Wednesday, September 18, 2019

Advertisement
Indian companies need to build trust and loyalty in a market: Accenture Research

By Bhawana Anand | Vjmedia Works | January 20, 2015

The research included 2,800 consumers and customer service officers at 40 businesses in several states.

Accenture released the third annual edition of "Masters of Rural Markets: From Touchpoints to Trustpoints - Winning over India's Aspiring Rural Consumers”. According to the Accenture research, businesses in India are more confident than ever about the growth of the country's rural consumer markets, but are risking their competitiveness by failing to respond to the changing needs and behaviours of rural consumers.
 
The research included 2,800 consumers and customer service officers at 40 businesses in several states. It shows that while businesses in India have built their physical footprint in these regions they need to build trust and loyalty in a market which is more diverse and sophisticated than many of them are ready to exploit.    
 
The research showcases that rural consumers are particularly aspirational, striving to purchase branded, high quality products. Seventy one per cent of respondents have purchased branded products and 59 per cent see them as trustworthy and reliable. While 42 per cent indicated product upgrading was a reason for spending more in a category. These consumers are defying conventional wisdom that says rural consumers care most about price and will settle for sub-standard offerings to achieve the best deal.
 
The report notes that rural consumers are better networked and proactively seek information through multiple sources. Additionally, women and children now play a more empowered role in purchasing decisions and travel further to buy goods and services. Half of the respondents (50 per cent) visit nearby towns and district headquarters to make small-ticket purchases.  Tellingly, only seven per cent of respondents said that advertisements influence their final purchase decisions. While these findings convey a shift in rural consumption patterns, Indian businesses are still using conventional marketing channels, such as celebrity endorsed advertisements, to reach these consumers.
 
"The expectations of today's rural Indian consumers differ markedly from those of previous generations. They are moving away from purely economic concepts of value driven by low prices, towards a broader notion of value that combines price with the utility, aesthetics and features of products and services. Being present is not sufficient to be competitive. To succeed, companies must extend from physical touch points to experience-led'trust points.' This means understanding how rural consumers are changing, and then using those insights to tailor their marketing strategies to different consumer segments”, said Sanjay Dawar, MD, Accenture's Strategy Practice, India.

Breaking assumptions
 
Accenture research also exposes several incorrect assumptions about rural Indian consumers that have prevented some businesses from establishing long-lasting brand relationships with them. While many business believe that consumers make most planned purchases on special occasions, more than half (55 per cent) of the respondents said they make such purchases as the need arises.  Likewise, while many companies underestimate the importance of customer service in rural markets, almost half (49 per cent) of respondents consider high-quality customer services to be an important factor when making purchases. Sixty-three per cent said they tell others about a bad purchase experience.
 
While Indian businesses tend to categorise rural consumers in one group, Accenture uses its survey findings to identify a portfolio of four broad rural Indian consumer segments and tests just how ready companies are to serve these diverse rural consumers:
 
  • Traditionalists are the conservative rural consumers who rely on conventional channels to make their purchase decisions. Necessity drives most of their purchase decisions and they typically purchase the cheapest offerings available, even if it means compromising on features and aesthetics.

  • Steady Climbers aspire for a more comfortable lifestyle. They want to enhance their social standing among their peers, and strive to do so by buying branded products and offerings.

  • Young Enthusiasts are rural consumers between 18 and 28 years of age who make extensive use of digital technology and buy branded products to enhance their social image. They extend powerful influence on the decisions of the other consumers segments.

  • Village Elites are the progressive rural consumers, boasting high education and awareness levels. They desire the best in product quality, features and aesthetics.

 
 "To meet the changing needs of the rural consumers, companies will need to adapt their product portfolio, their value propositions and their go-to-market strategies. Companies that act now to enhance their understanding of changing rural consumer behaviours and tailor their marketing, selling and service strategies to these consumers' shifting realities will gain a competitive edge over those who wait until the market evolves further”, said Raghuram Devarakonda, MD, Sales and Customer Services, Accenture Strategy.

Game Plan
 
At each of the following stages of rural consumers' purchase journey, Accenture outlines the specific imperatives businesses must make to improve their competitiveness in rural markets:

  • Trustpoint 1 — Need recognition: Target the right consumers according to their means. Show how offerings address their unique needs through simple and entertaining marketing.

  • Trustpoint 2 — Awareness: Include non-traditional media in marketing that conveys consistent messages across multiple channels.

  • Trustpoint 3 — Consideration: Define an irresistible value proposition that looks beyond pricing as a long-term source of differentiation, especially for products categories that are new to rural consumers.

  • Trustpoint 4 — Validation: Identify and engage the most relevant influencers for targeted consumer segments to strengthen trust through word of mouth.
  • Trustpoint 5 — Purchase: Offer expert advice and differentiated service to enhance the in-store experience as rural consumers increase their purchase expectations. 

  • Trustpoint 6 — Experience: Differentiate by offering exceptional customer service across the purchase journey to maintain loyalty well beyond the point of transaction.

  • Trustpoint 7 — Advocacy: Nurture consumer advocates by promptly addressing problems to preempt negative word of mouth.

Advertisement

Comments

Related News

Advertisement
Advertisement
Resource
Follow Us On
Advertisement