MKS0119

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 e-Choupal that offers similar services.

Rural Marketing in India: Demographics and Economics
Out of India’s population of over 1 billion, 70% lives in rural India.2 India consists of 627,000 villages3 with 13% of them having a population of above 2000.4 For the people of rural India, agriculture is the main occupation. Agriculture contributes 17.8% to India’s GDP with about 60% of the workforce employed in the agriculture sector in 2008.5 Since independence, rural India went through a socio-economic transformation due to the various initiatives taken by the ministry of rural development.6 However, till 1990s, the gap between rural and urban development remained wide. With the implementation of minimum support price (the rate at which the government buys the farm produce to prevent farmers from selling a low price) in 1999, coupled with loan waiver of INR 71,000 crore and the implementation of national rural employment guarantee schemes, the income level of rural Indians has been constantly rising.7 By 2009, the rural population is estimated to constitute more number of middle- and high-income households than those in the urban population (Exhibit I). There has also been considerable improvement in the literacy rate of rural India (Exhibit II).
1 2 3 4 5 6 7

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.

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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

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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.

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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

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Source: Bajpai Nirupam, et al., “Scaling up Primary Education Services in Rural India”, http://www.earthinstitute.columbia.edu/cgsd/documents/ RuralEducationPaper.pdf

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57.87 81.09 64.13 71.18 86.42 75.85

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Low

Lower- Middlehigh middle Rural

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2001–2002

2009–2010

MKS0119 Nokia’s Rural Marketing Strategies in India: Reaching Out to the Bottom of Pyramid

With greater disposable income in hand, the rural market is growing twice as fast as the urban market. At a growth rate of 3%–4% per annum, nearly 1 million new consumers are adding up to the rural consumer market every year.8 Due to the changing lifestyles, rural Indians are showing greater interest than ever before on many products. For example, rural India accounts for 53% of FMCG sales and 59% of consumer durable sales. It also accounts for 50% of the 2 million BSNL mobile connections and 60% of the 20 million Rediffmail subscriptions.9 Moreover, with changing mindsets, rural Indians are giving more importance to value than price and are shifting to better and easy-to-use products. For example, rural consumers are upgrading to convenient products like soaps made from locally made substance like sand mix. In categories like fabric wash, personal wash and packet tea, the penetration is as high as 90% on an average.10 However, in spite of the tempting opportunities, many corporate have failed to capture the rural potential. Rural consumers differ from urban consumers in many ways. Sanjiv Gupta, president, Coca-cola India, said, “While movies, music, social interactions and identifying the family as a key unit were the common attributes exhibited by both, expressions of these activities varied between the two sets of consumers. The rural consumer, for example, sought outings through local fairs, melas and haats, social gatherings such as card sessions, television viewing which was by and large confined to Doordarshan and DD Metro with limited influence of cable and satellite television, besides inter-village competitions.”11 Apart from this, generally consumers in rural areas buy products out of habit and not by choice. As a result, rural people do not often switch brands. They are majorly influenced by the cost of the product and buy products that have only those features, which they need. For lifestyle products, the penetration in rural markets is very low (Exhibit III).

Exhibit III Rural vs Urban Penetration Rate (2005)
Criteria Car/jeep/van Two-wheelers Colour television sets Refrigerators Washing machines Room air-conditioners Fans Bicycles TV (B/W or colour) Gas stoves Pressure cookers Has electricity connection Rural HH* (’000) 1,603 16,195 18,152 11,014 1,870 76 % PEN** 1 11 Urban HH (’000) 7,241 25,813 38,572 29,515 14,447 2,936 47,302 36,835 46,400 40,964 45,192 46,981 35,073 26,090 61,196 183,588

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12 8 1 0 43 55 33 19 26 41 27 6 100

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% PEN 12 42 63 48 24 5 77 60 76 67 74 77 57 43 100 Total HH (’000) 8,844 42,008 56,724 40,529 16,317 3,012 110,327 117,368 94,973 68,354 83,075 106,909 74,622 34,634 207,388 1,060,740

% PEN 4 20 27 20 8 1 53 57 46 33 40 52 36 17 100

Drinking water in the household Total Households (’000) Total Population Base

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Fuel used is LPG/electricity/biogas

Note: * Households ** Penetration Rate

Source: Rao Girish V., “Rural market in India”, www.ficci.com/media-room/speeches-presentations/2007/may/rural/Chandramouli.pdf

8 9 10 11

“Rural marketing – Understanding the consumer behavior and decision process”, op.cit. Ibid. Mansharamani Ashish, et al., “Upgrading Rural Customers to Branded Products”, http://www.brandchannel.com/papers_review.asp?sp_id=1319 Ratna Bhushan, “The rural conundrum”, http://www.blonnet.com/catalyst/stories/2003082800050300.htm, August 23rd 2003

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63,025 80,533 48,573 27,390 37,883 59,928 39,549 8,544 146,192 877,152

MKS0119 Nokia’s Rural Marketing Strategies in India: Reaching Out to the Bottom of Pyramid

Reaching Out to the BOP

Exhibit IV BOP of India (2006)
Purchasing Power Parity (in $)

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The lucrative potential of India’s rural market has lured many companies, wanting to expand their market size (Exhibit IV). According to experts, “As urban markets become saturated, more businesses are retooling their marketing strategies, and in many cases their products, to target rural consumers with tiny incomes but rising aspirations fuelled by the media and other forces.”14

Above 15,600

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11,700–15,600 7,800–11,700

4,000–7,800

Under 1 a day

Source: Sood Aditya Dev, “The mobile development report”, www.cks.in/mdr/Mobile%20Development%20Report.pdf, 2006

Moreover, marketing to rural Indians involves convincing them to try the products that were never used by them before. For example, when Colgate entered rural India, the challenge in front of it was to build toothpaste as a category and convince villagers to change from neem twigs to toothpaste.
12 13

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“Upgrading Rural Customers to Branded Products”, op.cit. “Marketing to the Rural India: Making the Ends Meet”, http://knowledge.wharton.upenn.edu/india/articlepdf/4172.pdf?CFID=413134&CFTOKEN=39414076 &jsessionid=a830b5d8bf3232c68cd54325184c3743302b, March 8th 2007 Lancaster John, “Building Wealth by the Penny”, http://www.washingtonpost.com/wp-dyn/content/article/2006/03/13/AR2006031301685_pf.html, March 14th 2006

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However, to reach out to the consumers at the BOP, conventional marketing strategies like print and television advertising are not sufficient. Instead of that, companies have been participating in melas (village fairs), haats (markets), van campaigns, street theatre, road shows and house-to-house campaigns. Due to low literacy rate, companies targeting rural India are adopting measures such as educating the customers about the usability of products by running media vans that show movies, live promotions and demonstrations of products during breaks.

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68 75 166 415 476

To some extent, the penetration of goods like cosmetics, mobile phones, etc., is due to the influence of media. Population of rural India that watch television comprises of 30% and as they are less exposed to the world outside, they are influenced by the lifestyle that they watch on television.12 Rural consumers are more attracted to symbols and colours and are greatly influenced by politicians and other famous personalities who endorse certain products. However, many multinational firms have been foraying into the rural India, they find it difficult to convince them. While, Jagmohan Singh Raju, professor of Marketing at Wharton, University of Pennsylvania said, “No consumer goods company can afford to forget that the rural market is a very big part of Indian consumer market. You can’t build a presence for a brand in India unless you have a strategy for reaching the villages.”13

Population (in million)

MKS0119 Nokia’s Rural Marketing Strategies in India: Reaching Out to the Bottom of Pyramid

Often rural marketers face certain key challenges. As Indian villages are scattered and lack proper infrastructure, distribution of products becomes a constraint. Moreover, in a sparsely populated area where distribution costs are high, distribution should be done through village level shopkeepers having more influencing power, local dealers and distributors, and company-owned distributors at state level. As a result, among the four Ps (Price, Promotion, Product, Place), rural marketers have to innovate at the fourth P – place or distribution.

Exhibit V ICICI Bank’s Rural Pyramid

Crop loans, commodity financing, farmer savings account, personal accident and health insurance, weather insurance

Source: Banerjee Gargi, “Banking the Hinterland”, http://www.businessworld.in/index.php/Economy-and-Banking/Banking-The-Hinterland-2.html

15 16 17

“Marketing to Rural India: Making the Ends Meet”, op.cit. Ibid. “Financial Inclusion efforts of the Group”, http://www.icicigroupcompanies.com/financial_inclusion_efforts.html

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R1 and R2: Rich farmers who own land, have a pucca house and have at least one graduate as a family member. R3: Middle level farmers who do not own land, have pucca houses and kaccha roofs and have had a minimum education up to standard 5. R4: Poorest of farmers who have kaccha houses and roofs and have never had any formal education.

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15% R3 37% R4 48%

Farm equipment loans and insurance, savings accounts, high value policies, mutual funds and IPOs

Micro-finance, jewel loans, health insurance, weather insurance

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R1/R2

For example, in order to reach out to a substantial rural population, ICICI bank acquired Bank of Madurai that holds a large market share in rural India. On the basis of the income level, ICICI bank segmented the rural population into three categories and offered products according to each segment (Exhibit V). For example, for the poor segment of farmers, the bank offered microfinance options and jewel loans. The Microfinance programme of ICICI Bank is one of the largest in India with a portfolio of INR 9.6 billion and a client base of 3.5 million.17

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Working capital loans, crop loans, farmer savings accounts, personal accident and health insurance, weather insurance

Moreover, to tap the needs of the rural population, many FMCG and consumer durables companies have customised their products. Keeping in view the affordability in rural areas, HLL, Godrej and Palmolive have introduced small sachets of products like oil, shampoo, surf, etc. Similarly, soft drink manufacturer Coca-Cola introduced a 200 ml bottle at INR 5. However, while the soft drink sector grew at a rate of 37% in 2007,15 its penetration rate has been only 25% in rural India.16 Due to the low-income levels, lack of infrastructure and different lifestyles, companies are unable to penetrate further in the Indian rural market.

MKS0119 Nokia’s Rural Marketing Strategies in India: Reaching Out to the Bottom of Pyramid

Exhibit VI HLL’s Innovation in Formulation and Packaging
Haircare (Cost in INR) Laundry Family-size bottles Mini bottles Cost: 5 Single-use sachets Cost: 50 paise

Source: Hang C.C., “The Fortune at the Bottom of the Economic Pyramid”, www.eng.nus.edu.sg/etm/Documents/fortune.pdf

18 19 20

21

22

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“Marketing to Rural India: Making the Ends Meet”, op.cit. “Telemedicine”, http://www.medicalindiatourism.com/minimally-invasive-surgery/telemedicine.html “How did Nokia succeed in Indian mobile market while its rival got hung up?”, http://knowledge.wharton.upenn.edu/india/articlepdf/4220.pdf?CFID=413134&CFTOKEN =39414076&jsessionid=a8304f7ff059a662fb8c5f13291d6c617b7d, August 23rd 2007 Niyaz, “Mobile manufacturers trying to capitalise on Rural India”, http://www.indiastudychannel.com/resources/971-Mobile-manufacturers-trying-capitalise-Rural-India.aspx, September 4th 2007 “Rural India’s mighty contribution to India’s booming Mobile Industry”, http://www.mobileindustryreview.com/2008/10/rural_indias_mighty_contribution_to_ indias_booming_mobile_industry.html, October 10th 2008 “Rural India New Target for Mobile Industry Players”, http://www.newswiretoday.com/news/26122/

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However to tap the rural market, mobile phone manufacturers have been using different strategies. As price and features are the key factors that rural customers seeked while buying mobile phones, mobile companies have launched the products according to their needs. For example, Nokia, the leader of the Indian mobile handset market customised its product according to the needs of Indian rural consumers. 20 It launched ‘Nokia 1100’ with longer battery life and torch and at affordable rate. Devinder Kishore, director, Marketing, Nokia India, said, “The three killer applications when it comes to phones for rural market are an in-built torchlight, an alarm clock and the basic ability to communicate using voice.” 21 Demand of telecom in rural India is growing at a faster pace than the urban India. In 2007, rural Indian constituted 4 million mobile subscribers (Exhibit VII). Out of the 25 million new mobile subscribers during April–June 2008, in India, 8 million are from rural India. 22 The use of mobile phones in rural area is in various sectors like transport, finance, healthcare, etc., where rural population usually depend on the traditional methods that involved more time and money (Exhibit VIII). While the cell phone penetration rate is low (Exhibit IX), the telecom industry in rural India has the potential of adding at least 150 million new subscribers per year.23

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Healthcare has also been customised for the rural population. Apollo hospitals have spread to the rural market through telemedicine, by which healthcare is provided electronically. As there has been low access to medical healthcare in rural areas, this service has been very successful. In 2008, Apollo hospital became the largest provider of telemedicine in India.19

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Wheel Best clean for less effort

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Surf Excel Stain Removal Rin Spotlessly white

Other success stories include Hindustan Lever Ltd.’s (HLL) project Shakti that was launched in 2001. HLL was the first MNC to launch a variant of its largest selling shampoos and surf for INR 1 (Exhibit VI). Through this project, HLL expanded its distribution network by working with rural Self Help Groups (SHG) and educating rural women. Products relevant to rural consumers like soaps, toothpaste, shampoo, etc., were distributed by the women from SHG. In 2006, 15% of HLL’s rural sales were made through Shakti distributors.18 With 26,000 women as its distributors, project Shakti is successful in more than 80,000 villages across 12 states in India.

MKS0119 Nokia’s Rural Marketing Strategies in India: Reaching Out to the Bottom of Pyramid

Exhibit VII No. of Mobile Subscribers in Rural India (million)
March ’01 Urban Rural Overall 10.4 0.9 3.6 March ’02 12.2 1.2 4.3 March ’03 14.3 1.5 5.1 March ’04 21.3 1.7 7.0 March ’05 26.3 1.8 9.1 March ’06 38.0 2.0 March ’07 48.5 4.0 18.3

Source: Supia Tippu, “Cell phones push mobile growth in rural India”, http://www.eetasia.com/ART_8800546363_499488_NT_6f42df7d.HTM, October 1st 2008

Transport – Finding cost-effective, reliable and safe ways to transport goods and services to market is a major problem for small businesses in rural communities. Public transport is not available in 45% of villages in India and only 1% of Indian households own a vehicle. Mobile communication could be used to create and coordinate car sharing schemes amongst villages and provide real-time information about public transport services and the ability to make request stops Micro-commerce – Small businesses in rural areas often have to travel significant distances to markets or other places where they can distribute their goods and cannot make arrangements in advance with buyers or other sellers. Mobile phones could significantly change the logistical issues faced by rural traders and home entrepreneurs, by affording mobile-based ordering systems, delivery requests and the ability to make more reliable and advance arrangements with business partners or clients Finance – Mobile phones are already being used in rural areas as a tool for financial transactions by swapping airtime for goods and services. The study encourages mobile networks and financial services institutions to work together to test and develop new financial services in this area and address how people can transfer these credits into cash Healthcare – New mobile services in this area could better connect rural communities, creating networks to share and discuss health information and advice Governance – Accessing information about public services remains a major challenge for many rural communities. Mobile phones provide a new platform through which rural communities will be able to access government information and services, using text, data, and audio browsing techniques Education – The study looks at a range of educational services that could be provided via mobiles to children in remote villages and communities, particularly where PCs or connections to the Internet are not available. Mobile phones could serve as an essential means for children to become connected to one another for educational and peer-learning activities. These are particularly important for communities that are either nomadic or transitional on account of displacements due to a natural disaster or for other reasons Infotainment – While the mainstream entertainment industry is already well aware of the emerging potential of mobile media, there are also many opportunities for local, peer-to-peer content to be created and distributed, affording new cultural and economic opportunities to rural community.
Source: “Mobile Phones Revolutionizing Development in Rural India”, http://www.cellular-news.com/story/21598.php, January 25 th 2007

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Exhibit VIII Areas of Use of Mobile Phones in Rural Areas

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12.9

MKS0119 Nokia’s Rural Marketing Strategies in India: Reaching Out to the Bottom of Pyramid

Exhibit IX PC and Cell Phone Penetration in Rural Areas (2006)

102.1

No. of Households in million

100 80 60 40 17 20 0 60 180 260 10

135 million rural households

3.9 360

Households Income in $ per Month

Source: Desai U.B., “Village Kiosk and impacting role of ICT for Rural areas”, http://www.cse.iitb.ac.in/~cs671/web07/web06/lectureslides/ Village%20Kiosk%20and%20ICT%20Impacting%20on%20Rural%20Areas.pdf

Nokia – Launching of Life Update Service

In order to expand its presence in the emerging rural market, Nokia is introducing a new service ‘Nokia Life Tools’. An SMS-based service for a monthly subscription between INR 30 and INR 60, Nokia Life Tools aims to provide agricultural information, educational services and entertainment to farmers (Exhibit X).25

Source: “Introducing Nokia life tools”, http://www.nokia.com/NOKIA_COM_1/Microsites/Entry_Event/phones/Nokia_Life_Tools_datasheet.pdf
“Nokia introduces affordable mobile devices and services that make the internet available to emerging market”, http://www.nokia.com/A41403253 Laurent Lionel, “Nokia plants a seed in India”, http://sify.com/finance/fullstory.php?id=14792698

24 25

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Robert Andersson, executive vice president, Devices, Nokia, said, “In 2002, Nokia unveiled a strategy to lower the cost of owning and operating a mobile phone and to bring the benefits of mobile telephony to people in emerging markets. Today, we are expanding that vision by introducing a number of devices and services...”24

Exhibit X Nokia Life Tools Services

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1.9 1 0.3 520 840 1300

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Cell Phone Penetration PC Penetration 0.3 2240

120

MKS0119 Nokia’s Rural Marketing Strategies in India: Reaching Out to the Bottom of Pyramid

Exhibit XI Needs of a Farmer

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Needs of a Farmer
Market Information & Linkage Financing & Risk Insurance • Production Risk • Price Risk

Storage, Harvest & Transportation of Produce

Source: “Enabling rural India using ICT”, http://www.tenet.res.in/Publications/Presentations/pdfs/Agriculture-Oct06.pdf

26

27 28 29

Ghosh Debojyoti, “Now, telecom majors focus on rural sector”, http://timesofindia.indiatimes.com/Business/India_Business/Now_telecom_majors_focus_on_rural_sector/ articleshow/3135140.cms, June 17th 2008 Chakravarathi Shivon, “Time warp: Rural India still info-starved”, http://economictimes.indiatimes.com/articleshow/1886317.cms, August 12th 2008 “Reuters Updates for Commodities and Energy”, https://customers.reuters.com/community/commodities/focus/focus_june08.aspx, June 2008 Kutty Darpana, “Nokia To Launch ‘Live Tools’ For Farmers, Students In India”, http://www.topnews.in/nokia-launch-live-tools-farmers-students-india-298505, December 15 th 2008

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Shiv Kumar, managing director and vice president, Nokia India, said, “With these new services, farmers can easily get information on agriculture, commodity prices and weather to the farming community and other related issues over their mobile handsets.”29 The information, customised according to the farmer’s location and selection of crops, will be delivered directly to the mobile phone.

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Knowledge & Extension Inputs • Seeds • Fertilisers • Pesticides • Farm Machinery Irrigation

In 2006, only 40% of the farmers of rural India had access to information.27 While 13.1% of rural households depended on input dealers, another 13% of households depended on radio for information. Apart from that, about 50% of the farmers got information from sources like television, newspapers, village fairs, government demonstrations, food processors and primary co-operative societies. Many small farmers depended on middlemen for the sale of their produce who exploited them due to their lack of awareness. As Indian farmers have only an approximate idea of price trends, traders cheat farmers by offering them much lesser prices. For example, Indian farmers fetch only 20%–25% price of their final produce in contrast to 40%–50% that the farmers in the West earn.28

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Despite improved agricultural productivity over the years, farmers have been lacking information on market prices, weather, etc. They even lack basic information that could help them in improving cultivation. Moreover, poor and illiterate farmers have limited access to information regarding techniques of production and quality inputs like seeds, pesticides, etc. Such constraints increase transaction costs, further decreasing the profit margins of the Indian farmers (Exhibit XI). According to S. Govindrajan, head, south India, Indian Farmers Fertiliser Cooperative (IFFCO), “Information like weather forecast, farming techniques, market rates will help farmers plan their cultivation services and will guide them where to sell their products.”26

MKS0119 Nokia’s Rural Marketing Strategies in India: Reaching Out to the Bottom of Pyramid

Besides, Nokia Life Tools also provides entertainment services, which include ring tones and ring back tones. Information on astrology, latest news and cricket scores is also part of ‘Nokia Life Tools’ services. Planned in the first half of 2009, Nokia Life Tools services would be available on entry-level models such as Nokia 2323 classic and Nokia 2330 classic models, priced between INR 1582 and INR 5697 (€25 and €90).31 The iconbased graphically rich user interface that comes complete with tables is highly user friendly. To overcome the constraint of English, the service also facilitates display of information simultaneously in local languages on payment of a monthly subscription. To make sure that the service works wherever a mobile phone works, SMS is used to deliver information. Nokia is providing this service in collaboration with Idea cellular limited, a leading mobile service company. For the content service on agriculture, Nokia has collaborated with Reuters Market Light (RML). RML, a mobile information service provider, was launched in October 2007 and has been successful in providing customised market information through SMS to the farmers in local language on crop prices, weather forecasts, news and advisory information. In return, RML charges INR 60 per month.32 Since the launch of its services, RML has signed up nearly 50,000 farmers that have on an average earned up to INR 100,000 of additional profits.33 Amit Mehra, managing director, RML, said, “Technology is changing the way farmers, their families and their surrounding communities are contributing to the economy, as well as benefiting from it.”34 After having established its services successfully in Maharashtra and Punjab, RML is planning to launch its services in other Indian states as well. Back in 2000, ITC launched a similar service called ITC e-Choupal. A unique web-based service, e-Choupal offers farmers all the information required to enhance productivity, know market prices and reduce transaction costs. Farmers can access information on weather, market prices of the products in regional languages online. Farmers can also order supply of quality farm inputs and purchase commodities through e-Choupal. With more than 4 million farmers in over 40,000 villages across eight states including Madhya Pradesh, Karnataka and Andhra Pradesh, Uttar Pradesh, Maharashtra, Rajasthan, Uttaranchal and Tamil Nadu,35 accessing this service, e-Choupal has become the largest initiative in rural India. However, it faced many challenges owing to poor infrastructure including power supply, telecom connectivity and illiterate farmers. ITC had to train the rural population to use Internet, upgrade telephone lines and use back-up batteries to overcome the challenge of power constraints. In 2006, they decided to invest $1 billion for the next 7–8 years.36 Robert Andersson, executive vice president, Nokia, said, “The internet is the opportunity but the barrier to internet access remains high. Does it really require a PC? Mobility has the power to make it available and affordable and bridge the digital device. The mobile phone is a durable that’s highly easy to use and is affordable though the screen size and memory may be disadvantages.”37

30 31 32 33

34 35 36 37

“Inform, Involve, Empower – Nokia’s service mantra for emerging markets with Nokia Life Tools”, http://www.nokia-asia.com/A4418023?newsid=-15812, November 7th 2008 Challapalli Sravanthi, “Nokia’s rural odyssey”, Brandline, November 13th 2008, page 1 “Reuters launches SMS crop service for Indian farmers”, http://www.reuters.com/article/companyNewsAndPR/idUSL0134842920071001, October 1st 2007 “Reuters Market Light achieves subscription milestone and commences multi state service roll out”, http://www.financialexpress.com/news/reuters-market-light-achieves-subscriptionmilestone-and-commences-multistate-service-rollout/366220/, September 26th 2008 “Inform, Involve, Empower – Nokia’s service mantra for emerging markets with Nokia Life Tools”, op.cit. “About e-choupal”, http://www.echoupal.com/ “ITC to invest $1 b in e-Choupal infrastructure”, http://www.thehindubusinessline.com/2006/01/04/stories/2006010403490900.htm, January 3rd 2006 “Nokia’s rural odyssey”, op.cit.

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Nokia Life Tools also has an option for education-related services. Through this option, rural population can learn and practice English daily through various levels of difficulty with explanation in their local language. Shiv Kumar, managing director and vice president of Nokia, India, said, “Education and English language, on the other hand, are spring boards for a number of small town and rural youth to move into the employment market. Nokia, through services in Agriculture and Education, will fulfil these opportunities for the Indian population.”30 The education service also provides information on general knowledge and tips to youth on taking various exams. It also gives results of national examination services directly to the mobiles of the students.

MKS0119 Nokia’s Rural Marketing Strategies in India: Reaching Out to the Bottom of Pyramid

While Nokia has initiated the service with a pilot test in Maharashtra (state of India), in languages like Marathi, English and Hindi, it plans to extend the service in other states depending upon the success it would achieve. As a marketing strategy, Nokia runs a van that displays mobile phones on the streets of the villages with the presenter explaining the features of the phones. Pamphlets saying Sapne dekhna mat chhodo, are also distributed in the villages to urge people not to stop dreaming, but realise their dreams by buying efficient mobile phones. However, in order to gain market share in rural India, Nokia will have to develop efficient distribution strategy. V.P. George Kovoor, executive of Pepsi, recommends, “...for the rural market, increased penetration should be achieved with availability, affordability and acceptability. The challenges in rural marketing lie in the 3 C’s: Competition, Capability and Cost.’’38

38

“Need For Special Initiatives To Woo Rural Market”, http://www.financialexpress.com/news/need-for-special-initiatives-to-woo-rural-market/75451/, December 1st 2003

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