How the other half buys

Half of corporate India's sales come from rural India though it invests less than 10 per cent in rural marketing.

Pradeep Kashyap, founder of rural market research company Mart, says this amounts to "shortchanging the rural sector". "Corporates are neglecting this segment at its own peril," he warns.

To build awareness about rural marketing, 11 rural research companies came together last week under an umbrella called Rural Marketing Agencies' Association of India.

It includes Chennai-based Anugrah Madison Advertising Ltd, Mart, RC&M,Ogilvy Activation and Linterland, the rural marketing division of Lintas IMAG.

According to RV Rajan, the managing director of Anugrah, while the country's advertisement industry is pegged at Rs 11,000 crore, the size of the rural marketing business is roughly Rs 500 crore.

"The association will promote the cause of rural marketing," says Rajan, adding that its objective is to set benchmarks for performance, evaluation and financial practices concerning the rural market. It will also organise workshops and seminars, the first of which will be held in Delhi this November.

The rural market accounts for more than 50 per cent of the total Indian market for FMCG and durables sector, which is roughly Rs 65,000 crore and Rs 5,000-Rs 8,000 crore, respectively.

But in the past two years, companies have woken up to adapt products to rural-specific needs. While companies such as HLL, ITC Ltd and Eveready Industries have been strengthening its rural network for several decades, last year Glaxo SmithKline Healthcare hired Mart to design its rural marketing plan for the Horlicks brand, including promotions, visuals and events.

Five months ago, when TVS Motor Company launched TVS Star, a four-stroke motorbike designed for the rural roads, it hired RC&M to design its marketing strategy.

This is the first time that TVS addressed the rural consumer directly instead of the top-down, urban-to-rural-market-reach approach. "We wanted to reach the media-dark areas with a population of 1,500 where TVs, newspapers and even wall paintings don't exist," says a TVS company source.

According to Kashyap, it's a myth that rural India has less purchasing powers. "If the per capita income is Rs 20,000 for an urban home and Rs 10,000 for a rural household, the latter's disposable surplus is higher," he says.

Kashyap says companies that started investing in the rural consumer early are today reaping the benefits. "But since return on investment starts coming much later from this sector, companies shy away from the rural market, but this is a myopic view," he says.