Page 269 - DMGT509_RURAL MARKETING

Rural Marketing

Notes Details of the findings were unveiled today at Nielsen’s flagship Consumer 360 conference in
New Delhi, India. The study showed that in more than half the largest FMCG categories, rural
India is now contributing more to their growth than urban. One of the key drivers of this trend
appears to be the unprecedented growth of smaller packaging options in rural India.
“While the ability of lower priced packs to improve accessibility is known, their pace and
presence has been unrelenting” said Prashant Singh, Vice President, The Nielsen Company,
India. “ In addition, premium skin care brands typically associated with urban areas are growing
nearly twice as fast in rural,” he added.
“The good news is that the opportunity needn’t overwhelm smart marketers. For instance, even
a mere 2.5 percent of villages, if selected correctly, can generate a 20 percent jump in sales
growth,” Singh added.
The rural market is currently worth approximately USD$9 billion in consumer spending in the
FMCG space annually. The study findings show that food categories are currently driving the
bulk of the additional USD$91 billion into the marketplace by 2025.

One of the most telling points is “the unprecedented pull of consumer demand fueled by an
overdrive of awareness and acceptability. This will allow, and propel manufacturers to swing
into full gear,” said Prasun Basu, Executive Director and Vice President, The Nielsen Company.
The study also found a surprising set of priorities. In rural areas, education of children ranked
second after having a good crop.

On the consumption front, a third of rural consumers are eating biscuits for breakfast and one in
six rural buyers of hair dye now uses colors other than black to indulge in the trend of externalized
beauty that is picking up fast in rural areas.
“These emerging cues that seem to be on the fringes of the larger market, or ‘EmerFringe’ trends
are the signs of a future that has arrived. The rural consumer is no longer merely experimenting
with urban products because of a phase of prosperity – rather, she is reveling in it and indulging
unabashedly, providing gratification to her senses and her self-esteem,” said Basu.

The study also revealed that:
1. Rural purchasing power has grown faster than urban in the last six quarters.
2. Faster growth in rural is not limited to penetration; today the rural consumer’s frequency
of consumption is growing faster as well, demonstrating their entrenchment in these
categories.
3. Instant noodle sales are growing nearly twice as fast in rural India compared to urban in
both penetration and frequency.
4. Seemingly ‘urbane’ brands in categories like deodorant and fabric softener are growing
much faster in rural India than urban.

Notes According to industry estimates, 70% of all new subscribers will come from rural
areas. Mobile device manufacturers are also tailoring their products to this market. Nokia
had earlier launched a basic handset with a torch and an alarm clock.

14.9 New Strategies to Win

Now that the new phase of rural consumption appears here to stay, marketers will need to
evolve new strategies to connect and communicate with a more aware and unreserved consumer

264 LOVELY PROFESSIONAL UNIVERSITY