Tuesday, January 02, 2007


The Indian Retail Revolution and Rural Marketing

The Retail Revolution and more

By Harish Bijoor

Q: With the retail revolution on its way, what’s the most important thing one needs to focus on to make a mark in this space?

-Saswathi Reddy, Hyderabad

A: Saswathi, we grew up with one definition of importance: "Retail is about Location, location and location"! We have heard this definition many a time. I define retail differently in the current day. Retail today is about People, people and more people!

There have been five waves in modern Indian management. The first wave in the fifties was that of Manufacturing Man, when the core competence of all businesses revolved round manufacturing more and
more, manufacturing unto a quality standard. The second wave was when there was enough manufactured product but companies needed to sell all of this. This was the era of the Salesperson at large. Then when there was enough of selling competence and enough of product, in came the era of the Cost manager or the man in Finance. This was the competence that helped prune costs and make the product more competitive. This era then gave way to the era of the brand person. Branding came to the fore. This era has just about ended.

The era just about to start is the era of the man in HR. The core competence for the next 7-8 years as per my study over these years, is the competence of understanding and managing people and their aspirations, dreams, wants and needs.

In this new era, the competence to map skills is not the only one. The competence to morph these skills into a front-line retail behavior-altering output is the need of the day.

It is certainly for sure that at the retail point, the most critical component that distinguishes between the sale and the non-sale is the sales-person behavior at hand

Retail tomorrow and today depends on the ability we build in terms of skill and behavior of the people who will run this revolution.

Q: Air India enjoyed a monopoly in the consumer mind space when it came to the
aviation sector, which got clouded with the emergence of hi-decibel
international airlines and the domestic airlines getting green signals for
few international routes. What, according to you, could be the competitive
strategy that can bail out Air India from the clutter?

-Anil Gokhale, Mumbai

Anil, you sure do sound like an employee of Air India.

Air India needs to establish its presence in the mass market commodity operation that
an airline ticket has well nigh nearly become today.

Aviation is one sector where in the beginning everything is a commodity and
then things morph into distinctive brands. Some of these brands become
super-brands and others have to contend with remaining just brands. And
finally, in sectors such as aviation, the brand becomes a commodity once

Telecom is another such category. In the US today, where service is largely
Parri passu'and where technology is rather parri passu as well in telecom,
you search for the cheapest cent rate for your call of destination. Does it
cost 17 cents a minute to India or does it cost 15 with another operator?
Telecom has become a commodity again.

Air India fights in this back-to-the-commodity space once again. AI needs to
therefore look for a distinctive appeal it will focus on. It cannot be a
part of the commodity game. Right now, it is time for it to attain a niche
status and grab seats with a brand appeal that will be distinctive. There is
plenty of scope in the name itself.

India is a happening brand across the world today. Indian Yoga is a big hit.
Alternate therapies are on a rampage. The India name is hot!

Indian music is hitting the world charts, just as Bollywood is making huge
inroads across the world. The Indian BPO and tech sector is equally creating
a great India brand out there. The airline of this country can surely
capitalize on all this India centricity in the world.

Q: What are your expectations for rural marketing for the next decade?

-A S Ramulu, Ramagunadam

Dear Mr.Ramulu, a very dynamic and robust set of expectations. Nine for a start, for the next ten years ahead of us.

  1. I believe rural markets are going to progressively vanish with the creeping state of urbanization that is bound to get into a galloping state soon enough. If today we have only 24% of the market in urban areas, my prognosis is that all of India will be all of 47% Urban by 2017 AD.

This is good and bad. Good for the modern day marketer salivating for markets, consumption and profits, but bad sociologically, as the very flavor of India is getting diluted. The rural nature of India is being tampered with and soon we are going to be another United States of America.

2. Rural folk are getting habituated to brands in a big way. There will be a progressively heightened eating, drinking, wearing and franchising of more brands in the rural hinterland of this country.

3. Newer distribution systems will fall into place. Many of these will use the hitherto discarded and disused systems even. For example, the Indian Post Office has the ability to morph into a huge retail distribution point. Rural Health centers will morph into marketing centers for the health product and solution. Railway stations and railway property holds the potential of becoming booming centers that will tout the brand aspired for in rural markets.

4. The line blurring rural and urban will vanish in the decade ahead. Cultural practices will change rapidly and a more modern milieu will emerge, making the access of markets that much easier.

5. Media at large will also need to morph. More of the inclusive rural imagery will need to come into use. The visuals will pack that much more rural, if only to uproot the rural man from his moorings and fast track him onto the path of rapid, if not creeping urbanization

6. Products and services will start getting created exclusively for the tough and hardy rural market. Today, the demand for these is small, but tomorrow is another day. Nokia has already set up a facility to make mobile phones for India. Dusty India. Tough India. Many more will follow.

7. Within marketing companies, rural marketing will assume significance and importance. If at all marketing companies need to insulate themselves from urban slump and recession, they need to run to rural markets.

In the bargain, what was hitherto a politically correct thing to do will become the only correct thing to do for survival within companies. Rural marketing will become all important.

8. Advertising and communication itself will morph from the 1: Many format of today (through television and mass media) to 1:1 in a big way. Rural evangelists will emerge and fan out in to the villages to sell the product of desire. Re-invention of the 1:1 format will be seen in this decade.

9. Rural marketing in India today is a hegemony of the urban man. The small percentage of urban people actually market to the large percentage of rural folk. This is a bit like apartheid we saw in South Africa a decade ago. This will change in India in the decade ahead.

The author is a business strategy specialist and CEO, Harish Bijoor Consults Inc.

Email your questions to: harishbijoor@hotmail.com

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