Unit 5 Rural Segmentation

Prof.
Dhirendra Apte
Symbiosis Centre for Management Studies
TY BBA : Sem 5 - Fundamentals of Rural Marketing
Chapter / Unit - 5 :
Rural Segmentation, Targeting & Positioning ( STP )
Prof. Dhirendra Apte

Chapter / Unit - 5 : Rural Segmentation, Targeting & Positioning ( STP )

TY BBA : Sem 5 - Fundamentals of Rural Marketing Chapter / Unit - 5
Rural Segmentation, Targeting & Positioning
Segmentation, targeting and positioning (STP) is a

marketing model that assists classifying population
segments according to their needs and common
characteristics and helps in selecting specific segments
and developing products and services for this particular
segment.

Segmentation, Targeting and Positioning (STP)

Segmenting is the process of dividing or categorizing market into
different groups based on one or more variables.
Targeting is selecting the market segments, which can be served

efficiently and profitability. It is, deciding on market coverage
strategies.
Positioning is a market attraction strategy, which involves placing the

brand in the minds of the customers in the target market.

Companies are today developing different brands in different pack

sizes and formulations to win over the consumers. Different people
want different quantities and different mixes of benefits from the
product they buy.
For example, Hindustan Uni Lever has Surf, Rin Shakti and
Wheel powder to meet the needs of different income groups.
Palmolive has three varieties of toilet soaps offering skin care
benefits to three different types of skins of consumers.
In reality they are dividing the markets into attractive segments to

reach them efficiently, serve them effectively and achieve results
economically.

The basic premise behind STP is that you cannot sell everything to
everyone. Therefore, you need to limit your product and service
offerings and target limited population segment that have higher
chance to purchase them.
Today, Amazon is trying to be everything for everyone, but even

Amazon started only as an online bookseller to gradually increase its
offering to increasing numbers of customer segments.

STP is effective because it allows personalization of products and

services to the needs and wants of selected consumers.
STP approach shifts the focus from product to consumers and

helps in satisfying customer needs and wants profitably.

STP marketing as a planning tool
Segmentation, targeting, and positioning is an audience-focused

rather than product-focused approach to marketing communications
which helps deliver more relevant messages to commercially
appealing audiences.
STP is a critical strategy and planning tool, featured in our RACE Growth
System. Our RACE Growth System supports marketers, managers, and
business owners to create a 90-day marketing plan across each stage of their
marketing funnel.

So, while STP sits within the planning activities, the benefits of
effective segmentation, targeting and positioning can be felt across the
types of customers you reach, interact with, convert, and engage.

How to use STP marketing?
Through segmentation, you can identify niches with specific needs,
mature markets to find new customers, deliver more focused and
effective marketing messages.
As the needs of each segment are different, so marketing messages

should be designed for each segment in such a way so as to
emphasise relevant benefits and features required rather than one
size fits all for all approach.
This approach is more efficient way to deliver the right mix to the
same group of people, rather than a scattergun approach. (The
scattergun approach to marketing means that the campaign is not
targeted at particular individuals.)


The Segmentation, Targeting and Positioning (STP) Model helps you position
a product or service to target different groups of customers more efficiently.
STP stands for:
Segment your market.
Target your best consumers.
Position your offering.
Who created the STP model?

Phillip Kotler A distinguished professor of marketing at the Kellogg School of
Management at North-western University, created the STP framework as a
tool to find a target market, before using the 4 P's to create a product and
marketing plan

What are the segmentation targeting and positioning steps?
How to create an STP model for your business: Implementation strategy
Step 1: Define your market.
Step 2: Create audience segments.
Step 3: Identify the more attractive segments.
Step 4: Evaluate your competition.
Step 5: Fix your positioning.
Step 6: Determine your marketing mix.
When creating your targeting and positioning strategy, you must evaluate the
potential and commercial attractiveness of each segment, and then
develop detailed product positioning for each selected segment, including a
tailored marketing mix based on your knowledge of that segment.



Targeting involves selecting which customer segment the

firm should target, i.e., the most attractive segment.

Application of Segmentation, Targeting and Positioning
What is the rural segmentation strategy?

Rural market segmentation is the starting step in applying the rural
marketing strategy. Once, segmentation takes place, the marketer
targets the identified customer groups with proper marketing mix, so
as to position the product/brand of company as perceived by the
target segments.
When creating your marketing strategy, it’s important to consider

which types of market targeting you’re going to use. Segmentation is
a key tactic for growing and out-performing market competitors.

Application of Segmentation, Targeting and Positioning

What is the rural Targeting strategy?
Rural market targeting is different than segmentation types, such as
demographic, geographic, psychographic or behavioural segmentation.
Market targeting strategies is the next step on from segmentation, and should
be part of overall marketing strategy.
What are the targeting strategies?
Essentially, targeting strategy involves evaluating each segment’s
attractiveness and, from there, choosing which segment to enter and how to
target it. And a brand’s choice tends to be based on which segment they think
will bring the business the most value. Establishing your potential customer
base and choosing how broadly or narrowly you wish to market to these
prospective consumers is key to your brand’s success and longevity.

There are typically 4 different types of market

targeting strategy:-
 Mass marketing (undifferentiated marketing)
 Segmented marketing (differentiated marketing)
 Concentrated marketing (niche marketing)
 Micromarketing.
Of course, there are many benefits and drawbacks to each targeting strategy.
However, the most important thing is deciding which one is the most suitable
for your brand. So, before you jump into any old target market, remember
these few things:--
� Identify your values and goals
� Analyse data
� Look into current and prospective competitors


1. Undifferentiated Marketing
Often referred to as mass marketing, the undifferentiated strategy

basically ignores the differences between market segments and treats
the entire market as a single target. Fundamentally, there is
essentially no targeting at all - Everyone is a potential customer.
Let’s imagine the entire market as one big cake. The undifferentiated
market targeting strategy doesn’t take a single slice or a half or even
three-quarters of the treat. It takes the whole thing.

1. Undifferentiated Marketing
The point of mass marketing is to reach as many people as possible,
in the hope that they get on board with your brand. One advantage of
this approach is that it’s cost-effective. It’s cheaper for brands to
manufacture goods and produce content that is targeted to, well,
everyone.
Example : Mass marketing usually occurs when a brand has a

product or service that has a high market appeal. This is most
common when it comes to things that people will always need or
want. Like toothpaste, toilet roll, washing up liquid and so on.

TY BBA : Sem 5 - Fundamentals of Rural Marketing Chapter /
Unit - 5
CASE STUDY : IKEA


CASE STUDY : IKEA
IKEA, the Swedish Furniture and homeware retailer mainly sell general
homeware, kitchen appliances, and ready-to-assemble furniture. IKEA wins at
undifferentiated marketing because of its huge, mass appeal.
IKEA are as popular offline as they are online. To put it into perspective; In
2022 financial year, IKEA saw 822 Mn store visits while its online channels
hosted 4.3 Bn visitors. Because the home-goods giant has the right price and
product for almost every consumer. IKEA have high-end tags and a wide
range of styles. Even their simplest, most basic product is still both innovative
and affordable.

CASE STUDY : IKEA
IKEA not only has mass appeal in their products and price but in their
personality, too. Because who doesn’t love a candid eco-enthusiast?

CASE STUDY : IKEA
IKEA has been eco-minded for some time now. They have even
committed to operating 416 offsite wind turbines and have installed
around 7,50,000 solar panels on IKEA buildings, globally.
But it’s not just about the price or style range or environmental-
mindedness for IKEA. It’s also about the experience.
So for many people, the ‘IKEA day out’ is a real thing. And it’s easy to
see why; you can get a bite to eat, pick up those homeware essentials
while also exploring the half-made homes. Essentially, it's an adult
playground. And it’s the existence of this shared experience and
common thought that heavily contributes to IKEA’s mass-market
appeal and the almost cult like status of the IKEA day out.

CASE STUDY : IKEA
This type of undifferentiated market targeting can be quite appealing to some

brands as we've just seen, because it can seem a lot less risky than more
segmented, precise forms of targeting. It undoubtedly works for larger,
established brands like IKEA.
Targeting strategy may be on its way out - Why? Because brands that
mass-market run the risk of increased competition and over-exposure,
and it can be expensive. Wasting money on targeting large groups of
consumers is inefficient and can be seen as wasteful.
Consumers today want to be treated as unique individuals, with highly
personalised products, content, and messages.

2. Differentiated Marketing
Segmented market targeting understands that consumers fit into different
groups and respond well to personalisation.
Differentiated market targeting offers a little more depth and clarity. It’s
otherwise known as ‘segmented’ marketing and entails isolating a number of
(generally two or more) primary target segments that have the most potential
value for the company. Once a brand has defined those Targets, then
separate marketing strategies need to be developed for each.
This type of market targeting is one of the most common. It makes sense for
brands to identify several market segments and then design separate,
concentrated strategies for each. In this way, companies don’t just constantly
offer products that are all the same, with no unique selling point, in the hope
consumers will just buy whatever is offered to them.

Iconic sportswear brand Nike.

In terms of footwear, they are most well known for their trainers. But
they wouldn’t get very far simply advertising one, single brand
‘trainers’. Like most other apparel brands, Nike offers different
products for different segments.
They love selling trainers, and they love selling trainers to you. But
who are you? Are you a runner, weightlifter, cyclist, gym-goer, golfer,
outdoorsy-type, or someone who simply loves sports footwear
fashion? Well if you answered yes, or even ‘no’, to any of those
options, Nike will have the footwear you’re after.



Even with the rise of big brand competitors such as Adidas teaming
up with global stars and influencers, like Beyonce, Nike still remains
one of the most dominant players in sneaker fashion.
Nike are innovators, collaborators, money-makers, and game-

changers. Nike are able to target a range of segments simply because
of their widespread resources and understanding of their target
markets.
Their products are diverse and wide-reaching. And, like any
successful brand, all of Nike’s products are specifically manufactured
and promoted to reach distinct market segments.

Unlike undifferentiated, segmented targeting gets the benefits of
avoiding over-exposure to consumers and dodging walls of
competitors - not completely dodging them but sort of evading some
of them.
Brands that use differentiated targeting are likely to see success that
is more consistent than undifferentiated, as their offerings will be
more personalised and focused. Consumers will appreciate this.
And will thus have more loyalty to the brand that offers them
distinctively featured products, opposed to the brand that offers the
same things as every other company, but at a cheaper price (for now,
anyway).

3. Concentrated Marketing
Concentrated marketing is often called ‘niche marketing’. If we’re keeping with
the cake metaphor, concentrated marketing doesn’t take the whole cake, half
or even quarter-slices. It takes just one, small, specific slice which has some
kind of desired attribute on top. Like a piece of chocolate or an icing rosette.
Essentially, niche marketing puts all of its focus on one, or a few, narrow,
specific consumer groups. Brands channel all of their marketing efforts
towards their uniquely defined segment of the population, with the aim of
owning this particular segment over their competitors. This way, the brand
aims to reach its growth potential and create thriving brand loyalty and long-
lasting relationships with its ideal consumer group.
So, concentrated marketing enables brands to streamline their marketing
efforts and create unique, personalisation for their narrow target audience.

4. Micromarketing
Micromarketing goes just that one step further than concentrated marketing.
In fact, micromarketing targets a specific group or individuals, within a niche
market. This strategy is highly targeted as all marketing efforts are focused on
the distinct characteristics of these small groups or individuals.
A great example of a brand that successfully uses micromarketing is

Groupon. Groupon is a digital marketplace where users are able to access
coupons online for almost anything - from holidays and retail products to
sports massages and date nights.

4. Micromarketing
Groupon allows users to get location-based deals from almost any digital
device. It was launched in 2008 and since then, Groupon has grown to be
themost popular website for discounts and promotions in the United States.
Groupon’s hyper-tailored targeting techniques mean that it tracks user activity

and tailors content and deals accordingly.
In 2021, Groupon had over 24 million active users inspite of facing stiff
competition from the ecommerce giant, Amazon.

( III ) What is the meaning of positioning?

Positioning refers to the place you want your brand or product to have
within a particular target market. More specifically, the process of
market positioning and brand positioning involves how you market
your brand or product to consumers to achieve that position.
Positioning influences how customers perceive a product or service.

During this stage, the business needs to decide how it wants
customers to view its product compared to competitors' products.
Positioning is a market attraction strategy, which involves placing the

brand in the minds of the customers in the target market.

Segmentation targeting and positioning initiatives include the following

stages:
1. Segmenting the market. Segmentation is dividing population on the basis

of their common traits and characteristics. Segmentation helps identifying
niches with specific previously untapped needs. There are many types and
bases of segmentation. The table below the most popular types of
segmentation.
Apple does not have to consider geographic segmentation with climate
criteria because weather conditions do not largely effect the usage of
consumer electronic products.

Type of Segmentation
 Geographic
 Demographic
 Religion
 Nationality
 Occupation
 Behavioral
 User Status
 Benefits sought
 Psychographic
 Personality
 Social Class

Type of Segmentation Criteria Example

Geographic Region : East / West / North / South
Density : Urban / Rural
Climate : Hot / Cold / Wet / Dry
Demographic Age : Teen Agers / Middle aged / Elder

Gender : Male / Female
Life Cycle Stage : Student / Working Bachelor /
Newly Married with No children /
Married with 1 Child / 2 or 3
Children / Older Married Couple /
Retired / Pensioner

Type of
segmentatio Segmentation criteria Example
n
Region North America, Asia, Europe
Density Urban/rural
Geographic
Climate Hot, cold, wet, dry
Age Teenagers, middle aged, elderly.
Gender Males & Females
Bachelor Stage young, single people not living at home

Newly Married Couples young, no children
Full Nest I youngest child under six
Full Nest II youngest child six or over
Demographi Full Nest III older married couples with dependent children
c Life-cycle stage
Empty Nest I older married couples, no children living with them
Empty Nest II older married couples, retired, no children living at home
Solitary Survivor I in labour force
Solitary Survivor II retired
Occupation Students, employees, professionals, senior manager, executives
‘Hard core loyals’ always purchase the product / brand in question.

‘Soft core loyals’ will sometimes purchase another brand
Degree of loyalty
‘Switchers’ will not specifically seek out a particular brand, but rather
purchase the brand available to them at time of need, or that which
was on sale
Behavioral
Benefits sought Cost saving, efficiency, status
Personality Easygoing, determined, ambitious
non-users, potential users, first-time users, regular users, or ex-users

User status
of a product
Social class Lower class, working class, middle class, upper class
Resigned, Struggler, Mainstreamer, Aspirer, Succeeder, Explorer,

Lifestyle[1]
Reformer
Psychograp
hic Risk avoiding,
Risk neutral
Risk aversion
Risk loving
Religion Religions, non-religions
Beliefs &
Politics Politically active, not interested in politics
values
Nationalistic Pride in one’s own nationality, not interested in nationality


Businesses do not need to consider all types of segmentation listed

above and they can choose only the ones most relevant to their
business.
For example, Apple does not have to consider geographic
segmentation with climate criteria because weather conditions do not
largely effect the usage of consumer electronic products.
However, the same cannot be said regarding a producer of premium

jackets, sweatshirts and footwear for whom Geographic segmentation
with climate criteria is important because only consumers living in cold
places might be interested to purchase their products.

2. Targeting the selected segment(s).
In this stage businesses evaluate potential long-term value of each

segment and choose one or more segments.
Target customer segment are those members of population who may
be most interested in your products and services. In other words, you
aim to target individuals and entities among the population that have
aims and needs resonating with your respective products and
services.
The ideal segments to be targeted are the ones that will grow in the
future.

3. Positioning products and services.
At the last stage companies develop marketing mix for each

chosen segment. It is about identifying proposition for chosen
customer segments.
Positioning is about competitive advantage and what sets apart

the company from the competition in the mind of the target
customer segments

3. Positioning products and services - Types of

positioning:
 Mono-segment positioning
 Multi-segment positioning
 Standby positioning
 Anticipatory positioning
 Imitative positioning – Copying strategies of market

leaders.
 Adaptive positioning . Periodical repositioning
according to changes in the segment.

3. Positioning products and services - Types of

positioning:
 Defensive positioning
 Stop-gap positioning
 Quality product positioning - USP
 Aesthetically based product positioning
 Sustainability based product positioning.
 Functional positioning
 Experiential positioning.


3. Positioning products and services –


3. Positioning products and services –
It is the act of designing the company's offering and image so that it occupies
a distinctive place in mind of the target segment. It serves as a platform for
the brands to reach target customers.


An example is Virgin Holidays who use segmentation, positioning
and targeting to promote their holidays to 6 different audiences.

Product positioning
Focus on individuals or very small groups to satisfy a particular taste or

need e.g. : Dabur launched Anmol, a mustard and amla based hair oil
pack of 50 ml pack worth Rs 10 to target rural consumers in northern
markets who used loose mustard oil.


Niche marketing
MRF introduced nylon bullock cart tyres. They used the
muscleman symbol as well as their leadership in tyres. MRF
became the leader due to the brand name and its meaning viz.
Pahalwan or Muscleman.

Chapter / Unit - 5
Niche marketing

Product positioning
Positioning maps are the last element of the STP process.
For this to work, two variables are required to illustrate the market
overview.
Example : Cars available in UK.

If there are no cars in one segment it could indicate a market
opportunity / Untapped market.


Key factors that determine purchase.


Use of a product positioning map :
To analyse your own business's current

position in the market, and identify
opportunities.


What to watch for in segmentation, positioning, and targeting

marketing strategy :
 Make sure the market is large enough to matter and customers can
be easily contacted.
 Apply market research to ensure your approach will add value to
the existing customer experience, above and beyond competitors.
 As Market continues to become more sophisticated, to support
digital market’s wants and needs, appropriate developments to
products / service must be done.

TY BBA : Sem 5 -
Fundamentals of Rural Marketing Chapter / Unit - 5
End of Chapter 5 :


Dhirendra Apte
Symbiosis Center for Management Studies



Dhirendra Apte


Dhirendra Apte

TY BBA : Sem 5 Fundamentals of Rural Marketing
Dhirendra Apte

What is Rural Marketing ?
Dhirendra Apte

Dhirendra Apte

TY BBA : Sem 5 Fundamentals of Rural Marketing

Unit 5 Rural Segmentation

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Unit 5 Rural Segmentation

Uploaded by

Copyright:

Available Formats

Prof.

Symbiosis Centre for Management Studies

TY BBA : Sem 5 - Fundamentals of Rural Marketing

Symbiosis Centre for Management Studies

Symbiosis Centre for Management Studies

Segmentation, targeting and positioning (STP) is a

Symbiosis Centre for Management Studies

Segmentation, Targeting and Positioning (STP)

Targeting is selecting the market segments, which can be served

Positioning is a market attraction strategy, which involves placing the

Symbiosis Centre for Management Studies

Companies are today developing different brands in different pack

In reality they are dividing the markets into attractive segments to

Symbiosis Centre for Management Studies

Today, Amazon is trying to be everything for everyone, but even

Symbiosis Centre for Management Studies

STP is effective because it allows personalization of products and

STP approach shifts the focus from product to consumers and

Symbiosis Centre for Management Studies

STP marketing as a planning tool

Segmentation, targeting, and positioning is an audience-focused

Symbiosis Centre for Management Studies

Symbiosis Centre for Management Studies

As the needs of each segment are different, so marketing messages

Symbiosis Centre for Management Studies

Rural Segmentation, Targeting & Positioning

Who created the STP model?

Symbiosis Centre for Management Studies

Symbiosis Centre for Management Studies

Symbiosis Centre for Management Studies

Symbiosis Centre for Management Studies

Rural Segmentation, Targeting & Positioning

Targeting involves selecting which customer segment the

Symbiosis Centre for Management Studies

Application of Segmentation, Targeting and Positioning

What is the rural segmentation strategy?

When creating your marketing strategy, it’s important to consider

Symbiosis Centre for Management Studies

Rural Segmentation, Targeting & Positioning

Application of Segmentation, Targeting and Positioning

Symbiosis Centre for Management Studies

There are typically 4 different types of market

Symbiosis Centre for Management Studies

TY BBA : Sem 5 - Fundamentals of Rural Marketing Chapter / Unit - 5

Rural Segmentation, Targeting & Positioning

Symbiosis Centre for Management Studies

Often referred to as mass marketing, the undifferentiated strategy

Symbiosis Centre for Management Studies

Example : Mass marketing usually occurs when a brand has a

Symbiosis Centre for Management Studies

CASE STUDY : IKEA

Symbiosis Centre for Management Studies

CASE STUDY : IKEA

Symbiosis Centre for Management Studies

CASE STUDY : IKEA

Symbiosis Centre for Management Studies

CASE STUDY : IKEA

Symbiosis Centre for Management Studies

This type of undifferentiated market targeting can be quite appealing to some

Symbiosis Centre for Management Studies

Symbiosis Centre for Management Studies

Iconic sportswear brand Nike.

Symbiosis Centre for Management Studies

Rural Segmentation, Targeting & Positioning