Special: Taking on the World

By Kishore Chakraborti , McCann Worldgroup, New Delhi | In Others
Last updated : September 25, 2014 04:04 PM
Small-town India is at the centre of all the action

This article is an excerpt of McCann Erickson's exploratory study of how far people in small town India are part of the bigger waves of consumerism that are inundating the metro and the class I town.

There was a time when Rampur ka Lakshman (in the 1970s hit movie of the same name, protagonist Randhir Kapoor comes to the city to try his fortunes) had only one way to change his destiny. It was to make a trip to the metro. Today, ironically, the centre of action has shifted to the Rampurs of the world. Brands, marketers, retailers are vying for attention of the Buntys, Bablis and their nouveau riche Gaon ka Rishtedar.

The metros are bursting at the seams - limitation of space, electricity, water, power (be it money power or manpower) - but the small towns have become the vital link between the metro and the affluent, ambitious villages. Only time will define whether they can finally absorb the unemployed mass coming back retrenched from their class one and metro workstations. But for now, small towns are where the action is.

Those Affluent towns…

These new emerging markets are already powering several existing and new categories and helping marketers tap mindsets. For instance, the grooming industry in India is seeing an unprecedented boom to the extent that beauty parlours are mushrooming in every nook and corner. Even products for hair streaking have taken off in their own right.

Similarly, institutes providing training to become airhostesses, newsreaders and radio jockeys are taking off in a big way. Glass and concrete shopping malls make surprise appearances in awkward proximity to paddy and wheat fields. Multinational brand names can be seen scrawled on walls and billboards. Universities and training institutes are mushrooming all around. Industries are relocating manufacturing units for cheaper land.

…and their affluent consumers

At the centre of the action in small town India is a heterogeneous huge relatively affluent consumer base comprising of small town upper class, and ambitious middle and lower middle class.

This affluence is a combination of multiple factors - less overheads, minimum loan trap, low transport cost, cheaper standards of living, and higher job opportunities for multiple members of the family. On top of it is the influx of repatriated money coming from the huge crowds staying in the slums and chawls of the metros and earning handsomely by providing much-needed workforce for the affluent metro elite.

Add to this the segment of the wealthy people in agriculture who have started frequenting the small town malls in their brand new tractors and bikes. Some had a windfall selling their lands to the real estate developers, others, by shifting towards cash crop and crop rotation creating alternative revenue channels from horticulture, poultry or fisheries. The icing on this multilayered consumer cake is an ambitious, focused young generation determined to make it big and offering a talent pool which, thanks to media, is getting countrywide exposure.

Will this mixed group offer a base to counter the economic slowdown? But the more important question is: what are the ways and means to leverage the full potential of this vast diversified consumer base? Together they are anything but simple. They are ambitious with a generous dash of stoicism thrown in; they are ambitious and they are happy "Being ambitious to look at the people above us and being happy to look at those below us."

Get there and mingle

Some of the FMCG companies had read the writing on the wall quite early and had started aligning marketing strategies to suit this heterogeneous consumer base and to grow "disproportionately by straddling the pyramid". Brands have been made more affordable for low-income consumers. Single-use shampoo sachets, single-use tea packs and sachets in other categories followed each other in quick succession.

Consumer durables major Mirc Electronics (the maker of Onida) decided to 'go directly to the consumer'. It believed that aspiration values of lower SECs are much higher than what their consumption level suggests. In smaller towns, it has been actively undertaking exhibitions for selling flat-screen TVs and air conditioners.

Ways and means are being worked out to leverage traditional trade practices by partnering with them. Garments distributor and manufactures have started a tailors club to unite the unorganised tailoring segment. The Reserve Bank is planning to harness lalajis for efficient loan disbursement to the rural consumers. The national highway project has added a new dimension to connectivity. While it is difficult to quantify the change a highway can cause to a place the impact can be seen by looking at the changing face of roadside dhabas.

It is hard to believe that even a few years back small town India was happy with unpacked commodities. All detergents were called Surf and all hydrogenated oil, Dalda. People used to carry their own dabba to carry everyday grocery - today everybody talks about some kind of brand in each category. But to arrive at any conclusion that customers in small-town India have become brand loyal overnight will be a hasty inference. Brands, in general, are important to them but not so much the brand loyalty. Consider these interesting conversations.

Q. What brands have you used in the last one month?
A. We don't keep a track of what we have purchased last - whatever we get now we use it, that's all.

Q. Which soap do you use? (To a trader in surgical instruments)
A. Normally we use Lux… its suits all… but we even shift… sometimes Hamam or Godrej… whoever has a scheme… we may even buy two months' quota under a scheme… earlier we were using Lifebuoy but it was cracking so now Lux.

Q. For which products would you go for local brands? (To a railway clerk)
A. Mixie, irons, fans and furniture here you can buy local… actually branded is always long-lasting… buying local is just a compromise.

It is in the food products category that a brand name commands maximum respect. There is practically no mention of unpackaged or unbranded purchase of cereals, oils and sugar. As medical expenses are spiralling, they feel it makes sense to eat well and keep healthy. The concern is more prominent about the diet of children. Like all other parents, guardians in small town India also suffer from anxiety of not providing enough nourishment to their children.

The traditional belief is "I feel bread is not good for health… they should be given roti (chapatis)… roti or wheat gives strength and also fills the stomach; bread gets digested soon and one starts feeling hungry again." Even milk is also not adequate in comparison - hence, probably, the popularity of costly milk additives. Brands like Bournvita, Horlicks, Complan and Milo are seen in the households which find it difficult to make both ends meet. Here is another question:

Q. Why Bournvita? (To the wife of a small trader)
A. They say it has calcium… improves memory… they will perform well… my daughter does not take white milk. Bournvita changes taste and colour, children like the chocolate.
It is through children that the dreams and desires of small town India gets its complete expression. Every morning bus-loads of children rush towards specialised coaching centres at metros.

A phenomenal amount of money is being paid by the small-town parents for the dream career of a doctor, engineer, IT specialist or the IAS. A sizeable number target the mushrooming business schools. Knowledge of English as a means to end the social and economic apartheid has caused the sprouting of spoken English classes at every nook and corner of small towns.

A number of MNC and desi brands are wooing small town customers along this axis of ambition and achievement - be it the Fair & Lovely Woman's Emancipation, Colgate Scholarship or the Hero Honda Career Pogramme. Brand ambassadors and icons are changing. Small town achievers are hot role models. Institutions are fighting over their ownership through full-page newspaper ads. Reality shows are pushing people to gyms; beauty parlours are putting them into branded clothes.

For established brands, small town India offers a sizeable floating consumer mass - if their value system can be leveraged. It is in understanding this complex and layered need of the heterogeneous mass that the success of tomorrow's marketer lies. Those who can read the signs properly will be rewarded by exponential growth. The rider is that such growth opportunity will continue to be open to challenge by the rival brands as well.

The writer is VP, consumer insight, McCann Worldgroup

First Published : September 25, 2014 04:04 PM

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