Segmentation, Targeting & Positioning in Rural Markets

Orientations to the Market

Selling orientation - Product orientation - Marketing orientation C K Prahalad and V Ramaswamy Co- creating value with customers Market as a target to Market as a forum The contribution revolution Customer is the king/ queen Understanding the customer is vital

The STP Process Source: The Rural Marketing Book- Khasyap. P & Raut. S

Marketing Decision Marketing Actions to be Undertaken Segmenting Identifying and developing profiles of market segments Target Evaluating segments and deciding the market coverage strategy Positioning Identifying , selecting and communicating competitive advantages

Heterogeneity in Rural India

Variable Example Socio Cultural Differences Caste Based Habitations in Villages Population Size & Density Kerala Vs Andhra Pradesh Difference in Infrastructure BIMARU states Vs Karnataka Media Exposure levels Kerala Vs Orissa Literacy Levels Himachal Pradesh Vs Bihar Income levels & patterns Farmers & Daily Wage Earners Family Structure Joint Families & Nuclear Families

Segmentation: Issues & Options Measurability- Accessibility- Differentiability & Profitability Is it easy to measure segments in rural areas? What are the issues in accessing rural markets? Is it necessary to segment underdeveloped markets? ( need for differentiation) What is the appropriate pay back period by focusing on a segment?What should be the appropriate market targeting strategy?Mass Segment Niche Micro approaches

Basis & Approaches to Segmentation

Segmentation Criteria Relevant Variables ( Indicative) Geographic Region Village Size and density Climate Demographic Age Gender Income: ( NCAER ) Landownership Education ( SEC Classification) Occupation ( SEC Classification) Type of home ( SEC Classification) Psychographics Lifestyle Rural, Urban. Personality Behavioral Occasions Benefits sought Loyalty & usage status / rate

Demographic SEC Classification

Three variables Education of chief wage earner ownership- type of house

Multi Attribute Segmentation

Thompson Rural Market Index Mica Rural Market Ratings Developed by HTA 26 variables Demographics,agriculture, electrification and banking facilities Weights are given to variables Data from 383 districts collected Classification into A, B, C, D and E markets 42 socio economic indicators for ranking districts

Linear combination of six variables for measuring market potential of districts

Classification into A, B , C , D & E markets

Contd Rural market ratings by RK Swamy BBDOLincompass by Linterland ( Lintas IMAG)

Effective Market Targeting Segment attractiveness must match company objectives and resources Undifferentiated marketing- Coca Cola Differentiated marketing Tractor Marketing Single segment concentration Deciding the appropriate coverage strategy Coca Cola An arms length from desire

Positioning A distinctive place in the mind of the consumerIdentifying the unique features of the product/ service Differences with respect to competition Selecting differences having a greater competitive advantageCommunicating the best advantage to the consumer

Issues in Positioning Attractiveness-Distinctiveness-Pre-emptive -Affordability - Communicability Under positioning over positioning confused positioning

Thomson rural market index(TRMI)segmentation

Hindustan Thomson Associates ltd developed a guide to market segmentation in 1972 and revised it in 1986.

Collected data in 335 districts based on 26 variables

Finally they arrived on 10 selected variables having strong co-relation to rural market potential.

Agricultural labourers Gross cropped area Gross irrigated area Area under non-food crops Pump sets

Fertilizers consumption Tractors Rural credit Rural deposits Villages electrified.

Contd. Based on these factors, the districts are classified as A,B,C,D&E. Which are in order of high potential market to low potential market

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