Owing to urban audiences wavering loyalty towards brands, Fast-Moving Consumer Goods (FMCG) firms are eyeing small towns to expand their reach. They are uncovering the potential of these rural markets and continuously targeting them to ramp up their sales.
FMCG brands like Dabur, HUL, Marico, Britannia Industries, TATA, etc. are all set to target these small towns where there are fewer options available and people choose from what is offered to them.
In this blog post, we will find out about India’s FMCG Industry and how small towns are turning out to be a big market for this industry.
So, roll up your sleeves while we begin discovering the keystones to enhancing your experience!
India’s Booming FMCG Industry
With the advancement of technology, the fourth-largest sector of the Indian economy, FMCG, is rapidly expanding in rural areas. These firms are increasingly eyeing the rural segment, where the demand for such products has outgrown its urban counterpart.
The rising disposable income in Tier-2 and Tier-3 cities has given FMCG firms the power to penetrate the market. Consumers in these towns are switching from unbranded, loose products to branded ones after gaining exposure to Below-the-Line (BTL) activities performed by brands.
Take Dabur’s story, for example, to create awareness about mosquito-borne diseases like Dengue, Malaria and Chikungunya in various small towns, cities and semi-urban areas, the company, with its product ODOMOS, tried to eradicate these diseases by sampling activity at Nauchandi Mela.
This campaign captured the essence of experiential marketing to a great extent, as it involved applying Dabur ODOMOS to the uncovered body parts of children who came along with their parents. In all, the campaign resulted in distributing more than 10 lakh free samples and engaging a mass audience.
On this subject, let us now walk you through how FMCG firms are considering small towns as a big market for their industry.
Small Towns: A Big Market for FMCG Firms
- Last Mile Distribution
Last mile distribution, the final leg in the distribution process of a product, fulfils the demand of consumers by building connectivity with local partners. Through BTL marketing, products are made available to consumers in rural areas, even in places where brands cannot reach them through ATL Advertising.
- Customization of Products and Campaigns
To stay relevant, keeping up with the tastes and preferences of consumers in this highly competitive industry is crucial for any brand. Building a loyal customer base by consistently providing quality products, brands build their reputation in the market.
As rural consumers are price-conscious, FMCG firms make their products available in smaller pack sizes that are affordable and within the reach of rural customers. They customize products and marketing campaigns to appeal to consumers in such towns.
- Word-of-mouth recommendations
While making a purchase decision, rural consumers rely heavily on word-of-mouth recommendations. FMCG brands are effectively attracting and retaining consumers by inculcating confidence in them.
BTL activities, including partnerships with local influencers and product demonstrations, have helped these brands establish growth opportunities in the long term.
- Door-to-door Selling
This type of sales promotion usually sells a large number of products. Direct marketing takes place by introducing products and services to potential consumers so as to generate demand among them. This helps to shape a personal connection with the consumer.
- In-person Demonstrations
Convincing audiences through product and process demonstrations helps establish a brand’s recall value in the minds of consumers. Creating brand awareness through such engaging activities enhances the product experience for the consumer. The ultimate goal is to assure consumers that the product solves their problem.
Digitization of the FMCG Industry
FMCG firms have been fortunate with the digital channels leveraged in rural areas.
Due to the growing penetration of technology such as smartphones and the internet, brands are able to build meaningful connections with consumers.
In a nutshell, FMCG firms are shifting consumer mindsets in rural areas by spreading brand awareness and engaging them in BTL marketing activities. Furthermore, by encouraging consumers to reconsider their brand choices at affordable prices through word-of-mouth recommendations, door-to-door selling, in-person demonstrations, etc., small towns are turning out to be big market for FMCG firms.
