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Segmentation, targeting ,positioning in rural

markets
Importance
1-Identification of the markets and understanding
differences within rural markets based on 4-A
criterias thru Market research needed for
differentiated strategy .
2-Marketers can then use 4/7 Ps effectively.
3-Undifferentiated products in undifferentiated market
hardly exists today
4-Concept of STP used for selecting and attracting
markets due to high levels of heterogeneity in rural.
Prerequisites of effective segmentation1-Measurable- based on clear data base of incomes etc
2-Accessible- conveniently reachable
3-differentiable- distinguishing features
4-substantial- profitable thru homogeneity and
largeness

Degrees of segmentation and strategyDistinct identifiable approaches


1- mass marketing
where all customers are homogenous, and marketers
do not have prior knowledge, then consider
trickledown theory salt
2- segment marketingIdentifies different group -,lig, mig ,hig segments
3- niche MarketingServing selectively one or few group needs to acquire
specific skills and satisfy customers
4- micro marketingVery small groups- local oil mills
5-local marketing
local brands
6- Individual marketingtailoring , carpentry

Basis of segmentations in rural


1-GeographicGrouping of villages- accessible , remote, corridorclose to feeder town , Population, density- low, high,
climate hot, cold. zones N-S-E-W
Cultural regions -bundelkhand, purvanchal,UK ,etc2-DemographicsFamily structures- large families- buying patterns of
family-refill-economy packs, multi brand consumptions
family splits increasing lpg, cookers etc
Age -confectionary preferred in rural children's ,young
like music systems,
Income agro incomes-perennial ,seasonal non agro
incomes
Landownership-landholding, agro-productivity, irrigated
-rain fed crop mix and money realizations
Occupation- patterns and product category choice.
Education and house type - SEC and abc classifications
distinctive

3-Psychographicsgeographic and demographics r hardware's and


psychographics r software for purchase behavior e.g.
tractor tech specs may not b favorable but preference
goes as it is also a neighbors possession.
Relates to personality , lifestyles, values etc
4-Social classncaer survey shows in-06-07 in rural
1-affluents/very rich hh owning cars /jeeps r 5.6%
2-the well offs,- hh owning bikes , durables r 5.8%,
3- climbers- hh owning- audio systems , TV's mixers
etc, r 22.4%
4-aspirants, hh owning bicycles, fans etc 44.6%
5- destitute-pressure cookers, watches etc- 20.2%
5-Lifestylessec- r-1 landlords adopting urban life styles, r-2 rich
farmers not educated, r-3- average 2-5 acres, r-4little or landless, bpl

1- trendsetters-use latest products, fallow celebrities,


2- adopters- average financials, indecisive- fallow o.l.,
3- traditional- conservatives, women as homemakers
6-Behavioral1-purchasing occasionsfestival / mela or harvest times- for wider choice and
attractive prices with buying power. e.g.-utsav time of
Asian paints
2-benefits soughteconomy, performance, durability, status etc, e.g..
dabur dunt manjan for low incomes and red
toothpaste for middle and gel for high
3-user statusfirst time user- use demo, regular user- maintain
availability and potential users give test rides , free
trials to change behavior. use it and then pay
4-Usage ratesfamily packs or economy packs or sachets

5- loyalty statustakes long to patronize brand , more brand loyalvillages dominated by nirma , wheel , escort ,
mahindra ,indica etc
6-Place of purchaseDaily use village shops, utensils cloths etc from
haats, agro inputs , durables etc from nearest
towns, cheap jewelry , livestock etc from mela
and legal , major health problems at state
capitals.
Multi-attribute segmentationSingle variables insufficient to segment so HTA
developed rural index to segment districts as
ABCDE class of markets based on 26 variables
like demographics, agro inputs, electrification ,
banking facilities etc. other agencies have also
developed ratings for districts.e.g. mahrashtrakolhapur sangli, pune etc.

TargetingSegmented markets need to b evaluated/selected to


target for effectiveness based on-.
1-overall attractiveness
Purchasing power - Integrated farming villages offer
higher per capita prosperity so accept better products
and services
2-Company objectives and resource competencieslong term sustainable with resources to invest ITC,HUL
Selection basis1- Potential ranking as high / medium / low for selective
attention
2-Coverage- basis ,as strategy based on product range,
etc
Undifferentiated- mass distribution, communication,
single product line, low cost, e.g. coca-cola, fair and
lovely

Differentiated/targeted marketing
strong identity, product category, class approach, more
costs but higher sales and profits, and more loyal
consumers. e.g. tractor , utility vehicle cos
selectiveniche marketing ,aimed at small sections of consumers.
ex-,hul brook bond tea
Coverage choicevariables

undifferentiated

differentiated

concentrated

Company
resources

Moderate

Large

limited

Product
availability

Less

More

less

Plc stage

Introduction

Growth

Intro/maturity

Market
variability

Less

High

high

Positioning1-Designing offering and its image to occupy


distinctive place in the mind of target customers.
2-Provide a platform for brand to reach the target
customer on the basis-.
1- u.s.p.
2- different features for competitive advantages
3-communicating differentiated advantages to target
markets for constructing a visual map the in mind of
customer
brands as expensive , economical, traditional ,
modern, superior, inferior - tandurasti
4-Marketers also compare competitors brands thru
mind mapping and make efforts to reposition-

additional inputs for segmentation in rural


Being highly scattered over wide geographical
areas identifying potential markets for products
and services needs considerations1-Irrigation facilities- HYV in irrigated -increased
farm incomes,
2-Electrcity- for pumps, fmcd goods,
3-size of land holding- more crops , higher income
4-type of crops- cash crops vs. food grains,
5-level of farm mechanization,
6- infrastructure all weather roads, post offices,
7- taluka /district h.q.- wholesalers, distributors
located ,
8-small scale industries- rice mills, oil mills, gives
additional incomes,
9-availability of sales outlets-, 10 reach of mass
medias
Index of villages

Market classification1-FMCG and FMCD, 2-agro inputs, 3- servicesinsurance,banking,4- agro/farm products


target customers1-Users or consumers-progressive farmers,
horticulturists, govt employees. School teachers, 2Opinion leaders-plays role , 3- sellers- a) distributors,
wholesalers, b) retailers- roles
Positioning-buying patterns- related 1-literacyawareness, 2- brand loyalty- highly brand loyallifebuoy-small and rexona, lux little higher class,3price sensitivity-sachets,4-husband domination and not
wife like in urban,5- opinion leaders influences,6-WOM,
7- shop loyalty-credit etc,8- pop materials helps, color
identification schemes, ceat shopees,9-use of local
idioms, phrases- literal translations not working. 10-low
awareness- so duplicates, still as cash memos r not
insisted.