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Chapter 5

Segmenting and Targeting Rural Markets

Rural Marketing, 2e

Learning Objectives

Describe the concepts of segmentation, target marketing and market positioning, stressing the need to recognise heterogeneity amongst rural consumers Understand the major bases for consumers and segmentation strategy segmenting rural

Understand how companies identify attractive segments and choose target marketing strategy

market

Realise how companies position their products for maximum competitive advantage in the rural marketplace

Rural Marketing, 2e

Introduction

Segmentation

Marketers need to progress from traditional descriptive, geographic and democratic traits to behaviour, psychographics in rural They also need to evolve different targeting and positioning strategies to penetrate rural markets

Targeting

Positioning

Rural Marketing, 2e

Segmentation

Sub-division of a market into homogenous subsets of customers which can be reached with a distinct marketing mix Profiles can be developed suitably Rural customers can be segmented as:

Self-employed farmers Daily wage labour Salaried employees Traders Micro-entrepreneurs

Rural Marketing, 2e

Heterogeneity in Rural Markets


Socio-cultural differences Population size and density

Level of infrastructure development


Media exposure levels Variations in literacy levels Differences in income levels and income flow Family structure

Rural Marketing, 2e

Pre-requisites for Effective Segmentation

Measurable

Accessible

Differentia ble

Substantial

Rural Marketing, 2e

Degree of Segmentation

Mass marketing Considers all customers homogeneous Companies use this while entering rural markets enter

Segment marketing Identifies customers as separate groups HUL Hamam and Lifebuoy

Niche marketing Serves selectively one or a few customer groups Ghari using quality of water to launch variants

Micro marketing Focuses on individuals or very small groups Daburs Anmol hair oil

Rural Marketing, 2e

Bases for Segmenting Rural Consumer Markets

Geographic

Demographic

Psychographic

Behavioural

Rural Marketing, 2e

Geographic Segmentation

By regions: North, south, west, east Village size: <1,000; 1,0002,000; 2,0005000; >5,000 Density: Low, moderate, high Climate: Summer, rainy, winter Culture: 56 socio-cultural groups

Regional Differences Among Consumers


Rural Marketing, 2e

Demographic Segmentation
Age and Lifecycle Family structure
Children, teens, young adults, elders, seniors Joint family, invidualized joint family, nuclear family Male, female Deprived, aspirers, seekers, strivers, global Landless, marginal, small and large Illiterates, semi-literates, literates Pucca, semi-pucca, kuccha Self-employed farmers, daily wage labourers, salaried, traders Hindu, Muslim, Christian, Sikh, Parsi Upper caste, lower caste

Gender
Income Land ownership Education House type:

Occupation
Religion Caste
Rural Marketing, 2e

Psychographic Segmentation
Social Class Lifestyle
Upper Lower Middle
Trendsetters Followers/adapters Traditionalists

Personality
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Authoritarian Ambitious

Psychographic Segments in Rural India


SEC Rural Demographic Characteristics
Landlord farmers, educated, exposed to urban environment, children in schools, colleges in nearby towns, owns durables like tractor, two wheeler, TV, music system, steel cupboard, LPG, refrigerator, mixer-grinders

Rural Lifestyle
Aspiring to match urban lifestyle, technology adopters, experiment with modern farming methods, eager for additional sources of income socially and politically well connected, high spenders on social occasions

R1

R2

Rich farmers with about 5 acres of land, may not be educated, friends and relatives living in urban areas, owns durables like tractor, two wheeler, TV, LPG

Want children to get educated, consult friends and relatives in urban areas for technology adoption, conscious of status, aspire to be well known in social and political circles

R3

Average landholding 2 5 acres, manages small savings, children sent to village school, owns durables like TV, tractor (self and rental)

Opt for time-tested technology, low risk-taker, desire more knowledge, followers, seekers

R4

Have little or no land, agricultural labour, living below poverty line, a major purchaser from public distribution system

Laggards, averse to latest technology, risk averse, uninformed

Rural Marketing, 2e

Behavioural Segmentation
Occasions
Festivals, melas, jatras, weekly haats Quality, convenience, value for money, service, etc. Non-user, ex-user, first time user, regular user, potential user Light user, medium user, heavy user Strong, weak, non-loyal Village shop, haats, nearby town, melas and jatras

Benefits sought
User status Usage rate Loyalty status Place of purchase
Rural Marketing, 2e

Behavioural Segmentation

Market Potential Value (MPV) from R.K. Swamy BBDO

Household Potential Index (HPI) by Media Research Users Council, Hansa Research
MART-MAS (Market Attractiveness Score)

Rural Marketing, 2e

Targeting
Evaluation of Segments Selection of Segments Coverage of Segments Choosing a Coverage Strategy
Rural Marketing, 2e

Overall attractiveness by size, growth rate, accessibility, etc. Company objectives and resource competitiveness Go to rural markets rather than wait for customer

Rating on a pre-determined scale

Undifferentiated marketing - Nirma Differentiated/targeted marketing - Lifebuoy Concentrated marketing Multiple brands of soaps of HUL

Depends on company resources, product variability, product lifestyle stage, and market variability

Positioning

The act of designing the companys offerings and image to occupy a distinctive place in the target segment Begins with construction of a visual map (perceptual positioning map) of the customers mind Existing brands tend to cluster around particular spots Marketers need to position brands in new attractive spots: Ghari in low price, high quality

Rural Marketing, 2e

Positioning
Identifying the positioning concept Product differentiation Service differentiation People differentiation Image differentiation Selecting the positioning concept Attractive Distinctive Pre-emptive Affordable Communicable

Developing the concept Concept development Select appropriate media

Communicating the concept How many ideas /differences to promote? Which positioning to promote?

Rural Marketing, 2e

Rural Marketing Case Bru Instant Coffee Connect


1.

What communication challenges did Bru face? Which innovative media vehicle was chosen was chosen for reaching the target group? Why? What else could have been used to improve the campaign? What kind of impact was generated by the campaign? How much rural growth was achieved as a result of the campaign? Identify different consumer segments among health food drinkers in rural. Suppose a new brand Health Plus is entering this market. As the brand manager of the company, explain how you enter this market and address the communication challenge for different segments.

2.

3.

Rural Marketing, 2e

Successful Mantra in Segmentation, Targeting and Positioning in Rural Markets


Do Not Over -Segment Develop Segment-by -Segment Invasion Plans

Rural Marketing, 2e

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