Despite the rural market being extremely difficult to cater to effectively, Nadia Chauhan, joint managing director & CMO of Parle Agro, tells WARC how the beverage company leverages technology and its superior product/price point to give the company an edge.

This article is part of a Spotlight series on rural marketing in India. Read more

Key insights

  • The biggest concern of marketing to a rural consumer is the high level of fragmentation, thus making an effective rural campaign an expensive affair.
  • Parle Agro’s presence on platforms like IPL or other highly-penetrated platforms gives it visibility, especially with the growing penetration of mobile and digital.
  • The pandemic shows rural markets are open to digitisation and digital payments, and it is only a matter of time before e-commerce becomes as aggressive as the urban segment.
How do you see COVID-19 impacting urban versus rural consumer demand and behaviour?

COVID-19 impacted both the rural and urban sectors differently across both years, 2020 and 2021. In 2020, the rural sector was driving growth for most businesses in India as it was impacted less severely by the pandemic. However, the scenario has been different in 2021 as the pandemic impacted both rural and urban sectors in an equally significant way.

The lockdowns resulted in higher in-home consumption, particularly in urban India, and value-for-money offerings have become a critical deciding factor. Consumers have become increasingly reliant on products that have a long history of quality and trust.

They have also become more conscious about what they are consuming, selecting products that are natural and less synthetic. There has also been a shift from group or shared consumption to more individual-oriented consumption. In a nutshell, there have been many changes common to both rural and urban sectors since the pandemic but they have impacted both sectors at different times.

Pre-2020 and post-2020, has there been a drastic change in marketing strategy?

I would compare the strategy against pre- and post-COVID. Different businesses were impacted differently and hence, the marketing strategies devised have been different based on the industry, the consumers being targeted and the services offered.

Pre-COVID, Parle Agro had high growth momentum. Our marketing strategy was extremely aggressive across all mediums.

Post-COVID, while certain mediums such as outdoor and print were massively impacted by the lockdown, many new opportunities opened up, such as a much larger digital, e-commerce and OTT space, which gained huge momentum. As mentioned, we witnessed growth in in-home consumption and changes in demand for different SKUs.

Thus, a lot of changes have happened post-pandemic which will continue. We are still in a very fluid state so we have to work and adapt wisely. Even today, we are taking day-to-day decisions based on the new and changing needs of the market.

In the beverage industry, weather also impacts business, so that coupled with the COVID-19 situation makes us even more alert.

However, we are witnessing a massive uptick in our growth momentum as consumers are back to a high consumption pattern. On that basis, we are aggressively marketing across all platforms once again, including outdoor. We have had two lockdown launches – B-Fizz and our dairy product, SMOODH.

These are going to see aggressive marketing across all mediums and platforms in the coming weeks.

What are the immediate challenges with the rural customer?

During the pandemic, stability of supply in rural markets was a challenge. The uncertainty of shops being open was a big concern. Nonetheless, as mentioned earlier, in the first wave, rural was a high growth area for businesses.

While the situation in the second wave was more aggressive, it was shorter. The rural markets have now completely adapted and are back to good growth momentum.

How do you segregate your audience and strategy? How drastically different is your stance when reaching out to consumers beyond the metros?

We do not have a metro strategy but rather a pan-India approach, especially targeting the deepest parts of India. Our entire strategy is very hyperlocalised and cuts through to all markets and creates aspirational value for our brands.

We have a range of SKUs that spans a wide portfolio. We can proudly say that we are the only brand in the beverage industry available from Rs 5 to Rs 100-plus. So we have a varied range that caters to different segments, audiences, consumption needs and types of markets.

Our marketing strategy has always been planned, keeping rural India in mind and ensuring we aim for strong reach and penetration in whatever we do.

Parle Agro recently forayed into the dairy segment with flavoured milk. Was it not a risky move in times like these? Do products like these find favour among your consumers in the rural areas and Tier 2 and 3 cities?

If you had to define the right time, it would be NOW. We are thrilled to have diversified into dairy with SMOODH. Our earlier diversification was perhaps too early for its time.

However, now we have diversified with a disruptive product and a category that had been out of reach for most people, particularly the rural consumer. With the combination of a price at Rs 10 and a pack size of 85 ml, we are offering a quality product that has extremely high value for money and now extremely accessible to a lot more people.

In the past, consumers in rural sectors have not had the opportunity to see and experience flavoured milk as a category because it was three to four times the price. By making it affordable, we have opened up a whole new product category for the rural consumer. With SMOODH, we have a very good product with very strong distribution support, great taste and great value for money.

What are the major concerns while marketing to the rural consumer and how can brands tackle them?

The biggest concern of marketing to a rural consumer is the high level of fragmentation. To implement an effective rural marketing campaign is an expensive affair.

Our presence on platforms like IPL or other highly-penetrated platforms does give us an edge in rural markets. It also gives us visibility especially with the growing penetration of mobile and digital. Despite all this, it is a market that is extremely difficult to cater to effectively.

How is Parle Agro leveraging technology to engage with the rural consumer? Tech for selling, tech for advice, transactions, education, healthcare, empowerment?

At Parle Agro, we have put technology at the forefront of a lot of divisions, including sales and distribution. Our most challenging task during the pandemic was to be able to reach out to stores and consumers.

Technology has been adopted across different platforms where consumers and retailers can reach us effortlessly. Consumers can access our products through our direct-to-home approach and retailers can reach out to us directly at any given point of time so that supply remains uninterrupted. We have integrated technology solutions to enhance our sales and distribution and drive greater visibility for our products.

What were the difficulties Parle Agro experienced managing supply during the lockdown? How did you overcome them?

During the lockdown, we operated while strictly adhering to all the government guidelines. However, what impacted us and the FMCG sector as a whole was the shutdown of a large number of businesses across the retail segment, while the ones operating were allowed to do so only within specific periods. This made us re-think our business strategies during the lockdown.

We reinvented our sales and distribution approach to adapt to the changing business practices during the lockdown. We altered our operating hours as per the new schedule of retailers. Stores were allowed to operate for a limited number of hours during the day and hence we adapted to the situation and adjusted our timings to operate deliveries within those specific hours.

To minimise contact and increase overall productivity, we adopted tele-calling in a big way to service our retailers for order inquiries.

To further penetrate and strengthen our reach across rural markets, we implemented a host of new strategies and initiatives. With the strong emergence of e-commerce, we strategically collaborated with numerous national and niche e-commerce players across the country to offer direct and uninterrupted access to our beverages and customers.

We also deployed aggressive strategies across a host of our e-commerce partners, like special offers and packs to drive sales.

As with the urban consumer, has the rural consumer also embraced digital commerce in the wake of the pandemic?

The number of e-commerce platforms across urban markets continues to be higher than the rural sectors. However, in the last two years, the pandemic has shown us that rural markets themselves have opened up to digitisation and digital payments.

Hence, it is only a matter of time before e-commerce becomes as aggressive across the rural segment too.

Is there a growing need for brands to focus on regional languages? There is an apparent championing of regional content, with OTT content in regional languages, for instance, and more stories in rural settings – what is causing this? Is there a new cultural confidence in rural India? In a recent chat with the marketing team of an online grocer, I was told how the brand is trying to appeal to the non-English, non-Hindi speaking customer. Does Parle Agro consider this to be a challenge as well?

English is not the dominant language and never has been. The use of regional languages or one’s mother tongue has been the emphasis for most states.

In such situations and going with the trend, most marketing strategies have adopted a regional approach using regional dialects for communication to gain a deeper connect with audiences.

This phenomenon is growing across almost every brand and industry targeting not just rural but urban markets as well.

What are some Parle Agro brands that are particularly popular with the rural consumer and what are some that find favour both in urban and rural areas? What kind of insights do you gather from such trends?

All our brands at Parle Agro are favourable across both rural and urban markets. Being an Indian brand, we proudly promote our heritage. This helps us to connect with our consumers across both the rural and urban segments.

Our strong connection with the Indian masses encourages us to launch products that offer the best in quality and price as well. As mentioned, our product and price point is our biggest advantage, enabling Parle Agro as a brand to build a strong connect with consumers. The same sentiments are expressed through our marketing strategies, be it television, OOH or digital.