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The changing ‘Bharat’

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By Pradeep Kashyap, Publication: Pearson Education, Price: Rs 450/-, Pages: 301

In its second edition, the title ‘Rural Marketing’ authored by Pradeep Kashyap, CEO and Founder, MART, captures the changing trends and reflects on latest marketing initiatives in rural markets. Exploring new dimensions of rural marketing, the new edition comes with two added chapters on ‘Rural Services Marketing’ and ‘Marketing in Small Towns’.  Excerpts from the new chapter ‘Marketing in small towns’:

Small-town consumer Behaviour
It is of utmost importance to understand the behaviour of consumers living in small towns. Although these places are small, the masses residing in these towns have big dreams and aspirations; they have good disposable incomes; aspire for a better standard of living; and are more brand aware and exposed through good media penetration. Understanding the demographic, behavioural and psychographic characteristics of this set of target audience is crucial for any marketer who wants to gradually make it big in the emerging market space.
The characteristics of a typical small-town consumer are explained here.

Growing affluence, leading to a better standard of living
As mentioned earlier, the disposable income of people living in Tier III and Tier IV towns together comprise 48 per cent of the total disposable income in urban India. This rising affluence is a result of multiple factors like less over­heads, minimum loan traps unlike the village folks, low transportation cost and low cost of living when compared to bigger cities, greater job opportunities for multiple members of the family, and to top it all, the influx of repatriated money that comes from the family members who have moved to bigger cities for jobs and are earning handsomely. These towns are much smaller than the top metros, but many have per capita incomes that are higher than those in the top metros and have also been able to sustain a double­digit growth. A rise in disposable incomes has steered the urge for a better standard of living. Some facts, like the Gitanjali Group’s (a diamond jewellery company) maximum growth in jewellery coming from places like Berhampur and Bhubaneswar in Orissa, and basically from all across India’s small towns; General Motors India’s compact car, Chevrolet Spark, driving into small towns quite aggressively; and nearly 40 per cent of Hyundai’s sales coming from small towns and rural areas are a perfect reflection of the high disposable incomes and purchasing power of these small-town habitants.

Increasing awareness and importance of education
Today, consumers in small towns are more aware because of increased media penetration. Be it the Internet, DTH (Direct-to-home) or C&S (Cable and Satellite), the off-take of all of these is growing faster in small towns. Contrary to the perception that DTH television technology is an urban or a metro phenomenon, 70 per cent of its subscribers today reside in small towns and rural areas. It is specifically towns with a population under one million that contribute to the two million DTH subscribers. Also, as per a study conducted in 2009 on Internet usage in India, it was found that around 36 per cent of the total Internet users in India are from towns with a population of less than 500,000, like Kolhapur, Thrissur and Panipat. This high media penetration is opening mass media communication options for marketers, which in turn is making these consumers more aware and exposed to a wide variety of products. As small-town inhabitants become more aware, they have also started giving considerable importance to education. Although the middle-aged people do not have separate dreams for themselves, they hope their children will study and make it big in their lives. It is through the children and youth that the dreams and desires of small-town India is being expressed. It is because of this that one can observe a phenomenal amount of money being spent by small-town parents to aid their children’s dream careers as doctors, engineers, IT specialists or in the IAS. Knowledge of English is seen as a symbol of status and upward mobility, and a means to end the social and economic apartheid among small-town youths. This has led to the sprouting of spoken English coaching centres at every nook and corner in small towns. Taking a cue from this consumer psyche, a number of companies have started wooing small-town consumers along this axis of ambition and achievement, some of them being Fair & Lovely Woman’s Emancipation, the Colgate Scholarship, Hero Honda Career Programme, and ICICI Prudential Life Insurance’s “Pragati Ki Anokhi Paathshaala” programme. Brand ambassadors and icon for this consumer segment are changing, and it is the small town achievers who are becoming the hot role models.

Aspirations and Lifestyle
This growing awareness and exposure has led to changes in the aspiration levels of small-town inhabitants, especially its youth. Young people from small towns are today aspiring for urban jobs like those of air hostesses, pilots, flight stewards, newsreaders and radio jockeys. Such jobs are not only high paying, but also provide a high-flying lifestyle to the ambitious youth. With an increasing number of youngsters opting for this field, training institutes are taking off in a big way, and even companies are hiring people from these small towns. It is not just urban jobs, but also self-grooming that has become a very important part of the lifestyle of small-town inhabitants. Their aspiration levels have gone up, to the extent that today, one can see a number of beauty parlours, salons and gyms coming up in every nook and corner of the towns. Small-town women have surprised retailers and manufacturers with their willingness to try new things and pay large amounts for beauty treatments and products. Beauty treatments such as age correction, removal of skin imperfections, and products for hair streaking have become increasingly popular there.

Increasing brand awareness
Today’s small-town consumers have become more brand aware and brand conscious. Many of them prefer to buy premium products and avail of the high-quality and best services in their towns. This is the reason why multinational brand names can be seen scrawled on the walls and billboards in these towns. Out of the many product categories, it is in the food products category that a brand name commands the maximum respect in a small town. There is practically no mention of unpackaged or unbranded purchase of cereals, oils and sugar. Brands like Priyagold biscuits, Wagh Bakri and Parivar Tea, Bournvita, Horlicks and Complan can be seen in small-town households. A well-planned strategy of many regional companies like Surya Foods, Wagh Bakri and Sapat has been to enter these markets first before making a mark in the hinterlands, thereby avoiding competition with the national players. However, of late many companies have started recognizing the potential of these small-town markets and are fast moving into this space. A company like S. Kumars, known for its premium brands such as Reid & Taylor and Belmonte, is launching a mass brand for the Tier III and IV towns at very reasonable rates.

Consumer buying behaviour
The buying behaviour of consumers in small towns is a reflection and mix of the behaviour of people in urban cities and rural villages. For consumers in small towns, similar to those in urban cities, the occasions for purchase are festivals like Holi, Deepawali, Baisakhi, etc., and not really the harvest or wedding season, as is typically the case in villages. Also, the place of purchase is a mix of small traditional mom-and-pop stores, convenience stores and malls. In smaller towns, the traditional trade still holds strong, especially due to the relationship between the retailer and the consumer, but for a brand that wants to use the last mile for experiential marketing, malls have become a very good option for displaying and selling their products. This is the reason why stores like Vishal Mega Mart, Nilgiris, 6Ten and BestPrice have come up in a big way in these towns. Also, with the advent of such stores, the traditional mom-and-pop stores have become more innovative in their offerings and services and have started giving discounts, credit, and even free home delivery facilities to retain their old customers. For a small-town consumer, friends and relatives act as the main influencers during the purchase of a product. They are also influenced to a large extent by the advertisements.

Small-town India offers a sizeable floating consumer mass for marketers, provided their value system can be leveraged. The success of tomorrow’s marketers lies in understanding the needs of this heterogeneous mass. Those who can read these behavioural signs properly will be rewarded with exponential growth.

About the author / 

Neeta Nair

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