6 Reasons Why Products Fail in the Rural Indian Market

In a past interview with Forbes, chairman Ratan Tata attributed the downfall of the Tata Nano to its aggressive branding as a cheap car, which ultimately led to negative perceptions among the target customers. One might wonder how such a critical oversight could occur and, more importantly, how it could have been prevented.

In this article, we explore the reasons that can contribute to product failure, especially when building for rural India.

Poor Product-Market Fit

It is a simple fact that any product is not made to sit on the shelf — its purpose is to find its way into the hands of the user and render some value. But for it to accomplish that, the product must fit into the market and meet the needs of its users in the first place.

But what exactly is this “fit”?

Product-Market Fit refers to how well a product meets market needs, ensuring that it is not created and shipped without demand. This balance requires considering user experience, features, and value proposition, as well as understanding the target customer and their unmet needs.

It is important to note that Product-Market Fit is not static; it evolves as people’s needs change. For example, as established as Skype was till 2020, it couldn’t meet user needs during the pandemic, leading to Zoom quickly filling the gap.

Unchecked Creator’s Bias

Creation is often a joyful process, filled with passion and innovation. However, when the finished product is intended for use by others, it is crucial to assess its relevance to the end user. This requires creators to set aside their biases and preconceived notions about how things are used, and instead, listen to the user’s needs and preferences.

Employing Ineffective Marketing Strategies

From Delhi’s Sarojini to Bengaluru’s Commercial Street, it is remarkable how shopkeepers try to lure in customers with their catchy slogans about the variety of products they have or its affordability. It is by doing this that a person just walking past these stores decides to pause, check out the clothes, and perhaps buy something too.

In essence, effectively communicating what you have to offer — and appealing to what the person in front of you has to gain — is crucial. This becomes even more critical during a product launch, where clearly defining your product, its target audience, and purpose is essential.

Human psychology works in interesting ways. At times, instead of focusing on the technical aspects of a product, zeroing in on the emotional quotient at work can actually lead to better marketing. For instance, consider the recent TVS Motor Company advertisement for children’s helmets. Rather than emphasizing the helmet’s strength or durability, the ad appeals to the customer’s emotions: why are you risking your child’s safety on the road, when you wouldn’t do so otherwise? This approach targets the Indian customer’s casual attitude towards children’s helmet use, effectively creating the product’s market fit.

Another factor to consider while designing a marketing campaign is to evaluate the differences in the rural vs. urban markets. Due to differences in ways of life, culture, and attitudes, the marketing campaigns both of them respond well to are also likely to differ.

Hence, copy-pasting marketing strategies successful in the urban region to the rural context is not advisable, and can lead to failure (Kompaniets and Rauhut, 2016). For example, consumers residing in rural areas might be more receptive to one-on-one marketing with hands-on involvement of salespersons, while in the urban context marketing needs to cater to segmented audiences. The mode of communication to be employed would also differ accordingly, and hence striking the right balance between traditional and digital media is important.

Lack of surety about after-sales support

From our 10+ years of experience in rural markets, we have seen time and again how crucial after sales support is for bridging the last mile gap.

Many times, clarity on what after-sales support one can expect plays a huge role in boosting the customer’s willingness to trust a brand or a product — it indicates accountability and provides an avenue for redressal. After sales support can include installation services, offering warranties and upgrades, providing maintenance checks, and having a reliable point of contact.

This kind of support actually goes on to reassure the customer that after the sale is done, they won’t be on their own when some issue arises. Addressing these concerns early on gives you a head start in building customer loyalty and trust.

Limited access to information about innovative products

A lack of information about a product can create a barrier to adoption; strategically communicating the value of the product is necessary. This gap in knowledge about the brand, product, and technology in use can lead to apprehension and a decisive lack of trust.

For example, at Essmart, we employ different strategies to address the gap in knowledge about the brand, product, and technology. We hold demos of new products as part of our Experience Centers with farmers and show them cost-benefit analysis to help visualize the long-term benefits of adopting clean tech. Being able to get the touch and feel of a product can also positively impact their decision to purchase by boosting trust. We ensure the farmer is sufficiently informed about the product and that credibility is established, by providing information using a multi-pronged approach.

Inadequate Market Research

All the points we have discussed so far, converge into one common issue — inadequate market research. Thorough market research before and during the early stages of a product launch can provide valuable insights into demand, product-market fit, marketing messaging, information gaps, and competition strategies.

Some insights and actionable pointers just cannot be accessed without going on ground and understanding how people interact with products. In their 2022 book “Winning Middle India”, authors Bala Srinivasa and T N Hari state that “The customer often does not have an affordability problem but a cash flow problem.” This is illustrated by the oft-quoted yet timeless example of Chik’s shampoo sachets. Designed specifically for low-income customers, Chik introduced shampoo sachets after noting how cash flow was a barrier for many to purchase larger pack sizes. Identifying a solution that let rural consumers try out a product for the first time led to customer acquisition and potential upselling as their income levels increased. This was hence an ideal solution for the customer and the manufacturer both.

By aligning your marketing and production efforts accordingly, you can use real insights to minimize financial loss and strive for a successful product launch.

Going back to the premise of this article, it is possible to state that the makers of Nano did not find out or take into account that Indians tend to perceive “cheap” as a compromise on quality, especially for purchases like a car — that has long since been a signifier of aspiration for millions of Indians.

By understanding their target audience better and positioning the Nano as a high-value, innovative product, rather than just a cheap car, Tata Motors could have potentially avoided the pitfalls that led to its failure.

References:

1. Kompaniets, Olga Rauhut, and Daniel Rauhut. “WHY URBAN AND RURAL PLACE MARKETING STRATEGIES DIFFER: A THEORETICAL DISCUSSION.” Romanian Journal of Regional Science, no. 10, 2016, pp. 23–40.
2. Rai, Saritha. “Its ‘World’s Cheapest Car’ Tag Made The Nano Undesirable In India.” Forbes, 2013, https://www.forbes.com/sites/saritharai/2013/12/05/its-worlds-cheapest-car-tag-made-the-nano-undesirable-in-india/.
3. Srinivasa, Bala, and Hari T.N. “CavinKare — Shampoo Sachet That Was the True Pioneer of Middle India Market.” ThePrint, 12 Nov. 2022, https://theprint.in/pageturner/excerpt/cavinkare-shampoo-sachet-that-was-the-true-pioneer-of-middle-india-market/1209049/.