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.