The tricky business of rural markets

This year, one particular stint was a refreshing expansion from our regular CSR impact portfolio. Samhita engaged in a baseline study with MARS Catalyst.

In 2016, MARS Inc. in collaboration with a leading Indian Trust launched an initiative to address malnutrition in India. Under the initiative, Samhita’s research team was commissioned to conduct an ecosystem mapping study in 3 states to identify the key stakeholders in a child’s nutritional ecosystem, the extent of their influence and challenges faced.

The principles of ‘Economics of Mutuality’ were applied to the intervention. The principles are of an unconventional growth model that encourages companies to adopt a more holistic approach to their mainstream businesses in a more efficient and sustainable manner than the dominant profit-maximising business models of today. 

A dal-based snack was born out of the initiative and was seen as a strong alternative nutrition product. 

For marketing of the product, the distribution channel adopted sought to leverage existing women Self-Help Group networks in two districts in rural UP through a micro-entrepreneurship model. Samhita was approached to design and conduct a baseline study for the pilot launch of the product with a target group of 1000 women. It was during the baseline data collection exercise that a niche opportunity presented itself for Samhita to extend its research services beyond the realm of CSR.

R V Rajan, the author of ‘Don’t flirt with Rural Marketing’ states in one of his interviews that it is not easy to penetrate the rural market because the folk are ‘brand sticky’ and that unless a company is willing to invest in research and a separate dedicated vertical to concentrate on rural markets, it should not think of going rural. He goes on to mention that taking a few vans around select districts once in a while is not rural marketing. If the company has the willingness to invest in the long term, any marketer with the right product can succeed in the rural markets.

Through communication beamed by the intervention, companies are able to generate demand in rural markets without a physical presence, in turn affecting supply from the local shopkeepers who buy brands from the nearby markets. Although strenuous and exhaustive, if met with the right amount of patience one can foray into rural markets.

Penetration strategies for rural markets require sensitivity to the context at both the demand and supply ends. Qualitatively, there were a few interesting learnings from our field exercise:

Positioning/ Identity of the product: While the product was born with an intent to address malnutrition, the narrative may not have effectively translated on-field. It is imperative to understand that the manner in which the identity of the product is positioned and communicated becomes a major factor in the sales of the product. To influence the rural market’s perception of the product one will have to put themselves in the situation and not be influenced by the my-side bias. For this initiative, it was crucial to evaluate whether the product was positioned as a healthy snack alternative to ‘samosas’ or a nutrition supplement.

The volume factor: One of the most commonly reported challenges to sales was the price point and the quantity derived at that particular price. Factors that encourage villagers to buy the product will often be different depending on the market- rural or urban. In rural markets, buyers focus on what will satiate them. Given the average size of a household in rural UP with 5-6 members, the women (key-decision maker) of the household would prefer a product that offered greater volume that would satiate more members at the same price. On investigating further, we realized that while a packet of the dal-based snack weighed as much as a local snacking alternative at the same price, it suffered in volume as the product was denser than local snacking alternatives.

Marketing skills: Given the background of the target group (women micro-entrepreneurs), with little education or exposure it is not sufficient to merely educate them on the nutritive value of the product. However, despite their limiting backgrounds, they are in fact experts on their contexts but may struggle to articulate their knowledge or transfer them in an entrepreneurial setting. A strong focus on marketing and communication in entrepreneurship training modules is therefore imperative while engaging community networks as distribution channels.

The findings were well received by the corporate’s researchers and they are currently in the process of setting up a robust monitoring and evaluation framework to measure critical parameters.

– Darshana Krishnamony