RURAL MARKETING

Module- 3
 TOPICS TO BE COVERED
• Rural Marketing Mix-
• Relevance of Marketing mix for Rural market/Consumers.
• Product Strategies, Rural Product Categories-FMCGs, Consumer
Durables, Agriculture Goods &Services; Importance of Branding,
Packaging and Labelling.
• Nature of Competition in Rural Markets, the problem of Fake Brands
• Pricing Strategies & objectives
• Promotional Strategies. Segmentation, Targeting & Positioning for rural
market.
 FOUR P’S OF MARKETING MIX
The term marketing mix was coined in an article written by Neil Borden called
“The Concept of the Marketing Mix.”
 The marketer, E. Jerome McCarthy, proposed a four Ps classification in 1960 .

Product
Place
Promotion
Price
Fifth ‘P’ of marketing is:
packaging
 7 P’S OF MARKETING MIX

Product
Place
Promotion
Price

• Physical evidence
• Process
• people
 FEATURES OF MARKETING MIX
• 1. the four elements of marketing mix are co-equal, interdependent,
and essential.
• Eg. Depends upon the product the other three factors will change.
• 2. Marketing mix is very useful in achieving the marketing objectives,
i.e. sales, profit and customer satisfaction.
• 3. Marketing mix is a flexible and dynamic concept. The components
could be adjusted to meet the competition in the dynamic market
environment.
• Eg. Nirma washing powder packed in a pouch and sealed at the top without
sophistication packing has been well accepted even in the face of intense
MNC competition.
• 4. Marketing manager acts as mixer of all marketing ingredients and he has
to use his knowledge, skills and experience in developing optimum
marketing mix.
• 5. the concept of marketing mix is applicable to business and non-business
organization.
• 6. A thorough understanding of the customer is common to all the four
elements. The focus points of marketing mix is the customer and the
marketing mix is expected to provide maximum customer satisfaction. e.g. in
the case of products like water purifiers, computers, etc. after sales service
plays an Important role in customer satisfaction.
ELEMENTS OF MARKETING MIX
PRODUCT MIX
 MEANING OF PRODUCT MIX
• Product mix or product assortment refers to the number of product lines that an organization
offers to its customers. Product line is a group of related products manufactured or marketed
by a single company. Such products function in similar manner, sold to the same customer
group, sold through the same type of outlets, and fall within a same price range .
• Product mix consists of various product lines that an organization offers, an organization may
have just one product line in its product mix and it may also have multiple product lines. These
product lines may be fairly similar or totally different, for example - Dish washing detergent
liquid and Powder are two similar product lines, both are used for cleaning and based on same
technology; whereas Deodorants and Laundry are totally different product lines.
An organization's product mix has following four dimensions :-
• Width,
• Length,
• Depth, and
• Consistency.
 VARIABLES OF PRODUCT MIX
• Size, shape, color, design and other features
• Packaging of the products
• Product labelling
• Guarantee and warrantee of the product.
• E.g. Frooti in different sizes and shapes and packaging.
• Nescafe in different line extension, sizes, packaging, color.
PRICE MIX
 CONCEPT OF PRICING STRATEGY
• A common strategy for beginning small businesses is creating a bargain pricing impression
by pricing their product lower than their competitors. Although this may boost initial sales,
low price usually equates to low quality and this may not be what customers to see in your
product.
• Your pricing strategy should reflect your product’s positioning in the market and the
resulting price should cover the cost per item and the profit margin. The amount should not
project your business as timid or greedy.
• Low pricing hinders your business’ growth while high pricing kicks you out of the
competition.
• There are a number of pricing strategies that you can follow. Some strategies may call for
complex computation/ calculative methods and others are intuitive/ spontaneous decisions.
Select a pricing strategy that’s based on the product itself, competitive environment,
customer demand, and other products that you offer.
• Cost Plus
• Cost Plus is taking the production cost and adding a certain profit percentage. The
resulting amount will be the product’s price. You need to consider variable and fixed
production costs for this pricing method.
• Value Based
• Instead of using the production cost as your basis, you consider the customer’s
perception of the product’s value. The perception of the buyer is dependent on the
product’s quality, the company’s reputation, and healthfulness, aside from the cost
factors.
• Competitive
• You take a survey of the pricing implemented by your competitors on a similar product
that you are trying to market and then decide whether to price your product lower, the
same, or higher. You should also monitor their prices and be able to respond to changes.
PLACE MIX
 PLACE MIX
• Place refers to distribution or the methods and location you use for your products or
services to be easily accessible to the target customers.Your product or service dictates
how it should be distributed.
• If you own a retail shop, for example, the distribution chain ends with you and you supply
to your customers directly. If you own a factory, your options will be to either sell your
products directly or sell them to retailers or vendors as your distribution strategy.
• Selling Directly
• Direct selling can be a good starting point, especially if the product supply is limited or
you only sell seasonal products. One advantage of selling your products directly is you
get a more personal feel of the market because you interact directly with the customers so
you can easily adapt to the changes. Another is that you control your product’s pricing and
the methods on which it should be sold. Distribution methods may include, but are not
limited to, door-to-door, retail, e-commerce, mail order, or on-site.
• Selling Through a Reseller
• If you want to have wider distribution for your product, you can sell it through a third party, either a
retailer or wholesaler, who will then resell the product to their customers. This distribution
strategy also reduces the pressure of running a distribution system. Reseller sales also reduce the
storage space required for product stocks. However, you will lose personal contact, and even company
identity in some cases, with the customers since they will be talking now to your resellers. Some
resellers may request that your product be sold under their own brand.
• Market Coverage
• Market coverage refers to how wide or varied you want your products to be distributed. This applies to
either direct sales or through intermediaries. There are two types of market coverage that you may
want to adopt.
• Intensive distribution
• This ensures the widest distribution possible for your product or service. You sell your products in as
many locations or markets as possible. And oftentimes, you need to lower your prices. This is the
method most commonly used by large businesses or manufacturers to reach customers nationwide or
even globally. Examples of products effectively distributed using this distribution strategy are
convenience products or things we buy regularly, like candy or chewing gum.
• Exclusive distribution
• This strategy restricts your product distribution to only one reseller. The reseller will have
exclusive rights to sell your product or service, and in return, you may also be the sole supplier.
This works more effectively with specialty products that you can promote as prestigious
because you are the sole supplier and the intermediary is the sole reseller.
 PROMOTION MIX
• Promotion is the part of marketing where you advertise and market your product, also
known as a promotional strategy. Through it, you let potential customers know what you are
selling.
• In order to convince them to buy your product, you need to explain what it is, how to use it,
and why they should buy. The trick in promoting is letting consumers feel that their needs
can be satisfied by what you are selling.
• Advertising
• PR/ Publicity
• Sales promotion
• Personal selling
 PRODCUT STRETEGY

• 1. Small Unit Packaging

• Small packs are preferred due to the following reasons:
• Small packs help the rural consumer to pick the product at affordable
price.
• Individual use products like shampoo; toilet soaps, etc. are bought in
smaller size.
• Small packs are easy to display and they increase the visual appeal.
• Small packs are convenient to retailer to do his business.
• Example:
• Lux introduced shampoo in 4 ml sachets at 0.50 paise.
• Rasna is now available in sachet at Rs. 1
• Ponds introduced 20 gm talcum powder
• Tiger biscuit is available in four biscuits pack at Re. 1
 2. NEW PRODUCT DESIGN
• The products are designed as per the rural lifestyle. The rural infrastructure has to
be considered while designing the product, like roads, electricity and usage of the
product. In rural area electricity fluctuation is a common problem and at the same
time roads are not developed well, so bikes, cars and footwear has to be designed
in that way. The product design also depends upon the usage of the product, like
small refridgerator, small TV sets, etc.
• Example:
• PVC shoes and chappals are designed to work in adverse conditions.
• LG electronics launched “Sampoorna” TV that can withstand power fluctuations.
• Philips introduced small refrigerators especially for rural consumers.
 3. STURDY PRODUCTS

• Sturdiness of a product is an important factor for rural consumers. The rural

consumers believe that heavier the product is, the higher the power and
durability. Products are made for rough use, longer time, as per the conditions
of the rural areas.
• Example:
• Bullet motorcycle is popular in village due to its ruggedness.
• Escorts has positioned their motorcycle “Rajdoot” as a tough vehicle.
• Rural consumer prefer dry battery cell, which are heavy.
 4. UTILITY ORIENTED PRODUCTS

• Rural consumers are more concerned with the utility of the product and
its appearance.
• Example:
• Philips introduced low cost radio “Bahadur” with only medium wave
receiver, which was failed and fund that rural consumer purchase radio
not only for news but also for entertainment
 5. BRAND NAME

• Rural consumers are more brand loyalists than urban consumer. The brand name
should instantly be understood by the rural consumers. Rural consumers are
unfamiliar with English and absurd names. More preferably rural brand is a symbol,
logo or color.
• Example:
• Everyday battery with a cat symbol – rural consumers remember it as ‘billi wali
battery’.
• Lifebuoy soap – rural consumers remember it as ‘lal saboon’
• Mahindra tractor’s brand ‘Bhumiputra’
• Slogan of Red Label Tea “jiyo mere lal” proved very effective to promote sale.
 DUPLICATE AND COUNTERFEIT PRODUCTS IN
RURAL MARKET
• Spurious products are the copy of established brand name at a cost of
few thousand rupees and sold it in the rural market. This duplication
takes place in all sectors and especially in FMCG, food items and
medicines.
• Counterfeiting is a kind of duplication where the fake products bear
the identical name of the original product, its packaging, graphics,
color pattern, design and even same name and address as the genuine
manufacturer. A pass-off product is one that comes with a few minor
changes from the original product. The slight changes are made to
avoid legal problems.
 EXAMPLE:

• Head and Shower – Head and Shoulder

• Pantane – Pantene
• Sunmilk – Sunsilk
• Lifebuoy – Loveboy
• Climic Plus – Clinic Plus
• Parla G – Parle G
• Vikas – Vicks
 RURAL PRODUCT CATEGORIES

Rural products

Agricultural
FMCG Consumer goods
goods services
 RURAL PRODUCTS
• FMCG – Major players are HUL, Dabur, Marico, Colgate Palmolive, Nirma, CavinKare
and Godrej, move relatively faster, irregular income induces small quantity
purchase like sachets, small tubes. It is classified into household,(floor cleaner,
utensils cleaner, detergent, toilet cleaners, mosquito repellent, etc) food & beverages,
(health beverages, soft driks, dairy products, branded rice, wheat, flour. Branded juices,
branded sugar etc. ) and personal care. (oral care, skin care, hair care, cosmetics,
deodorants, perfumes, feminine hygiene)
• Consumer Durables – these are purchased once in a few years, it is in less demand
due to low income and bad infrastructural facility, and lifestyle. LG Sampoorna TV,
small refridgerator by Philips. Usha, Bajaj, Philips, Titan, Godrej, Videocon, Onida,
Salora, Hero Cycles, Hero Honda, Mahindra & Mahindra and Tata. New entrants – LG,
Samsung and Maruti.
• Agricultural Products – Agricultural inputs such as seeds, fertilizers,
pesticides, insecticides and implements (tractors, tillers and
threshers) Livestock, poultry and fishery. Major players are Rallis India,
Monsanto, DCM Shriram, Chambal Fertilisers, IFFCO, Mahindra &
Mahindra, Eicher and Escorts.
• Services – rural services are witnessing the birth and growth, internet
services are growing as well. Rural market witnessing e-choupal.
• Telecommunications (BSNL), transport, health care, banking (SBI),
insurance (LIC) and education. Kisan credit cards, debit cards.
 BRANDING, PACKAGING AND LABELLING
Brand is a specific term and includes a name, symbol, sign or design given
to a product for easy identification. It provides distinct identity to a product
• Brand Association is mainly with Colors, numbers, and visuals and not
necessarily with the name of the brand.
• Retailers play a major role in brand promotion. Due to strong bonding and
trust between customers and retailers, coupled with low brand awareness,
consumers often do not ask for the product by brand but instead will request
the retailer, ‘Paanch rupaye waali chai dena’. It is up to the retailer to push the
brand.
• First mover brands become generic brands – Detergent powder came to
be identified with Surf, mosquito coil with Kachua Chaap, vegetable oil with
Dalda.
 BRAND BUILDING IN RURAL INDIA
• Brand name development – Facilitates easy brand recall and in drawing any color,
visual or numeric association. E.g. Ajanta for toothpaste, Sansar for sewing machines.
• Creating a brand identity – Involve the need to relate the brand with the rural
lifestyle, or with appropriate status symbols, or with the rural environment. E.g.
Britannia Tiger Biscuits created an identity associated with a smart, active and sharp
child. Parle G was created as glucose supplement.
• Building a brand image – Brand should have a personality of its own. E.g. Mahindra &
Mahindra have maintained their sterling image in rural.
• Brand choices are often limited due to the small market size and the limited
investment capacity available with the rural retailer.
• Only Three brands are available in rural retail shop against six to nine
brands in urban shops.
 BRAND LOYALTY/ STICKINESS
• Low levels of literacy and awareness make rural people less likely to
switch brands as they do not have the required knowledge or
information to exercise a choice. They are more comfortable in
purchasing tried and tested brands. They are therefore, brand sticky
rather than brand loyal.
• First / Early mover advantage – Whichever brand enters a village
market first seems to gain acceptance in the community through ‘word
of mouth’ communication and thereafter many prefer to stick to this
particular brand
 FAKE BRANDS
• Rural markets suffer from the problems of low penetration and poor
availability of branded products. Hence, although there exists a huge demand
for branded products, there are no distribution channels to make the product
reach the customer. This has led to the growth of fake brands.
• Ponds has been replaced by Bond’s talc
• Fair & Lovely by Fair & Lonely
• Lifebuoy by Likebuoy
 THE FAKE MARKET
• Lookalikes – Products where the color scheme on the packaging
material closely resembles that of a popular brand but the pack carries
a different name. Shagun for Lifebuoy, Lalita Amla for Dabur Amla
• Spell alike – Fakes of original brands packaged in colors and
designs similar to those of the originals but have names that are subtly
and cleverly misspelt. E.g. Paracute for Parachute, Fair & Lonely for Fair
& Lovely.
• Duplicates – Exact replicas of original brands. The color, design, and
name on the package are the same as those of the original brands.
 STRATEGY TO COUNTER FAKE MARKET
• Introduce upgraded packaging which is difficult to copy – Dabur replaced its plastic
blow molded container with a premium four-color shrink-sleeve packaging, which
has a grainy texture and water bubbles. The packaging is difficult to replicate. Tetra
packs for Juices.
• Raids or Legal course – Raids on the premises of the fake manufacturer and seize
the products. File a patent for the product. E.g. P&G initiated action against the
manufacturers of lookalike Vicks Vaporub.
• Educate the customers – Coca Cola has put into place 48 consumer response
coordinators, who work with their teams to redress the consumers complaints about
overcharging and fake bottling.
 IMPORTANCE OF BRANDING

• Recognition and loyalty

• Brand image
• Quality
• Experience
• Reliability
• Multi-product branding
• Brand personality
 PACKAGING IN RURAL INDIA
• Packaging in rural India needs special focus because of the following factors:
• Poor Transport System (poor road conditions)
• Difficulties of safe storage (rats, moisture, heat, rainwater)
• Poor Facilities (erratic power supply leading to poor cold-storage facilities for
food products)
• The product for rural should :
• Have a longer shelf life than the product for urban.
• Be able to withstand extreme weather conditions
• Be able to withstand sudden and jerky movements on dusty roads.
• Have alternate storage arrangements (ice box for cold drinks).
 PACKAGING AESTHETICS

• Bright colors like red, yellow, green etc.

• Use of local languages on the pack, images.
• Texla TVs – Launched new range in bright red and yellow color as
the old one with black and grey cabinet was a failure.
• ITC – Goldflake with a yellow cover in the south whereas golden
color in north because yellow is associated with ill-health and jaundice
in north.
 FUNCTIONS OF PACKAGING

• Protecting from damage

• Attracting the attention
• Information on packaging
• Facilitates purchase decision- nutritional info, usage, packaging date,
• Differentiation- different brands, rival brands
 LABELING
• Packaging is essential as it is used for the identification of the products in marketing. It
enhances the appearance of the label for promoting the product. This is the major
importance of labeling in marketing. In addition, labeling also helps to provide the
information about a product to the prospective customer.
• Marketers use labeling to their products to bring identification. This kind of labeling
helps a viewer to differentiate the product from the rest in the shelves of the market.
There are several used of the label for the products in the market.
• Labeling is used for packaging the product. In marketing, a marketer can also use a
sticker inedible products to impart knowledge of the ingredients of the food items. This
helps to spread awareness among the customers about the item they are consuming and
labeling also helps to mention ingredients.
 IMPORTANCE OF LABELING AND PACKAGING
• Another main purpose of the use of labeling and packaging is to exaggerate the product. A
marketer needs to grab the attention of a viewer to purchase the product. Labeling and
packaging should be able to beautify a product to add to its visual appeal.
• This can instantly grab a viewer’s attention towards a product. You can arouse interest in the
mind of a customer towards a product through an attractively designed label. It is essential
to use a good quality material for the sticker.
• Importance: The role of packaging and labeling has become quite significant as it helps
to grab the attention of the audience.
• Labelling and packaging can be used by marketers to encourage potential buyers to
purchase the product.
• Packaging is also used for convenience and information transmission. Packages
and labels communicate how to use, transport, recycle or dispose of the package or
product.
 FUNCTION/IMPORTANCE OF LABELLING

• Describing the product and specify its contents

• Identification of the brand/ product
• Grading of the product
• Helps in product promotion (different types in the product category-
ingredient, added colors) e.g. Maggi contains information on added
colors.)
• Providing information required by law
 PRICING STRATEGY
• 1. Low Cost Products
• Rural customer is price conscious manly because of low income. The price can be kept low, by low
unit packaging. This is a common strategy adopted by many companies marketing in rural areas.
Example – same as of small unit packs. The initial introduction of the product is for low price and
the price hikes once the products gets familiar.
• 2. Application of Value Engineering/ value for money
• The aim of value engineering is to reduce the value of the product so that a larger segment of
population can afford it to buy. The rural people are ready to pay once they are assured of returns
of the product. By keeping socio-economic conditions of the rural population the products are
manufactured.
• Example:
• Soya protein can be used instead of milk protein, nutrition content of both is same but the soya
protein is cheaper then milk protein.
• 3. Refill / Reusable Packaging/ coinage pricing strategy-
• Refill packs benefits the rural consumers in terms of price and also the packaging material
should be reusable in rural areas.
• Example – Many farmers demand for fertilizers packed in LDPE (low density polyethylene) or
HDPE sacks. They feel that they get sacks free of cost by purchasing fertilizers.
• 4. Discounts
• In order to motivate the rural retailer to sell more, a discount of 5-10% is given on the MRP
particularly in case of FMC goods.
• 5. Promotional Schemes
• Rural consumer normally buys household articles during festivals like Eid, Diwali, and Pongal
etc. special promotional schemes could be introduced on such occasions like exchange
offers, special discounts, etc.
 RURAL PRICING OBJECTIVE
• 1. Deeper penetration of market: Basically rural markets are adopted for deeper penetration and
expansion because of its size. Hence the pricing objectives are different for rural and urban
markets. E.g. VIM washing bar is Rs. 15 (400 gm) in the urban market but it is offered for Rs. 4 (200
gm) in rural markets.
• 2. Long run profit maximization: A company enters in rural market should wait for success in
long run. Hence penetration-pricing strategy is the best option.
• 3. Recover distribution cost: The pricing objective of a rural marketer should recover the costs
involved in distribution along with production cost and dealer margin.
• 4. Competing pricing: Rural marketer should study the pricing strategy of its competitors and
accordingly fix its prices.
• 5. Increaser sales and market share: The pricing objectives should be such that it boosts the
sales in rural markets. E.g. Anchor white toothpaste launched with much lower price than the
leading brands and captured the market.
 CONSUMER CATEGORIE
• Quality Conscious Consumers – They are very rich and are mainly
concerned with quality of the products and services
• Pricing Methods:
• 1. Discriminatory Pricing – charging different customer groups
differently.
• 2. Skimming pricing – Charging high prices at initial level, E.g. P&G
launched Tide detergent at high price and then reduced it lower than
other brands.
• 3. Value Conscious Customers – They are of middle class and are
mainly concerned with functional benefits and value for money
• Pricing Methods:
• Penetration Pricing – Charging low prices at initial level then increasing gradually when
brand name has been established. E.g. Maggie noodles, Vicks, Rin detergent.
• Value Pricing – Setting the price reasonably lower than the competitor’s price.
• Price Conscious Customers – They are climbers, aspirants and destitutes. They watch for
promotional offers and purchase cheap or fake products.
• Price Conscious Customers – They are climbers, aspirants and destitutes. They watch for
promotional offers and purchase cheap or fake products.
• Pricing Methods:
• Psychological Pricing – Psychological pricing is one that ends in an odd number e.g. Rs.
99.95. It conveys two notions to consumer that there is a discount or bargain and it
belongs to lower price category.
• Promotional Pricing – It includes mini packs, price-off, special discounts, credit facilities
etc.
 VARIOUS PROMOTIONAL STRATEGIES

• Mass media- traditional and rural specific media

• Personal selling
• Public relations
• Sales promotion-push and pull promotion
• Push- free display material, storages, demonstrations, Incentives, free gifts
• Pull- free sample, price off, money refund, exchange, interactive games
• Fairs and exhibitions
 PROMOTIONAL STRATEGY
• Qualities Required for a Rural Sales Person
• Knowledge of local language
• Willingness to get located in villages
• Cultural Congruence: Rural salesman must have proper acquaintance with the cultural pattern
of rural life.
• Attitudes: Rural salesman must have patience as their customers are traditional and conscious, it
will not be possible to clinch the sales quickly. He may have to spend lot of time with customer
and make several visits to gain favourable response.
• Capacity to handle number of products lines: Rural salesman usually does not generate
economic value of business if he handles few products. He is required to handle much large
number of products lines as compared to urban salesman.
• Greater Creativity: Rural marketing involves greater creativity. If the product is very new in the
rural context, He has to introduce it using consumption pioneers and opinion leaders.
 ALTERNATIVE MEDIA FOR RURAL
COMMUNICATION
• Formal Organised Media
• Newspapers and Magazines: Local language newspapers and magazines are popular among educated
rural families. E.g. Dina Thanthi in Tamilnadu, Punjab Kesri in North and Loksatta in Maharashtra.
• TV: About 77% of villages receive TV transmission and 27% of rural people actually watch TV. Regional
channel is very popular like SUN TV in Tamilnadu and Asianet in Kerala.
• Cinema: About 29% of rural people watch cinema as regular lifestyle. Short feature films with
advertisement message, Ad-films and documentaries that combine knowledge and advertisement are
useful for rural communication.
• Radio: It is a well-established medium in rural areas. Radio reaches large rural population at low cost.
• * Point Of Purchase: Point of purchase or point of sale is popular promotional tool used in rural market.
POPs should be especially designed to suit rural requirements. POPs. Colors, symbols and pictures
should be used more than the written words.
• Outdoors: Outdoors such as hoardings, wall paintings, illuminations and other displays are also now
being used for rural communication.
 RURAL SPECIFIC MEDIA
• Music Records: It is an inexpensive medium. On complete language group can be
reached on a low budget through cassettes that can be played in the place where
rural people gathered.
• *Puppetry: Puppetry is the indigenous theatre of India; it has been mot popular form
of entertainment available to the village people. The performer uses puppets as a
medium to communicate, ideas, values and social messages. Example:
• Sounds and drama division of the government of India used puppets to promote various
government projects.
• LIC used puppets to educate rural masses about ‘jeevan beema’ in Lucknow.
 TYPES OF PUPPET THEATRE IN INDIA

States Type of Puppet Content

Rajasthan Kathputli Prithvi Raj Chauhan, Amar Singh Rathod

Orissa String Puppet Radha Krishna

Bengal Rod Puppet Mahabharat, Radha Krishna
Chennai & Andhra Pradesh String/Rod Puppet Lathakali

Orissa, Kerala, Karnataka Shadow Puppet Ramayana

• Folk Theater: Folk theatre is mainly short and rhythmic in form. It has been used as an
effective medium for social protest against injustice and exploitation.
• Interpersonal Media: In many cases, rural people prefer face-to-face communication
than mass communication. A firm can contact with audience through fairs & festivals, folk,
etc.
• Group Meeting: It is a component of interpersonal media. Salesman can effectively
convey the product message at these meetings. Demonstration of products can also be
carried out.
• House-to-House Campaign: In these campaigns, promotional staff makes house-to-house
visits in rural areas. This is different from door-to-door selling campaigns. Promotion staff
does not sell the products, they only propagate the products.
• *Field Demonstrations:
• *AV Vans: AV van is a comprehensive mobile promotion station. The van can be used for
sales campaign in addition to promotion campaigns. AV van exhibits films, audiovisual
presentations, slide shows etc. It is very popular with rural marketing firms particularly
agro business firms. AV van is very effective tool in rural communication but its cost is
very high as the target population is very high.
• *Syndicated AV Vans: It is an AV van publicity service provided by the independent agencies. Firms,
which cannot afford to have their own publicity van, can utilise the syndicate van services.
• Stalls, Haats, Meals: These are useful media of rural communication to spread the message and to
induce brand trials.
• Wall Paintings: The speech or the film comes to an end but the paintings stay as long as whether
allows it to stay. The retailer usually paints its shops wall and name board which acts as a status
symbol
• Use of Logos and Symbols: Illiterate villagers would remember brands only by picture, symbols
more than the name.
• Use of Information Technology: ITC developed a web portal in regional languages to provide
information to the farmers about the products and services which they need in order to enhance
farm productivity, information on whether, scientific practices, market prices etc.
• Focus on Reference Groups: They are the opinion leaders and are the key persons of the village e.g.
Sir Punch, Gram Sevak, Teachers, Doctors etc. These people should be taken into consideration
while chalking the rural communication.
 MARKET SEGMENTATION
• Segment the market but focus more on targeting and positioning
• Segment the market but aggregate on your marketing effort. And that will give you a
better toehold. By Philip Kotler.

• What marketing is?

• Strategic planning and marketing process (IMC)
What’s New (Key marketing strategy decisions)
• How to divide up markets into meaningful customer groups (market segmentation)
• Select which customer groups (one or more) to serve (target marketing)
• Create marketing offers that best serve targeted customers (positioning)
 MASS MARKETING OR MASS
SEGMENTATION
• Mass production, mass distribution, mass promotion about the same product in about
the same way to all consumers. Coca Cola
Why? Lowest cost, highest margin
• Market segmentation - distinct needs, characteristics, or behavior who might require
separate products or marketing mixes. P&G – laundry detergent, Sunsilk shampoo,
Toyota.
• It means dividing whole market for a product into different segments on certain
bases.
 STEPS IN SEGMENTING, TARGETING AND
POSITIONING
• Three major steps:

Market segmentation Market Positioning

Target marketing
5. Develop positioning for
1.Identify bases for
3. Develop measure target segments
segmenting the market
of segment attractiveness
2.Develop segment 6. Develop a marketing mix
4. Select target segments for each segment
profiles
VARIABLES FOR SEGMENTING BUSINESS
MARKET
• Geographic segmentation: nations, states, regions, cities. Largest display
store in Delhi, Medium in Mumbai, Small in Rajsthan. Starbucks: more coffee
and dessert for the Southern states customers.
• Demographic segmentation: age, gender, family size, family life cycle,
income, occupation, education, religion, race, generation, and nationality.
Most popular and widely used bases.
• Age and life-cycle stage: baby gap, gap kids, gap maternity
• Gender: clothing, cosmetics, toiletries, magazines. Facial cleansing, eye brow,
mascara
• Income: automobiles, clothing, cosmetics, and travel. Target affluent customers or
low income consumers. rural users
• Psychographic segmentation: social class, lifestyles or personality
characteristics. Mercedes, Tata,
VARIABLES FOR SEGMENTING BUSINESS
MARKET
• Behavioral segmentation: dividing groups on the basis of knowledge of, attitude
toward, use of, or response to a product. Cold Ovaltine, Mobil oil users
• Occasions: coke in the morning, water resistant watch,
• Benefits sought: different toothpaste, different laundry detergents, different
shampoo, different body lotion.
• User status: non-users, ex-users, potential users, first time users, regular users.
Blood bank (regular donors, first-time donors, ex donors).
• Usage rate: Heavy users make up only 15 - 20% of all buyers but consumer 50 -
55% of all products. Extremely loyal or always search for lower price
• Loyalty Status: brand (Sony), stores (Palladium), company (Apple)
Cross selling
 REQUIREMENT FOR EFFECTIVE
SEGMENTATION
To be useful market segments must be:
• Measurable: size, purchasing power, and profiles can be measured. Scattered
customers difficult to measure (left handed people)
• Accessible: effectively reached and served.
• Substantial: large or profitable enough to serve.
• Differentiable: conceptually distinguishable and respond differently to different
marketing mix elements and programs.
• Actionable: Sufficient resources, marketing capabilities I.e. effective marketing
programs can be designed for attracting and serving the segments. Staff limitation
 EVALUATING MARKET SEGMENTS

The process of evaluating each market segment’s attractiveness and selecting

one or more segments to enter.

Evaluating market segments

Three factors:
• Segment size and growth: right size and growth. relative
• Segment structural attractiveness: strong competitors, substitute products,
power of buyers, powerful suppliers
• Company objectives and resources: make sense for long run objectives
and have required resources.
 SELECTING TARGET MARKET SEGMENTS
Selecting target market segments
Target marketing strategies:
• Target broadly (undifferentiated / mass marketing): ignore market
segments, go after the whole market with one offer. Coca-cola, keep down cost
• Differentiated marketing: target several market segments and designs
separate offers for each. GM (cars for every “purse, purpose, personality”);
P&G – more total market share. Increase cost.
• Concentrated (niche) marketing: large share of one or a few segments or
niches, ignored by larger competitors. limited resources, gain operating
economies through specialization. Porsche – sports car market, Volkswagen –
small car market.
SELECTING TARGET MARKET SEGMENTS

Selecting target market segments

Target marketing strategies (continued):
• Micromarketing: tailor products and marketing programs to the
needs and wants of specific individuals and local customer
groups.
• Local Marketing: local customer groups – cities, neighborhoods, Retailers.
Customize each store’s merchandise and promotions.
• Individual Marketing: individual customers. Dell computer.
 CHOOSING A TARGET MARKETING
STRATEGY DEPENDS ON:
Choosing a Target Marketing Strategy Depends on:
• Company resources: limited resources – concentrated marketing.
• Product variability: Uniform products, undifferentiated marketing. Steel. Variety
products, differentiation or concentration. Automobiles.
• Product’s life-cycle stage: new product, one version, undifferentiated or
concentrated marketing. Mature stage, Differentiated.
• Market variability: same tastes, buy same amounts, react same way to marketing
offers, undifferentiated.
• Competitors’ marketing strategies: competitors use differentiated or concentrated,
then undifferentiated is suicidal. Competitors use undifferentiated, then differentiated
gain advantage.
 CHOOSING A POSITIONING STRATEGY
Arranging for a product to occupy a clear, distinctive, and desirable place
relative to competing products in the minds of target consumers. Bata –
durable, Tide – powerful, Toyota – economy, Cadillac/Mercedes – luxury, Dettol
soap – health and hygiene.
Choosing a Positioning Strategy
The positioning task consists of three steps:
• Identifying possible competitive advantages: offer consumers greater value,
either through lower prices or by providing more benefits that justify higher
prices. Offer and deliver.
In what specific ways company can differentiate its offer?
Market offer can be differentiated along the lines of product, services, channels,
people, or image.
Positioning is on the basis of price, attributes, benefits, user, usage, application,
etc.
 POSITIONING FOR COMPETITIVE
ADVANTAGE
• Choosing the right competitive advantages: How many differences to
promote and which ones.
• How many differences to promote: only one benefit (Colgate – anti-cavity
protection), more than one benefit (Dove/ Nivea – three-in-one bar soap
I.e. offering cleansing, moisturizing and deodorizing benefits).
Must avoid three major positioning errors. Under-positioning, over-
positioning, confused positioning
- Which differences to promote: important, distinctive, superior,
communicable, preventive, affordable, profitable (Pepsi – crystal Pepsi)
POSITIONING FOR COMPETITIVE ADVANTAGE
• Selecting an overall positioning strategy: value proposition – the full
positioning of brand.
Five winning value propositions upon which companies can position
their products:
• More for more: produce high quality products, charge a high price,
distribute through high quality dealers, advertise in high-quality media,
hire and train more service people. upscale product at higher price
(Mercedes-Benz automobiles; Haagen-Dazs ice cream)
• More for the same: Dove
• The same for less: Best Buy, best in the category
• Less for much less: wheel detergent
• More for less: winning value proposition. P&G laundry detergent, Dell.
 ADVANTAGES OF MARKET SEGMENTATION:
• Facilitates consumer-oriented marketing (specific marketing mix helpful in achieving marketing
objective)
• Facilitates suitable marketing mix (helps to understand needs of consumers, behavior, expectations,
4p’s decision)
• Facilitates effective product strategy (facilitates product that match with consumer needs)
• Facilitates the selection of promising markets: (concentrate the most profitable and productive
segment)
• Facilitates exploitation of better marketing opportunities: (distinguish one customer group from
another helps him decide his target market, helps him to utilize the available marketing resources)
• Provide proper direction to marketing efforts: (avoid wastage in marketing efforts, avoid market
which is unprofitable and irrelevant)
• Ensures effective advertising: (advertising media can reach to the segment which is selected)
 LIMITATIONS

• Too much concentration on few segments is dangerous: a firm has no

capacity to take care of all segments so it has to concentrate on certain
segments, it may affect the firm adversely.
• Rational segmentation is difficult: difficult to divide the whole country
on the basis of demography, psychography etc. in a vast diverse
country like India.
LECTURE KHATAM… GHAR JAO!!