Brands have been looking to expand into rural markets in emerging Asia for the past few years. Due to the recent slowdown in economic growth in the region, low-tier consumers are becoming an even more important segment for companies seeking to maintain growth.
Mindshare recently partnered with OgilvyAction to launch communication solutions aimed at Asia’s rural and low-income consumers. Calling it “the most elusive set of consumers today”, R Gowthaman, Mindshare World-wide’s chief client officer for APAC and CEO of South Asia and ASEAN, says the segment is “under-served, with an informal economy, and equally inefficient with very little competition”.
With more than three billion people at an average consumption power of US$2 to $10 a day, this segment is valued at $5 trillion, and China, India, Thailand, Indonesia, Vietnam, Cambodia and the Philippines together will constitute almost two thirds of it, according to World Bank data. Unlike urban markets that are accessible through multiple media channels, it takes different approaches to achieve pen-etration in rural communities. For example, to promote hand-washing, Unilever’s Lifebuoy branded chapatis given out during the Hindu festival of Kumbh Mela, asking: “Have you washed your hands yet?”
“It would be a mistake to assume brands will trickle down or be picked up via migration to urban areas,” says Benjamin Duvall, co-founder of Wildfire. Catering to rural customers means recognising behavioural, media consumption, and platform differences, which have implications for product formats, channels, and pricing, he says.
Gowthaman says this segment is a ‘volume’ business, rather than a ‘value’ business, so scale is important. “We need to rediscover the target group, starting with a pilot to test the hypothesis and then scale up,” he says.
Due to fragmented social media and low rural internet penetration, Duvall suggests that brands should take an integrated approach and create frameworks for community building and social customer relations management.
Without exposure to TV commercials and digital campaigns, rural consumers are more receptive when it comes to direct, personal experiences. So, mass media needs to be complemented by below-the-line activities. “All these ‘fans’ are real people and some are true advocates,” Duvall says. “They can be engaged to share stories, experiences, promotions and samples with their friends and families, and even produce and share brand relevant content, which would be a very effective integrated approach.”
“In rural India, long-term activation-led programmes including awareness generation, engagement and selling, and post-sales engagement are key to success,” says Jasmin Sohrabji, CEO of Southeast Asia at Omnicom Media Group. “Such programmes can be supported by static media, including wall paintings, mini-billboards, branding of community spaces, fairs and weekly markets.”
Atipol Ithivatana, CEO of Starcom Thailand, suggests brands should speak in rural consumers’ language. For example, Chevrolet Colorado used a popular Thai country music band’s national tour to connect with rural Thais, who can’t be reached via TV, print or digital media. Colorado increased its market share by 237 per cent and raised awareness from 18 per cent to 35 per cent compared to the previous quarter.
Rural growth (19 per cent year-on-year) outpaced urban growth (17 per cent) in consumer expenditure for the first time in 2011-12, and rural revenues today account for almost 30 to 40 per cent of the bottom-line of most large packaged-goods companies in India, according to the country’s National Sample Survey Office.
“Many marketers believe they are underspending in this space, some less than others,” Sohrabji says. “Marketers of packaged goods could be spending anywhere between 10 to 20 per cent of their media budgets.”
Meanwhile, marketers also need to think about the cost of execution, return on investment (ROI) and how sustainable it is. “Overall, I think this is a ‘think big—start small—scale fast’ approach,” Gowthaman says.
CASE STUDY Missed calls reach their target
Active Wheel, Hindustan Unilever Limited (HUL)’s detergent brand in India, promised to deliver more washes per bar, but was struggling in rural markets where the consumers are known to be very frugal. Wheel needed to reach rural consumers in Uttar Pradesh and Bihar, which are largely media dark, with very low print, TV and radio reach.
In 2012, mobile penetration was as high as 40 per cent and is still growing today at 18 to 20 per cent per annum in rural India, according to the Telecom Regulatory Authority of India.
HUL worked with OMD India to launch a campaign called ‘One missed call’, inspired by a practice that Indians make missed calls to get a call back, in order to save money.
Consumers were asked to give a missed call to a toll-free number, and would receive a call back with a pre-recorded joke in their local language and a brand message in the voice of their favourite Bollywood star Salman Khan. They were also encouraged to share the message and give as many missed calls as they liked.
The campaign was rolled out between March and September 2012. The brand created 30 pieces of content across local languages. A total of 18,209,652 missed calls were received, with 2,640,345 unique callers.
Active Wheel saw a 300 per cent spike in sales and 80 per cent uplift in brand awareness.