On 10th February 2018, a panel discussion on the topic “Rural and Urban convergence”, conducted as part of M-Power, the annual Marketing Conclave of TAPMI, shed light on the rural-urban divide and its relevance for marketers. The talk centered around four perspectives – the difference, if any, between the two markets, defining relevance and reach, the impact of technology penetration and the challenges in operating distribution channels. Prof. Vinod Madhavan moderated the discussion.
Mr. Prashant Parameswaran- Director of Marketing Strategy & Insights, Coca-Cola
Mr. Prashant Parameswaran opened the discussion on the perceived difference between rural and urban India. Disagreeing with the notion, he believed that there could be a way to unify the rural and urban markets. The India A, B, C classification for consumers brings both markets together and could help in understanding these markets, he opined. Rather than focusing on the divide, the fundamental question that needs to be considered is the problem that the product is trying to solve for its consumers. Understanding the rural ecosystem and tailoring the product communication to suit the same is also important, he said, citing the “Thanda Matlab Coca-Cola” advertising campaign.
Discussing market reach and relevance, he defined reach as finding a consumer for a product and relevance as finding the right product for the consumer. “In a reach oriented world, ignoring the relevance of your product will only lead to wastage”, he stated. Digital marketing has helped bring relevance and reach together, helping marketers cater to their target segments easily and better communicate their offerings. Developing sales channels in terms of visibility is also an important concern, as marketers try to leverage the limited shelf-space available in retail markets today. Finally, he drew attention to the use of technology as a facilitator to help develop markets in a sharper, smarter and faster way. Companies are using their internal data to make smarter decisions in real-time to better cater to their market segments, he concluded.
Mr. Rajeev Ranjan- Director Sales – DFM Foods Limited
Mr. Rajeev Ranjan disagreed with the notion of the rural-urban market divide, stating that marketing communication is done for the entirety of the country. The difference lay only in the Census Bureau definition of it, he opined, stating that it ultimately boils down to the per-capita income. Rural India has the same aspirations as its urban counterpart, and the only differentiator is the purchasing power. Creating a new product for the market would therefore not be the right strategy and would incur significant costs. Rather, marketers should rather focus on the right package size and pricing strategies for the rural market, he stated.
Distribution channels play a major role in reaching out to rural markets, he stated. Achieving high market penetration through wholesalers would, therefore, be important. The hub and spoke model would be helpful to reach out to the consumers in a cost-effective manner. Talking about the role of technology, he stated that companies should recognize the limitations of data. “Do not force fit data to force conclusions. There must be a confluence of your industry experience and the insights drawn from data”, he concluded.
Mr. Shashank Gaur- Head of Trade Marketing at The Kraft Heinz Company
Mr. Shashank Gaur started the discussion by mentioning that there was really no difference between the rural and the urban market. He felt that we classify the market from our end but in essence, the requirement of the user is the same. He mentioned that Facebook users in the rural area went from 2% to 17% and that showed an increase in the use of social media in the rural areas. He went on to mention that it is important for us to know our audience. Due to the use of GPS, Geocoding and multiple analysis, the cost is very high when we go to the rural market. The consumer he elaborated is the same in both the rural and the urban setting however what might differ is the literacy level and the per capita income.
Mr. Gaur mentioned that even in the rural setting the consumer has become more aware of different products and that it is the job of the marketers to make sure that they can connect with the consumers. The visibility and the availability of the product are extremely important according to him. He mentioned that on top of that the freshness of the product is also something that should be kept in mind. On the topic of the use of technology in understanding data, Mr. Gaur mentioned that data and technology are helping us drive execution since the changes are coming so fast it is up to us to use all the tools that we have to make smarter choices.
Vikram Ahluwalia- SRK Diagnostics, Director Marketing
Mr. Vikram Ahluwalia agreed with the other panelists that there was no difference between the rural and the urban consumer. The job of the brand he mentioned was to reach to the user. He gave the example of one brand that did very well in North India because the brand had smartly tapped into the mindset of the consumers there. “It’s all about the brand speaking to the consumer”, he explained. Pricing was also a very important factor according to him. He elaborated that before positioning a product to the rural customers it was very important to have the price right otherwise the product, no matter how good it was, would not work well with the consumers.
“The mistake that the brand and the company makes”, Mr. Ahluwalia stressed, “is to look beyond”. According to him, reach can be easily fulfilled by using television as a medium to spread knowledge about the product, however, for relevance, smart marketing ideas and language had to be used. He went on to add that the retailers today are the small shop owners and only meaningful brands and SKUs are allowed to stay on the shelf. While talking about data and technology in marketing, Mr. Ahluwalia mentioned that data acts as a catalyst in decision making. He elaborated that today we are able to leapfrog a lot of steps due to the presence of technology, therefore we are able to challenge what we are doing and do it better.