Integrated Marketing Communications in Rural Markets in India

Integrated Marketing Communications in Rural Markets in India With around 6, 38, 667 villages, India boasts of the highest number of villages in the world, hugely populated by 720 million people (72% of India lives in villages). It is a market which cant be ignored by the marketers. Customers in villages have their own sets of aspirations and are willing to pay for the right services. Companies understand that that the rules of game are different when it comes to rural markets, especially in a diverse one like India. The rural environment is different from the urban and therefore communication to potential customers in a proper and effective manner is a major challenge for corporate marketers. An urban communications approach might not hold well in these rural markets and thus there is a need to have a different Integrated Marketing Communications (IMC) approach for the rural markets in India. This Research Paper tries to explore and find out how Integrated Marketing Communications (IMC) can be used in the rural markets in India and a strategic framework has been proposed for the same. Keywords: Rural Markets, Integrated Marketing Communications (IMC). Introduction The global economic meltdown has taken its toll on the manufacturing and service sector of the economy, which, in turn, has slowed down the urban market. The companies cutting across sectors have discovered the importance of rural markets. With urban India in the grip of a slowdown, the rural market is helping industries like automobiles, cement, consumer electronics, textiles, telecommunications and FMCGs grow. While urban organised retail is in pain, its rural counterpart is thriving. All of a sudden, the consumer in the laid back Indian village is being spoilt for choice. The rural incomes are progressing, thanks to the Government initiatives like National Rural Employment Guarantee Scheme (NREGS) launched in 2006 which promised employment of at least 100 days to every member of a poor rural household. This served three purposes: It built rural infrastructure Plugged pilferage of funds Boosted the disposable incomes of rural families The scheme was rolled out to all the 596 districts of the country. All told, Rs 66,800 crores has been earmarked for the programme. Another boost for liquidity among farmers came with the farm loan waiver of Rs 65,318 crores carried out by the Government last year. The bottom-line is clear. Customers in villages have their own set of aspirations and are willing to pay for the right services. Companies are understanding that to play the game in rural markets is to understand and innovate products exclusively for the rural consumers and after tasting success can also be replicated in the urban markets. For example, Tata Sky launched DTH (Direct to Home) primarily for the urban markets. However, in the rural entry, the package has been at Rs 99 per month which was a mini-thali of sorts with a bit of everything. The promotional campaigns included taking Aamir Khan as the brand ambassador who could easily appeal across the rural-urban divide and they also do a lot of promotions and demonstrations so as to motivate the local distributors who highlight the benefits of the service. Tata Sky has launched the Rs 99 pack in the urban markets as well. Advertising goes hand in hand with economic growth. With economic liberalization and increasing rural prosperity, marketers are keen to inform villagers about the benefits of buying and consuming their products and services. Prior to the introduction of economic liberalization in 1990s, there was little incentive for marketers to advertise their products and services, as rural markets were predominantly a sellers market. The influence of the electronic media, in particular television, video and the Hindi film industry, is contributing to the growth of rural aspirations, which are being manifested in rural India in the form of increasing consumerism. The rural environment is different from the urban and therefore communication to potential customers in a proper and effective manner is a major challenge for corporate marketers. The majority of advertisements designed by corporate marketers, are largely urban oriented and extend themselves to rural areas without any consideration to the values and sensitivities of the rural audience, which are often in striking contrast to those of their urban counterparts. This has led to a negative perception in the minds of villagers, about urban media planners and advertisers. Rural communication is not a peripheral activity. It does not, for instance, involve taking an audio-visual van to a village and assuming that this step is enough to reach out to customers. It requires an entirely different mindset, which demands getting rid of many mental barriers. Companies have to realize that rural is a long-haul market, as gains in the short term are neither immediate nor large. Challenges in Rural Communications There are many challenges to communication in rural. Low literacy level; poor media reach and exposure and vast, heterogeneous and diversely spread rural audiences characterized by variations in language, culture and lifestyle-all these factors pose multiple challenges to marketers looking to take their messages to the largely media-dark or media-grey areas, of rural markets. Heterogeneity and spread The communication pattern in any society is a part of its culture. No communication medium can exist in a cultural vacuum. Communicating the message to rural consumers ha posed enormous challenges to the rural marketer, because of the large numbers of consumers scatters across the country. The problem is further compounded by the heterogeneous nature of consumers there are 16 scheduled languages and 114 local vernaculars. For example, the dialects used in the Vidharbha region, in Konkan region, in costal Maharashtra etc. Limited Media Reach The limited reach of the mass media imposes limitations on universal communication to rural consumers. These factors lead to poor message comprehension and negligible impact, which fail to translate into consumer awareness and hence fail in generating consumer pull. Understanding the Rural Audience It is not sufficient to understand rural communication challenges as stated above: rather, what is equally crucial is the need to understand the behavioural and psychographic characteristics of the rural audience, in order to develop an effective rural communication strategy. Integrated Marketing Communications (IMC) Tools IMC is a management concept that is designed to make all aspects of marketing communication such as advertising, sales promotion, public relations, personal selling and direct marketing work together as a unified force, rather than permitting each to work in isolation. Advertising Advertising has four characteristics: it is persuasive in nature; it is non-personal; it is paid for by an identified sponsor; and it is disseminated through mass channels of communication. Advertising messages may promote the adoption of goods, services, persons, or ideas. Because the sales message is disseminated through the mass media-as opposed to personal selling-it is viewed as a much cheaper way of reaching consumers. However, its non-personal nature means it lacks the ability to tailor the sales message to the message recipient and, more importantly, actually get the sale. Therefore, advertising effects are best measured in terms of increasing awareness and changing attitudes and opinions, not creating sales. Advertisings contribution to sales is difficult to isolate because many factors influence sales. The contribution advertising makes to sales are best viewed over the long run. The exception to this thinking is within the internet arena. While banner ads, pop-ups and inte rstitials should still be viewed as brand promoting and not necessarily sales drivers, technology provides the ability to track how many of a websites visitors click the banner, investigate a product, request more information, and ultimately make a purchase. Through the use of symbols and images advertising can help differentiate products and services that are otherwise similar. Advertising also helps create and maintain brand equity. Brand equity is an intangible asset that results from a favorable image, impressions of differentiation, or consumer attachment to the company, brand, or trademark. This equity translates into greater sales volume, and/or higher margins, thus greater competitive advantage. Brand equity is established and maintained through advertising that focuses on image, product attributes, service, or other features of the company and its products or services. Cost is the greatest disadvantage of advertising. The average cost for a 30-second spot on network television increased fivefold between 1980 and 2005. Plus, the average cost of producing a 30-second ad for network television is quite expensive. It is not uncommon for a national advertiser to spend in the millions of dollars for one 30-second commercial to be produced. Add more millions on top of that if celebrity talent is utilized. Credibility and clutter are other disadvantages. Consumers have become increasingly skeptical about advertising messages and tend to resent advertisers attempt to persuade. Advertising is everywhere, from network television, to daily newspapers, to roadside billboards, to golf course signs, to stickers on fruit in grocery stores. Clutter encourages consumers to ignore many advertising messages. New media are emerging, such as DVRs (digital video recorders) which allow consumers to record programs and then skip commercials, and satellite radio which provides a majority of its channels advertising free. Public Relations (PR) Public relations is defined as a management function which identifies, establishes, and maintains mutually beneficial relationships between an organization and the public upon which its success or failure depends. Whereas advertising is a one-way communication from sender (the marketer) to the receiver (the consumer or the retail trade), public relations considers multiple audiences (consumers, employees, suppliers, vendors, etc.) and uses two-way communication to monitor feedback and adjust both its message and the organizations actions for maximum benefit. A primary tool used by public relations practitioners is publicity. Publicity capitalizes on the news value of a product, service, idea, person or event so that the information can be disseminated through the news media. This third party endorsement by the news media provides a vital boost to the marketing communication message: credibility. Articles in the media are perceived as being more objective than advertisements, and thei r messages are more likely to be absorbed and believed. For example, after the CBS newsmagazine 60 Minutes reported in the early 1990s that drinking moderate amounts of red wine could prevent heart attacks by lowering cholesterol, red wine sales in the United States increased 50 percent. Another benefit publicity offers is that it is free, not considering the great amount of effort it can require to get out-bound publicity noticed and picked up by media sources. Public relations role in the promotional mix is becoming more important because of what Philip Kotler describes as an over communicated society. Consumers develop communication-avoidance routines where they are likely to tune out commercial messages. As advertising loses some of its cost-effectiveness, marketers are turning to news coverage, events, and community programs to help disseminate their product and company messages. Some consumers may also base their purchase decisions on the image of the company, for example, how environmentally responsible the company is. In this regard, public relations plays an important role in presenting, through news reports, sponsorships, advertorials (a form of advertising that instead of selling a product or service promotes the companys views regarding current issues), and other forms of communication, what the company stands for. Sales Promotions (SP) Sales promotions are direct inducements that offer extra incentives to enhance or accelerate the products movement from producer to consumer. Sales promotions may be directed at the consumer or the trade. Consumer promotions such as coupons, sampling, premiums, sweepstakes, price packs (packs that offer greater quantity or lower cost than normal), low-cost financing deals, and rebates are purchase incentives in that they induce product trial and encourage repurchase. Consumer promotions may also include incentives to visit a retail establishment or request additional information. Trade promotions include slotting allowances (buying shelf space in retail stores), allowances for featuring the brand in retail advertising, display and merchandising allowances, buying allowances (volume discounts and other volume-oriented incentives), bill back allowances (pay-for-performance incentives), incentives to salespeople, and other tactics to encourage retailers to carry the item and to push the brand. Two perspectives may be found among marketers regarding sales promotion. First, sales promotion is supplemental to advertising in that it binds the role of advertising with personal selling. This view regards sales promotion as a minor player in the marketing communication program. A second view regards sales promotion and advertising as distinct functions with objectives and strategies very different from each other. Sales promotion in this sense is equal to or even more important than advertising. Some companies allocate as much as 75 percent of their advertising/promotion dollars to sales promotion and just 25 percent to advertising. Finding the right balance is often a difficult task. The main purpose of sales promotion is to spur action. Advertising sets up the deal by developing a brand reputation and building market value. Sales promotion helps close the deal by providing incentives that build market volume. Sales promotions can motivate customers to select a particular brand, especially when brands appear to be equal, and they can produce more immediate and measurable results than advertising. However, too heavy a reliance on sales promotions results in deal-prone consumers with little brand loyalty and too much price sensitivity. Sales promotions can also force competitors to offer similar inducements, with sales and profits suffering for everyone. Personal Selling (PS) Personal selling includes all person-to-person contact with customers with the purpose of introducing the product to the customer, convincing him or her of the products value, and closing the sale. The role of personal selling varies from organization to organization, depending on the nature and size of the company, the industry, and the products or services it is marketing. Many marketing executives realize that both sales and non-sales employees act as salespeople for their organization in one way or another. One study that perhaps supports this contention found that marketing executives predicted greater emphasis being placed on sales management and personal selling in their organization than on any other promotional mix element. These organizations have launched training sessions that show employees how they act as salespeople for the organization and how they can improve their interpersonal skills with clients, customers, and prospects. Employee reward programs now reward employ ees for their efforts in this regard. Personal selling is the most effective way to make a sale because of the interpersonal communication between the salesperson and the prospect. Messages can be tailored to particular situations, immediate feedback can be processed, and message strategies can be changed to accommodate the feedback. However, personal selling is the most expensive way to make a sale, with the average cost per sales call ranging from $235 to $332 and the average number of sales calls needed to close a deal being between three and six personal calls. Sales and marketing management classifies salespersons into one of three groups: creative selling, order taking, and missionary sales reps. Creative selling jobs require the most skills and preparation. They are the point person for the sales function. They prospect for customers, analyze situations, determine how their company can satisfy wants and needs of prospects, and, most importantly, get an order. Order takers take over after the initial order is received. They handle repeat purchases (straight rebuys) and modified rebuys. Missionary sales reps service accounts by introducing new products, promotions, and other programs. Orders are taken by order takers or by distributors. Direct Marketing (DM) Direct marketing, the oldest form of marketing, is the process of communicating directly with target customers to encourage response by telephone, mail, electronic means, or personal visit. Users of direct marketing include retailers, wholesalers, manufacturers, and service providers, and they use a variety of methods including direct mail, telemarketing, direct-response advertising, online computer shopping services, cable shopping networks, and infomercials. Traditionally not viewed as an element in the promotional mix, direct marketing represents one of the most profound changes in marketing and promotion in the last 25 years. Aspects of direct marketing, which includes direct response advertising and direct mail advertising as well as the various research and support activities necessary for their implementation, have been adopted by virtually all companies engaged in marketing products, services, ideas, or persons. Direct marketing has become an important part of many marketing communication programs for three reasons. First, the number of two-income households has increased dramatically. About six in every ten women in the United States work outside the home. This has reduced the amount of time families have for shopping trips. Secondly, more shoppers than ever before rely on credit cards for payment of goods and services. These cashless transactions make products easier and faster to purchase. Finally, technological advances in telecommunications and computers allow consumers to make purchases from their homes via telephone, television, or computer with ease and safety. These three factors have dramatically altered the purchasing habits of American consumers and made direct marketing a growing field worldwide. Direct marketing allows a company to target more precisely a segment of customers and prospects with a sales message tailored to their specific needs and characteristics. Unlike advertising and public relations, whose connections to actual sales are tenuous or nebulous at best, direct marketing offers accountability by providing tangible results. The economics of direct marketing have also improved over the years as more information is gathered about customers and prospects. By identifying those consumers they can serve more effectively and profitably, companies may be more efficient in their marketing efforts. Whereas network television in the past offered opportunities to reach huge groups of consumers at a low cost per thousand, direct marketing can reach individual consumers and develop a relationship with each of them. Research indicates that brands with strong brand equity are more successful in direct marketing efforts than little-known brands. Direct marketing, then, works best when other marketing communication such as traditional media advertising supports the direct marketing effort. Direct marketing has its drawbacks also. Just as consumers built resistance to the persuasive nature of advertising, so have they with direct marketing efforts. Direct marketers have responded by being less sales oriented and more relationship oriented. Also, just as consumers grew weary of advertising clutter, so have they with the direct marketing efforts. Consumers are bombarded with mail, infomercials, and telemarketing pitches daily. Some direct marketers have responded by regarding privacy as a customer service benefit. Direct marketers must also overcome consumer mistrust of direct marketing efforts due to incidents of illegal behavior by companies and individuals using direct marketing. The U.S. Postal Service, the Federal Trade Commission, and other federal and state agencies may prosecute criminal acts. The industry then risks legislation regulating the behavior of direct marketers if it is not successful in self-regulation. The Direct Marketing Association, the leading tra de organization for direct marketing, works with companies and government agencies to initiate self-regulation. In March of 2003 the National Do Not Call Registry went into affect whereby consumers added their names to a list that telemarketers had to eliminate from their out-bound call database. Emerging Tools of IMC Sponsorships (Event Marketing) Sponsorships, or event marketing, combine advertising and sales promotions with public relations. Sponsorships increase awareness of a company or product, build loyalty with a specific target audience, help differentiate a product from its competitors, provide merchandising opportunities, demonstrate commitment to a community or ethnic group, or impact the bottom line. Like advertising, sponsorships are initiated to build long-term associations. Organizations sometimes compare sponsorships with advertising by using gross impressions or cost-per-thousand measurements. However, the value of sponsorships can be very difficult to measure. Companies considering sponsorships should consider the short-term public relations value of sponsorships and the long-term goals of the organization. Sports sponsorships make up about two-thirds of all sponsorships. Social Media Marketing The concept of social media marketing basically refers to the process of promoting business or websites through social media channels. It is a powerful marketing medium that is defining the way people are communicating. It is one of the significantly low-cost promotional methods that provide businesses large numbers of links and huge amount of traffic. Companies manage to get massive attention and that really works in favour of the business. Social media marketing is a potent method applied by progressive companies for selling their products/services or for just publishing content for advertisement revenue. Social media is an extremely useful tool using which companies can get their information, product descriptions, promotions all ingrained in the chain of networking world. Considering the newness of this marketing method, organizations are coming up with innovative ways to develop their marketing plans. New platforms are being created to approach potential clients. A large number of business organizations are allocating budget for online business development using social media marketing. It is a booming sector which is going to redefine the way marketing strategies are being formed and promoted. Internet Marketing Internet marketing also referred to as i-marketing, web-marketing, online-marketing or e-Marketing, is the marketing of products or services over the Internet. The Internet has brought media to a global audience. The interactive nature of Internet marketing in terms of providing instant responses and eliciting responses are the unique qualities of the medium. Internet marketing is sometimes considered to be broad in scope because it not only refers to marketing on the Internet, but also includes marketing done via e-mail and wireless media. Management of digital customer data and electronic customer relationship management (ECRM) systems are also often grouped together under internet marketing. Internet marketing ties together creative and technical aspects of the Internet, including: design, development, advertising, and sales. Internet marketing also refers to the placement of media along many different stages of the customer engagement cycle through search engine marketing (SEM), search engine optimization (SEO), banner ads on specific websites, e-mail marketing, and Web 2.0 strategies. Mobile Marketing Mobile Marketing involves communicating with the consumer via cellular (or mobile) device, either to send a simple marketing message, to introduce them to a new audience participation-based campaign or to allow them to visit a mobile website. Mobile connectivity not only enables people to connect to the Internet via a cellular telephone, PDA or other gadget, but also consolidates the different communication channels in a simple, yet effective medium. Cheaper than traditional means for both the consumer and the marketer and easy enough for almost any age group to understand and engage with Mobile Marketing really is a streamlined version of traditional eMarketing. Strategic Framework for IMC in Rural Markets in India A strategic framework for implementing Integrated Marketing Communications (IMC) in the rural markets in India has been proposed. The following are the elements of the framework: Objectives: The firms need to set and review their objectives for the rural markets. The desired effects and output needed from an integrated communications programme need to be decided and this becomes the base for the next steps in the implementation framework. 3As of the Adoption Process: Awareness Creation: Firstly, awareness needs to be created about the brand and the product in the rural market. An urban product might have low or almost nil awareness level in the rural market. The various tools that should be used at this stage are Public Relations, Direct Marketing, Advertising and Events. Adopt the Brand: Once awareness has been created about the brand, steps need to be taken so that the rural markets adopt the brand. The various tools that should be used at this stage are Personal Selling, Sales Promotions and Road shows. Brand Purchase: Once people have adopted the brand, steps must be taken to ensure that people purchase the brand and become repeat buyers. The tools which must be used at this stage are Sales Promotion and Personal Selling. IMC Tools: As mentioned before, different tools serve different purposes in the rural markets. For awareness creation, Public Relations, Direct Marketing, Advertising and Events are useful. Rural advertising will be different from the urban advertising keeping in mind the different profiles of the rural customers. Events also are very effective tools as they engage prospective consumers. The tools useful for adopting the brand are Personal Selling, Sales Promotions and Road shows. The markets accept and adopt the brands once salience has been achieved in the previous stage. Road shows are newer IMC tools which are proving to be very effective. They should be leveraged in the rural markets. In the brand purchase stage, tools like Personal Selling and Sales Promotions must be used as they have a direct impact on the brand purchase by providing incentives and more direct information about the brand. Select Right Mix of IMC: All these above mentioned tools need to be used judiciously and in the right proportion to achieve the desired marketing objectives. There needs to be a strategic fit between the chosen tools and the IMC objectives. Depending on the stages of the adoption process, the corresponding tools should be given importance over others and also overall media budget must be considered. Adds Incremental Value to the Firm: The implementation of an Integrated Marketing Communications (IMC) model in the rural markets in the above mentioned manner will add incremental value to the firm. Since most of the corporate are looking in a big manner to exploit the rural markets in India, the above strategic framework might be useful for them to devise an IMC strategy. And it goes without saying that an urban IMC will be different from a rural IMC. Conclusions Customers in villages have their own set of aspirations and are willing to pay for the right services. Companies are understanding that to play the game in rural markets is to understand and innovate products exclusively for the rural consumers and after tasting success can also be replicated in the urban markets. The rural environment is different from the urban and therefore communication to potential customers in a proper and effective manner is a major challenge for corporate marketers. An urban communications approach might not hold well in these rural markets and thus there is a need to have a different Integrated Marketing Communications (IMC) approach for the rural markets in India. The strategic framework for Integrated Marketing Communications (IMC) developed in this paper may be used by companies as a part of their rural strategy. Thus the companies can add incremental value to themselves.