Companies roam the countryside KALA VIJAYRAGHAVAN AND RAJESHWARI ADAPPA THAKUR
TIMES NEWS NETWORK[ MONDAY, AUGUST 29, 2005 01:51:37 AM]
MUMBAI: After years of depending on the urban markets, corporate India is being forced to do a reality check on the rural consumer and finetune marketing strategies accordingly. Companies are finding that the rural consumer — or at least a section of rural consumers— is not poor consumer and is, in fact, more aspirational and at times willing to spend more.
Consumer durable makers are selling more high-end products in smaller markets while low-end products are throwing up big sales from urban markets. "Substantial sales for models launched for the rural markets actually came in from the urban markets. Today, nobody's marketing specific models for the rural markets. Models are launched based on income brackets," says Anil Khera, director of Sansui.
For key product categories such as FMCG and consumer durables the rural market is larger than the urban market in terms of sales value. The total size of the rural market for FMCG products is Rs 41,550 crore compared with Rs 37,130 crore in urban India.
The rural market accounts for 59% of consumer durables sales.Rough industry data assesses the market size for nail polish at around 270 m tonnes in rural areas against 81 m tonnes in cities. Lipsticks sold in rural markets totalled 250 mtones compared with 131 m tonnes in urban markets. Shampoos sold 2,257 tonnes in rural areas against 718 tonnes in urban areas. Mosquito repellants sold 173 million units in rural areas against 79 million units in urban areas.
Sunil Alagh, corporate consultant and ex-CEO of Britannia Industries says marketers are learning to classify consumers based on their level of income or education rather than classifying them as rural or urban, "One can actually witness rural people amidst poverty spending lavishly on weddings, ceremonies and festivals.
There could be cultural differences which determine their purchases, not mere affordability issues. Effective distribution and a correct selling price with income levels in mind will ensure the right growth numbers" he says.