6

SELECTING AND ATTRACTING MARKETS

Rural Marketing: Text and Cases

C. S. G. Krishnamacharyulu/Lalitha Ramakrishnan

 Enable Students in segmentation of markets, targeting and positioning of products in Rural Markets.

Rural Marketing: Text and Cases

LEARNING OBJECTIVES
After studying this chapter, you should be able to:

Know the concept and methods of segmenting markets

Examine the appropriateness of multi-variable segmentation

approaches Understand the importance of women and youth as the emerging segments Discuss the approaches to marketing coverage and positioning.

Rural Marketing: Text and Cases

THREE KEY DECISIONS

Decision Segmentation 1. Actions Identification of various bases for segmenting markets 2. Targeting 3. Developing profiles of the market segments Evaluating the market segments for their attractiveness 4. Positioning 5. Deciding the market coverage strategy Identifying a set of possible competitive

advantages of the brand

6. 7. Selecting the right competitive advantage Communicating the chosen competitive advantage to the target customers

Rural Marketing: Text and Cases

CASE FOR SEGMENTATION

Substantial differences exist among rural people.

Occupational Differences About 69.4 per cent of urban consumers are found in employment or own businesses as against 22 per cent in rural areas.

Income-level Differences Rural India has an average per capita income that is half of that of urban India. At the bottom of the pyramid, in the income bracket of less than Rs 75,000 per annum, we find 428 million people in rural areas as against 49 million in urban areas.

Different Educational Levels About 26 per cent of rural Indias chief wage earners (CWEs) are illiterate compared to 7.9 percent in urban India. Seven per cent of rural CWEs are graduates compared to 29 per cent in urban India.

Rural Marketing: Text and Cases

BASES FOR SEGMENTATION-GEOGRAPHIC

Characteristics Variable Geographic Zones/region Climate States Districts Villages Categories East, West, North, and South Tropical, Rainy, and Cool 30 States and 6 Union Territories With different market potentials Corridor villages , Accessible villages and Remote villages Population density High and Low

Culture

Traditional Versus Modern, Socio-cultural regions

Rural Marketing: Text and Cases

DEMOGRAPHIC BASES FOR SEGMENTATION

Demographic Age Under 6, 6 to 12, 13 to 19, 20 to 40, 41 to 60, 60+

Lifecycle
Gender Marital status Family size Income

Infants, children, teens, young adults, elders, seniors

Male, female Married, unmarried 1 to 2, 3 to 4, 5+ Rs 25,000 and below, Rs 25,001 to 50,000, Rs 50,001 to 75,000, Rs 75,001 to Rs 100,000, above Rs 100,000

Occupation

Farmer, agricultural labourers, artisans, non-agricultural labourers, businessmen, professional employees, retired persons, students, unemployed

Land holding

Landless, marginal, small and large farmers

Education

Illiterate, literate, elementary school, high school, college,

university

Religion

Hindu, Muslim, Christian, others

Rural Marketing: Text and Cases

PSYCHOGRAPHIC AND BEHAVIOURAL BASES FOR SEGMENTATION

Psychographic Lifestyle Personality Behavioural Occasion Benefits sought User status Trend setters, Traditional Pleasant and assertive Family, religious, national, political and weekends Aesthetic, emotional, rational and moral Ex-user, first time user, regular user and potential user Usage rate Loyalty status Place of purchase Heavy, medium and light Strong ,weak, non-loyal Retail outlets/Shakti Ammas, haats, feeder towns, mobile vans

Rural Marketing: Text and Cases

GEOGRAPHIC SEGMENTATION BASED ON PROXIMITY TO TOWN

Segment Corridor villages Characteristics Close to town (within 2 km Implications for marketers An extension of the urban market. Adopt the

radius). Connected by public and same marketing strategy with minor

private transport. modifications.

Accessible villages Away from towns. Connected by Design channels to reach these places.
public transport. Supplement with CSR programmes.

Remote villages

Far-flung , scattered small villages

Design innovative distribution strategies with high CSR/development component.

Rural Marketing: Text and Cases

DEMOGRAPHIC SEGMENTATION

Age groups Infants (milk powder, cereals, diapers); Teens (sports goods); Adults (brief cases, magazines); Seniors (walking sticks).

Gender Different grooming products for male and females. Marital status Married (honeymoon packages); unmarried (fast food centres) Family size Economy refill packs for large families. Colgate is a family toothpaste; Close-up is personalized with a focus on the youth.

Income High income groups: Super premium products . Low income groups: Economy products.

Rural Marketing: Text and Cases

Occupation

Farmers (seeds, fertilizers, pesticides, tractors, pump sets); Students and

employees (books and stationery items, Internet facility, etc)

Landholding Large landholding allows the buying of farm machinery and bulk purchase

of seeds, fertilizers, etc.

Religion Christians (Holy Bible, crosses, candles), Hindus (coconuts, fruits) and Muslims (white caps, incense sticks, Holy Quran)

Rural Marketing: Text and Cases

PSYCHOGRAPHIC SEGMENTATION
Lifestyle

Trendsetters: Latest fashion goods, products with extra features like mobile with music, camera and the Internet.

Chameleons: Both aspirational products like those preferred by

trendsetters and value-for-money products preferred by traditionalists. Traditionalists: Economy, value-for-money products.

Personality Pleasant personality: Preference for skin care products, aesthetic and functional durables, picnics, parties and photography. Assertive personality: Prefer display of confidence, Fair & Lovely, Coke or Pepsi.

Rural Marketing: Text and Cases

BEHAVIOURAL SEGMENTATION
Occasions: Occasions can be classified as under.

Family occasions: marriage, birthday. Religious occasions: Festivals, melas, village god festivals

National occasions: Independence Day, Republic Day

Political occasions: Elections and meetings Weekends: haats

Benefits sought: In case of toilet soap:

aesthetic (fragrance, skin-glow) emotional (pleasant experience ) rational (value for money, cleanliness, durability)

moral (hygiene at social places)

Rural Marketing: Text and Cases

User Status

Ex-user: Target for conversion by highlighting benefits

First-time user: Reinforce confidence by stating benefits and explain better

usages Regular user: Educate about better usage or additional usages Potential user: Target for conversion by highlighting benefits

Usage rate: Heavy and low

Pepsi has 300 ml bottles priced at Rs 9. To meet the consumption of light users, it introduced Chota Pepsi (200 ml) at Rs 7. Brand loyalty: Strong and weak

Offer incentives and new uses to reinforce loyalty. Offer variety for nonloyals to switch from one brand to another.

Rural Marketing: Text and Cases

PLACE OF PURCHASE

Retail outlets/Shakti ammas Weekly haats or shandies Occasional melas and jaataras Nearest town, the feeding centre for villages Mobile vans

Rural Marketing: Text and Cases

PRODUCT POSSESSION CATEGORIES I, II AND III

Purchases in Category II are made after the purchase of three or four items in

category I. Purchases in category III are made after purchasing five to six
products in category I and II. Sometimes it can be a straight jump from category I to category III. NCAER Classification
Category I Product price Below Rs 1,000 Products Wrist watches, transistors, fans, bicycles, electric irons, mono cassette recorders, pressure cookers/pans

II

Between Rs 1,000 and Rs 6,000 Two-in-ones, TV (B&W), sewing machines, mixergrinders, geysers, vacuum cleaners

III

Above Rs 6,000

Two-wheelers, refrigerators, TV (colour), VCRs/ VCPs, washing machines

Rural Marketing: Text and Cases

MULTIVARIABLE SEGMENTATION
Tools Thompson Rural Market Index (TRMI) MICA Rural Market Ratings (MRMR) Developers Hindustan Thompson Associates Ltd Mudra Institute of Communications, Ahmedabad (MICA) LinQuest Relative Development Index Ogilvy Radar R-panel Socio-economic classification (SEC) Initiative Media of Lintas Centre for Monitoring Indian Economy (CMIE) Ogilvy ORG-MARG NCAER Media Research Users Council (MRUC) and Indian Readership Survey (IRS)95 Household Potential Index (HPI) Hansa Research for Media Research Users Council (MRUC)

Rural Marketing: Text and Cases

Thompson Rural Market Index

Based on 26 variables like irrigated area, fertilizer consumption, tractors, bank deposits etc, they have covered 335 districts & developed a index with 5 class of markets namely;A to E. 60-100 A, 40-60 B, 30-40 C, 20-30 D < 20 E

Rural Marketing: Text and Cases

EMERGENT SEGMENTS

Women: Population is 48.1 per cent; illiteracy is 62 per cent; labour force participation rate of women is 22.7 per cent; in agriculture and allied industrial sectors 89.5 per cent of the total labour force is female.

Youth: Fifty per cent of the rural population (25 and 40 years of age); earning members; brand knowledge is high; internet savvy; innovation adopters.

Rural Marketing: Text and Cases

TARGETING
Segment Evaluation Sheet Sl No. Criteria Rating Scale High 1 2 Profitability Growth 3 3 Medium 2 2 Low 1 1 Nil 0 0

Attractiveness
Strengths (resources) Threats (competition) 3 0 3 2 1 2 1 2 1 0 3 0

Company objectives (degree of consistency)

Limitations

Rural Marketing: Text and Cases

Coverage of Segments

Variable

Strategy Undifferentiated Differentiated Large More Growth High Concentrated Limited Less Introduction High

Company resources Product variability Product lifecycle stage Market variability

Moderate Less Introduction Less

Rural Marketing: Text and Cases

POSITIONING
Positioning involves three tasks

Identifying the differences of the offer vis--vis the competitors offers Selecting the differences that have greater competitive advantage Communicating such advantages effectively to the target audience.

Identify Differences The marketing offer may be differentiated along the following lines:

Product

Services
People Image

Rural Marketing: Text and Cases

SELECTING THE RIGHT DIFFERENCES AND USP

Criteria for evaluation

Attractive Does it provide value to the customer?

DistinctiveIs it different from that of its competitors? Pre-emptiveIs it very difficult for competitors to copy it? Affordable Can buyers pay for it?

Communicable Can the difference be clearly expressed?

Unique Selling Proposition (USP): best quality, best technology, best service, etc.

USP

Communicating

A high-tech position may be communicated by futuristic products, classy ads in elite journals and large showrooms with good atmosphere

Rural Marketing: Text and Cases