Segmentation of Rural Market

Marketer can target a market with two broad

strategies.

Mass Market
Strategy

Market
Segmentation
strategy

Market Segmentation is the process of identifying small

Markets that exists within a large market .

Mass Marketing or Undifferentiated Marketing

e.g. Ruf & Tuf Jeans,
Segment Marketing - Cars
Niche Marketing specialize to a narrowly defined
customer group Temple jewellery for South Indian
women wanting to take part in cultural programmes
Levels of Market
Segmentation
Local Marketing Market around sector 44
One to One Marketing
Individual Marketing
Mass customization
ability to prepare on a
mass basis individually
designed products

Why is segmentation useful ?

Segmentation helps firm tailor their marketing programs
focuses an actionable and accessible set of the market.
cuts of wasteful expenditures on unwanted consumers
matches needs and wants of specific groups of buyers to firms offerings
stimulates demands through multi-products for multi-segments
resource allocation to segment specific marketing mix activities will be made
more efficient
Segmentation is a way to plan rather than explain

Geographic - Rural / Urban; metropolis/city/town/village;

modern retail stores/kirana stores / mandis/ haats
Demographic Age, Family Size (nuclear or joint ), gender,
Income, Occupation, Education, SEC, religion, race,
Nationality, social class
Bases
Psychographic Use of Psychology and demographics
Lifestyle (AIO) Nike, Benetton, * Personality Femina
woman of substance
* Values HiDesign leather accessories consumers
who hold the value style and elegance in a classical sense
Behavioral Segmentation next slide

Behavioral Segmentation - based on buyers

knowledge of, attitude towards,
use of, or response to a product
Occasions Marriage, Birth Archies and Hallmark cards
Benefits In soaps - Dettol antiseptic, Lux Beauty
User Status Non users, first time users, potential users, regular user
Usage rate Light users, medium users, heavy users
Buyer Readiness State Cold Prospect, Hot Prospect
Loyalty status Hard Core Loyals, Split Loyals, Shifting Loyals, Switchers
Attitude enthusiastic, positive, indifferent, negative, hostile

Segmenting the Market: Nirma vs HLL

Until about twenty ago, the rural market in India was considered a
homogenous decade of the 1980s was a significant one for Hindustan
Level Ltd (HLL), when the giant and undisputed market leader in
detergent (Surf) in Indian Suffered significant losses at the hands of a
new and small firm , Nirma Chemicals . Nirma immediately caught th
fancy of the middle and lower-income customers, who were finding it
difficult to make both ends meet with their limited monthly income.
Nirma was the lowest priced branded washing powder available in
grocery and co-operatives stores. The middle class house wife was
happy as she could choose a lower priced washing powder against
Surf, Which was beyond her budget
Around 1984 , HLL decided to take a fresh look at the market.
Research conducted across the country revealed that different income
groups of consumers had varying expectorations from detergent and
washing powder. Thus, to counter the attack from Nirma, HLL
launched Sunlight (Yellow), Wheel (green) and Rin (blue) detergent
powders for different market segments. This strategy of segmenting
the market helped HLL win back part of its lost market.

Segmenting the Markets

T-Series introduced audiocassettes at unbelievably
low price and took away a huge share from the
market leader HMV.
Cavin Kare studied the Shampoo market and came
out with Chik Shampoo priced at 50 paisa per
sachet and the brand became an instant hit in rural
areas.
Titan has introduced Sonata brand watches; priced
between Rs 350/- and Rs.800/- to meet the
requirement of price sensitive rural and semi urban
consumers.

Utsav Time
Asian Piants Ltd(APL) is Indias largest paints company and ranks
among the top ten decorative coating companies in the world today.
The company has come a long way since its small beginning in 1942.
APl was the first Indian company to go rural In 1999 It launched
Tractor enamel paint in rural markets, rural customers started using it
to paint the horns of their bullock. APL survey the rural markets
extensively with the able support of its advertising agency Ogilvy
outreach. They found that there was a gap in demand in the market for
paints used for houses. These were two choice available for rural
people : the traditional chuan powder, which cost around Rs9 per kg
and enamel paint which cost around Rs 50 per liter was very
expensive for most rural customers. Chuan powder however was not
long lasting .
Hence APL launched Utasv distemper exclusively for rural markets in
1999. Utsav is good example of brand that used excellent STP for
rural markets.

Segmentation Variables
Geographic
Variables

Demographic
variables

Psychographics
Variables

Product Related
Variables

Segmentation variables are the parameters and

characteristics of people comprising total market for o
product category on which can segment them into
groups.

Conditions fro Effective Market Segmentation

1.Measurable

Customer Oriented Philosophy

2.Accessible
Enables Tailoring of
marketing Programme
Profitable

Data
Availability

Enables Development of
strong positioning of Brand

Approaches for segmentation the rural

market of India

Based on Size of Village Population

(The size of population residing in a village is a significant factor which
determines the overall potential demand for a product or service in that village)
Population
No.of Villages
% of total Villages
Less than 200
114,267 17.9*
200-499 155,123 24.3*
500-999 159,400 25.0
1,000-1,999
125,758 19.7
2,000-4,999
69,135 10.8**
5,000-9,999
11,618 1.8**
10,000& above
3,064
0.5**
Note:* Hardly any shop in these 2.7 lakh village
** 13% of villages falling in the last three categories account 50% rural population
and 60% rural wealth.

Based on Location with Respects to

Nearby Town
Villages Near Urban Centers.
Villages in Developing Districts
Immobile and self sufficient Asiatic Villages

Based on Size of Farmland

1.
2.
3.
4.
5.

Marginal Farmer
Small Framer
Semi-medium
Farmer:
Medium Farmer
Large Farmer

:holding upto 1.0 hectare

:holding 1.0-2.0 hectare
:holding 2.0-4.0 hectare
: holding 4.0-10.0 hectare
:holding 10.0 hectares and above

Rural Market Segmentation Tools

Thompson Rural Market Index.

Mica Rural Market Rating
Linquest
Indian Market Demographic
Business Intelligence Unit
Lincompass
ARCVIEW