Rural segmentation

MODULE 5SEGMENTING, TARGETING,

POSITIONING AND PRODUCT STRATEGY

PRESENTEDBY

PRAVEEN PRABHU AND

PARTHA SARTHI CHATTERJEE

Introduction• With the increase in population and with the increased target

groups undifferentiated products for an undifferentiated market is a thing of the past.

• Initially, marketers in India concentrated on segmenting the urban market only as it contributed to 75% of the revenue. With the saturation of the urban market in recent years and the growing demand in rural markets simultaneously, the need to segment the market is being felt increasingly.

• As economies evolve, consumer choice and requirements become more focused. This calls for Segmenting, Targeting and Positioning (STP).

Segmenting, Targeting and Positioning.Decision Actions

Segmenting •Identifying various bases for segmenting markets•Developing profiles of market segments

Targeting •Evaluating the market segments for their attractiveness•Deciding the market coverage strategy

Positioning •Identifying a set of possible competitive advantages of the brand•Selecting the right competitive advantage•Communicating the chosen competitive advantage to the target customers.

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.

• According to Philip Kotler, “Market Segmentation os dividing a market into distinct groups of buyers who have distinct needs, characteristics, or behaviuor and who might require separate products or marketing mixes.

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.

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.

Segmentation

• Heterogeneity of the Rural Market:There are a number of factors that display the heterogeneity of

the rural market;• Socio-cultural differences across regions• Variation in population size and population density• Difference in levels of infrastructural development • Variations in literacy levels• Differences in income levels and patterns of income flow• Family structure

Segmentation

• Prerequisites for Effective Segmentation:– Measurable– Accessible– Differentiable– Substantiable

• Homogeneity• Largeness

Segmentation• Degrees of Segmentation:– Mass Marketing

• Considers all customers homogeneous.– Segment Marketing

• Identifies customers as different groups– Niche Marketing

• Serves selectively one or a few customer groups– Micro Marketing

• Focuses on individuals or very small groups– Local Marketing– Individual Marketing

Segmentation

• Basis of Segmentation and Approaches to Rural Segmentation:

• Geographic Segmentation– Regions– Village population and density– Culture

Segmentation

• Demographic Segmentation– Age & Life Cycle– Family Structure– Income– Landownership– Occupation– Education and House Type– Religion & Caste

Segmentation

• Psychographic Segmentation– Social Class– Lifestyle

Segmentation

• Behavioural Segmentation– Occasions– Benefits Sought– User Status– Usage Rate– Loyalty– Place of Purchase

• Multi-attribute Segmentation

SegmentationBasis of Segmentation

Targeting

Targeting involves evaluating various segments and selecting how many and which one to target. The three aspects of targeting are evaluating, selection and coverage

Targeting

• Evaluation: - Evaluation and selection of segment: The two main factors to be considered here

are: the overall attractiveness of each segment and company’s objectives.

- Overall attractiveness: Size of the marketing may be huge but the

purchasing power is limited.

Targeting

- Company objective and resource competencies:

• Selection of segment: Selection of the segment can be made by rating

them on predetermined scale(low, medium, high) in respect of the evaluation factors

Targeting

• Coverage of segments: - Undifferentiated Marketing:

It takes into consideration what is common among consumers and tries to include it in the offer. Hence, it relies on mass distribution and mass advertisement. Due to this the company can afford to set its price low.

Targeting

-Differentiated Marketing: It investigates and identifies differences

between segments and tries to match the market offer to the desires and expectation of each segment. This strategy results in strong identification of the company in the product category, higher sales and can get more loyal consumers.

Targeting

- Concentrated Strategy: It is important for them to have multi-

segment strategy rather than a single segment strategy to ensure adequate Return On Investment and to avoid the risk of change in preference of the consumers.

Positioning

Positioning is the act of designing the company’s offering and image so that it occupies a distinctive place in the mind of the target segment.

Positioning

• Identifying the positioning concept• Product differentiation• Service differentiation• People • Image • Selection of positioning concept• Developing the concept

Positioning

• Communicating the concept - Deciding how many differences to promote - Deciding which positioning to promote

Product Strategy

• For transferring a marketing strategy into a marketing program the marketer needs to decide on the Marketing Mix that is to pursue the marketing objective in the rural market.

Product Strategy

4Ps (Tools) 4As (Challenges)

Product Acceptability

Price Affordability

Place Availability

Promotion Awareness

Marketing Mix Challenges

Product Strategy

• Product Concepts and Classification:– A marketer should keep the following aspects ion

mind while taking the products to rural markets. Products intended for rural markets should be:

1. Simple2. Easy to use3. Visually identifiable4. Affordable

Product Strategy

• Five Levels Of Products:1. Core Benefit2. Basic Product3. Expected Product4. Augmented Product5. Potential Product

Product Strategy

• Rural Product Categories:1. FMCG

2. Consumer Durables

3. Agri Products

4. Services

ThankYou