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Rural Marketing, 2e

Chapter 5Segmenting and Targeting Rural

Markets

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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 segmenting rural consumers and segmentation strategy

• Understand how companies identify attractive market segments and choose target marketing strategy

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

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Rural Marketing, 2e

Introduction

Segmentation

Targeting

Positioning

• 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

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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

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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

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Rural Marketing, 2e

Pre-requisites for Effective Segmentation

Measurable Accessible

Differentiable

Substantial

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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•Dabur’s Anmol hair oil

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Rural Marketing, 2e

Bases for Segmenting Rural Consumer Markets

Geographic Demographic

Psychographic Behavioural

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Rural Marketing, 2e

Geographic Segmentation

• By regions: North, south, west, east• Village size: <1,000; 1,000–2,000; 2,000–5000; >5,000• Density: Low, moderate, high• Climate: Summer, rainy, winter• Culture: 56 socio-cultural groups

Regional Differences Among Consumers

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Rural Marketing, 2e

Demographic Segmentation

•Children, teens, young adults, elders, seniorsAge and Lifecycle

•Joint family, invidualized joint family, nuclear familyFamily structure

•Male, femaleGender

•Deprived, aspirers, seekers, strivers, globalIncome

•Landless, marginal, small and largeLand ownership

•Illiterates, semi-literates, literatesEducation

•Pucca, semi-pucca, kucchaHouse type:•Self-employed farmers, daily wage labourers, salaried, tradersOccupation

•Hindu, Muslim, Christian, Sikh, ParsiReligion

•Upper caste, lower casteCaste

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Rural Marketing, 2e

Psychographic Segmentation

•Upper•Lower•Middle

Social Class

•Trendsetters•Followers/adapters•Traditionalists

Lifestyle

•Authoritarian•Ambitious

Personality

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Rural Marketing, 2e

Psychographic Segments in Rural India

SECRural Demographic

CharacteristicsRural Lifestyle

R1

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

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

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

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Rural Marketing, 2e

Behavioural Segmentation

•Festivals, melas, jatras, weekly haatsOccasions•Quality, convenience, value for money, service, etc.Benefits sought

•Non-user, ex-user, first time user, regular user, potential userUser status

•Light user, medium user, heavy userUsage rate

•Strong, weak, non-loyalLoyalty status

•Village shop, haats, nearby town, melas and jatrasPlace of purchase

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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)

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Rural Marketing, 2e

Targeting

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

Evaluation of Segments

•Rating on a pre-determined scale

Selection of Segments

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

Coverage of Segments

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

Choosing a Coverage Strategy

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Rural Marketing, 2e

Positioning

• The act of designing the company’s offerings and image to occupy a distinctive place in the target segment

• Begins with construction of a visual map (perceptual positioning map) of the customer’s mind

• Existing brands tend to cluster around particular spots

• Marketers need to position brands in new attractive spots: Ghari in low price, high quality

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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?

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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?

2. What kind of impact was generated by the campaign? How much rural growth was achieved as a result of the campaign?

3. 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.

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Rural Marketing, 2e

Do Not Over -SegmentDevelop Segment-by -Segment

Invasion Plans

Successful Mantra in Segmentation, Targeting and Positioning in Rural Markets