Posted in Marketing & Strategy Articles, Total Reads: 2828
, Published on 11 February 2012
With increasing consumer awareness, changing customer preferences and better economic conditions, we have loads of products and ideas to choose from. Our lives are getting much better, things are now fitting into our palms, we have varied lifestyle products and we of course have the most important factor, money, to spend on them. Welcome to the urban life! But can we say the same about the rural areas where hardly any good products are available? And even if they somehow manage to reach the rural areas, are all the people well endowed to buy them? Probably not!
Around 70% of the Indian population lives in rural areas. India’s network doesn’t reach all the parts of the country with varying levels of absolute and relative poverty. Already this part of the population has lower incomes and on top of that, we try to sell them the products which might not be affordable and further worsen the condition.
So clearly, simple marketing techniques are not really working. Inclusive marketing then seems to be the apt choice. It sees consumers as not only the consumer but also the producer or distributor of the goods and services. The company’s focus here is on increasing the disposable income of the poor and thus making them capable of buying their products. Since marketing is all about selling products, inclusive marketing goes a step further and even empowers the poor to make the right choice.
Generally, local traders are seen as exploiting the poor, which leads the poor to work harder but get hardly anything in return. The aim here should be to understand the local markets, the conditions prevalent and come up with activities and offers which will benefit not only the company but also the poor. Training, guidance, and practice are given to the rural population so that they can sell the products. A dedicated team is set up which deals with getting in touch with people, motivating them, highlighting the importance of being self sufficient and then trains the people.
Companies in India are showing their interest to explore the rural consumer base through their corporate social responsibility (CSR) projects. That is why many companies are training employees and providing opportunities to them to give back to the society. It is a new business strategy which is being tried and tested in India and quite literally so. It offers economic value to goods and services produced in the rural area. ITC’s e-Choupal is the best example for inclusive marketing and gives a clear idea about the same.
The rural population mainly consists of people who are wage laborers or are involved with businesses like handiwork, pottery and dairy products and on an average earns less than 1 dollar per day. They buy products in small quantities as and when the requirement arises, but basic amenities are sometimes not affordable. The inclusive marketing initiatives, which are partnered with NGOs or the government, make the marginalized poor earn sustainable incomes, teach them bargaining, negotiation, provide marketing knowledge and give them a sense of achievement and an identity. They will be able to earn more income, pay off their debts and some even start their own businesses.
Statistics show that a person, through inclusive marketing, sells products anywhere between Rs 10000 to Rs 20000 per month. Inclusive marketing is thus able to add economic value to goods and services, provides an enhanced livelihood to the marginalized, and also protects the environment by coming up with biodegradable packaging materials. These products are sold in the rural markets, rural malls, town shops and wholesale markets. Sometimes they are sold even in the retail shops in cities nearby thus increasing their value, importance and worth. Another thing to note about inclusive marketing is that it provides a good amount of employment opportunity to the women thus making them earn a level of respect in the family.
Since the limited daily spending powers of the rural are now increased to a certain extent thanks to inclusive marketing, they are now able to educate their kids, invest in their marriage and also have good amounts of savings for their own future.
As an example, project Shakti was started by Unilever which identified a number of leaders from the marginalized population and trained them to sort, clean, package and standardize the products. They were taught to access smaller local markets through associations with larger markets and sell the products by setting up home shops and targeting door-to-door selling techniques.
Inclusive marketing actually works both ways. The companies get to sell their products in the rural markets and increase their reach by adopting a low cost communication strategy. This way they are able to get better product penetration in different markets and also fulfill their social obligations in the process. And of course the rural population gets to earn a sustainable income (not to forget identity and respect), improve their standards of living and afford better products and services. So as Pradeep Kashyap, CEO of MART, says, it really is the time to have a business mind combined with a social heart.