Consumer Adoption Process
The adoption of new products and services is slow
among rural consumers in comparison to urban consumers due to poor awareness of
new products because of low media access and resistance to trying new products
in the absence of demonstrations.
The sarpanch, the school teacher, and salaried
people who have better media access and market exposure become early adopters,
some of who in turn act as opinion leaders for other potential buyers.
The inducement of product trials and demonstrations
works well in rural for the adoption of new products.
Product Life Cycle
In most cases, the product is developed for the
urban market and is later pushed into the rural market. Only in recent years
have companies started customizing their products for rural markets. Eg. LG Television, Philips Free
PLC of a product in the rural market is often longer
due the multiple challenges involved in the distribution, communication and
adoption of the product.
Low growth in the rural market has forced companies
to reengineer their products (Free power Radio) or introduce low price packs
(sachets, 200 ml Chota Pepsi).
They are also trying to change consumption patterns
through consumer education (increasing soap usage frequency from weekly to
daily) and adopting alternate channels to reach deeper (HUL‘s Project Shakti,
haats, mandis) to grow the market.
The product mix in rural markets is simple.
Mostly only one product of a particular company
registers its availability on rural shelves.
Limitations of investment in stocks, the slow
movement and replenishment of stocks and the dominance of the retailer in rural
markets are some of the important factors
responsible for the smaller range of products
available at retail shops in rural.
HUL has good product width, with a presence in
toothpaste, shampoo, detergent etc.
Packaging in Rural India Packaging in
rural India needs special focus because of the
Poor Transport System (poor road conditions)
Difficulties of safe storage (rats, moisture, heat,
Poor Facilities (erratic power supply leading to
poor cold-storage facilities for food products)
The product for rural should :
Have a longer shelf life than the product for urban.
Be able to withstand extreme weather conditions
Be able to withstand sudden and jerky movements on
dusty roads. Have alternate storage arrangements (ice box for cold drinks).
Bright colors like red, yellow, green etc.
Use of local languages on the pack, images.
Texla TVs –Launched new range in bright red and
yellow color as the old one with black and grey cabinet was a failure.
ITC –Goldflake with a yellow cover in the south
whereas golden color in north because yellow is associated with ill-health and
jaundice in north.
Branding in Rural India
Brand Association is mainly with Colors, numbers,
and visuals and not necessarily with
the name of the brand.
Retailers play a major role in brand promotion. Due
to strong bonding and trust between customers and retailers, coupled with low
brand awareness, consumers often do not ask
for the product by brand but insteadPaanchwillrupaye
waalirequestchai th dena‘. It is upto the retailer to push
First mover brands become generic brands –Detergent
powder came to be identified with Surf, mosquito coil with Kachua
Chaap,vegetable oil with Dalda.
Brand Building in Rural India
Brand name development –Facilitates
easy brand recall and in drawing any color, visual or numeric
association. Eg. Ajanta for toothpaste, Sansar for sewing machines.
Creating a brand identity –Involve
the need to relate the brand with the rural lifestyle, or with
appropriate status symbols, or with the rural environment. Eg. Britannia Tiger
Biscuits created an identity associated with a
smart, active and sharp child.
a brand image –Brand should have a personality of its
own. Eg. Mahindra & Mahindra have maintained their sterling image in rural.
Brand Spectrum in Rural
Brand choices are often limited due to the small
market size and the limited investment capacity available with the rural
Only Three brands are available in rural retail shop
against six to nine brands in urban shops.
Brand Loyalty Vs Stickiness
Low levels of literacy and awareness make
rural people less likely to switch brands as they do not have the
required knowledge or information to exercise a choice. They are more
comfortable in purchasing tried and tested brands. They are therefore, brand
sticky rather than brand loyal.
First / Early mover
advantage –Whichever brand enters a village market
first seems to gain acceptance in the community through ‗word of mouth‘
communication and There after many prefer to stick to this particular brand.
Rural markets suffer from the problems of low
penetration and poor availability of branded products. Hence, although there
exists a huge demand for branded products, there are no distribution channels
to make the product reach the customer. This has led to the growth of fake
Ponds has been replaced by Bond‘s talc
Fair & Lovely by Fair & Lonely
Lifebuoy by Likebuoy
The Fakes Market
Lookalikes –Products where the color scheme on the packaging material closely resembles that of a popular brand but the pack carries a different name. Shagun for Lifebuoy, Lalita Amla for Dabur Amla
of original brands packaged in colors and designs similar to those of the
originals but have names that are subtly and cleverly misspelt. Eg. Paracute
Parachute, Fair & Lonely for Fair & Lovely.
replicas of original brands. The color, design, and name on the package
are the same as those of the original brands.
Strategy to counter fakes
Introduce upgraded packaging which is
difficult to copy –Dabur replaced its plastic blow-moulded
container with a premium four-color shrink-sleeve packaging, which has a grainy
texture and water bubbles. The packaging is difficult to replicate. Tetra packs
Raids or Legal course –Raids
on the premises of the fake manufacturer and seize the products. File a
patent for the product. Eg. P&G initiated action against the manufacturers of
lookalike Vicks Vaporub.
Educate the customers – Coca
Cola has put into place 48 consumer response coordinators, who work with
their teams to redress the consumers complaints about overcharging and fake
Structure of Competition in Rural India
Other urban national branded products –In certain villages, the proliferation of national brands is quite evident. More likely in villages that are on the periphery of larger towns because of the spillover from urban centers.
Regional urban branded products –regional
brands of unorganized sector are quite common. True for soaps.
Local urban brands –These
products are manufactured in urban centers and find their way into rural
India through the wholesale channels like washing products, bangle etc.
Local village brands –Products
manufactured in the village itself. For eg ropes, bread etc.
Substitutable products or indirect
competition –Products that can be substituted. Eg.
Ash for washing vessels, neem twigs for toothpaste.
Product warranty and after sales service
When purchasing high-value durable products, rural
consumers attach a great deal of value to the warranty offered on the products.
With the increase in the usage of machinery,
appliances and equipment, there has been a continuous demand for after-sales
Tractor servicing –Most tractor companies regularly organize service camps in big villages/ small towns. They invite tyre, battery, fuel injection and other component suppliers to participate. Advance notice is sent to tractor owners of the company brand with a request to come on a scheduled date for a free-check up.
Videocon servicing –Company
mechanics go around to villages twice a week to provide after-sales
service, an important factor in the decision to purchase consumer durables.