Business Today

Keeping up with the Dhonis

Marketers are finding new havens in non-metro India.

Print Edition: April 20, 2008

The growing share and clout of small-town India in marketing budgets is staple conversation fodder at most marketing conventions. Last fortnight, consulting firm Ernst & Young released a report, Dhoni Effect: Rise of Small-Town India, in which it shed some more light on the subject. The study highlighted the growing affluence levels, increased media penetration, improved physical connectivity and changes in consumption patterns that are compelling the marketers to take notice of the needs of this growing marketplace.

To begin with, the study divided the country into three sections— the six metros (Mumbai, Delhi, Bangalore, Hyderabad, Chennai and Kolkata), the key urban towns (KUT), which are the 22 cities for the purpose of the study, and the rest of urban India (ROUI), which comprises urban cities other than KUTs.

The changing face of Ranchi: Small towns are the new metros for marketers
Changing face of Ranchi
Marketers seem to be increasingly more aware of the growing affluence of non-metro towns. For example, according to E&Y, of the total print advertising spends of Rs 7,700 crore in 100 cities in 2007, metros accounted for almost 60 per cent. However, when compared to the previous year, spends in KUTs and ROUIs grew by 50 per cent over the previous year, whereas spends in metros grew only 7 per cent.

Another interesting insight the survey provided was the increasing spends on below-the-line (BTL) activities. According to E&Y, the average BTL spends across marketers that the consulting firm spoke to had leapfrogged to 40 per cent as against 15 per cent of all marketing spends three years ago. “In metros, BTL is used to beat the clutter, while in ROUI, media options are comparatively limited. There is definitely a skew towards BTL in marketing budgets in rest of urban India,” says Ashok Rajagopal, Partner (Media and Entertainment Practice), E&Y.

Big spending marketers like Hindustan Unilever (HUL) agree on the importance of customising strategy for various parts of the country. “Growth is not even across the country. There are many Indias and not one India—some parts are doing much better, and some are being left behind,” says Sanjiv Kakkar, ED (Sales & Customer Development), HUL. Kakkar cites the example of Madhya Pradesh, which has been traditionally off the radar of marketers. “Now it is exploding for a large number of our categories. So, localised promotions are something we rely on in such areas.”

T.V. Mahalingam

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