As of 2005 , urban areas accounted for 52% of India’s NDP ,despite having just over one quarter of the population. Although the primary source of income is agriculture in the rural areas , the economy is more diverse in terms of the economic output .
Traditionally rural / urban markets are considered in isolation by FMCG companies . During drought since the PPP drops , so do the targets , conversely when the industrial activity slows down , the focus is renewed on rural markets .
Is it really the case ?
- Has the transformation been mapped ?
- Or are the companies limited in their reach of products
- Are the company personnel unable to travel the rural markets since it is a “tough” non AC terrain
- Have the marketers really talked to the rural consumers to see what their drivers are ?
The rural markets are becoming prosperous . The “bottom of the pyramid” is expanding
In the past 4 /5 years the economy has improved in these markets on account of better support prices , normal monsoon, escalating real estate prices income emanating from activities in towns are sent back .
The aspirations of the rural today mimic those of the urban consumers. The emergenceof modern retail trade , the growing demand for ready to eat food , the exposure through C&S network , penetration of colour televisions seem to transform the needs. Today girls / women wear less sarees and more salwars/jeans , for it is trendy and apparently more comfortable .
Improvements in infrastructure , rural connectivity on roads ( which from 40% in 2004 is today at 70% ), mobile penetration , improvement the cross migration of the rural –urban consumer into real time situation , all contribute to an aware rural consumer .
As the younger generation grows , the inability of the fsarm to support a family forces , family members to move away from the agricultural income .as the proporation of non-agricultural income grows , and dominates the character of consumption changes .The evidence points to the PPP of a rural consumer coming from dual sector = agriculture+ non agricultural activities.
BW reaserach ,based on data provided by Indicus Analytics , CMIE finds that less than 10% of the FMCG business is actually susceptible to the vagaries of the monsoon .
Knowing consumer behavior is the key , so do the traditional consumer companies approach the rural markets from a sales /distribution perspective rather than a marketing understanding ?
