INDIA:RURAL MARKET IS WAITING TO EXPLODE

 RAHUL Patwardhan, vice chairman and managing director, Indiaco Ventures, made the keynote presentation highlighting the emerging opportunities and strategies for rural marketing. The purchasing power of rural families has grown rapidly over the last years. 23 million households are slated to receive electricity by 2009. There is a growing demand for television sets, two-wheelers and cars, which will surge significantly. Television sales in rural areas are expected to double from 50 million in a decade. Income from the non-farm sector is likely to touch 66% of net rural income by 2020. The market size would thus nearly double as people earning up to $5 a day could grow from 35% in 2005 to 65% in 2025. Average rural spending would grow overall six times from current levels in 20 years. Healthcare and education spending are estimated to grow at 7% and 9% respectively in the coming years. There is a huge opportunity for rural marketer in India. With 600,000 villages with 700 million people, the countryside offers a huge consumer base. Rural Indians contribute half of the country's GDP as 50% of well-off families live in rural India.
    However, rural marketing is not without its challenges. Poor infrastructure, shortage of electricity, water, sanitation, poor logistics support, challenges in distribution network, poor telecommunication facilities, lack of micro financing & insurance services, illiteracy, local consuming habits, lack of identification or documented proof of identity, small value transactions, a fragmented market, lack of access to products, difficult customer engagement and a valuefor-money mentality are some of the many challenges faced in India.
    It is not that the rural market is impenetrable. There are companies like Hindustan Unilever, ITC, Reliance, Coke, Pepsi, LG, HDFC and ICICI, which have managed to establish brand equity in the rural markets. While attempting to market products/services to rural consumers, companies have to keep in mind certain principles. There is a need to design end-to-end solutions collaboratively. Major problems have to be identified, which have to be solved with efficiency and transparency. Marketing has to be initiated with proper market research involving focus groups. Marketers need to build prototypes while strategising for marketing. An iterative approach has to be followed to build models to solve realworld problems.
    There are key issues which need to be addressed like who pays and how? Who monitors quality and how? Who are the stakeholders? What are the value propositions to the stakeholders? It is critical to have a right pricing model. In this regard, challenges are data collection and aggregation and communication.

ANURAG GUPTA,
President - Strategic Initiatives & Integration, TERRA, Mudra Group
Today, rural marketing is either a CEO's sexy dream to go 360 degrees or it is a group of five people working in a corner

SHAILESH NAIK,
Head - eChoupal Channel, ITC
Cos don't have the luxury to ignore rural markets. We have seen a reach-based approach adopted by the cos towards these markets. From increasing reach, marketers have to move towards increasing engagement

K RAMAKRISHNAN
General Manager - Marketing, TVS Motor Company
Rural marketing has not been an option to us. Unfortunately, companies that have focussed their efforts on rural marketing have not been very effective, for other cos to be prompted to follow suit

ANURADHA BANSAL,
Managing Director, Verity Technologies
How does one go about creating identity in rural markets? How about trapping information about rural consumer's habits and creating profiles? We believe a mobile device can place an ID address for every company - a marketer's dream

SUJIT GANGULI,
SVP and Head Marketing, ICICI Prudential Life Insurance
The share of non-farm income has crossed 50% and is growing since last 10-15 years. Rural income growth is more diversified today and a year of bad monsoon cannot prevent consumption

SANDIP BANSAL,
Country Head, Xpanse Asia
India's rural population accounts for 12.5% of the world population. It is not any different from any other consumer elsewhere. Marketers have to have a campaign approach rather than a promotion kind of approach.

RAHUL PATWARDHAN,
Vice Chairman and Managing Director, Indiaco Ventures
We need to have something with a clear ROI. Rural markets can give a sustainable ROI, provided marketers nurture this market like any other market

ABDUL KHAN
Head - Brand and Marketing Communications, Tata Teleservices
We find increasing convergence between rural and urban mindset. The marketing in rural areas starts with young people. We are pretty bullish on it