The rural India offers a tremendous market potential. A mere one percent increase in India’s rural income translates to a mind-boggling Rs 10,000 crore of buying power. Nearly two-thirds of all middle-income households in the country are in rural India. And close to half of India’s buying potential lies in its villages. Thus for the country’s marketers, small and big, rural reach is on the rise and is fast becoming their most important route to growth. Realizing this Corporate India is now investing a sizeable chunk of its marketing budget to target the rural consumers.

Increasing brand awareness
In the rural families, studies indicate a slow but determined shift in the use of categories. There is a remarkable improvement in the form of products used. For instance, households are upgrading from indigenous teeth-cleaning ingredients to tooth powder and tooth-pastes, from traditional mosquito repellant to coils and mats. There is also a visible shift from local and unbranded products to national brands. From low-priced brands to premium brands.

FMCG consumption
Organizations like Hindustan Lever Ltd., Nirma Chemical Works, Colgate Palmolive, Parle foods and Malhotra Marketing have carved inroads into the heart of rural markets. Various categories of products have been able to spread their tentacles deep into the rural market and achieved significant recognition in the country households. And, in the process, the regional brands, local brands and the other unbranded offerings got displaced by the leading brands.

Of the expenditure on consumer goods in rural household, approximately, 44% is on food articles such as biscuits, tea, coffee and salt, 20% on toiletries, 13% on washing material, 10% on cosmetics, 4% on OTC products and 9% on other consumables. A number of category products have established themselves firmly in the rural households.
It is evident that in the villages low-priced brands are well accepted and one might feel that a larger proportion of the purchases made in rural market can be attributed to local/ unbranded players. Surprisingly, however, the unbranded/local component contributes to a substantial portion of the volume of only a few of the highly penetrated categories.

Focus on urban categories
Though the commodity products have greater penetration, traditionally urban categories such as skin creams and talcum powder have also made a mark. While the urban talcum powder market suffered a de-growth, the rural talcum powder market darted ahead. Similarly, growth of rural skin cream market was at par with that of urban skin cream market. This clearly indicated that after being considered urban for a long time, some categories are now wearing a rural face. And, in many a case, it is the rural market that is actually driving the growth of category.

Premium brands
Pond’s is the leader in the talcum powder category with a penetration of 65% and volume contribution of 56%. Its rivals viz. Nycil and Liril are trailing far behind. Moreover, 60% of the Pond’s users have purchased no other brand i.e. they are 100% brand loyal. This reflects the strength of the brand in rural bazaar.

In the skin care category, Fair & Lovely fairness cream, with a penetration of 75%, accounts for 60% of the skin care market in rural India. It also enjoys the undistinguished patronage of 58% of its user households. Both Pond’s and Fair & Lovely are enjoying a monopoly in the rural markets in their respective categories.
Rural India is not averse to trying out the premium brands at high prices. A study indicated that a majority of the premium brand users are using the brand for the first time. Similarly 0.9% of the talcum powder-using families have started using Denim talc and 0.7% of the shampoo using households started using Pantene. Surveys also reveal that trials are not restricted to the more affluent echelon of the villages. The experimenting households are more-or-less evenly spread across the various socio-economic clusters of the rural market. This should further encourage the marketers to focus their attention on rural buyers.

The rural youths are more open to fresh concepts as against their elderly family members. Their difference in choice of products/brands with the seniors of the households often leads to a “dual-usage” of product categories. As an instance, 20% of the households using tooth powder also use tooth paste. Similarly, many of the households using premium brands also use mass market brands. For example, while 15% of Surf and 12% of Ariel using families also use Nirma detergent, 3% of Denim users use Pond’s Dreamflower talc and 18% of Pantene using households use Clinic shampoo as well.

Amazing innovator
With a queer psychology of purchase and usage, Indian rural market is still a puzzle to marketers. In many a case, it stretches its imagination to find surprisingly different uses of some of the products. And the red-faced marketers admit that they actually sell their products in areas they would otherwise find difficult, simply because there are other uses for them. For instance, in parts of Northern India, condoms are used by weavers as gloves on their fingers to weave fine threads. Lubrication on condoms allows them fine control on threads and protects their sensitive fingers. Buffaloes displayed at the haats for sale are dyed an immaculate black with Godrej hair dye. Horlicks is used as a health beverage to fatten up cattle in Bihar. In villages of Punjab, washing machines are being used to make frothy lassi in bulk. Paints meant for colouring up the rich-smooth walls are used to paint the horns of cattle to make identification easier and to achieve a long-term protection from theft. Iodex is rubbed into the skins of animals after a hard day’s work to relieve muscular pain. The organizations in question might not be pleased with such usage. However, their moneybags keep on jingling.