Introduction

Our country is endowed with a good degree of ethnic and regional diversity. About three-fourth
of the total population resides in the rural areas and majority of them are dependent upon
agriculture for their subsistence. Agriculture contributes about 24.7% to the Gross Domestic
Product (GDP) of the country. It also contributes about 13.1% to the total Indian exports. This
sector provides employment to 58.4% of the country's workforce and livelihood to more than
650 million people. Despite this fact, the condition of these people has not shown any significant
improvement.
The development of the nation largely depends upon the development of the rural population.
Mahatma Gandhi had once said: "India's way is not Europe's. India is not Calcutta and Bombay.
India lives in her several hundreds of villages".
Rural Market Potential
India is an agro-based economy and the growth of most of the other sectors of economy is driven
by rural demand. Urban market is reaching towards the saturation point, thus bringing in and
urgent need to focus on rural development. Moreover, more than 70% of India's population lives
in villages and constitutions a big market for industry because of increasing disposal incomes
and awareness level.
In comparison to just 5,161 towns in India there are 6,38,365 villages in India. This in itself is an
indicator where the real India resides. Companies are realizing slowly but surely that the key to
gain true market leadership lies in tapping the rural potential. However, the rural sector in India
suffers from different kinds of problems. Some areas are having enough money but their level of
awareness and hence consumerism is very low. But there are many areas where economic
empowerment, education, health etc., are major problems.
What is rural marketing
While there is a large growth in the urban market, the rural or latent market is yet to be tapped,
and has an enormous potential for growth. A rural market can be defined as any market that
exists in a area where the population is less than 10, 000. The rural market in India is scattered
and spread over a wide geographical area. Indian market is divided into urban and rural markets.
o Urban market is flooded with low demand.
o Rural market witnesses a high demand It's the rural segment of market that contributes more
profit than its urban counterpart. Rural marketing broadly involves reaching customers,
understanding their wants, supply of goods and services, and ultimately satisfying consumers,
leading to more sales. The general impression is that only agricultural inputs like seeds,
fertilizers, pesticides, cattle feed and agricultural machinery have a potential for growth in the
rural market. However, there is a growing market for consumer goods now. It has been estimated
the rural market is growing at the rate of five times its urban counterpart.
Challenges in Rural Marketing
Though rural markets are a huge attraction to marketers, it is not easy to enter the market and
take a sizeable share of the market, in the short time due to the following reasons.
Low Literacy
There are not enough opportunities for education in rural areas. The literacy level is as low
(36%) when compared to all- India average of 52%.
Seasonal Demand
Demand for goods in rural markets depends upon agricultural situation, as agriculture is the main
source of income. Agriculture to a large extent depends upon monsoon and, therefore, the
demand or buying capacity is not stable or regular.
Transportation
Many rural areas are not connected by rail transport. Kacha roads become unserviceable during
the monsoon and interior villages get isolated.
Distribution
An effective distribution system requires village-level shopkeeper, Mandal/ Taluka- level
wholesaler or preferred dealer, distributor or stockiest at district level and company-owned depot
or consignment distribution at state level. The presence of too many tiers in the distribution
system increases the cost of distribution.
Communication Problems
Facilities such as telephone, fax and telegram are rather poor in rural areas.
Traditional Life
Life in rural areas is still governed by customs and traditions and people do not easily adapt new
practices. For example, even rich and educated class of farmers does not wear jeans or branded
shoes.
Buying Decisions
Rural consumers are cautious in buying and decisions are slow and delayed. They like to give a
trial and only after being personally satisfied, do they buy the product.
Media for Promotions
Television has made a great impact and large audience has been exposed to this medium. Radio
reaches large population in rural areas at a relatively low cost. However, reach of formal media is
low in rural households; therefore, the market has to undertake specific sales promotion activities
in rural areas like participating in melas or fairs.
Career in Rural Market
While rural marketing offers a challenging career, a rural sales person should require certain
qualifications and specialized talent.
Cultural Factors
Culture is a system of shared values, beliefs and perceptions that influence the behavior of
consumers. There are different groups based on religion, caste, occupation, income, age,
education and politics and each group exerts influence on the behavior of people in villages.
There is a belief among rural people that experience is more important than formal education and
they respect salespersons who can offer practical solutions to their problems. Therefore, it is
desirable that sales persons, especially those who have been brought up in cities are given a
thorough training consisting of both theory and practical aspects of village life. The training will
help these sales persons to align themselves with the market realities and settle down smoothly in
their jobs.
Rural market has a tremendous potential that is yet to be tapped. A small increase in rural
income, results in an exponential increase in buying power.
Future Trends
Markets which are not able to face the stiff competition posed by MNCs, can restore their profits
in the rural sector. The market share of urban market when compared to the rural market is low,
hence if Indian industries concentrate on rural markets their sales will increase. If rural markets
are brought into the limelight of development, they pave way to prosperity. Prosperity of India
lies in the prosperity of every Indian, hence no rural segment should be left untapped.

Article Source: http://EzineArticles.com/1092597

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MARKET SEGMENTATION, TARGETING AND POSITIONING

MARKET SEGMENTATION
, TARGETING AND POSITIONING
MARKET SEGMENTATION
MARKET SEGMENTATION
INTRODUCTION: -
INTRODUCTION: - The market for any product is normally made up of
several
segments. A ‘market’ after all is the aggregate of consumers of a
given product.
And, consumer (the end user
the end user), who makes a market, are of varying
characteristics and buying behavior. There are different factors contributing for
varying mind set of consumers. It is thus natural that many differing segments
occur within a market.
In order to capture this heterogeneous market for any product, marketers
usually divide or disintegrate the market into a number of sub-
markets/segments and the process is known as market segmentation
market segmentation.
Thus we can say that market segmentation is the segmentation of markets
into homogenous groups of customers, each of them reacting differently to
promotion, communication, pricing and other variables of the marketing mix.
Market segments should be formed in that way that difference between
buyers within each segment is as small as possible. Thus, every segment can
be addressed with an individually targeted marketing mix.
The importance of market segmentation results from the fact that the buyers
of a product or a service are no homogenous group. Actually, every buyer has
individual needs, preferences, resources and behaviors. Since it is virtually
impossible to cater for every customer’s individual characteristics, marketers
group customers to market segments by variables they have in common.
These common characteristics allow developing a standardized marketing mix
for all customers in this segment.
Through segmentation, the marketer can look at the differences among the
customer groups and decide on appropriate strategies/offers for each group.
This is precisely why some marketing gurus/experts have described
segmentation as a strategy of
dividing the markets for conquering them.
dividing the markets for conquering them.
MARKETING STRATEGY AND MARKET SEGMENTATION: -
MARKETING STRATEGY AND MARKET SEGMENTATION: - When it
comes to marketing strategies, most people spontaneously think about the 4P
(Product, Price, Place, Promotion) – maybe extended by three more Ps for
marketing services (People, Processes, Physical Evidence).
Market segmentation and the identification of target markets, however, are an
important element of each marketing strategy. They are the basis for
determining any particular marketing mix. Basic steps in marketing strategy
are as follows:-
~1 ~
•
•ATTRIBUTES OF EFFECTIVE SEGMENTATION
ATTRIBUTES OF EFFECTIVE SEGMENTATION
Market segmentation is resorted to for achieving certain practical purpose. For
example, it has to be useful in developing and implementing effective and
practical marketing programmes. For this to happen, the segments arrived at
must meet certain criteria such:-
a.Identifiable
Identifiable:
: The differentiating attributes of the segments must be
measurable so that they can be identified.
~2 ~

b.Accessible
Accessible:
: The segments must be reachable through communication and
distribution channels.
c.Sizeable
Sizeable : The segments should be sufficiently large to justify the
resources
required to target them. A very small segment may not serve
commercial
exploitation.
d.Profitable
Profitable:
: - There is no use in locating segments that are sizeable but not
profitable.
e.Unique needs
Unique needs : To justify separate offerings, the segments must
respond
differently to the different marketing mixes.
f.Durable
Durable : The segments should be relatively stable to minimize the
cost of
frequent changes.
g.Measurable
Measurable : The potential of the segments as well as the effect of a
specific
marketing mix on them should be measurable.
h.Compatible:
Compatible: - Segments must be compatible with firm’s resources
and
capabilities.
•
•REASONS FOR MARKET SEGMENTATION
REASONS FOR MARKET SEGMENTATION
Segmentation is the basis for developing targeted and effective marketing
plans. Furthermore, analysis of market segments enables decisions about
intensity of marketing activities in particular segments.
~3 ~
A segment-orientated marketing approach generally offers a range
of advantages for
both, businesses and customers.
1.
1.Facilitates proper choice of target marketing:
Facilitates proper choice of target marketing:-
Segmentation helps the marketers to distinguish one customer group from
another
within a given market and thereby enables him to decide which segment
should
form his target market.
2.
2.Higher Profits:
Higher Profits: -
It is often difficult to increase prices for the whole market. Nevertheless, it is
possible to develop premium segments in which customers accept a higher
price level. Such segments could be distinguished from the mass market by
features like additional services, exclusive points of sale, product variations
and the like. A typical segment-based price variation is by region. The
generally higher price level in big cities is evidence for this. When
differentiating prices by segments, organizations have to take care that there
is no chance for cannibalization between high-priced products with high
margins and budget offers in different segments. This risk is the higher, the
less distinguished the segments are.
3.
3.Facilitates tapping of the market, adapting the offer to the target:-
Facilitates tapping of the market, adapting the offer to the target:-
Segmentation also enables the marketer to crystallize the needs of target
buyers. It also helps him to generate an accurate prediction of the likely
responses from each segment of the target buyer. Moreover, when buyers are
handled after careful segmentation, the responses for each segment will be
homogeneous. This in turn, will help the marketer develop marketing
offer/programmers that most suited to each groups. He can achieve
specialization that is required in product, distribution, promotion and pricing for
matching the particular customer group and develop offers and appeals for
the segmented group.
Example of Ford:
Example of Ford: - Ford has gained useful insights through
segmentation and
adapted its offer to suit the Indian target market. For the Indian segment Ford
made some changes in its cars in comparison to their European version.
Modifications such as: -
a. Higher ground clearance to make the car
ground clearance to make the carcompatible to the rougher road
compatible to the rougher road
surface in India
surface in India.
.
~4 ~
b. Stiffer rear springs to enable negotiating the ubiquitous potholes on
Indian
b. Stiffer rear springs to enable negotiating the ubiquitous potholes on
Indian
roads.
roads.
c. Changes in cooling requirement, with greater airflow to the rear.
c. Changes in cooling requirement, with greater airflow to the rear.
d. Higher resistance to dust.
d. Higher resistance to dust.
e. Compatibility of engine with the quality of fuel available in India.
e. Compatibility of engine with the quality of fuel available in India.
f. Location of horn buttons on the steering wheel. As Indian motorists use
horn
f. Location of horn buttons on the steering wheel. As Indian motorists use
horn
far more frequently than the European where the horns are located on the
lever.
far more frequently than the European where the horns are located on the
lever.
4.
4.Stimulating Innovation: -
Stimulating Innovation: -
An undifferentiated marketing strategy that targets at all customers in the total
market necessarily reduces customers’ preferences to the smallest common
basis. Segmentations provide information about smaller units in the total
market that share particular needs. Only the identification of these needs
enables a planned development of new or improved products that better meet
the wishes of these customer groups. If a product meets and exceeds a
customer’s expectations by adding superior value, the customers normally is
willing to pay a higher price for that product. Thus, profit margins and
profitability of the innovating organizations increase.
5.
5.Makes the marketing effort more efficient and economic: -
Makes the marketing effort more efficient and economic:
-Segmentation
ensures that the marketing effort is concentrated on well defined and carefully
chosen segments. After all, the resources of any firm are limited and no firm
can normally afford to attack and tap the entire market without any delimitation
whatsoever. It would benefit the firm if the efforts were concentrated on
segments that are more profitable and productive ones.
Segmentation also helps the marketer assess as to what extend existing offer
from competitors match the needs of different customer segments. The
marketer can thus identify the relatively less satisfied segments and succeed
by concentrating on them and satisfying their needs.
6.
6.Benefits the customer as well:
Benefits the customer as well: -
~5 ~