Today i saw this news and wondering, Bajaj Electricals set to launch separate brand for rural India
1. Is rural market mature enough to take a separate brand?
2. Do rural consumer differentiate various brands?
3. Do rural consumer at all follow brands and have loyalty for it?
With changing economic scenario, currently the Indian rural market generates about 50 per cent of the country’s gross domestic product (GDP). Rural India comprises around 840 million people, and growing income levels and greater ambitions are progressively driving demand there. In the period 2009–2012, rural consumption per person increased annually at 19 per cent, according to data from National Sample Survey Organisation (NSSO). This is phenomenal and will be a driving force for self reliant Indian economy of future. Any company or brand which is a fast mover will harness the benefit. Indian consumers are also moving towards more consumption like their urban counterpart. This lead to multiple challenges for rural
– Enhanced rural connectivity has improved, logistics which was a nightmare for many company. So roads are becoming back bone of growth. Many small consumption centers are mushrooming in the joint area of roads. So villagers are coming to it for buying their product and services. A road joint (Chaurah) in UP.
– Penetration of mobile / internet network / Satellite TV has improved the knowledge base of the rural consumers. As Rural consumers are subdivided in to various strata as per education and economic status, their behaviors are different and we can not target the whole group as a monolith. Now consumption of advertisement in rural hinterland is not a bigger challenge as it was earlier. So targeted communication will enhance the chance of acceptance of newer products. Many company including Uniliver is studying rural consumers behavior towards upcoming media like mobile or internet marketing. Intresting challenge for all marketing professionals.
– Currently rural, inflation has significantly risen in food item which also showcase than buyer and producers have more disposable money to spend. Few months back during a travel to rural UP, i found the onion / potato price of rural is almost 10-15% less than Delhi and consumers are purchasing it. that also shows that people area consuming. If we check the real estate price in rural segment the rise is almost two to three times than urban counterpart. It is an overall effect of national economy. One curious advertisement found in rural market of UP shows how the economy has grown.
Rural house with many durable shows the rural prosperity.
– Rural consumers are extremely value conscious as we as innovation customers. They understand the importance of limited resources and utilize it in the best way. Classical Jugad is a way for them to handle day to day need. Any way if a product or services is available to them on their arms reach they are not averse to try it and keep it till they have a feeling that the product is giving them what they expect out of it. Interesting to see a women uses fan motor to make lassi (Very famous Indian cold drink from yogurt)
A unique product and a business model seen, where a person is shaving a horse with an electrical razor locally made and he is doing it on rent basis. Interesting, is not it ;)-
— I Rural areas, Loyalty on brand is again dependent on many factors, but most important is value for money along with ease and convenience of user to handle the brand. Easier, regional communication platforms will assure conversion and stay on brand for longer time. In rural area relationship plays a major role in the purchase decisions of the consumers, so right channel mix and channel partner loyalty plays a long way on gaining the confidence of rural consumers.
I still remember a sentence of Prof. C. K Prahallad on rural or BOP market, i.e rural is no more a need but it is a strategic necessity for any company to survive in long run.