Roy Morgan Update: Country cousins contribute to bottom line

Debnath Guharoy , Consultant | Tue, 11/11/2008 11:30 AM | Business

They account for 60 percent of the national population and make up half of Java. By rule of thumb they account for at least 40 percent of all consumers and 30 percent of sales revenue for most products and services.

If they disappeared, so would the black ink from the bottomline of many balance sheets. Yet, city-focussed marketing and advertising people seem not to care, bother to understand or focus any of their efforts on them.

They are Indonesia's rural consumers. With the exception of high-end cars, overseas travel, credit cards and other luxury goods, they're in the market for just about everything. With their ignorance on full display, some marketing and advertising people have difficulty understanding the simple census classifications of kota (urban) and desa (rural).

That "urban" comprises both big cities as well as smaller towns is a distinction many seem unable to make. That life in a big city is different from life in a small town and different again in a village escapes their imagination. That many live at rural addresses and commute daily to the nearby city remains a reality too often disregarded.

Nobody would deny that a larger proportion of the poor live in rural, not urban Indonesia. But the teeming millions of the poor who do inhabit urban dwellings have a much tougher time, day after day. It could easily be argued that the quality of life for most Indonesians, particularly the poor, is considerably better outside the big cities. Living in wide-open spaces, with more green and blue in their everyday lives, most desa residents get much better value for money than their city counterparts.

Only the affluent few and the comfortable middle-class could perhaps disagree that their country cousins are better off, all things considered. What cannot be debated is that the Roy Morgan Consumer Confidence index as of June 2008 shows rural Indonesians at 103, ahead of urban Indonesians at 101.

Equally important is the fact that the average income earner in a rural area has less trouble paying household bills than the average urban breadwinner.

The contribution to sales revenue by the rural consumer may actually be more than the urban counterpart, depending on the product, service or brand. This is true for products ranging from shampoo to motorcycles, as well as services ranging from banks to cellular phones.

In a marketplace where distribution itself accounts for half the success, even today, a company like Unilever remains unchallenged by an aspiring competitor like Procter & Gamble, outside urban boundaries. For the same reason, Bank Rakyat Indonesia not only has the lion's share of banking relationships but also the highest proportion of satisfied customers.

Financial constraints may mean that the size of each purchase or transaction is smaller in rural areas, but the sheer number of consumers using these myriad products and services continues to grow.

This is even truer of future demand. Across the spectrum, the spending habits of rural consumers offer robust comparisons with their urban counterparts. Further removed from the tremors emanating from Wall Street, it could be said that their plans are firmer. Few would question the fact that they lead simpler lives, with fewer pressures, needs or wants.

Those are no reasons however, to simply take them for granted. But every plan, almost without exception, is focussed on the urban consumer. This is equally true of the country's biggest consumer goods manufacturer, advertising agency and media owner.

Shocking though it may sound, none of them have access to a reliable source of information that can continuously feed them with insights on the rural consumers behavior, their habits and attitudes, their media usage. It's as if they don't exist, like their opinions don't matter.

It doesn't take an expert to leverage billions from an advertising budget for discounts on network airtime to be thrown at the highest-rated television programs, measured only in the bigger cities. Surely it would make sense to identify people with particular brand preferences or purchase intentions then connect them with appropriate activities, interests and channels of contact.

This simple premise for a marketing or communications plan is all too often ignored. As for monitoring returns on investment and taking corrective actions, that is just jargon parroted at annual presentations and conveniently forgotten for the rest of the year -- even by the biggest and supposedly brightest.

But relevant resources for addressing these vital questions actually exists. Roy Morgan Single Source, the country's largest syndicated survey, with over 27,000 Indonesian respondents annually, reflects almost 90% of the population over the age of 14, both urban and rural and is updated every 90 days. The survey is used by more marketers and advertising agencies than any other survey in the country.

Now that the truth is out, the likely urge of a few of the marketing community's illustrious leaders will be to shoot the messenger.

Or, to be generous, simply ignore it. That is a reflection of where Indonesia's marketing and communications prowess really lies in the 21st century.

The writer can be contacted at Debnath.Guharoy@roymorgan.com

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