This is an article written by me which appeared in Idea's in-house magazine !-Pratibimb around february/march 2009. Just reproducing it here as well.________________________________________________
Scene 1: Abhishek Bachchan portrays a Sarpanch and is holding a village meeting in a Village background.
Scene 2: Abhishek Bachchan trying to impart education to students from far off villages using mobile telephony.
Scene 3: Abhishek Bachchan trying to include villagers in the decision making for running a government.
What is the similarity in these three ads? Of course, Abhishek Bachchan for one. But there is something more to it. All the ads are set in the rural background. This represents the changing mindset of the companies in India today. Today more & more companies are trying to woo the customers from rural segments. This love started brewing since Mr. C.K. Prahalad discussed the fortunes at the bottom of the pyramid in his book in the year 2004. But the seriousness of this affair has come to the helm recently. In the last one quarter, the growth in various sectors in rural India was more than growth in urban India by quite a margin. Telecom was one such sector. Well, it could have been a one off event due to the economic downturn but the tremors are being felt.
So what could be done by any company to strengthen its foothold in the rural market? The basic commercial infrastructure suggested by Prahalad and Hart (2002) for the bottom of the pyramid markets constitutes of four things, creating buying power, improving access, tailoring local solutions and shaping aspirations. They also talk about 4As model.
Availability: Availability does not talk only about providing the service in rural market. As a basic rule of marketing, one also has to insure that that the service being provided is beneficial for the user. E.g. If a company is providing “Mandi Live Rates” to the users in a village in western UP, but the information is being provided in English language, it is of no use to the user.
So considering the facts that there is still a major difference in the customer behavior in rural and urban India, it becomes imperative to modify the offerings to suit rural Indian user.
Awareness: Continuing with the example of the VAS given above, such VAS is being provided by the telecom service providers in India for a long time. However, the usage of such services is still very low. Only in places like Punjab & Haryana etc. these services are being used by the customers. In other places, people are not aware of such services at all.
Another aspect to this factor is how easily this service can be used. Is the graphic interface helpful to the customer? If we look at the present scenario, the answer is negative. Handset companies like Nokia are working on this aspect, but the support also has to come from the service providers.
Affordability:
Fact 1‐ India telecom service providers are among the least cost service providers in the world.
Fact 2‐ Majority of the consumers in rural India can still not afford the mobile services due to the high initial costs.
As stated earlier, service providers need to work more closely with handset providers to design handsets which can suit the needs of a villager and also easily affordable. In this aspect, major progress has been made by handset companies; however there is still a lot of room for improvement. Service providers can be of real help because they are closer to the customer and are in a better position to understand their needs & demands.
Acceptability: Mobile telephony as a source of communication does not face the challenge of acceptability now. However, it is the new services which are being launched by the service providers which face the challenge of acceptability. Today a major issue for service providers is the falling ARPU’s. This problem can be sorted out, if people start using more VAS’s and other services. However, in rural India, the acceptability of these services in not very high. To increase the acceptability, the companies need to improve on their communication with the consumer and as well, try to educate the consumer about the benefits & usage of the service regularly.
Around the world we have seen, mobile telephony playing a major role in the development of rural areas. Mobile telephony played a major role in the success of Grameen Bank in Bangladesh as well. There have been many such cases around the world e.g. in Chile, Philippines & Africa.
Thus for success in rural telecom operators have to be innovative in both product which they offer and the ways in which they tackle the challenges posed by rural markets.
So let’s follow what Mahatma Gandhi once said and try to find the real Indian markets in rural India.
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I will love feedback from my friends especially from friends in the telecom sector.
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