Chapter 24 MMAAA

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© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 24 OF 24 / 1
Managing Markets Strategically

Professor Noel Capon
R.C. Kopf Professor of International Marketing
Columbia Business School
New York, NY, U.S.A.
&
Professor Siddharth Shekhar Singh
Director Fellow Programme in Management & Associate Professor of Marketing
Indian School of Business
Hyderabad & Mohali, India
www.axcesscapon.com www.wileyindia.com Managing Markets Strategically
Section I: Marketing and the Firm

Section II: Fundamental Insights for Strategic Marketing
Section III: Strategic Marketing
Section IV: Implementing the Market Strategy
Section V: Special Marketing Topics
Chapter 23: International, Regional, and Global Marketing
Chapter 24: Rural Marketing
www.axcesscapon.com www.wileyindia.com
CHAPTER 24
Rural Marketing
www.axcesscapon.com www.wileyindia.com Rural Marketing
Session Roadmap
• Should the Firm Enter Rural Markets?
• Characteristics of Rural Markets
• Rural Consumer Behavior
• Developing Rural Marketing Strategy
• Implementing Rural Marketing Strategy
• Typology of Successful Rural Marketers
www.axcesscapon.com www.wileyindia.com Should the Firm Enter Rural Markets?
• 750 million rural population: low per capita income

• Market size: US$ 425 billion
• $70 billion rural market for lifestyle products exceeds urban
markets by 25 percent
• Rural per capita consumption grew by 19%, 2 percent greater than
its urban counterpart
• Great opportunities, great challenges
• High cost to serve
• Complex and challenging distribution
• Lack of sales talent
www.axcesscapon.com www.wileyindia.com Should the Firm Enter Rural Markets?
• Entering rural markets makes business sense

• Urban markets: crowded with intense competition
• Rural markets: high growth, low competition
• Entering rural markets makes social sense
• Corporate social responsibility goals
• Promotional advantages
• Example: ITC e-choupal and HUL Project Shakti
www.axcesscapon.com www.wileyindia.com Characteristics of Rural Markets
• Market structure
• Infrastructure
www.axcesscapon.com www.wileyindia.com Rural Consumer Behavior
• Value for money

• Limited disposable income
• Trust
• Access to television.
• Family decision-making
• Cultural imperatives
www.axcesscapon.com www.wileyindia.com Developing Rural Marketing Strategy
• Objectives
• Segmenting, Targeting, and Positioning
• Developing market segment strategy
Segmentation approach for rural markets

Segmentation Category Variable Groups
Geography Remoteness Connected by main – pucca – road; connected by
makeshift – kachcha – road; no proper road access
Geography Size of settlement Population more than 15,000; 10,000 to 15,000; 5,000
to 10,000; less than 5,000
Demography Profession Landed farmer; full-time employed agricultural laborer;
full-time employed other laborer; shopkeeper; part-
time laborer; other
Demography Age Infant, child, teen, youth, mature adult, senior
Behavioral Decision-making Individual (self); other family individual

unit (husband/mother-in-law/others); family (group); non-
family
Behavioral Experience New user, existing user
Socio-psychological Exposure Stays in village; visits neighboring villages;

occasionally visits town/city; frequently visits town/city;
has business or residence in town/city
Socio-psychological Attitude Conservative, liberal, practical
Positioning in Rural Markets

• Customer targets
• Competitor targets
• Value proposition
• Reason to believe
www.axcesscapon.com www.wileyindia.com Implementing Rural Marketing Strategy
The 4As Framework

• Acceptability
• Awareness
• Availability
• Affordability
www.axcesscapon.com www.wileyindia.com Implementing Rural Marketing Strategy
The 4Ps Framework

• Product
• Promotion
• Distribution (Place)
• Price
www.axcesscapon.com www.wileyindia.com Typology of Successful Rural Marketers
• Rural Performance Index (RPI). RPI measures the significance of rural

markets to overall company business — revenue and profit
proportion earned from rural markets versus urban markets, and the
sustainability and scalability of rural operations.
• Rural Innovation Index (RII). RII measures the firm’s degree of

innovation and customization for entering rural markets. High
degrees of innovation and customization in the entire marketing effort
imply high RII scores.
• New Entrants: performance — low, innovation — low

• Rural Voyagers: performance — low, innovation — high
• Rural Performers: performance — high, innovation — low
• Rural Masters: performance — high, innovation — high
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CHAPTER 24
Rural Marketing

Chapter 24 MMAAA

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Chapter 24 MMAAA

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www.axcesscapon.com www.wileyindia.

Managing Markets Strategically

Section I: Marketing and the Firm

• 750 million rural population: low per capita income

• Entering rural markets makes business sense

• Value for money

Segmentation approach for rural markets

Behavioral Decision-making Individual (self); other family individual

Socio-psychological Exposure Stays in village; visits neighboring villages;

Positioning in Rural Markets

The 4As Framework

The 4Ps Framework

• Rural Performance Index (RPI). RPI measures the significance of rural

• Rural Innovation Index (RII). RII measures the firm’s degree of

• New Entrants: performance — low, innovation — low

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