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1-15 September 2006  
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Home - Management - Article

Road to the village

Indian pharma companies are eyeing the global markets and employing tactics to grab a piece of the international consumers' wallet. But what about the average Indian consumer, who resides in villages? Nandini Patwardhan focuses on the marketing activities of pharma companies in rural areas.

As companies across business segments make heavy investments to tap the rural consumer, same cannot be said about pharma. Rural marketing activities of many pharma companies have been traditionally restricted to markets with stocks of the concerned product; and stocking them with the chemists there. Not much emphasis has been given to employing novel marketing strategies to woo the rural Indian consumer.

"The pharma industry as such needs a lot of facilities and experts. As these facilities and experts are available only in the urban areas, our market comprises predominantly of urban areas (70 percent of the total market) and hardly 30 percent in rural areas," explains Dr J B Smarta, Managing Director, Interlink Marketing Consultancy.

"The pharma industry needs a lot of facilities and experts. As these facilities and experts are available only in the urban areas, our market comprises predominantly of urban areas"

- Dr J B Smarta
Managing Director
Interlink Marketing Consultancy

About 70 percent of India resides in villages, which (according to various sources) comes approximately to 74,26,17,747 of the whopping 1.1 billion of the total Indian population. "In India, only 30 percent of the population has access to quality medicines and the treatment gap in almost every chronic disease segment is more than 65 percent. Therefore, the opportunity is huge," opines Susan Josi, Managing Partner of the Mumbai-based Sorento Healthcare Communications.

Even today, the best and the largest of pharmaceutical companies reach only Class 1 towns. Marketing in the villages possibly includes some unplanned taxi tours or they leave it to the stockist’s network to make the goods available without any doctor promotion in the rural areas. Hence, the villages present a huge untapped market.

"The rural market is indeed very large and is growing. There is an estimated 20 million middle class households spread across 600,000 villages in rural India"

- Devendra Shinde Marketing Manager Boots Piramal Healthcare

"The rural market is indeed very large and is growing. There is an estimated 20 million middle class households spread across 6,00,000 villages in rural India, which is equal to the number of middle class households in urban India," states Devendra Shinde, Marketing Manager, Boots Piramal Healthcare. In addition, the disposable income in rural India is much more as compared to urban areas. Food, shelter and primary education are virtually free in rural areas, whereas a substantial chunk of the income in urban areas is spent on these. "As a consequence, the spends on healthcare in rural India is also increasing," he adds.

The rural market place

Given the potential of the rural markets, these days, companies are more open to reaching the rural consumer than even before. However, most of the products that are being advertised and marketed aggressively are the low risk-low involvement products like pain balms, lozenges, cough and cold syrups.

The high risk-high involvement products like cardiac or cancer products, are not advertised or marketed through media as regulations prevent this. However, companies have often taken the community-welfare route to educate the rural consumers about a particular disease segment and make them aware of the treatments available. Companies are conducting healthcare workshops in the rural areas by tapping the doctors there. Such programmes offer mutual advantages to both the parties concerned. The doctors benefit through the increased footfall of prospective patients and companies benefit through the brand awareness and possibility of increased prescriptions.

For instance, Sorento Healthcare Communications has been associated with Nicholas Piramal (NPIL) for over the last two years for an Epilepsy Outreach Programme launched under the banner 'Reach More, Teach More'. With an 85 percent treatment gap in epilepsy management in India, NPIL was keen to make the most of the opportunity by spreading its reach to towns beyond their current coverage.

There are many myths surrounding epilepsy right from madness to black magic, especially among less educated rural masses. These fatal superstitions were addressed by folk theatre shows at markets and high traffic junctions. Auto rickshaw announcements, leaflet distribution in local languages, danglers and banners at strategic locations were also made use of. Camps were conducted at primary healthcare centres and later on mobile vans were used, wherein specialists from NIMHANS were brought in for the same. Besides promoting the brands, this project also generated a lot of goodwill for the company among the opinion leaders in epilepsy management.

Strepsils lozenges has chosen to build brand awareness in the villages through traditional means like billboards at bus stands, branding buses, hoardings, promotions at haats, jatras and melas.

They have also done rural road shows in the interiors of Maharashtra in a traditional lawani set up. The objective was to generate sufficient word-of-mouth so that the brand remains on tip of the tongue when the consumers actually decide to make the purchase. "We have been participating in these activities on a regular basis and have come up with smaller pack sizes and low unit packs as they do well. Singles versus strips is the order of the rural market," states Shinde.

As far as Pinkoo Gripe Water, the flagship brand from the Ajanta Pharma stable, is concerned, the product was a rural product from the very beginning. The promotion too was rural oriented, ranging from stalls at fairs to showing slides in cinema halls. They also have vans that move across regions. "We also educate tertiary health workers, who work in smaller villages. We train and brief them so that they can try to promote the products," states Rajesh Agrawal, Director, Ajanta Pharma. For Pinkoo Gripe Water, the entire promotion strategy is executed in local languages.

Agrawal feels that high fundas of metro marketing do not work and one should focus more on what the rural consumer understands and what he likes. One of the strategies implemented by the company is by organising a ‘healthy baby’ contest.

A good example of rural promotion of healthcare products is the Goli Ke Humjoli Campaign, which helped trigger the sales of a whole range of oral contraceptive brands. "The entire market grew by a good 22 percent and created an excellent platform for low-priced contraceptives in the bimaru states of India," states Josi.

The speed breakers

So, what is stopping the pharma companies from exploiting the full potential of rural markets? "In my 22 years career with the pharma industry, I have seen many companies trying to make sense of the rural opportunity. But they often give up due to lack of skill sets, expertise and experience to reach these unexplored territories," declares Josi. "This is because most of the companies evaluate this opportunity in a knee-jerk manner and give up when it becomes logistically unmanageable," she explains further.

We, however, have some shining examples of companies like P&G and Reckitt, with their OTC offerings trying to reach the rural markets, more through their FMCG expertise and network. "The biggest problem that marketers face today, is the cost of reaching the rural consumer. Rural markets tend to be far more spread out in contrast to the urban markets that are very concentrated and in compact geographies," explains Shinde.

Absence of regional brands

As far as prescription products are concerned, there is always a trickle down effect with companies contacting the city-based specialists first, when promoting a new prescription product. After the product satisfies him, it is prescribed by the layer of General Practitioners (GP) under them. Slowly and steadily, this product then finds flavour with the GPs at the grass root level and that is how a product reaches the doctors in the class II cities and villages.

The pharma industry may be the only industry in India that cannot boast of rural or regional brands. "The pharma industry is fraught with various social and regulatory issues, in addition to various business issues. This is because human life is at stake here," states Smarta.

With various norms in place for quality of the product, pricing, packaging and huge investments that are needed for pharma R&D and manufacturing. It is not possible for a small regional or a rural player to come up with a standardised product for the rural as well as urban markets. Also, in these areas, chemist is the biggest influencer and plays a significant role in the purchase process as he often recommends products to consumers.

"But he is cautious about recommending any product because if something goes wrong, people will blame him. He has to look at his prestige too and hence, he will not give anything that is not branded or not from a good company," elucidates Smarta.

Thus, it will always be an urban to rural flow and not other way round. However, it can so happen that regional players offer products in nutraceutical or ayurvedic segment to the consumers.

Yet, there will never be a situation, where a rural brand will present a threat to an MNC brand. "I am not sure of this situation in Rx business, but surely in the OTC business one sees many local brands doing very well," says Josi. "There are many examples in Kerala where one finds a good number of ayurvedic brands advertised on satellite local channel very well especially in the cough, cold and supplements areas," she adds.

A different ball game

The typical Indian villager is a poor and ignorant man. The pharma companies have to play the dual role of an educator and provider

The typical Indian villager is a poor, superstitious and ignorant man. Most of the villages do not even have a health centre or a doctor. In these circumstances, the pharma companies have to play the dual role of an educator and provider. In addition, each village is different in its ethnicity, values and culture. Thus, the companies require to adopt different strategies for different villagers. The companies would also have to price their products strategically keeping in mind the spending power of villagers.

All the effort and resources that go into rural marketing are appropriate as not only are rural markets big, but they also present untapped potential. The rural consumer is also highly brand loyal unlike the fickle urban consumers. The rural Indian consumer is a value conscious consumer. "For instance, if he buys crocin and it works, he will swear by it. He will not accept anything else. In case he is used to a blue crocin and a chemist gives him a white tablet, he will not accept it," says Smarta. Considering this, though it will be a mammoth task for companies to come across the right formula for success in rural areas, nonetheless, the effort and investment will not be useless as every penny spent will yield them loyal customers, who trust not just the efficacy of the brand, but also the company as a whole.



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