"Television is fueling demands for
                                                 branded products in rural India. But
 ...
MART is like cricket team, which just functions as a team when the matches
  are on and after that disbands except the cor...
Q. Are products and communication being designed keeping in mind
   these nuances?
A. Not really. Take for instance, simpl...
areas, everybody knows ‘Jeevan Beema’. They all are shifting their money to
   LIC, or to mutual funds.

   The change is ...
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Television is Fueling Demands for Branded Products in Rural India -(Exclusive Interview of Pradeep Kashyap,CEO,MART with exchange4media)

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For this week's dialogue, Amit Agnihotri and Neha Pant of exchange4media had an extensive chat with someone who is regarded as one of the top professionals in the area of rural market – Pradeep Kashyap. Kashyap, after spending nearly two decades in corporate sector and heading marketing function at Denso, has been involved with the ‘development sector’ since 1987. Since, then he has been a consultant to UN, World Bank and on marketing advisory committees of RBI, NABARD and more recently KVIC.

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Television is Fueling Demands for Branded Products in Rural India -(Exclusive Interview of Pradeep Kashyap,CEO,MART with exchange4media)

  1. 1. "Television is fueling demands for branded products in rural India. But sadly, marketers are finding it tough to reach rural consumers. They also need to handle communication more sensitively." Pradeep Kashyap, Founder, MART For very many companies and product categories, rural markets contribute to over 50% of values but only lip service is paid to rural marketing and media management. If the discussions in many power boardrooms are any indicator, it is time to change our worldview and look beyond. For this week's dialogue, Amit Agnihotri and Neha Pant of exchange4media had an extensive chat with someone who is regarded as one of the top professionals in the area of rural market – Pradeep Kashyap. Kashyap, after spending nearly two decades in corporate sector and heading marketing function at Denso, has been involved with the ‘development sector’ since 1987. Since, then he has been a consultant to UN, World Bank and on marketing advisory committees of RBI, NABARD and more recently KVIC. In 1993, he founded MART (Market and Research Team), a rural marketing and research agency advising clients like Hindustan Lever, Dabur, Glaxo, Eicher and Escorts. He also authored an important report on marketing in Rural India – ‘Traditional Haats and Melas in India.’ Q. Let’s start from the start. When and how did MART came into being? A. After spending 18 years working with many MNCs, in 1987, I thought I had enough. So, one fine day I just decided to walk out of the corporate sector and get into the rural sector. And for the next four years, I just worked with various NGOs trying to understand what this sector is all about. In 1989, fortunately enough, I got an opportunity from the Ministry of Rural Development to act as their marketing advisor. At the Ministry, in CAPART, which is a nodal agency for all NGOs in India, i got exposure to thousands of NGOs and their activities. I was with CAPART for three years. Then, in 1993, I submitted a bid for a World Bank project. They liked the concept and they approved our bid. I hired 8-10 people to work on this project and that was the genesis of MART. But, we didn’t have an organization and we still don’t have one as MART is not registered under any act.
  2. 2. MART is like cricket team, which just functions as a team when the matches are on and after that disbands except the core staff that remains. It is a management concept, which we are trying and it has worked successfully for the last 10-12 years. It helps in building up a very high team spirit because there is no hierarchy; the team takes all decisions. In 1999, we started getting requests from the Corporate for work in rural markets and that’s when the second division, rural marketing of corporate products was established alongside the existing rural development division. Q. How are the rural consumers different from the urban consumers? Do rural folks have a different purchase pattern? A. That’s a good question. Most corporate marketers believe that rural audiences are not very different. They are looking for one homogenous mass, which is easy to tackle and suits their point of view. But rural consumers are different and their sensibilities need to be kept in mind. First point of difference is that every rural region is different. The behavior in rural Punjab is very different from the behavior of rural of Andhra or Bihar. Punjabis are very open, aggressive, and keen to try out new things. Rural folks in Bihar are not willing to experiment with new technology. This is one broad example. Much of the distinctions in behavior come from prosperity. The problem is that while in international marketing, marketers treat every country differently in terms of strategy, product design, packaging and communication, when it come to rural India, most treat it as a homogeneous mass. Rural markets are extremely important today. Take Hindustan Lever. 50% of their sales come from rural market Q. So, you are saying that what differentiate the two is that they are extremely value conscious. What are the other major differences? A. Yes. The second difference is that urban buyer is an individual; he buys his stuff of his own free choice whereas in rural the purchase decision-making is largely in groups. For instance, when the first tractor is bought in a village, there will be lot of debate and discussion in the village Panchayat. So, it is about collective decision-making. The same principle will apply to even personal care products. A decision to use lipstick in rural environment needs social approval. The level of literacy is also a big divide. While urban audiences can buy a product after reading product literature, the same is not true of rural buyers. For rural audiences, seeing is believing. Which is why Levers is demonstrating the use of its shampoos in 3000 haats! And tractor companies give out tractors for weeks to use before purchase.
  3. 3. Q. Are products and communication being designed keeping in mind these nuances? A. Not really. Take for instance, simple products like pressure cooker or electric bulb. Most cooking in urban households is on a tabletop whereas all rural cooking is done on the floor and on wood flames. So ergonomically the rural cookers should ideally have two stub handles on either sides like halwai’s kadhai, long bakelite handle on one side gets charred in open flames. Simple, but important stuff. Similarly for electric bulbs. A typical rural consumer changes bulbs 5 times more than his urban counterpart. Reason, in rural areas, voltage fluctuates from 100 volts against 300 volts. So, all your electrical equipments get blown out, even simple things like electric bulbs! I am not saying all product categories need to be modified, but certainly some do. Q. How do rural audiences respond to communication messages? A. I will give you a hilarious example and then I will explain the point. Recently, in a village in Rajasthan, women watching an ad on TV started murmuring loudly. On asking an intermediary, I was told these women were saying ‘is ladki sharam nahi aati’ pointing at a model in the Shampoo ad where the girl after shampoo is bouncing her hair! According to local tradition, women comb her hair in the privacy of the home and do not demonstrate in public! So, is the role of communication being met? What I am saying is that you have to be very sensitive towards your communication. You have to be very clear about how you address in your communication and what medium you use. We relate much better to a worldview, which is closer to our own worldview. Q. But isn’t the presence of mass media, especially television, changing rural consumers? Are they not opening up and becoming brand conscious? A. Yes they are. Today villagers are becoming more brand conscious. For instance, in my recent to trip to a small town in UP, a Rikshawallah sporting a branded Ruff & Tuff jeans retorted ;sahab saal mein do pehenta hoon, Readymade kyon nahin. So that’s the sense of of ‘release’ in the current generation from the philosophy of ‘restraint’ that his father’s generation practiced. See earlier Gold used to be a major source of security. Today, the security comes from life insurance. There is almost a 100% recall for LIC in rural
  4. 4. areas, everybody knows ‘Jeevan Beema’. They all are shifting their money to LIC, or to mutual funds. The change is very visible and that’s what marketers are trying to use. But I think they are going wrong somewhere- one is in distribution and second is not enough local customization to compete with regional brands. See, Local brands are emerging very strong. For every Britannia ‘Tiger’ there are brands like ‘Kwality’ in Karnataka and ‘Priya’ in West Bengal. To stock a ‘local’ washing powder –‘Ghadi’, one needs to send money in advance! Some tea brands have adopted local ‘masala’ flavor and are giving market leaders run for their money. Q. So are you saying that TV has created awareness but marketers are finding it difficult to penetrate? A. Yes. Television has created a visibility and recall. So at the surface level, a demand for brands is there but because of poor distribution, it is fueling growth of spurious brands. And there are amazing take-offs of popular brands! Also marketers will have to adapt the sales pitch to include ‘demos’. Q. But distribution is really the key today. And is a complex issue. A. Yes. It is a difficult one for the marketers. Q. What are a few basic suggestions you have for tackling rural distribution? A. The huge number of 6.5 lakh villages in India bogs down marketers. But we need to understand that small villages with population of less than 1000 do not offer any potential. Their number is 4.5 lac. It is really the 2,000+ villages totalling 65,000 that have the purchasing power. For durables, having stockists in the 5,000 towns of India is enough as these categories are not purchased from the village. For FMCGs, the stockist in addition to his shop distribution can target the larger 15,000 haats which serve over 50% of the rural population. Thus one can serve the needs of rural India by feeding a few thousand locations only. I would end by saying that growth in the next few years will come largely from rural markets. Those companies that develop a long term strategy will take the bulk of the market growth. On the other hand, companies that ignore the rural markets or make only a few, sporadic tactical forays will do so at their own peril. Send your comments to Pradeep Kashyap More such interviews... © exchange4media 2009 Post your Opinion

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