Driving rural India, the Maruti way

Fifty-year-old Mr Mayank Pareek says he likes going on long drives, especially to rural India. This is not for pleasure. It is work.

He says these drives help him connect with potential customers. He covers nearly 1,000 km a month on these country roads. He would like to do more, but work keeps him busy in his head office and he has to travel to the cities too.

His preferred vehicle, of course, is a Maruti. After all he heads marketing and sales for the country's largest car maker.

On these drives, Mr Pareek, Managing Executive Officer – Marketing & Sales, Maruti Suzuki India, and his colleagues stop at villages en route, engage these rural folk, try to understand their economy and, of course, convince them to buy their cars.

These drives in the last three years, ever since Maruti started paying greater attention to the rural market, have helped break many myths for the company and the car industry. The rural buyers, says Mr Pareek, a B.Tech from Institute of Technology – Banaras Hindu University and an MBA from IIM-Bangalore, are aspirational, want to improve their lot and, thanks to television, are as well informed as those living in cities.

Only 40 per cent of the rural buyers are farmers, he says. The rest are those who support the rural economy – school teachers, shop keepers… “Generally you would think that rural economy means farmers. But there is a big supporting population in the villages. Initially we were also surprised,” says Mr Pareek, who joined Maruti in 1991.

A lot of investment has been made in the rural economy in the last few years and roads have improved. This means people have more money to spend and are better connected. When they are connected, people tend to and need to move.

Thanks to the rural marketing initiative, Maruti identified nearly 270 small clusters – turmeric farmers in Tiruchengode in Tamil Nadu, apple growers in Himachal Pradesh and the like. The company started focussing on them. Each of these 270 customer groups account for 25-50 vehicle sales a month. In December, the company sold almost 6,000 vehicles to these customers.

“That is a good number. More than the full sales of most companies,” says Mr Pareek.

The rural markets account for a little over a fourth of Maruti's overall sales. The company sells about 100,000 cars a month. Two per cent of this comes from villages with less than 100 households, says Mr Pareek.

Three years ago, rural sales accounted for about 3.5 per cent of the 68,000 vehicles that the company sold in a month. In April-December 2011, the rural market grew at eight per cent, but in January it grew 16 per cent. The preferred models are Alto, WagonR and Swift.

Are the rural markets predominantly diesel cars?

No, says Mr Pareek. “In rural areas, the growth in petrol cars is better. These are some of the things which challenge our conventional wisdom.”

The cost of marketing to rural customers is less than marketing to city buyers. “The very fact that somebody is coming and meeting them, treating them with dignity and understanding their needs, it opens a lot of doors.” City customers shop around, checking for deals. But, says Mr Pareek, the cost of approach for rural customers is high, because of the distances that have to be covered.

To help it in rural sales, Maruti has identified and appointed local people in the villages – calling them resident dealer sales executives – of whom there are 525 now. They will map potential customers – those with a tractor or who own more than five acres – after which the company will get in touch with them. The nearest dealer outlet will be only 20 km from a village.

Maruti has a network of mobile workshops that will carry out routine and minor repairs. It plans to have an extensive network of service facilities on the highways, says Mr Pareek.

> nramki@thehindu.co.in.

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