Unit 3 Rural Market Segmentation

8/3/2019 Unit 3 Rural Market Segmentation

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Profile of the Rural ConsumerLow Literacy LevelLow Income LevelMassive Geographic Spread

Urban population concentrated 3200 cities town

Rural scattered over 630000 villagesReference Group

Health WorkersDoctorsTeachersPanchayat Members

Rural Bank Managers

District Managers

Occupation Principal FarmingTradingHandicraftsCattle & Poultry Farming

Media HabitsFond of music T.V Radio Video Films



} RURAL CONSUMER CLASS

The Affluent Class

The Middle Class

The Poor

Poor

Aspirant

Climbers

Well Off

Very Rich



RURAL CONSUMER BEHAVIOR} How does an individual decide to spread his available

resources (time,money effort) on consumption-relatedproducts.

} That is ² what they buy

} why they buy

} when they buy

} where they buy it

} how often they buy it

} how often they use it



Profile of Rural Consumer

} Understanding a rural consumer is difficult

}More difficult is to implement the findings}Defining a rural consumer is difficult

because

} low literacy levels

}

low capita per income



Traditional background} The consumer believes in old customs and

traditions.

} They take the consideration of their

culture. It influences a lot on thepurchasing decision.

} They look at functionality than on thestyle, brand and features.

}

The superstition is one of the draw back inthe rural market.

} They have a set of attitudes and theyfollow those only.

} It is really a tough task to change their

mindset.



Perceptions

} The perceptual experience of ruralconsumer is most important.

} In rural market the size, colour, shape,and packaging of the product matters alot. If the packaging has some changes init, then it might be a problem.

} The colors differ according to the areas.

} In south people prefer yellow as good,but in North it is a sign of a disease.



Less exposure

} The consumers have less exposuretowards the product, marketing of the

brands, on the advertisements and itsbehaviors.

} There will not be any ready handinformation available for them, which is a

great disadvantage.



Money value} They buy the products depending upon the

money they have.

} And they buy the product if at all they feelthat the product will sustain for the long termusage.

} Rural consumer does not want to pay anyextra money for the product.

} For a lower price the product should be withall attributes.

} Hence this kind of expectation they havefrom the product.



Attitude

} Their approach to buy the products is veryrealistic.

} They look at their money and spendingpatterns before going for any product.

} They buy the product if it is in their limits of

the budget.



4 As

Key

Challenges

4A

Awareness

Affordability

Availability

Acceptability

4 Ps

Promotion

Price

Product

Place



Rural MarketSegmentation



Why is segmentation useful ?} Segmentation helps firm tailor their marketing programs

} focuses an actionable and accessible set of the market.

} cuts of wasteful expenditures on unwanted consumers

} matches needs and wants of specific groups of buyers to firm·s offerings

} stimulates demands through multi-products for multi-segments

} resource allocation to segment specific marketing mix activities will be made

more efficient

} Segmentation is a way to plan rather than explain



Degree of Segmentation

}Mass Marketing

}

Segment Marketing}Niche Marketing

}Micro Marketing



Mass Marketing Segmentation

}Older approach for urban market

}

Market was dominated by production}Companies practiced mass production

and mass distribution

}Consumer choice was not taken intoaccount

}Many companies still practice massmarket segmentation for rural markets



Segment Marketing

} Based on premise that buyers differ in their needs, wants, demands and behaviors

} It evolved when consumers becamemore diverse, sophisticated and choosy

} Prerequisites:

} Understanding consumer needs and wants} Awareness of competition

} Innovative capabilities



Niche Marketing

} It is a very small group with a distinctiveset of traits who seek a special

combination of benefits

} It is a sub-group of a larger segment of

market



Micro Marketing} It involves tailor made products and programs

to suit the taste of specific locations and

individuals} Local Marketing} Products and programs for people of specific

location} Logistics problem

} Individual Marketing} Customized marketing as per individual·s taste

and requirement} Hotels, construction of homes



Conditions for Effective MarketSegmentation

} Measurable

} Accessible

} Dependent on mobile vans and nearby towndistributor

} Differentiable

} Should have distinguishing features

} Substantial} It is attractive only when it is profitable

} It should be homogenous and large enough



Segmentation Basis

GeographicSegmentation

DemographicSegmentation

PsychographicsSegmentation

Behavior

Segmentation



Geographic Segmentation

} Zones: East, west, north, south and center

}

States, districts, towns, villages}Density

}Climate

}Culture



Demographic Segmentation

} Age

} Life cycle: Infants, children, teenagers, young

adults, elders and seniors} Gender

} Marital status} Family size

} Income

} Occupation} Education

} Religion



Psychographic Segmentation

} Social class

} Caste

} Combination of education, occupation,income, wealth

} Ownership of durables

} Type of house

} Lifestyle

} Trend setters, traditionalists and chameleons} Personality

} Self confidence, sociability, creativity



Behavior Segmentation

}Occasions

}

Benefits sought} User status

} Usage rate

} Loyalty status



Approaches for segmentation therural market of India} Based on Size of Village Population

(The size of population residing in a village is a significant factor which determines the overall potential demand for a product or service in that village)

Population No.of Villages % of total VillagesLess than 200 114,267 17.9*200-499 155,123 24.3*500-999 159,400 25.01,000-1,999 125,758 19.72,000-4,999 69,135 10.8**5,000-9,999 11,618 1.8**10,000& above 3,064 0.5**

* Hardly any shop in these 2.7 lakh village** 13% of villages falling in the last three categories account 50% rural

population and 60% rural wealth.



Based on Location with Respectsto Nearby Town

} Villages Near Urban Centers.

}

Villages in Developing Districts} Immobile and self sufficient Asiatic

Villages



Based on Size of Farmland

1. Marginal Farmer :holding upto 1.0 hectare

2. Small Framer :holding 1.0-2.0 hectare

3. Semi-medium :holding 2.0-4.0 hectare

Farmer:

4. Medium Farmer : holding 4.0-10.0 hectare

5. Large Farmer :holding 10.0 hectares andabove

Unit 3 Rural Market Segmentation

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