Segmentation, Targeting & Positioning in Rural Markets

Session II Xavier Institute of Management, Bhubaneswar

Orientations to the Market

y Selling orientation - Product orientation - Marketing orientation y C K Prahalad and V Ramaswamy Co- creating value with y y y y y y

customers Market as a target to Market as a forum The contribution revolution Customer is the king/ queen Understanding the customer is vital The Mahatmas words at railway stations Foundation of the STP process

The STP Process

Marketing Decision Segmenting Target Positioning Marketing Actions to be Undertaken Identifying and developing profiles of market segments Evaluating segments and deciding the market coverage strategy Identifying , selecting and communicating competitive advantages

Source: The Rural Marketing Book- Khasyap. P & Raut. S

Heterogeneity in Rural India

Variable Socio Cultural Differences Population Size & Density Difference in Infrastructure Media Exposure levels Literacy Levels Income levels & patterns Family Structure Example Caste Based Habitations in Villages KeralaVs Andhra Pradesh BIMARU states Vs Karnataka KeralaVs Orissa Himachal Pradesh Vs Bihar Farmers & Daily Wage Earners Joint Families & Nuclear Families

Segmentation: Issues & Options

y Measurability- Accessibility- Differentiability & Profitability y Is it easy to measure segments in rural areas? y What are the issues in accessing rural markets? y Is it necessary to segment underdeveloped markets? ( need

for differentiation) y What is the appropriate pay back period by focusing on a segment? y What should be the appropriate market targeting strategy? y Mass Segment Niche Micro approaches

Basis & Approaches to Segmentation

Segmentation Criteria Geographic Relevant Variables ( Indicative) Region & SCRs Village Size and density Climate Age Gender Income: ( NCAER ) Landownership Education ( SEC Classification) Occupation ( SEC Classification) Type of home ( SEC Classification) Lifestyle Rural, Urban & Rurban Personality Occasions Benefits sought Loyalty & usage status / rate

Demographic

Psychographics Behavioral

Demographic SEC Classification

y MRUC and IRS y Three variables Education of chief wage earner durable

ownership- type of house

Multi Attribute Segmentation

Thompson Rural Market Index 1. Developed by HTA 2. 26 variables 3. Demographics,agriculture, electrification and banking facilities 4. Weights are given to variables 5. Data from 383 districts collected 6. Classification into A, B, C, D and E markets 2. Linear combination of six variables for measuring market potential of districts 3. Classification into A, B , C , D & E markets Mica Rural Market Ratings 1. 42 socio economic indicators for ranking districts

Contd
y Rural market ratings by RK Swamy BBDO y Lincompass by Linterland ( Lintas IMAG)

Effective Market Targeting

y Segment attractiveness must match company objectives and y y y y y

resources Undifferentiated marketing- Coca Cola Differentiated marketing Tractor Marketing Single segment concentration Deciding the appropriate coverage strategy Coca Cola An arms length from desire

Positioning
y A distinctive place in the mind of the consumer y Identifying the unique features of the product/ service y Differences with respect to competition y Selecting differences having a greater competitive advantage y Communicating the best advantage to the consumer

Issues in Positioning
y Attractiveness-Distinctiveness-Pre-emptive -Affordability -

Communicability
y Under positioning over positioning confused positioning

Close of Session

Thank You