Rural-centric marketing strategies can help FMGCs grow faster

LAHORE: Domestic manufacturers have to prepare their business models for urban and rural consumers separately, as the urban consumers graduate from any product to brand and feel empowered buying affordable gadgets they craved decades back.

Urbanisation is more pronounced in Punjab where the urban boundaries have encroached to rural areas. There was a distinctive distance between Lahore and Sheikhupura, Lahore, and Muridke, Lahore and Kasur. In between were located rural villages without any connecting road work.

It is the same in Karachi, where population has exceeded 200 million and the area of the city has expanded and many goths (villages) are now part of the metropolitan.

Despite this amalgamation, the income disparities still exist. The families living in areas that comprised Karachi or Lahore two decades back are more affluent than those living at the periphery of the cities. At the same time, the income level of the semi-urban peripheries has also increased much more than what they earned 20 years back.

The urban affluent now prefer brands, branded clothing, branded smartphones, fully loaded vehicles, in case of motorcycles they desire high powered bikes. They prefer fast food, imported juices and things like that.

The rural consumers buy what they can afford. Some buy analogue phones and some a little expensive smartphones. They prefer to stitch their clothing at home and buy fabric instead of garments, in bikes they prefer cheaper 50cc models; they still love tractors and use it for farming as well as transport by attaching a trolley.

There are clear and distinctive buying patterns of urban and rural populations. Still the Fast Moving Goods Companies (FMGC), the motorcycle manufacturers, the tractor producers, and unbranded fabric producers concentrate on the urban markets.

The rural consumer has to come to urban centres to buy all the gadgets he needs. More than 70 percent of the motorcycles are sold in rural areas still there are no dedicated show rooms or sales staff in these areas.

The manufacturers depend upon their city dealers that have a network of sub-dealers in rural regions. If the manufacturer loses the main dealer due to any dispute, he loses the market commanded by that dealer.

This of course does not apply to the largest multinational motorcycle manufacturer. But even if it surveyed the market, it would find that the Chinese 50cc motorcycles had more penetration in the rural region, as sales were pushed by the local dealers through their network.

In the same way, the television brand pushed by the entrenched dealer with vast network sells more than other brands, although the price difference is very small. Domestic manufacturers are acting just like our exporters. Instead of exploring potential markets they tend to concentrate on already established markets that are nearly saturated.

Marketing will have to move to rural centres for sustained growth. There are many potential buyers in rural regions that prefer not to go to cities for buying. If goods are made available to them at reasonable rates at their door steps, they may be induced to buy many items.

Most of the young consuming class resides in rural regions. They would remember for life their first taste of luxury when they finally move out in cities.

The road infrastructure and internet connectivity is creating awareness among the rural consumers as well. They would soon start distinguishing between a good quality and bad quality product. It would be a folly to market low quality products in rural regions as the suppliers are likely to lose them for good.