Page 270 - DMGT509_RURAL MARKETING

Unit 14: Corporate Sector in Agri-Business

than ever before, the study found. With this, product and brand development cycles will need to Notes
undergo a dramatic change. This growth is proving to be systemic and sustainable as multiple
factors converge:
1. Government spending in rural India has tripled over the last four years and is now
translating into higher consumer spending.

2. Significant progress on literacy levels – 99 percent of the villages have a primary school
within a 1 km walk.
3. Rural consumers are consuming more premium and convenience oriented categories that
are typical of their urban counterparts.
4. DTH television connections in rural are more than double that of urban and have grown
dramatically; today two out of five new mobile telephone connections are in rural.
“Today’s rural consumer is not just indulgent, but ‘smart’ too: she wants products that carry the
best of traditional wisdom and modern science; ones that provide her convenience and
individualism in one go. This means product and brand strategies that respond to these demands
are more likely to succeed” said Basu. “This bolder and more individualistic consumer is unafraid
to exhibit and ‘externalize’ the need to indulge. Recognizing this and coupling it with ideas that
offer ‘individualized convenience’ will separate the brands that will win from the others.”

“These findings have wide-ranging, practical implications for creating successful portfolio
strategies and packaging formats that recognize these traits and appeal to the rural consumers’
senses. Combined with a smarter selection of locations and targeted distribution plans, brands
can transform their plans for growth dramatically and profitably to make the most of the next
big rural opportunity,” added Prashant Singh.

14.10 Durables and Financial Services

In late May, when India’s GDP numbers were released, many were happily surprised. In the
fourth quarter of the fiscal year (January-March 2009), the economy grew 5.8% against expectations
of less than 5%. For the year, growth was 6.7%, less than the 9% recorded in 2007-2008, but still
very respectable during a global downturn. Multinational banks and brokerage houses rushed
back to their spreadsheets to raise their growth forecasts for 2009-2010.
But why were the estimates so pessimistic in the first place? A possible explanation is that most
analysts work in cities, and their views are colored by what is happening around them and in the
corporate world. That picture has been bleak: During the last quarter of 2008-2009, manufacturing
shrank 1.4%. In contrast, agriculture grew 2.7%. The feel-good factor in urban India is returning
only now with a new, stable government and a sharp jump in the Bombay Stock Exchange
Sensitive Index (Sensex).
In the villages and small towns, it has been a very different picture. “The rural market is
insulated from the global meltdown,” says Harish Bijoor, CEO of brand and business strategy
consultants Harish Bijoor Consults. “The rural part of our economy has been untouched by
credit cards and mortgages as known in the West.”

“The slowdown experienced by India on account of the IT (information technology), real estate,
financial services and automobile sectors was an urban phenomenon,” says Ajay Gupta, founder
and CEO of ruralnaukri.com, which focuses on jobs in the rural sector. (See “rural naukri.com’s
Ajay Gupta: ‘Rural Jobs Can Provide Momentum to the Wheel of the Economy’”). “However,
the negative impact of all this on urban India has been more than offset by encouraging
performance in rural areas. The rural economy has provided a cushion. Overall sentiment in the
country was different from other parts of the world where each household had at least one
person with a pink slip.”

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