Segmentation and Targeting Rural Markets

Segmentation and Targeting Rural markets

1. Chapter 5 Segmenting and Targeting Rural Markets

2. 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

3. Introduction 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

4. 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

5. Heterogeneity in Rural Markets

6. Pre-requisites for Effective Segmentation

7. Degree of Segmentation

8. Bases for Segmenting Rural Consumer Markets

9. 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

10. Demographic Segmentation

11. Psychographic Segmentation

12. Psychographic Segments in Rural India SEC Rural Demographic Characteristics Rural 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

13. Behavioural Segmentation

14. Behavioural Segmentation

15. Targeting

16. 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

17. Positioning

18. Rural Marketing Case Bru Instant Coffee Connect 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.

19. Do Not Over -Segment Develop Segment-by -Segment Invasion Plans Successful Mantra in Segmentation, Targeting and Positioning in Rural Markets