Page 164 - DMGT509_RURAL MARKETING

Unit 8: Rural Product Strategy

actual loyalty and work towards ensuring that the customers are not sticking to the brand but Notes
are actually loyal.
Brand Stickiness is the repurchase behavior shown by the customers due to the absence of a
viable alternative. Viable alternative implies that either other brands are unaffordable (Price),
unavailable or risk associated with the brand is too high. A great example of brand stickiness is
éclairs. In organized urban market éclairs is produced by major giants like Cadburys, Nestle
etc., but in the rural market éclairs is produced by unorganized players. The market share of
these unorganized players is as high as 27%. Availability as I have already mentioned is the
reason for the brand stickiness. According to figures released by market researcher AC Nielsen,
demand for personal care products grew faster in rural areas than urban areas during the period
April-September 2009.

Several FMCG companies such as Godrej Consumer Products, Dabur, Marico and Hindustan
Unilever (HUL) have increased their hiring in rural India and small towns in order to establish
a local connect and increase visibility.
GlaxoSmithKline Consumer Healthcare (GSK) and Nestle and are now launching products
specifically for rural markets. Anand Ramanathan, an analyst from KPMG, said, “Till recently,
most FMCG companies used to treat rural markets as adjuncts to their urban strongholds and
rural consumers as a homogeneous mass without segmenting them into target markets and
positioning brands appropriately.”
The dynamics of brand stickiness governs by the fact of compatibility. Although most marketers
believe that change is the only constant thing in the world. But they failed to realize that the
change should take place sometimes in both ends as well. Thus the marketer’s offerings should
be compatible with the target market and they must be able to diffuse the innovation among
them. Otherwise the change may backfire.
Brand Loyalty, on the other hand, is the consumer’s commitment to repurchase the brand and
they often help in a lot of positive word of mouth for the brand. Most of us are clear about brand
loyalty. But the problem is sometimes we believe we can make people brand loyal by changing
price or affordability. But the fact is the concept of brand loyalty is making the customer addicted
by making them positioned in the minds of the customer as a higher perceived valued product.

!
Caution A study conducted by AC Nielson, a research agency reveals that FMCG industry
loses around 2500 crores annually to counterfeits and pass-off products. According to
Ashok Chhabra, Executive Director, P&G the fake products are affecting the sales of leading
brands to the extent of 20 to 30 percent. Another recent survey conducted by AC Nielson
reveals that top brands in India are estimated to lose up to 30 percent of their business to
fake products.

8.12 Fake Brands

Daily Milk, Lifebody soap and Fair & Lonely. These are popular brands in the hinterlands of
India. Don’t they sound familiar to daily brands Dairy Milk, Life Buoy & Fair & Lovely. Well,
they not only sound but also look similar to the original brands. These brands are created by
manufacturers producing cheap versions of the original brands.

Fake brands are identified under two broad categories, namely:
Counterfeit products: These are fake products that bear identical name of product/ packaging/
graphics/colour scheme and even same name and address as the genuine manufacturer. They
look exactly like real products other than the legal owner of the real products & trademarks.

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