Rural market segmentation and Targeting & Rural Marketing Research

Submitted To

Sanmeet Sidhu

Submitted By

Arsh KoulNavpreetManish Mehra

Rural market segmentation and Targeting & Rural Marketing Research

The right product, in the right place, at the right time, and at the right price.

According to Kotler “Marketing is the social process by which individuals and organizations obtain what they need and want through creating and exchanging value with others”.

What is marketing

Rural marketing involve delivering manufactured or processed inputs or services to rural producers or consumers.

Rural Marketing is also defined as any marketing activity in which one dominant participant is from a rural area.

Rural marketing is a two- way marketing process that includes the flow of goods and services from rural to urban areas and the flow of goods and services from urban to rural areas as well as the flow of goods and services within rural areas.

What is rural marketing

A market segment is a classification of potential private or corporate customers by one or more characteristics, in order to identify groups of customers, which have similar needs and demand similar products or services concerning the recognized qualities of these products, e.g. functionality, price, design, etc.

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. The division is based on the premise, that different people have different preferences.

What is segmentation

1. Geographic Segmentation2. Demographic Segmentation3. Psychographics Segmentation4. Behavioral Segmentation5. Multi Attribute Segmentation

Segmentation can be done on basis of

Segmentation on the basis of geography is done depending on various factors such as

Region: North, South, East and West.˃ Proximity to the feeder town: Density:  The number of people per sq. km Climate: Moderate, rain fed or dry with scanty rainfall. Level of Irrigation: Whether good, moderate or scanty.

Geographic Segmentation

Demographic segmentation calls for grouping of their demographic characteristic

It is based on the population, age group, literacy level and income of the rural consumer.

Demographic Segmentation

Such segmentation which is done using variables such as Lifestyle of the people, (whether rigid, traditional or changing), Occasion, (whether on a regular day or a special occasion), Benefits sought from the product (such as Quality, Price and Service), and Loyalty to brands (whether Low, Medium or High.)

Psychographics Segmentation

It takes into account the specific behavior of a consumer related to occasions, benefits, user accounts etc.

Behavioral Segmentation

In practical terms it is very difficult for a marketer to depend on a single variable for segmenting the market. It is a complex function since it depends on multiple factors that define market dynamics. In order to identify smaller, well defined, meaningful target groups marketers use several variables.

Multi Attribute Segmentation

Untapped rural potential 6,27,000 villages across the country account for 70% of

population 60% of national demand for various product categories

comes from rural areas 41 million kisan Credit Card have been issued

What makes rural market attractive.

Once segmentation has been done the marketer needs to evaluate each segment to decide which segment to target.

Targeting involves evaluating various segments and selecting how many and which one to target.

Targeting

ASPECTS

Targeting

EVALUATION

SELECTIONCOVERAGE

While evaluating market segments two broad factors are considered

1. Overall attractiveness of each segment2. Company’s objective and resource competencies.

Evaluation

While evaluating segments in rural one should not be impressed by size alone. This is because in rural the size of market may be big but purchasing power on people in rural area is limited. Therefore the growth of rural markets for different product categories should be evaluated while targeting the market.

Overall attractiveness of each segment

Marketers should evaluate the segment opportunity with reference to their short term and long term objectives. If a company’s objective is to achieve long term sustainable sales volume by expanding its customer base then it has to go rural instead of expecting consumers to come to urban markets to purchase the products and services.

Company’s objective and resource competencies

COVERAGE

UndifferentiatedMarketing Differentiated

orTargeted Marketing

Concentrated Segmentation

Undifferentiated Marketing takes into consideration what is common among consumers and tries to include it in offer. It majorly relies on mass distribution and mass advertising. Only one product line keeps down the cost of research and product management. Due to low cost incurred in production and distribution the company can afford to set its price low.

Undifferentiated Marketing

Differentiated marketing strategy investigates and identifies differences between segments and tries to match the market offer to desires and expectations of each segment.

This strategy results in:- Strong identification of company in product category. More costs but higher sales and profitability. More loyal consumers.

Differentiated/Targeted Marketing

Due to small number of consumers in each segment, targeting only one segment would spread marketing efforts thinly over a vast area. As companies invest a great deal of time, effort and money to reach rural markets, it is important that they should have a multi segment strategy rather than single segment strategy to ensure adequate returns on investment.

Concentrated Segmentation

In the case of single segment there is a risk of change in the preference if consumers although there is a lower risk of this in rural, as the pace of change in preference if consumers is slower. This is also known as niche marketing. EG HLL dominates the mass market in rural with a series of niche brands each aimed at small section of consumers. With brands like LUX, LIRIL etc HLL targets different consumer segment in rural market.

Research is the guidepost to laying the foundations of a successful marketing program, it must be planned, keeping in mind what is the objective of conducting research. It must also be designed in order to get maximum inputs, on an accurate and authentic framework, in order to yield the right results.

Rural market research

Marketing research is a function which links the consumer, customer and public to marketer through information. Information used to identify and define marketing opportunities and problem, generate refine and evaluate marketing actions, monitor marketing performance and improve understanding of marketing as a process.

According to American Market Association

Rural Marketing Research

Types

Primary Sources Secondary Sources

Primary data are collected especially to address a specific research objective. A variety of methods ranging from qualitative research to surveys may be employed.

Some of the sources are1. Retail shops2. Tea stalls3. Schools 4. Melas 5. Influence groups

Primary Source

These are the readymade sources of information that a marketer can use for his or her research. This kind of data can be collected from government publication websites, research agencies.

Some best sources from where marketer can get information are

1. Government Websites2. Private Bodies 3. Publications

Secondary Sources