Segmentation of rural marketing

Market segmentation

1. Segmentation of Indian Rural Market Dr. Syed Mohd Jamal Mahmood Assistant Professor, School of Management GD Goenka University

2. Introduction Ma . rketer can target a market with two broad strategies Mass Market Strategy Market Segmentation strategy Market Segmentation is the process of identifying small Markets that exists within a large market .

3. What is Segmentation ?  Segmentation is the process of dividing a heterogeneous market, into several sub- markets or segments, each of which tends to be homogeneous in all significant aspects.  Heterogenity Population size, socio cultural difference between regions, difference in income level, family structure.

4. Segmentation  Market Segment : A group of consumers who respond in a similar way to a given set of marketing efforts.  Market Segments helps distinguish one customer profile from another within a given market.  Segmentation facilitates in understanding the needs of target buyers.

5. Segmentation  75% of people in rural India are engaged in agriculture, but they cannot all be clubbed under one omnibus category of farmers.  There are;  large farmers,  medium farmers,  small farmers,  marginal farmers and  agricultural labourers.  Their income levels, lifestyles and behaviour are different from each other.

6. What are Prerequisites for an effective Segmentation:  Measurable - The variables in each segment should be distinct, clear and measurable.  Accessible - It is important that marketers should access each segment so that they can serve it.  Differentiable - Each segment should differentiate from the other.  Substantial - A segment should posses the following characteristics i.e. homogeneous (similar in terms of perception, learning, attitudes and action), large.

7. Degrees of Segmentation:  Mass Marketing  Segment Marketing  Niche Marketing  Micro Marketing ( i )Local Marketing (ii)Individual Marketing  Mass Marketing : Most marketers used this in rural markets. All consumers being treated the same. Company could target maximum no. of consumers. First step in marketing-less market knowledge

8. Segment M arketing  Identifies customers as different groups   E . g . 1 : Colgates 10Rs sache in 2000 aimed rural consumer Eg2 : LG s low cost television Sampoorna(1999)

9. Niche Marketing  Niche marketing is used when there is as small group with specific need . Indian rural market is not matured to this level Eg: Hero Honda bikes, Nokia mobiles

10. Micro Marketing  In this marketers focus on individuals or on very small groups just t o satisfy a particular taste or need of customer. Eg: Dabur launched Anmol,a mustard and amla based hair oil to target rural consumers in northern markets who used loose mustard oil.50 ml pack worth Rs 10.

11. Micromarketing is divided into Two.. i)Local marketing This involves designing brands and promotions to suit the needs of local customers on the basis of geography and demography. Eg:Philips promotion programme in TamilNadu Engavettu superstar. In TN Rajnikanth is the superstar. -- Castrol Using Rajani Kanth Too.

12.  In Andra pradesh they launched the campaign maa inti megastar.  In AP Chiranjeevi is the megastar This strategy helped them to increase their television sales by 25-30% Similarly Coca cola India Used Chiranjeevi in Thumbs Up Promotions.

13. Individual Marketing This involves designing the products according to the exact need of Individual s’ can get the product made exactly to his need . Eg: carpentry, tailoring .

14. Why is segmentation useful ? Segmentation helps a firm in tailoring their marketing programs Firm’s can focus , take action and access new set of the market. It helps in reducing wasteful expenditures on unwanted consumers Firm’s can easily match needs and wants of specific groups of buyers to firm’s offerings Segmentation stimulates demands through multi-products for multi-segments . It helps in resource allocation to segment specific marketing mix activities and make it more efficient Segmentation is a way to plan rather than explain .

15. Bases Geographic - Rural Urban , Zones, Climate, States, Districts, Population, Culture. Demographic – Age , Lifecycle, Gender, Marital Status, Family Size, Income, Occupation, Land-Holding, Education, Religion. Psychographic – Lifestyle – Trend Setters, Chameleons Personality – Pleasant and Assertive. Behavioral Segmentation - Occasion, User Status, Usage Rate, Loyalty, Place of purchase, product possession categories. Basis of Segmentaion

16. Geographic Segmentation: Zones - East, West, North, South Climate - Tropical, Rainy and Cool States - 30 States including UT Districts - With different market potential Villages - Corridor Villages (close to feeder town), Accessible Villages, Remote Villages Population Density - High and Low Culture - Traditional Vs Modern. B e a u t iful SOUTH Sensual, Rational, Diligent http:// www.facebok.com/mr.fortyseven

17. Demographic Segmentation Age - Under 6, 6-12, 13-19, 20-40, 41-60, 60+ Life Cycle- Infants, Children, teens, young adults, elders, seniors Gender - Male, female and others Marital Status- Married and Unmarried Family Size- 1 to 2, 3 to 4, 5+ Income- Below 25k, 25k-50k, 50k-75k, Above 75k Occupation - Student, Farmer, Labour, Businessman, Govt. or Private Employee. Land Holding- Landless, Marginal, Small, Large Education - Illiterate, Elementary School, High School Religion - Hinduism, Islam, Christianity

18. Psychographic Segmentation Lifestyle - Trend Setters, Traditionalist, Chameleons Women- Capable homemaker, Career Woman, A free Sprit Personality - It can be define with the help of self confidence, sociability, adaptability, assertiveness, autonomy, sensitivity, creativity, autonomy etc.

19. Some examples are  Affordability Has changed the Life style -Godrej introduced three brands of Cinthol, Fair Glow and Godrej (soap) in 50-gram packs, priced at Rs 5.  Adidas and Reebok increased their sales by 50% in rural markets by reducingprices. Size and design changes  Videocon introduced a washing machine without a drier for US$60;  Philips launched a low-cost smoke less chulha (stove);  DCM Shriram developed a low-cost water purifier especially for rural areas. Improving product acceptance --  LG Electronics developed a customized TV (cheap and capable of picking up low-intensity signals) for the rural markets and christened it Sampoorna. It sold 100,000 sets in the first year;  Coca-Cola provided low-cost ice boxesas regular power outages meant families could not depend on refrigerators.

20. Behavioural Segmentation Occasions - Family, Religious, national, political and weekends Benefits s ought - Emotional, rational and moral U s e r Status - Ex-user, first time, regular, and potential Usage Rate – Heavy, Medium, Light Loyalty - Strong, Weak, non- loyal Place of Purchase - Retail outlets, haats, feeder towns, mobile vans Product Possession- Product Hierarchy

21. Socio-economic Classification It is a measure used to classify and target consumers based on certain parameters, as defined by Market Research Society of Indian (MRSI) in 2011. SEC Classification is based on two variables- Education of Chief Earner - Numbers of Consumers Durables owned by family. 11 durables- Electricity connection, Ceiling fan, LPG Stove, Two Wheeler, Colour TV, Refrigerator, Washing Machine, PC/ Laptop, Car, AC, Agricultural Land.

22. Grades Of SEC System: Based on these two variables 12 grades are being identified in SEC system A1,A2, A3 B1, B2 C1, C2 D1, D2 E1, E2, E3 These 12 groups are applicable to both urban and rural India

23. The Grid of SEC

24. Thank You