Nokia’s Rural Marketing Strategies in India: Reaching Out to the Bottom of Pyramid
“The rural consumer is discerning and the rural market is vibrant. At the current rate of growth, it will soon outstrip the urban market. The rural market is not sleeping any longer. We are.”1 – Adi Godrej, Chairman, Godrej Group of Industries
To expand its presence, Nokia is planning to launch a new service ‘Nokia Life Tools’ that would provide information on market price, weather, etc., to information-starved farmers. While the idea is not new, the challenge in front of Nokia is to convert the 70 million rural mobile users in using its service, amidst competition from local input dealers and ITC ...view middle of the document...
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This case study was written by Shreya Tantia under the direction of Priti Krishnan, IBSCDC. It is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation. The case was compiled from published sources. © 2009, IBSCDC. No part of this publication may be copied, stored, transmitted, reproduced or distributed in any form or medium whatsoever without the permission of the copyright owner.
Dhumal Mandar Naresh, et al., “Rural marketing – Understanding the consumer behavior and decision process”, http://dspace.iimk.ac.in/bitstream/2259/469/1/RM88.pdf “Why India?”, http://www.ifsecindia.com/ifsec08/why_india.html?e, October 16th 2008 “Rural market – A world of opportunity”, http://www.hindu.com/thehindu/2001/10/11/stories/0611000c.htm Aithal Rajesh K. and Mukhopadhyay Arunabha, “Rural Telecom in India: Marketing Issues and Experiences from other countries”, http://www.iceg.net/2007/books/3/32_319_3.pdf “The world fact book”, https://www.cia.gov/library/publications/the-world-factbook/geos/in.html, December 18th 2008 “Ministry of rural development”, http://rural.nic.in/i1.htm Antony Anto, “Rural market new beacon of hope for slowing economy”, http://economictimes.indiatimes.com/News/News_By_Company/Corporate_Trends/ Rural_market_new_beacon_of_hope_for_slowing_economy/rssarticleshow/3935361.cms, January 5th 2009
With the rural market growing twice as fast as the urban market, companies from various sectors are eyeing the rural Bottom of the Pyramid (BOP) to expand their market size. In 2007, Indian rural market accounted for 50% market share for categories like FMCG and consumer durables, with growing penetration rate in few categories. However, as the rural consumers differ from urban consumers in many ways, reaching out to them has not been so easy. Many companies have failed in the rural market due to difficulties like lack of infrastructure and low disposable income of rural people. However, few others like HLL, ICICI and Apollo have successfully won the rural consumers by customising their products and marketing strategies. Similarly, Nokia achieved success in the rural market when it launched a customised phone coupled with a customised marketing campaign.
MKS0119 Nokia’s Rural Marketing Strategies in India: Reaching Out to the Bottom of Pyramid
Exhibit I Changing Rural Income
(million people) 400 300 200 100 0 Low
Lower- Middlemiddle high Urban
Source: “Innovation for Inclusive Growth”, http://www.globalfoodchainpartnerships.org/india/Presentations/Hariyali_SanjayChhabra.pdf
Exhibit II Literacy Rate in Rural India from 1991 to 2001 (%)
Rural–Urban Literacy Rates 1991 (7 years and above) Rural Urban Total 2001 (7 years and above) Rural Urban Total Male Female 30.62 64.05 39.29 46.58 72.99 54.16
Source: Bajpai Nirupam, et al., “Scaling up Primary Education Services in Rural India”,...