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Rural India lacks brand loyalty

News, 10 February 2016

BENGALURU: Consumers in rural India do not generally display much brand loyalty according to a new study which also highlights the continuing differences between the urban and rural markets.

"Everyone knows that rural consumers need to be treated or targeted differently, yet nobody's doing much about it," claimed Rahul Saigal, Group COO, Geometry Global Encompass Network.

While much has changed for rural consumers over the past ten years, not least in terms of higher incomes and greater connection to the rest of the world via mobile phones, brands and categories remain at different stages of evolution across urban and rural markets, and urban advertising often ends up being irrelevant for rural audiences.

Accordingly, Geometry Global Encompass Network surveyed more than 6,000 rural consumers in eight states and covered more than 20 popular categories, from FMCG to BFSI. The resulting R|SCAPE report said that rural consumers exhibit a lack of brand fidelity attitudinally as well as behaviourally.

Other significant findings included the need to segment rural consumers on the basis of village norms. And adherence to those norms has also created strong differentiation among rural married women.

The reasons for the adoption and consumption of categories are very different for rural and urban consumers, the study reported, so the same brand positioning or advertising is unlikely to work across both markets.

Nor are rural market homogenous – the reasons for buying and consuming categories can be different for consumers from even neighbouring regions, who may have differing traditions and cultures or be at different stages of economic development.

"Rural marketing efforts need special mindsets," according to RV Rajan, the former chairman of Anugrah Madison Advertising.

He maintains that brands require "A separate marketing and sales vertical, headed by people with passion and commitment to rural marketing, and supported by a field team which can face the rough and tough of the vast countryside, with courage and conviction".

Their task has not been made any easier after two years of drought which have hit rural consumer spending, which until recently was growing 50% faster than that in towns and cities.

"Rural has grown worse for some companies," said Abneesh Roy, associate director, institutional equities, research, at Edelweiss Securities. "It is now growing at similar rate as urban," he told Mint.

Data sourced from Economic Times, Rural Marketing, mxmIndia, Mint; additional content by Warc staff