Rural areas, the challenging market
Rural areas, the challenging market
Whoever said that rural markets are small and unattractive?
About 70 percent of Indonesians live in rural areas. It is true
that their spending power is not much for each individual, but
together, these individuals bear a large sum of money, even an
abundance.
Last year, the Polling Center conducted a survey which showed
that 41 percent of the rural community spends Rp 1,000 to Rp
5,000 per day. Say we take an average spending of Rp 3,000, then
41 percent of the rural community spends a total of Rp 500
billion every day. A market as much as Rp 500 billion is
certainly not a minor one.
This already huge market is surely growing, because of the
political atmosphere, which is currently bonding itself with
rural areas. As we know, the government has passed Law No. 22 and
Law No. 25, each regulating Regional Autonomy and Central-
Regional Budget Balancing, and will be effective starting next
year. These laws transfer larger authority to the regions to be
self-managed and self-administrative.
In addition, the laws also regulate the income distribution
between central and regional areas, where the bigger portion of
funding is awarded to the regional areas, not vice versa, which
is different to what it used to be. So, if larger authority and
funding portion exist regionally, then the logical thing is that
rural areas, which were once discriminated against, are now
beginning to be "touched". This is further supported by the fact
that the new government is relatively pro to the rural
development.
Aside from its high potential, the rural market also reveals a
challenge, since competitors are few to be found. Moreover, the
target market contained in this rural market is relatively
distinctive, which is different from urban consumers, who are
complex and heterogeneous. Because of those various issues, we
will be making a big mistake if we are not quick in changing our
glasses and our old paradigm. This is the right time to prepare
ourselves to enter the rural market, before our competitors do so
ahead of us.
To enter the rural market is not an easy task. Why? Because
rural consumers are 180 percent different from urban consumers.
To enter, and to be the winner of the rural market, whether you
like it or not, you have to familiarize yourself with their
psychographic condition: perception, lifestyle, behavior and
preference, as well as their norms and beliefs. This cannot be
done if we take urban consumers as our guideline. Various
specialized tactics and strategies, which should be "customized",
have to be utilized to attract rural consumers.
The tactical step of PT Bintang Toejoe (BT) shows its success
story in entering the rural market, which is interesting to
examine. Almost all BT products are targeted to low-to-middle
class consumers, price becoming the point of differentiation that
is crucial to the consumers. Because of that, cheap prices are
the main weapon for BT to win in the rural market.
However, cheap prices for BT does not mean that its brands
deliver low quality. How is this possible? The way to do this is
to eliminate "context" but to put emphasis on the "content". Take
Extra Joss, one of its reliable products, as an example. Extra
Joss is sold at a price approximately a quarter of its
competitors' prices. But sticking to a very low price does not
necessarily mean that Extra Joss offers low quality. In contrast,
BT guarantees that the quality and content of Extra Joss are no
different with those of competitors. Then why is it so cheap?
Because Extra Joss uses sachet packaging, not bottles, which
definitely cost more. It is true that sachet packaging does not
offer much prestige compared to bottling, but bear in mind that
rural consumers do not need to be prestigious.
Beside the "cheap price, good quality" strategy, BT is also
using an appropriate communicative approach suitable to the
characteristics of its target market. Its branding, for instance,
was done in a direct and friendly manner with the rural
community. So is the style of its TV commercials, which uses
idioms friendly to the ears of the rural community in its daily
life.
BT's strategy certainly represents only one variance of so
many other strategies, which are adopted in tapping the rural
market. To enter and to win in this particular market, you have
to build your own strategy. You have to explore and develop the
strategy that matches the customer preference of the rural
community. To do this, there is one thing you must fulfill: you
must know the exact wants of this rural community, as well as its
own values.