Page 165 - DMGT509_RURAL MARKETING

Rural Marketing

Notes
Example: ‘Ponds’ talcum powder; ‘Clinic Plus’ shampoo
Pass-off products: Such products have a similar sounding name or have a similar spelling with
similar looking packaging and design. These products are meant to mislead the consumers who
are illiterate or in a hurry to purchase goods.

Example: ‘LUK’ for ‘LUX’; ‘Head & Shower’ for ‘Head & Shoulders’
Fake brands exist in rural as well as urban locations. But the problem is more acute in rural areas
especially the deep pockets which are less accessible and people have very little knowledge
about the original brands. “Most people in rural India can recognize alphabets but not complete
words, so during a research, we found a whole lot of samples of fake Clinic Plus shampoo
sachets where the visual was similar to the original brand but the name was changed to ‘Clinton’
as Bill Clinton was to arrive soon in the country. During another such raid, we collected about
99 variants of Fair & Lovely cream including Fair&Lonely, Far & Lovely etc.”, said Mr. Pradeep
Kashyap, president, Rural Marketing Association of India (RMAI) and CEO, MART while sharing
an interesting incident in past.

The Indian rural landscape being scattered in smaller villages, gaining access in all of them is a
tedious task for brands. Also, most of the FMCG brands have not been able to set up an efficient
distribution network in such areas. The local entrepreneurs are well aware of these challenges.
Hence, take advantage by manufacturing cheap substitutes of original brands, misleading the
rural consumers. These manufacturers have an advantage of being local and thus reach the shops
before the original brands do.
Such counterfeits piggy back on huge marketing budgets of FMCG companies. The rural
consumers are aware of the brand owing to ads broadcasted on radio & television channels. But
on time of purchase, the consumers tend to pick their fake counterparts due to unavailability of
original product or get fooled by the retailers who on purpose sell cheap products for higher
margins.

Over the time the share of fake products in the FMCG market has grown to 10- 15% causing a
deep hole in the pockets of the FMCG companies. A study conducted by AC Nielson, a research
agency reveals that FMCG industry loses around 2500 crores annually to counterfeits and
pass-off products. In 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. Besides the loss of
revenue, the leading companies also bear the damage to brand image and brand loyalty of
consumers.
On a whole, the brands not only suffer in terms of revenue but also have to compromise on the
brand image which in no case can be tolerable. Therefore, various brands have come up with
unique strategies to overcome their shortcomings in the rural markets and curb the growth of
fake brands in rural areas.

Companies like Coca-Cola have set up an elaborate system to curb the menace of duplicate
manufacturers, offering incentives to informers. It has 48 consumer response coordinators across
the countries who work with their teams and redress consumer complaints directly, including
overcharging and spurious bottling. Besides, it has a large network of route salesmen who have
a one-to-one relationship with the retailers on their beat and keep their ears to the ground.
When they spot suspicious activity, they inform company officials. So though it is impossible to
stop counterfeiters totally, it is possible to minimize the damage they cause.
Upgrading the product packaging periodically or launch product variants so that the
manufacturers of counterfeits find it difficult to copy their products. Hindustan Lever has initiated

160 LOVELY PROFESSIONAL UNIVERSITY