Industry majors say they benefited from tapping rural markets

August 19th, 2008 - 10:42 pm ICT by IANS  

New Delhi, Aug 19 (IANS) Four of India’s largest companies Tuesday showcased here how they have benefited by tapping India’s huge rural market.The four - ICICI Bank, Hindustan Unilever Ltd, Hero Honda Motors and Infosys Technologies - are among the largest in their own areas of business.

“It’s a myth that profit margins get squeezed if you market to the bottom of the pyramid,” said K.V. Kamath, managing director and chief executive officer of ICICI Bank, India’s largest private lender, Tuesday in his keynote address at the Ninth Annual Marketing Summit organised by the Confederation of Indian Industry (CII).

“Our growth strategy is now focused on tapping the Rs.500-billion credit market among India’s low-income groups who do not get any credit now,” Kamath said. The two-day summit began Monday.

“Growth is being driven by the poorest sections of the population who comprise 110 million households out of a total of 209 million households in the country,” said Thomas Puliyel, president of leading market research firm IMRB International.

The summit, an annual jamboree that brings together every year some of the country’s top marketers, advertisers and media personalities, on the whole agreed that the bottom of the pyramid indeed represented a huge opportunity.

“There is certainly life in the bottom of the pyramid,” argued Piyush Pandey, executive chairman and national creative director of Ogilvy and Mather India.

He was referring to the only contrarion view put forth by Arvind K. Singhal, chairman of Technopak, a global management consultancy major, who said “there is no opportunity at the bottom of the pyramid”.

But his was a lone voice.

Anil Dua, senior vice-president for marketing and sales of Hero Honda Motors, gave a detailed presentation to show how his company has been able to capture the largest market share in entry-level motorbikes.

Sudhanshu Vats, vice-president for home care of Hindustan Unilever Ltd (HUL), India’s largest and fast-moving consumer goods (FMCG) company, bolstered Dua’s example with a few from his own company.

HUL is credited with pioneering sachet marketing in India - a marketing format that refers to selling in small packs with low unit price so as to be affordable to people with low disposable incomes.

Interestingly, Aditya Nath Jha, vice-president and head of global branding Infosys Technologies, came up with a completely different take on marketing to the bottom of the pyramid.

He said Infosys sold jobs because, as a knowledge company, its main resource is talent.

“The key question before us was how to get talent without reducing the currency for selling jobs - domain skills, communication skills and analytical skills,” Jha said.

“We did it through our Campus Connect programme which trains people coming from diverse backgrounds, including from low-income and rural households,” he said.

Advertising guru Alique Padamsee brought up the rear by declaring the rural poor may seem to be visually illiterate but “they are aurally smart.”

With rising disposable incomes, they have emerged as a huge business opportunity, he said.

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