This paper attempts to describe how social issues in rural areas can be used as a base to create an effective marketing strategy. A number of social issues are prevalent in rural India and some companies have tried to reach out to the rural consumer by addressing the social issues. The social issues can be successfully incorporated as a part of the company marketing strategy. The marketing strategy developed by companies' aims to achieve rural development and company profits. It overall leads to rural development, increased employment and ultimately more rural people using branded FMCG products and consumer durables. With many social issues prevalent in rural India like illiteracy, unemployment, poverty, lack of sanitation and hygiene facilities etc. and now in recent times the scanty rainfall has only added to the existing problems of the rural people as they are mainly dependent on agriculture. A marketing strategy developed with a broader perspective will pay rich dividends to the company. For e.g.: HUL's Roti reminder campaign at Kumbh Mela. HUL along with creative agency Ogilvy had partnered with more than 100 dhabas and hotels at the mela site to serve rotis that are stamped with the message “Life buoy se haath dhoye Kya?” This way the company promoted lifebuoy hand wash to inculcate in the minds of consumer the need to wash hands before having a meal. HUL aimed to have the hand wash message stamped on approximately 2.5 million rotis during the 30 days period of the campaign thereby achieving higher sales and also promoting hygiene .
This paper is based on the available secondary data. It will be useful for students, faculty and also companies interested in marketing their products in rural India.
Social issues, Agriculture, FMCG, Consumer Durables
Definition of rural area
The census of India defines rural as any habitation with a population density of 400 per sq. km, where at least 75 per cent population is engaged in agriculture and where there exists no municipality or board. (Kashyap)
Planning Commission of India defined rural market as towns up to 15,000 populations are considered as rural market. According to marketers an underdeveloped area which is sparsely populated and lacks amenities like good schools, roads hospitals electrification and where agriculture is the main source of income. These places are generally influenced by the nearby town or city.
McKinsey and company predict that given the right investment in rural infrastructure, the rural markets may be worth
$500-600 billion by 2020. Over the years marketing has gradually evolved from the production stage to product stage to selling stage marketing stage and now we are in the societal marketing stage gradually moving to the digital marketing stage. Treating urban and rural consumers on the same parameters could prove to be disastrous. Rural consumers also have aspirations like their urban counterparts but their needs are different and also their level of disposable income is low. An effective marketing mix would help in successfully targeting rural consumers.
Some of the advantages a company can have in reaching out to rural consumers by addressing social issues are:
A marketing philosophy based on marketing, societal concepts and relationship marketing should be developed. The following points should be kept in mind when you want to successfully target rural consumers by addressing the social issues.
Some Case studies
Indian Tobacco Company Limited (ITC) is one of India's foremost multi-business enterprises with a market capitalization of US $ 40 billion and a turnover of US $ 8 billion. ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and as 'India's Most Admired Company' in a survey conducted by Fortune India magazine and Hay Group. ITC's aspiration to create enduring value for the nation and its stakeholders is manifest in its robust portfolio of traditional and greenfield businesses encompassing Fast Moving Consumer Goods (FMCG), Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, and Information Technology. (about-itc/profile/index.aspx)
To eliminate the problems of middlemen and to ensure that farmers get the right price for their produce and also to provide the farmers the latest updated information on price, educate them about new farming techniques. ITC started the E-Choupal through an internet Kiosk, set up in the house of an influential person in the village called as the shanchalak.
This has created a win-win situation for both ITC and the villagers. The villagers get a fair price for their produce which they sell to ITC through the E-Choupal and also get all the necessary information needed about price, farming etc. While ITC gets to buy directly from the farmers at a fair price and also gets to sell its other products directly to the villagers.
Thus through E-Choupal ITC has been successful in making goods move from rural to urban area and vise-versa. This business model has been successfully replicated in many villages across different states of the country.
ITC has now tied up with Nokia to carry this service further. They will now offer personalized crop management advisory services to individual farmers integrating mobile phones into the physical network of E-Choupal.
Awareness about oral hygiene is very less in India especially in the villages. Colgate executed a rural hygiene drive along with the Indian Dental association. In 1998 60 lakh people in 20 thousand villages were contacted under this project of which 15 thousand villages had no experience in the availability of tooth paste or tooth powder. This strategy was useful in providing vital information on oral hygiene also helped Colgate create brand awareness.(Ghuman, Reprint 10th Edition 2012)
Marico Industries is in the business of hair care, skin care healthy foods. Parachute is a premium grade coconut oil in the market. With aim of getting women out of their homes, Marico industries launched a van campaign for parachute coconut oil for towns with less than twenty thousand population in Tamil Nadu. (ahuja, 2015)
The product is basically aimed at the women and so using them to promote the product made the campaign successful. This strategy of getting the women out of their homes to participate in the van campaign is a good social initiative as women in rural India are generally confined to their homes.
HUL is the largest soap and detergent manufacturer in The company is now differentiating its products based on a health platform. One means of making this connection was the tie between diarrheal disease prevention and HUL soap products.
UNICEF estimates that one child dies every 30 seconds from diarrhea globally. Research on preventive behavior for diarrhea disease shows that washing hands with soap reduces diarrhea attacks significantly. Currently hand washing using soap is low among Indians especially among rural people. HLL used public-private partnership to market its soap as a product required for hygiene in rural areas and in this way reached out to rural Indians by addressing a social issue.
Some companies have used Swachh Bharat as an example of how brands can play a role in societal progress while remaining true to social progress and also remain true to the core business. Swachh Bharat was launched in 2014. Lakhs of toilets were being built every day, but this activity has to be supported by educating people on right behavior. For the first time three brands-Lifebuoy, Pireit and domex have come together to the adoption of “Swach Aadat”. The companies wanted to propagate-washing hands in a proper way, using a toilet to defecate and adopting safe drinking water practices. This campaign was brought alive through the fun and engaging film “Haath Mooh Bum, Bimari Hogi Kum” It celebrates children as agents of behavior change, trying to influence adults to change old practices. The goal is to make India illness free, also the objective of Swach Bharat Abhiyan. (Nair, 2016)
In the rural area's three out of four villages do not have access to drinking water and where an estimated 4,00,000 children die every year from diarrhea .
During the launch of Swach-Hindi for clean, Tata had said that his dream was to provide safe and affordable drinking water to millions of Indians. According to company sources the product will be available in two variants priced at Rupees 749 and Rupees 999 respectively. It was the Tata group strategy to cater to the bottom of the pyramid. The social issue of clean drinking water is what drove the group to develop a product to address crises in rural areas. Tata Swach is a product that will reach the masses and is also affordable.
Tata Swach is a house hold water purifier and requires no electricity or running water to operate. Using the power of Nano technology combined with natural ingredients, it delivers safe drinking water at a bench mark price of Rupee one per day for a family of five. This product is made available all over India, using the distribution network of Tata salt. The water purifier is also sold online. (Mint, 2009)
Dabar used a unique distribution strategy to distribute their products in rural areas. Well knowing the problem of unemployment among rural youth, Dabar in their effort to distribute the product involved the rural youth. They recruited the local youth, provided them training and offered them a unique career path.
Water scarcity is a major issue in rural areas. Surf having a good understanding about this issue decided to do something about it. They have designed their product “Surf Excel Quick Wash” in such a way that it requires only two buckets of water for washing clothes. Generally for a wash a minimum of four buckets are required. The detergent with its low form technology is capable of reducing water consumption to two buckets instead of four.
This new form low detergent also claims to be a quick wash formula with features such as high speed stain removal, low scrubbing and low rinsing. (Krishana)
From the above cases of different it can be observed that all these companies identified a social issue and integrated the social issue in their marketing plan.
It can thus be concluded that marketing concept is long over and most successful companies are now opting for the societal marketing concept. This approach yields rich dividends when used for rural marketing. It creates a win-win situation leading to a better life for rural consumers and higher profits for the company. The companies need to understand that the problems faced by the rural consumers are different from those faced by their urban counterparts. Each region might have its own set of problems and hence a thorough understanding of region specific issues is very important before devising a marketing strategy.