Strategies for Consumer Engagement in Rural Areas

By

Sankar A Marketing 2014batch 12020841044

Rural Environment
What drives the consumer?

Rural Consumer Drivers

Past Drivers of Rural Marketing Low Cost
Rural consumers cannot afford high priced products

Outreach
need to get their places in whatever manner

Earlier, feature stripped some products and brought the price low or converted them to unit packs made companies successful to some extent

Current Drivers of Rural Marketing Deeper consumer engagement

no different from any other part of the world this shift is occurring very rapidly

Strong consumer engagement is the mantra that company need to take away on rural marketing

Rural consumer growth

Rural Indian market continued to grow at 20% every

year for the last 5 years there are various reasons

Income Growth
Crop diversification moved a lot more out of grains,

oil seeds into things like horticulture, vegetables and fruits This led to higher incomes to consumers, because
60% of all rural incomes are directly linked with

agriculture Others have significant overlap with agriculture

Even in traditional crops the prices have moved up.

A lot more money is moving into rural India

market distortion in some businesses People earning in urban areas and send back there

It started with a loan waiver which recycled a lot of

money

Rural employment guarantee

65,000-70,000 crores of money is being put in the hands

of rural people even in the labour level led to income growth

Better connectivity
In roads, telecom led to education moving into nearby

urban areas and allowed to working in enhanced

Fundamental Change Aspiration

30 years ago village people says this is what my fate!

. But now, I can have a better quality of life There is a aspiration on part of people to get a quality life. This new aspirations would want to trigger more incomes for rural people Even though income is one part of driver, Aspirations creates a virtuous cycle saying that companies better connected to market now.

Issues in Rural Marketing

Consumer Types

15% of rural people- like urban upper middle class for strategizing no need to look at too much 85% of people strategizing need to be tailored for each segment

Remaining 85% of Customers - real big oppourtunity But strategies need to be tailored separately Addressing this market is really difficult because once again rest of this 85% can be classified further To solve this issue in this segment, we have to create virtual cycle by combining with aspiration and growing income the whole ability to raise income and getting the people to spend also in company hands So, there is very little left for exogenous factors therefore it is possible to create those kinds of virtual cycles

Virtual Cycle
Raising Incomes

Increase Opportunities

Increase Aspirations

Improve quality of life

Rural Consumers = Western Consumers

Behavior of Indian rural consumer is same as that of

western urban consumer

Behavior
Driving Distance

Western Consumers
Long drive by car to outside malls Since the drive is long

Rural Consumers
drive out possibly in a tractor 30 miles for mandi Because of my income level, at this point of time its far lower so maximize my buy is the mindset Wallet size is small, people apply a lot of mind

Bulk buy

Savvy

Savvy - because of information available

Strategies for Rural Engagement

1. Contextual Products and Services
Any product idea, any service idea that can contribute to

raising productivity, enhancing incomes, and reducing transaction costs for people are called as contextual products and services
Micro-finance -contribute enhancing incomes and create

enormous business opportunity Mobile Phones - it can directly contribute in enhancing incomes by eliminating information asymmetry, by reducing transaction costs Agri Cash flow related products - Since 60% people are linked with agri Energy related products power is not regular, 4-6 hours/day. Also there is voltage fluctuation in any area
Products which are very relevant for this market is the first

2. Leveraging Technology
Best of the technology has to be used to create products and services for these markets Remote Delivery: 600,000 villages that we have in India that are obviously spread far and wide.
Crop management and productivity and dealing with the

specific problems is fundamentally changing and thats the kind of opportunity in leveraging technology

Personalized solutions: agricultural extensions need to

be delivered to individual farmers in terms of for this specific problem. We can use mobile phones for this
For Healthcare and education we need to use remote

delivery and again personalized solutions

Operations effectiveness : Technology helps in

education, healthcare, agri operations

3. Co-opting local people

Co-opt people from the local communities into your business models, they make up for missing institutions
Minimizing Cost- Men: Need to create appropriate

engagement through some people who either as lead consumers, who are our transaction intermediaries
To engage with rural consumers, we need to transact at much

lower cost because their income level are 1/3rd or 1/5th of urban people Leveraging Social Connectivity: rural India is otherwise also culturally

Leveraging Social Connectivity: Rural India is also

built as communities culturally like in urban social media

4. Creating New Business

Business models where these rural consumers can get access to products and services for which they dont need to pay in full will be more successful
New Value Chain We need to integrate them in our value chain By using various agricultural extension models, we need to

raise productivity of a farmer by cutting costs for production, the income for the farmer is still higher So we can sell products in a profitable way
Third Party Pace Rural is about volumes and what we have is a future market We need to pay for that - Mobile phones, for personalized

extensions and in all the business models that we use the farmer pays nothing, is third party A holistic model where it is profitable and yet it is a lower cost

End to End Solution is important

Rural Consumer is not simply looking at a product A product is part of a solution that the consumer is

looking for
rural person is able to access all of that solutions

To start with from a partner companys point of view

where this platform is provided first that insight as to

what is the real need of this person develop and test that product demonstrate and sample that product communicate about that product and distribute