The Feminist Version

Opening new frontiers: Story at the bottom of the pyramid
-Anita Motwani(senior VP(marketing), Max New York Life Insurance

Rural India seems to be the latest flavour in town. From finance ministers to corporate India across industries, everyone seems to be shifting focus to the bottom of the pyramid. All boardroom discussions are getting centred on finding ways and means to grab a share of this lucrative pie. Numbers look seductive with statistics and data giving enough evidence of volume potential...smaller ticket sizes but more buyers making it eminent for most industries to ignore this segment at its own peril.
With near saturation and cut-throat competition in urban markets, there is almost no debate left on the potential of the rural population whose incomes are rising and mindsets are changing. While certain industries like FMCG have made an early entry, others are learning the ropes with each passing day. Most industries are trying to test the waters through various forms of pilots and test launches, with n clear indicators of gains in the short run. But there is no denying the long term potential is vast, but so are the challenges.
Till recently, a large part of marketing was done targeting the Urban Consumer, and with most marketers having no prior exposure to the rural audience, they are applying the same rules to connect with this completely different segments. THE MISTAKE that most companies make while chalking their rural strategies is to treat the rural consumers as an extension of the urban counterpart. The other common mistake is to treat rural consumers as a homogeneous mass without segmenting them into appropriate segments. The most relevant point to note is that this segment is extremely fragmented and spread out over a large geographical base. The cultural and behavioural differences vary not just from state to state but from villages to villages. Mapping out this difference in consumer behaviour is the key to any successful rural strategy.

A recent insighting exercise in India's villages has revealed some interesting trends:

• From buffaloes to beauty parlours

Farmers verging on retirement, sensing the decline of their own profession, are encouraging their children to enter different vocations. Around one-fifth of rural households now generate their primary income from a salaried job or a small business. Besides small village shops, loans are being taken for novel business ideas like beauty parlours, popcorn machines, spice factories, tailoring shops, etc. A villager equals farmers is true no more as life has moved beyond farming and agriculture.

• Don't just sell dreams, tell them how to live their dreams

Thanks to the TV having made substantial inroads into rural homes, villagers have also learned to dream. Everyday they are exposed to images of ordinary people scaling extraordinary heights. This has given them enough hope about their own future, but where they flounder is the "way" to go about it. It is here that measured approach consisting of small actions, one step at a time, finds better acceptance and credibility. Actions where outcome can be measured from time to time and results are visible in the near future. So, go ahead and sell them dreams, but at same time give them a solution and a formula for it to materialise.

• Not just economic but emotional security

Even though they are receptive to new ideas, they do not readily dash into ventures. They do not only want economic security but also emotional security. They are likely to welcome innovations that satisfies their sense of security. If they feel that a particular idea will help them improve their economic position or their social relationship, they will accept it. Selling a product to them is not a cold commercial transaction(but) an agreement of trust between the marketer and the consumer. And companies that live up to the trust that this consumer places in them will benefit immensely in the long run.

• Their children are like stocks in a portfolio

Its alws known that family ties are very strong in hinterland, but the difference is in the proportion of family budget that is being allocated to the children, esp the male child and his education. Son's education in a pvt school is like a stock market investment that is bound to yield return far greater than any other investment. Any marketing effort that appeals to this agenda is bound to catch his immediate attention.

• Sharing risks and rotating savings

This insight is the basis for the SUCCESS of all micro-finance ventures in rural India. A simple model that lends on the back-up commitment of small groups has minimised risks and reduced bad-debts to near zero percent (certainly doesn't need the intervention of finance minister to help instt recover their money)!Some of the other industries that can leverage this to their advantage are Insurance schemes that offer group products and innovative saving schemes.

• Community empowerment and Inclusion

The rural communities have not been empowered in the past. So they do not participate in the development process. A participatory model that mobilises the community and makes it responsible for its own well-being is bound to find greater success. The attempt should be turn villages into entrepreneurs and keep the ownership of the various projects with the community. Given the vastness and diversity of the geographies involved, marketers would do well to leverage the potential of villagers themselves by creating entrepreneurial communities. Make them an extended team of your business and let them grow with you.


A last word of caution, the companies the rural markets must do so for strategic reasons and not for tactical gains. The rural consumer is still a "closed book" and it is only through unwavering commitment that companies can hope to make a dent in this market. Not to forget that it has to be a revolutionary and not just evolutionary business approach that will open new frontiers of consumer demand and create an emerging market within a developing market.