deviations were seen around central (n) region where everybody wakes up around 7.00 a.m.

The man has his usual datun/brush, washes his face, takes bath, washes clothes if needed.

Life in rural

Life in rural

Then he goes to clean his cattle, feed them, milk them. The woman helps him in this.

He spends a lot of his time in looking after the animals, who are his main assets. the major portion of the evening is spent in cutting fodder, looking after them & preparing food for them.

Life in rural

At about 7.30 a.m. the man leaves to the field for most of the days.

Life in rural

Children and woman also help him in fields.

Life in rural

Payment to hired laborers is never cash but 5 Kg. of the current crop

Life in rural

He visits to the weekly market (haat) or mandi either to sell his wares/crop or to buy something.

Life in rural

The man comes from the field at about 1.00 in the afternoon, by which time food is made ready for him by the household woman at home.

The man has a siesta post lunch and leaves back to the field at about 3.00 in the afternoon.

Life in rural

The man returns from the fields at about 6.00 in the evening and chats with his friends before he has his dinner.

The men all get together and smoke a bidi, hookah and either play cards or gossip. The main topic of gossip is village activities, farming and films

Life in rural

The children generally study till standard V. They either go to school or help out in the fields.

In case of a girl child above the age of 14 years she stays back and helps out in the housework.

Collectivism as opposed to individualistic

Adhere to prevailing social norms: the community they live in is very important and their behaviour is usually consistent with the community’s shared beliefs and norms

Enjoy social gatherings: women’s associations, celebrations, events, etc

Spend a lot of their free time chatting and gossiping with neighbours: both as a source of entertainment and information

Tend to be suspicious about people outside the community

Follow opinion leaders: school teachers, priests, religious leaders, urbanised relatives, local politicians, the village head

Other beliefs

Strong belief in ‘fate’ and ‘luck’, religion and God

Active participation in religious activities

Let’s understand rural consumers a bit more…

Shopping behaviour

Buy small quantities - more frequently

• Unit price is critical, particularly as many of them are daily-wage earners

Look for ‘acceptable performance’/ functional benefits / paisa vasool paradigm (good in relation to current product) at a reasonable price

“Make high-volume purchases at weekly village markets

Build personal acquaintance with neighbourhood retailer

• Often trust the retailer who does influence brand choice • Frequently get ‘credit’ from the retailer

Shopping behaviour

Word-of-mouth, very important and credible

Mass driven• Buy products that are perceived

to be popular: the ‘bandwagon’ effect

Still influenced by popular idols/role models such as movie stars, famous sportsmen, etc

High awareness of range of consumer brands - but propensity to actually purchase premium performance brands is low

Family and the housewife’s role

Housewives manage the household and decide on its needs

• Largely determine brand choice for low-cost household products• But in rural India, males play that role too

Males are still dominant; largely a patriarchal society

• Yet, housewife establishes her ‘territory’

Family is at the core of their existence - and the ‘self’ is considered less important

• Children are the centre of the housewife’s life

Family and the housewife’s role

Housewife is often frustrated in her own ambitions, but wishes to see these aspirations fulfilled vicariously through her children, daughter included

• Aims for children to achieve academic excellence

Socially acceptable aspirations for the housewife

When the children excel in their studies/school activities

When the son sends money from the city to the village

When a prestigious consumer durable in brought home: the arrival of a 2-wheeler, a TV-set or a refrigerator is a proud event in itself

Key considerations while targeting rural consumers?

Targeting rural consumers…

Highlight multiple uses from the same product

• Dettol liquid for cuts, gargle for bad throat, washing clothes as a disinfectant, dandruff etc

• Jet mosquito coil for mosquito repellent and room freshner

Advertise small packs with a low unit price

• Tiger biscuits tikki pack• Cavin Kare - Chik shampoo• Chota Pepsi 5 rupiya mein

Why pay more?

• Nirma Super “Jab vohi manghe damo vali quality kam dam mein mile to koi vo kuye le”


A little (of the product) goes a long way

• Rin detergent bar claims that with just a little Rin, you can get a whole lot of wash

Using price itself as an indicator of value has some risks attached to it; if used indiscriminately, it can:

• Down-grade the perceived quality of the product• Permanently position the product at that price point making it difficult to

effect price increases in the future


The rural consumer is sensitive about being portrayed as poor

• Don’t do it!• Play on their aspirations instead

Fantasy, Song & Dance, Idiom of the cinema

• Navrattan hair oil - Govinda in a dance sequence with “Chandramukhi”

Use catch-phrases accompanied by matching signature visuals

• Surf Ultra detergent powder used the hugely evocative phrase - “Dhoondte reh jaoge” along with the characteristic twirl of the finger

• Rin detergent bar used the phrase “Zara sa Rin” along with the characteristic flick of the finger


Use opinion leaders

• If they are credible, they work : Colgate dental cream endorsed by a doctor

Leverage the rural consumer’s belief in folklore and natural ingredients

• Dabur Amla hair oil with “Anvla”, Lal Dant Manjan with “lavng”

Depict characters and families that are aspirational yet real

• It is advisable to use characters that are aspirational and yet middle-of-the-road i.e. not beyond the perceived reach of the rural consumer (avoid being too freaky or too Westernised i.e. jeans are OK but torn ones may not be)


Exploit the warmth of emotion among family members

• VIP Alpha luggage - man wants to take back the wife when he goes to town to work again

Consider leveraging the appeal of mass sports

• Lifebuoy soap has consistently used mass sports like hockey or football

Understand and leverage your local culture, beliefs and customs

• Bajaj scooters uses typical vignettes from Indian life to establish an emotional bond with the consumer


Make promotions relevant and ‘aspirational’

• Upbeat promotions that promise the possibility of winning a dream prize such as a house, gold ornaments etc alternatively look at instant redemptions

Use radio effectively

• Radio often has a much higher reach than TV or any other medium among the rural consumer - and must therefore be considered as a mainline medium

Sampling

• The importance of sampling cannot be underestimated as it provides a low-risk opportunity to try the product


Pack

• Pack is sometimes the only communication medium• Due to low literacy levels, particularly in India, recognition of the brand

name is mainly through its distinct logo and visual pack properties

Brand recognition signals

• Distinctive colours: use lively, bright colours• Strong and bright colours usually imply a health proposition, whereas

pastels and shades have a cosmetic or beauty connotation• For toothpaste, avoid using pack colours that have negative connotations -

like yellow which connotes dirty teeth


As the rural consumer tend to come to the shop frequently, POS materials act as a constant reminder of brand presence and advantage

• Branding must be done through colour, brand name and symbols: strong visuals are important

• POS material should be

•Durable: tinplates, plastic, sun-resistant inks•Functional and reusable: calendars, mirrors, stands•Space-efficient•Decorative


Location is key: need to be placed strategically

• Billboards, wall paintings, banners

Special events which are entertaining are very popular

• Folk-song concerts• Road shows• Travelling cinemas

How are brands reaching rural

consumers?

Igloo

Rural India

Myths & Reality

Documents

Rural Consumers