There has been a gradual evolution in rural marketing for the past few decades. Since most of the Indian population resides in rural areas, brands can’t ignore advertising their products in rural hinterlands. Advertising in rural areas is significant, making it crucial for businesses to target the masses and enhance their reach.
Therefore, knowing methods to fetch a large consumer base is crucial for every advertiser. Marketers need to take advertisements to another level to capture the attention of consumers across geographies. Simultaneously, it is also true that most advertising mediums are not employed efficiently in rural areas.
It is worth highlighting that the Indian hinterlands have over 650k towns with more than 850 million population. In the past decade, the telecom expansion has been extraordinary, and the information access is similar to that in any other part of India. The high income in horticulture has also prompted purchasing power, adding to a better life than previously. It has driven increment in rural areas market size, with rural shoppers looking for high-quality products without much concern on the price (1).
“It is a difficult task to put a price tag on rural marketing areas. However, over 70% of India’s population, contributing about 50% of purchasing, is a huge pie of consumption. Delivering the product to them at the right place and the right prices are in the hands of rural marketers.”
– Biswabaran Chakrabarti, the President of RMAI, Rural Marketing Association of India (2).
Indian Rural Market – Overview
There is no second thought regarding the fact that the Indian rural market is becoming its economic powerhouse. The country’s hinterlands account for over 50% of its GDP, gross domestic products, and houses; about 70% of its population show remarkable multiplier effects and hence exciting business leaders.
Additionally, rural India, where 12% of the world population resides, is witnessing enormous income growth and a crucial shift in consumer behavior.
Businesses have realized the enormous opportunity it offers and is essentially tuning their strategies to the rural population via their products and services.
Here are some facts that strengthen its position as an economic segment:
Rural India accounts for over 55% of the manufacturing GDP. They have hosted over 75% of new manufacturing facilities built in the last decade, and these factories account for about 70% of all new manufacturing vacancies.
According to the IBEF report (3), rural consumption per person has surged by 19% early between 2009 and 2012. Notably, it is 2% higher than its urban counterparts. The spending in rural India, in incremental terms, during the same period has increased by 69 billion USD, significantly higher than 55 billion USD by the urban population.
The Need for Rural Marketing
The urban market is getting saturated with the entry of new brands weekly. In such a scene, it has become impossible to survive without proper planting methods and creativity, which needs to take brands to the next level (4).
With rural marketing in place, the branch can fulfill the dual purpose of business and generating brand awareness among the local population. Today, brands actively engage in marketing campaigns specially crafted to suit the consumer’s requirements and offer them good options to decide.
Rural marketing has empowered local people and improved their living quality. There are unlimited business opportunities in the hinterlands. Brands can utilize untapped resources at an optimum level and can further accelerate overall economic growth. People often mistake that ruler marketing in India is only about agricultural marketing. However, in reality, rural marketing can serve as the carrier for business activities from urban areas to the rural factors and the marketing of different products manufactured by the non-agriculture businesses from rural to urban regions.
A few years ago, corporations did not consider the Indian rural market lucrative enough. Only some agriculture-based companies came up with some inventing strategies to work in this area. Soon, major corporations also realize the saturation and growing competition in the urban space and rising demand in the rural regions. Eventually, they also started to develop several methods and techniques to garner sales for their products and services.
- The use of regional languages: Businesses need to converse and promote their services in the local language for marketing in rural areas.
- Targeted campaigns: Today, companies are in a commanding position to explain their offerings more effectively to the customers with advancements in technology. However, the service’s perceived image could be different from what the brand wants to be. Consumers are more aware of product branding as compared to its utility. They are also ready to pay the premium price if the product justifies the item’s efficacy.
- Relevant products: companies are developing products while keeping all rural populations’ requirements to cater to their specific necessities.
- Nationalism: Today, several MNCs connect with individuals by building a feeling of patriotism towards the brand and services. They see it as a very effective tool to build an immense following in rural India.
Apart from these, it is also worth noting that rural consumers are becoming more conscious of what they choose to purchase (5). Influencers are playing a considerable role, and hence, referral marketing establishes big points. Businesses need to establish that connection with the customers to demonstrate their product’s quality. Therefore, direct brand engagement also plays a crucial role.
Branes need to converse with their hinterland customers directly. It is vital to cement brand loyalty and establish familiarity. A sampling of a new brand or product is critical to gain quality trust. One can acquire this impetus via the ‘Sales on Wheels’ activity.
For instance, to establish the emotional connection, brands throned several Ganesh mandap with their assonance during the past festive seasons.
Another new trend in rural marketing is eco-friendly media use. The ban on flex in several South Indian states has also given a push to it. There are also many alternative methods available to do rural advertising and branding. Wall painting has been a conventional and popular medium for a long time in rural India. Tin board is also a signage option (6).
Different Methods for Rural Marketing
Rural marketing has witnessed significant changes in advertising at a rapid pace.
There are some ways through which promotional activities take place in Indian rural markets:
- Village Haats: Haats our weekly organized markets in rural areas. They cater to the daily requirements of people and act as a place for social interaction. These are among the most solid places for brands to attract people with their offerings.
- Melas: They are an integral part of the Indian festive culture. They also help marketers promote their offerings, test new launches, get feedback, and give them the exposure they require to expand their reach and connect with their target audience. For instance, Kumbh Mela, organized in 2019, offered a perfect cultural and marketing activity platform.
- Roadshows: Roadshows are among the most prominent forms of advertising ways in the rural market. They involve holdings and banners used on vehicles for marketing activities. Besides advertising, they are also full of engaging events and act as a spot for social gatherings.
- Inflatables: businesses use inflatable balloons in rural areas for different purposes. From awareness programs to brand promotions, inflatable balloons are among the most viable options for various initiatives since they are economical and offer excellent visibility and reach to a small town’s localities.
- Wall stickers and paintings: Wall paintings and wall stickers are among the most durable outdoor advertising ways. They are noticeable in most of the villagers because of their efficiency and feasibility in impacting the local population. Be it a campaign on people education or any marketing strategy; they are amongst the most viable options available.
- Shop shutter painting: Shop shutter painting is a highly economical form of branding widely used in small towns and rural areas. They are painted to show the company logo and name and often even new launches.
The Impact of COVID-19 Pandemic on Rural Marketing
Pradeep Kashyap, the founder of MART, also known as the father of rural marketing in India (7), stated in a recent virtual event that the Indian rural economy would recover from the pandemic impact faster than any other sector. He further added that rural demand for FMCG would be more than the urban market.
Enhanced communication channels, better connectivity with reliable transport facilities, and easy access to banking services have boosted consumer products’ demand in the rural market. Brands have also started to understand the fact and are now changing their business models to target rural consumers.
While we’re all in the middle of an unprecedented time, most businesses and industries are severely impacted by the pandemic. However, we are witnessing recoveries in the rural areas at a rapid pace compared to urban markets, especially in the post-lockdown period.
Even during the nationwide lockdown, before the start of Kharif season, businesses were eager to venture into the rural market. However, they were restrained because of safety concerns.
Today, we witness rural advertising picking up rapidly than where we left in pre covid era (8). Conventional roadshows with safety precautions have begun to gain traction. Since physical engagements are limited, with social distancing being compulsory, brands started innovating in the design and execution of several campaigns.
They started working on innovative, unique designs and differentiated communication to rise above the clutter. Advertising mediums like building wraps, merchandise, visual signages are also witnessing the spaces growing.
Marketers need to innovate and differentiate to offer more value for businesses. For instance, one can come out with pure cotton masks with client branding and distribute them among people to promote safety. Hand sanitizer stands have also become increasingly common at several touchpoints, and businesses are uniquely designing them and placing them at strategic touchpoints.
The good news is that the rural market has become more resilient compared to the urban market (9). The agriculture sector, seeds, pesticides, and fertilizers brands are doing well and are reaching the pre covid level business. FMCG brands are also pouring more capital into the rural market as they are witnessing more potential in the rural market compared to the urban market. A new range of products in immunity and hygiene are also seeing growth.
Similarly, the automobile industry, even though it lost a couple of months of pre-season sales because of the lockdown where logistics and production were severely affected, today, two-wheelers and tractors are seeing good growth compared to last year (9). The banking sector is also increasing its presence. The funds are the need of the hour for them because of the temporary pause in the revenues. Since they need to recoup the losses, they are also aggressively marketing to get access to finance (10).
During the lockdown, entertainment consumption also skyrocketed in the rural areas. Consequently, data consumption also shot the roof, giving rise to telecom firms and increasing their ARPUs. The trend has also driven a surge in demand for electronic products such as smartphones and television. OTT platforms have also witnessed a rise in their subscriptions (11).
Brands operating in the above sectors are not leaving any stone unturned while establishing their presence via multiple advertising mediums.
Digital Boom in the Rural Market
Like outdoor printer cable TV, the conventional ALT still plays a crucial role in establishing brand awareness. However, today, digital marketing has become a more vital element in the media plan for almost all the rural market brands.
With the surge in smartphone penetration and internet access, brands are developing more videos and content for rural consumers. ROI-based campaigns are also increasing (12).
Consumers are also interested in learning about new brands and products via social media platforms. There is a trendsetting in the light of increasing smartphone penetration and digital consumption. There have been anticipations that rural marketing will leverage it to ensure last-mile reach. The only rider would be marketers who can curate differentiated planning for the rural market while keeping their everyday habits and digital experience levels in mind.
We also feel that digital alone would not be a solution. Businesses need an integrated strategy with conventional practices to make them win, a phygital approach (13).
Infrastructure has also been substantially improved considering the rise in local employment and easy access to major towns. With the considerable penetration of telecommunication in rural India, we would also see the trends that follow urban regions as we advance.
Rural consumers will also steadily embrace online purchases. We have already witnessed Amazon Flipkart and other e-commerce giants collaborating with brick-and-mortar stores to build online purchase access for the nearby villagers (14).
Digital serves a colossal promise in rural India. The media and telecommunication services’ wider reach as offered information in influencing their buying decisions. Digital provides end-to-end solutions. The hinterland population is becoming more and more tech-savvy. Technology has changed various conventional options.
In the traditional auto campaigns, we are witnessing online presence, and technology becomes a hygiene factor. For instance, farmer engagement now involves technologies like VR, virtual reality, and MR, mixed reality (15).
Digital marketing presence has also surged with the rural customers spending more time on their smartphones. Social media portals like Facebook and YouTube have deeply penetrated the rural market. We are witnessing their ads taking chunks away from the conventional advertising business.
Marketers also establish a digital arm where they create short videos and promote on several social media channels for their clients. Some of them have also adopted ROI-based performance marketing (16).
Over the past few years, the rural marketplace has been evolving consistently. It has now started to overtake the urban market. ‘Go Rural’ is the new slogan for marketers. Several domestic marketers and MNCs like Godrej, Colgate-Palmolive, and Hindustan Unilever have turned their focus on rural markets.
Government Initiatives in Rural India
The Indian government is a catalyst for the rural market growth process. It has envisaged several schemes, support policies, and relaxed regulations for companies venturing into the rural market.
There is a massive need for skilled employees in Indian industries, the government targets to train 500 million people by 2022 to fulfill the same. The government is also encouraging entrepreneurs and private companies to participate in the space (17).
Several corporate and educational organizations are initiating efforts to educate, train, and generate skilled workers. They also offer job-oriented vocational courses online to empower students with a particular skill-set and a viable degree.
One such program is the MGNF, Mahatma Gandhi National Fellowship certification program in Public Policy and Management offered by IIMs (18). The MSDE, Ministry of Skill Development and Entrepreneurship, GoI, Government of India have designed the initiative and implemented it via a partnership with SSDMs, State Skill Development Missions.
It aims to offer young and dynamic individuals the opportunity to enhance their skills and promote economic development. The two-year program seeks to combine classroom sessions, academic modules, host IIMS, an intensive field immersion at the district level, district immersion, build credible plans, find barriers in raising economic output employment, and promote livelihoods in rural India.
Rural consumer preferences have shown a paradigm shift in the past few years. Their consumptions look very similar to their urban peers. Premium products are replacing basic versions, and brands are marking their presence.
There are also estimations that the FMCG market in rural India would mark 100 billion USD by 2025, from the present 12 billion USD. Additionally, the Indian government’s efforts to improve their welfare programs’ efficiency would further enhance rural consumption (19).
Soon, online portals would serve as critical instruments for businesses trying to access rural markets. With cheap internet availability, companies can expand their reach exponentially and overcome any geographical barriers (20).
Hence, gazing upon the future endeavors, which the rural market has to offer to the marketers, we can say that the future is encouraging for businesses that can understand the rural market dynamics.
And with the Indian government policies offering fillip to the rural economy, we hope to see it translating into the overall growth of several industries and businesses for rural agencies.