The Hindu Business Line : A market in waiting

Dear Raj, the rural market has always been a big one for India. Three-fourths of all consumption lies here in sheer population terms. Only less than a quarter of the population lives in urban areas.

The population numbers occupying rural spaces have, however, shrunk over the last several decades. This is what I call `creeping urbanisation' affecting rural masses in a state of market and habit transition. The rural population has shown a trend of wanting to move into a state of gradual urbanisation in terms of exposure, habits, lifestyles and lastly, consumption patterns of goods and services.

In rural areas, we have key issues with the populations that live on and off the land. As the generations go by, land holdings are splintering, with successive generations getting less and less land to farm and live off. This is causing a gradual urge for better lifestyles, as seen in urban centres. This movement and aspiration is further accentuated by mass media, which today penetrates 98.9 per cent of all areas urban and rural. This media's dominant visual, tone and tenor is the urban lifestyle. This is actually making for a generation in rural India that wants to migrate physically, emotionally and aspirationally, for sure, to the urban mode of living.

Back to the size of the market, then. The market size has always been large. The size of this rural market is well over 700 million! All these individuals have needs, wants, desires and aspirations that anyone in Urban India has. The fulfilment of these needs hitherto was served by an unbranded commodity format thus far. Today, however, there is a rampant craving for the brand offering for a host of needs. This craving is suddenly giving the market a boost as brands find takers in markets that hitherto frowned on the branded produce that lacked value differentiation in their minds.

The size of the market for branded goods and services, therefore, looks suddenly big.

In sheer comparative terms, the rural market size is exciting by a factor of 1:3, for sure. For every colour television set that is demanded in Urban India, three will be demanded in rural India.

The market is a very involved market as well. Not as cynical a market as most modern urban economies where brands are suddenly being seen as entities that do not necessarily pack value. Brands in these urban markets are seen to pack premium, and not necessarily value. Not so in the nascent emerging rural markets of India. Therefore, the market size is large, involved and has the potential of packing great marketer premiums for a while to come.

In the recent past, there have been a lot of logo changes. Why do companies change their logos?

- Rajeev Sikka, New Delhi

Rajeev, many, many reasons really. Here are five for a start.

One is certainly the need to re-define corporate culture within and outside the organisation. In such a case, companies suddenly find their existing logos to be burdens. A part of the old heritage of an organisation. Something that was thrust on it by a very old founding management that believed in a different credo altogether. In such cases, the company believes it must change tack and move away from the definitions of organisational purpose and reinvent itself. As it reinvents, it wants to shed the old logo and adopt a new one.

Yet another reason is when a company finds a logo too frivolous for the intent of organisation. We must realise that when most old logos were created (ones that have been around for more than 50 years), the fonts available were basic and so were the colours. Most logos did not look solid enough and some even had a basic frivolity about them. Companies, therefore, want change.

And then there are companies which want logos changed when there is a split in business. This happens mostly in family-run businesses. Take Reliance, for instance. The Anil Dhirubhai Ambani Group versus the Mukesh Dhirubhai Ambani Group. Both need different logos. One inherits it, and another creates it anew.

Companies further want to look contemporary. The Wolf Olins re-creation for the Tata group was one such effort.

Name changes of companies necessitate logo changes as well. A company that goes in for a drastic name change, where it moves away from a generic sounding name, might call for a logo change as well.

Would you agree that the Indian consumer is more promiscuous today than ever before?

- J. S. Manian, Chennai

Manian, I think the Indian consumer is certainly more promiscuous than ever before. In any society promiscuity is essentially polarised between the two ends. The higher income group at one end, which can afford the best of brands, and at the other end, the lower income group, which doesn't quite care as much about brands. The middle income group (the large middle class) is the most loyal of the lot.

The reason for this promiscuity is the fact that the Indian at large is more and more exposed to media of every kind that offers the best of range and variety. The Indian is getting very range-conscious and is getting rather impatient with brands. The brand experience one wants to secure from brands is also getting wider in appeal. Brands that offer narrow solutions are getting the raw end of the consumer action that results in their being dumped.

(Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc.)

More Stories on : Brands | Ask Harish Bijoor | Rural Marketing

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