'Availability key to success in hinterland'

If you think that consumers in the countryside buy cheap products, and avoid brands, you are very sadly mistaken.

A recent survey by the Federation of Indian Chambers of Commerce and Industry (Ficci) on buying habits says access and availability are the two most important issues in the rural market where Jo dikhta hai woh bikta hai (whatever is accessible, sells).

The survey predicts that the next big marketing revolution could already be happening in the rural sector.

The Ficci survey corroborates its advice by citing the examples of Clinic shampoo and Parle-G biscuits, which are relatively expensive and yet are the largest selling brands in rural India.

This is because these products have got deep a distribution network, which assures availability at all points of sale.

The survey suggests that corporate marketers build reassurance and trust about product quality, service support and the company's credentials to the rural consumers through "face-to-face, below the line, touch, feel, and talk modes, at haats, melas, and mandis".

According to the FICCI survey, consumption of branded products, both national and regional, accounts for 80 per cent of the sales of fast moving consumer goods (FMCG). It cites the example of FMCG major Hindustan Lever which earns more than half of its annual sales of Rs 11,700 crore from the rural markets.

The survey says rural customers are not eager to buy cheap products.

Rather, they are keen on value for money goods. Rural consumers are fundamentally different from their urban counterparts and different rural geographies display considerable heterogeneity, calling for rural-specific and region-specific strategies.

For instance, a farmer in rural Punjab is much more progressive than his counterpart in Bihar, a farmer in Karnataka is far more educated than one in Rajasthan.

The need to build assurance and trust about the product stems from the fact that with hardly any key influencer within the village and few sources of information (since print and electronic media have a limited reach), the rural consumer feels inhibited and ill-equipped to buy confidently.

An income dispersal projection by the National Counsel of Applied Economic Research for 2006-07 shows that the number of poor households will half from 61 million in 1997-98 to 28 million, whereas the number of middle-income households will double and the numbers of rich households will treble over the decade in rural India.

This upward push "" taking rural people from poverty to prosperity ""will lead to increased purchasing power. Today's non-consumers, comprising the rural poor, will enter the market as first-time buyers in large numbers.

To claim a larger share of the growing rural pie will call for a radical shift in management thinking: from gross margins to high profit, from high-value unit sales to a game of high volumes; capital efficiency and from the one-solution-fits-all mentality to market innovations.