SEGMENTATION OF RURAL MARKET Two broad strategies: Mass market strategy-targeting the total market as potential buyers of a brand

nd in a product category with one marketing mix Market segmentation strategy-it is the process of identifying small markets that exist within a large market and are similar in terms of criteria by which they choose a product within a product category but act differently across the groups. A segment represents a set of consumers who respond in a similar way to a given marketing mix and marketing stimuli.

Segmentation variables : Geographic-region, state, district, village Demographic-age, gender, occupation Psychographic-social class, personality and lifestyle Product related variables-types of usage, amount of usage and benefit sought

While segmenting a market , organizations can opt for a single variable or a combination of variables(multivariate segmentation) Conditions for effective market segmentation : Measurable-to calculate the market potential Accessible-in a financially viable manner Profitable-large enough Data availability-on segmentation variables

Benefits of market segmentation : Customer oriented philosophy-in an optimum manner Enables tailoring of marketing program-customized for delight Enables development of strong positioning of brand-

Approaches for segmenting the rural market of India : Based on size of village population-13% villages having population of >2000 you can tap 50% of the rural population that possesses 60% of rural wealth

ORG MARG classification :

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Class I ->5000 Class II-1000 to 5000 Class III-<1000 Population single most important variable for segmentation Based on location with respect to nearby town 1. Villages near urban centres-purchase from nearby towns 2. Villages in developing districts-potential market for branded goods as income profile is good 3. Immobile and self sufficient Asiatic villages-they are media dark Based on size of farmland-land holding pattern can be a basis for segmentation of the rural market 1. 2. 3. 4. 5. Marginal farmer<1 hectare Small farmer 1-2 hectare Semi medium farmer 2-4 hectare Medium farmer 4-10 hectare Large farmer > 10 hectares

This basis is more appropriate for marketing of agricultural inputs. The weakness are : -based on land owned and not on its fertility level -silent about other occupations -silent about attitude -silent about non-agricultural activities Based on sociological characteristics

-proprietors of land like zamindars -rich farmers-dominant caste of the area -small peasants or marginal farmers-1 to 2 hectares ownership -tenant farmers-rented lands

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-agricultural labourers-daily wage basis -artisans and others-unemployed In India there are 56 distinct socio-cultural regions A. Based on income Rural rich consumer -concentrated rich consumers-punjab, Haryana, AP, Gujarat and Karnataka -scattered rich consumers-money lenders and zamindars Rural consumers around urban area-akin to urban consumers Rural consumers above poverty line-purchase manufactured goods in addition to agro products Rural consumers below poverty line-26% of population and is not of interest to marketers. NCAER has also classified : -destitutes-<Rs 16000 per annum(essential) -aspirants-16-22000(basic durables) -climbers-22-45000(consumables and consumer durables) -Consumers-45-215000(consumables and consumer durables) -Very rich>215000(market for international brands) B. Based on development level-developed, developing and underdeveloped rural Punjab, Haryana, Gujarat, Maharashtra, goa, Karnataka. Kerala, TN are considered developed C. Based on age group perspectives -pre inidependence -pain of nation building>1947 -pain of liberalization>1985 -liberalization children>1990

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-millenium children >1997

>35 laggards as influenced by beliefs and customs D. Based on distribution and internal structure of villages -nuclear -linear villages -irregularly clustered villages -scattered homesteads This classification is for the use of sales staff who are operating in the rural market to plan and execute their route to tap different retailers in villages Rural market segmentation tools-Thompson rural market index Developing a targeted marketing strategy Define relevant market Analysis of potential customers Basis for segmentation Define market segments Analyse competitors position Evaluate market segments Select market segments Finalise marketing mix

Criteria for segmentation Environment of different districts Density of population Heterogeneity Mobility, media availability and cost of access to the area System of interaction

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