Rural Marketing

Segmentation
y

Dividing heterogeneous market into sub markets Heterogeneity x Population size, socio cultural difference between regions, difference in income level, family structure Effective segmentation:

   

Measurable Accessible Differentiable Substantial

Example:- Bajaj Auto Ltd

Degrees of segmentation
1.Mass marketing: y Most marketers used this in rural markets y All consumers being treated the same y company could target maximum no. of consumers y First step in marketing-less market knowledge

HLL offered Surf to all consumers. Then Nirma entered, seized the market share of low income households. Then HLL introduced Wheel

Colgate Palmolive successfully marketed same toothpaste to all consumers in urban and rural market. Recently they introduced Cibaca when the rural market became more demanding

2.Segment marketing
Identifies customers as different groups y Ex-1 :Colgates 10gm sache in 2000 aimed rural consumer y Ex-2:LGs low cost television Sampoorna (1999)
y

Britannia introduced smaller pack sizes of Tiger biscuits in 1998,Rs4,Rs 2 Rs 1 pack

3.Niche marketing
Serves selectively one or a few customer groups y Niche marketing is used when there is a small group with specific need .Our rural market is not matured to this level Eg: Hero Honda bikes, Nokia mobiles
y

4.Micro marketing
Focus on individuals or very small groups y To satisfy a particular taste or need Eg: Dabur launched Anmol,a mustard and amla based hair oil to target rural consumers in northern markets who used loose mustard oil.50 ml pack worth Rs 10. Micromarketing is divided into 2
y

i)Local marketing
This involves designing brands and promotions to suit the needs of local customers on the basis of geography and demography. Eg:Philips promotion programme in Tamil Nadu Engavetta superstar.In TN Rajnikanth is the superstar
y

In Andra pradesh they launched the campaign maa inti megastar. In AP Chiranjeevi is the megarstar y This strategy helped them to increase their television sales by 25-30%
y

Eg 2. MRF introduced nylon bullock cart tyres.They used the muscleman symbol as well as their leadership in tyres.Finally the communication revolved around the brand name and its meaning viz., Pahalwan Muscleman.MRF became the leader.

ii)Individual marketing
y

Individual can get the product made exactly to his need Eg: carpentary,tailoring

Segmentation
Process of diving a heterogeneous market into several sub markets or segments, each of which tends to be homogeneous in all aspects. y Geographic y Demographic y Psychographic y Behavioral

Geographic Segmentation.
Commercial

North Aggressive Dominant Big is

Emotionally expressive

Open to new products

beautiful
Geographic Segmentation..

Generous

West Leisure Simple life Money is god Democratic Simplicity Cleanliness/Hygiene

East
Sensual Assertive Women Men
Socialistic,idealistic

South Sensual, rational Diligent

Family centric Health Conscious Culturally Conscious

Village Population and Density size of population- a major factor that determines the overall potential demand for a product/service. Class I- population over 5000. Class II- population between 1000- 5000 Class III- population less than 1000.

Climate
Climatic conditions play an important role. Eg: Talcum powder in hot and humid regions, and health tonics in winter.

Culture
Society and culture provide insights into the attitudes of people and their needs.

Demographic Segmentation
y

Age and Life Cycle

Pre Independence Pain of Nation Building(Post Independence) Pain of Liberalization(1985 onwards) Liberalization Children( 1990 onwards) Millennium Children( 1997 Onwards) Marketers target the age group of 8 15, exposed to urban markets; education; Old age and above the age of 35- influenced by traditional customs.

Demographic Segmentation
y

Family Structure
Joint family and large families still predominate. Increase in family size- increase in consumption. Also leads to multi brand consumption. Increasing nuclear families- greater demand of products, esp. consumer durables like TV, cooker, LPG connection.

Demographic Segmentation
y

Income
Income is seasonal( post harvest for farmers) or Weekly/daily( Wage Earners) . Multiple sources of income( agriculture, dairy etc) Agricultural income is not taxable.

Demographic Segmentation
y

Landownership
55% of income in rural areas coming from agriculture.
x x x x x Marginal Farmers- holding upto 1 Hect Small Farmers- 1-2 hect Semi-medium Farmer- 2-4 hect Medium Farmer- 4- 10 hect Large Farmer- 10 hect and more

Demographic Segmentation
y

Occupation
Farm based occupations. Cultivators: farm owners, marginal farmers. Agri and non agri labour. Poultry, dairy Salary earners: doctors, teachers. Traders, micro entrepreneurs.

Demographic Segmentation
y

Education and House types

Education: Illiterate, Below SSC, SSC/HSC, College Houses: Pucca, Semi -Pucca, Kuccha.

Religion and castes

Differences in religion and caste visible in terms of settlement patterns in villages. Village shops are demarcated along similar lines.

Psychographic Segmentation In Rural India.

Psychographics include personality traits, lifestyle & value system.

Some Examples
y

Affordability -- Godrej introduced three brands of Cinthol, Fair Glow and Godrej (soap) in 50-gram packs, priced at 10 cents; Adidas and Reebok increased their sales by 50% in rural markets by reducing prices. Size and design changes -- Videocon introduced a washing machine without a drier for US$60; Philips launched a low-cost smokeless chulha(stove); DCM Shriram developed a low-cost water purifier especially for rural areas. Improving product acceptance -- LG Electronics developed a customized TV (cheap and capable of picking up low-intensity signals) for the rural markets and christened it Sampoorna. It sold 100,000 sets in the first year; Coca-Cola provided low-cost iceboxes as regular power outages meant families could not depend on refrigerators.

Lifestyles
y

Trendsetters Adopters Traditionalists

Behavioral segmentation
Occasions y Benefits sought y User status y Usage rate y Loyalty status y Place of purchase
y

Targeting
y

Targeting involves evaluating and selecting various segments. Steps 1. Evaluation and Selection of segments 2. Coverage

Evaluation and Selection

While evaluating market segments, two broad factors are considered: 1.Overall attractiveness of each segment
y

Size, Growth rate, Accessibility, Profitability, Low risk

2. Companies objectives and resource competencies.

Long term and short term objectives of companies Its resources and capabilities should also considered

Coverage strategies
1.

Undifferentiated Marketing
It take into consideration what is common requirements among consumers, and try to include it in the offer Ex : Medimix---claims it as a beauty care ayurvedic family soap.

Coverage strategies
2. Differentiated / Targeted Marketing Differentiated marketing strategy investigates and identifies the difference between segments and tries to match the market offer to the desire and expectations of each segment. Ex : Tractors 25 - 30HP for small/marginal and 50HP for large farmers

Coverage strategies
3. Concentrated Strategy - Concentrate on single segment, also known as niche marketing - Risk of changing preference of customers
HUL dominate the mass market in the rural with a series of niche brands, each aimed at small section of customers. Ex-Lifebuoy, Lifebuoy Active, Lifebuoy Gold

SEGMENTATION .Very Varied hence proper segmentation very essential

Geographic: Region: North, East, West and South Village size Climate Demographic Age Family Size Gender Income, Occupation, Education, Caste Psychographics (consists of psychological: sociology: anthropological) Lifestyle Rigid ,changing attitude, urban influence

Personality Authoritarian, Ambitious Behavioral Occasions Benefits User status regular user, first time user, non user Usage rate Loyalty Light, medium, heavy None, medium, strong Regular, special occasion

Attitude to product : positive, negative, hostile

Different variables could be used.. multilevel segmentation

Rural Segmentation
Basis for Segmentation may be
y

Region wise Climate/Irrigation level (irrigated/un irrigated) Nearness to a town Population concentration Ex- Micro finance companies Age (rural youth) Income; 75% income is from Land Land holding pattern( Marginal, small, semi-medium, medium, large ) Ex- Fertilizer, insecticide, pesticide etc Sociological Basis: 6 segments (Gaikwad)(proprietors of Land, Rich Farmers belong to dominant caste of area, small peasants or marginal farmers owning uneconomic land holding,Tenanats farmers operating on rented lands, agricultural Labourers, artisans and others including the unemployment) Ex- Consumable and durable items Progressive ness of farmers (progressive, semi progressive, traditional) Ex- Tractor and agricultural implement companies

Multi variable Segmentation Geo demographic: Thompson rural market index: (HTA,1972)355 districts with 26 variables. It has strong co relation with 10 selected agriculture related variables (Agriculture laborer, Gross cropped area, Gross irrigated area, Area under non food crops, pump sets, fertilizer consumption,Tractor, rural credit, rural deposit, villages electrified) Class of market Index range No of districts % of market A 60-100 22 17.8 B 40-59.99 39 20.5 C D E 30-39.99 20-29.99 Below 20.00 54 86 154 355 20.4 23.0 18.3 100.0

Mica Rural Market Rating

MICA rating: Data from 1991 census. All 459 districts are covered Total value of agricultural output, Bank advances, cropped area, irrigated area, no of cultivators, fertilizer consumption
A total of 42 socio economic indicators are used for ranking. For each district the socio economic indicators are classified in the following categories
y y y y y y y y y

Demographics Major occupation Communication methods Educational profiles Shops and other establishment Commercial banks Agricultural Data Medical facilities Major crops be stored on five parameters;Demographic,Agricultural,Income,literacy,civic amenities

Lin: quest: Initiative media developed Lin:Quest a software package. Data can

Class
The Affluent/Very Rich

Rural Consumer Classification

Households owning

1995-96
1.60%

2006=2007
5.60%

personal cars/jeep with other products The Well Off Household owning any/all of the foll. 2.70% 5.80%

A.C/Motorcycle/scooter/washing m/c

colour TV with other durable (No car/jeep) The Climbers Households owning any/all of the foll 8.30% 22.40%

VCR/VCP,mixer grinder sewing m/c

audio equip, B/W TV,geyser with other durables

(not those mentioned in above 2 categories) The Aspirants Households owning any/all of the foll 26.00% 44.60%

bicycle,electric fans, electric iron with other durab

(not those mentioned in above 3 categories) The Destitutes/Poor Households other than those classified above 61.40% 20.20%

Households owning any/all of the foll

wristwatch,pressure cooker,cassette recorder

transistor/radio

Source - NCAER

RURAL MARKET RESEARCH

Marketing Research is a formalized means of obtaining Information to be used in making marketing decisions

Issue Design Manage Analyze Communicate

Information Required to address MR Method of Collecting Information The data collection process The results Finding and implication

Types of rural studies

Qualitative studies in certain specific areas y 4 As of rural marketing y U&A(usage & attitude) or KAP(knowledge, attitude & practices) y Feasibility y Mapping distribution, promotion and communication channel

SOURCES

Primary Sources
Retail shops/STD booths Tea Stalls Playgrounds/schools Chaupals (meeting point old/middle aged/influential) Haats & Melas
Location for conducting research:
Caste neutral place in village Easy to locate Where it is easy to find people Where it is easy to initiate a conversation

FOR

CONDUCTING

Influence Group

RURAL

Secondary Sources
Government website
www.censusindia.com, www.indiastat.com www agroindia.com

MARKET

NCAER, NSSO, CSO, DRDA, ICDS, Panchayat office

Private bodies ( Rural panels of market research advertising agencies, Indian Market Research Bureau Thompson Rural Index Guide to Rural Markets) Publications State statistical abstract District statistical handbook

RESEARCH

Tool Kits Used for Rural Market Research

Primary Data collection

Data Collection Method:
Normally in depth interviews  Focus group discussion  PRA( Participatory rural appraisal),Tools are (Social Mapping, Resource mapping, Seasonality diagram,Venn diagrams)


PRA
Large and heterogeneous in nature, ensuring participation from all walks of life As expression is both verbal and non verbal, even less assertive people can express their views Moderators role is low, hence information flow is more natural Attitudes and behavioral change oriented On-the sport analysis by participants Cross checking and validation of data can be done on site by involving other members or groups

FGD(Focus group discussion)

Typically small and homogeneous in nature A verbal channel outspoken individuals dominate the discussion Moderators intervention can be high in evoking response and form all sections Action oriented Analysis done by moderators FGD needs to be verified with more FGD till a consensus is reached

Measurement and scaling method

y y y

Faces for rating Wheels with different colors

Ladder Questionnaire design: GIGO principle applied

Simple and direct questions Self explanatory Should have logical flow Local language Population spread Scattered and remote location Heterogeneity Village sampling Respondent sampling

y y y y

Sampling: Factors
y y y

Sampling process:
y y

POINTS TO REMEMBER

FOR

RURAL MARKETING RESEARCH

Remember
Build Rapport - *** Greet need to be informal Speak local language Do not jump to survey speak of other matters of interest Gradually lead to the objective of the interview Explain the benefit of the survey how it will gain Interviewer should be aware of the rural area Never make the respondent uneasy if he offers tea do not refuse Attributes of rural researchers:
Mindset Effective communication Discerning ability Good memory Patience

Limitations of rural research

Low literacy levels y Poor media exposure, low product and brand awareness y Local language communication y Scattered and remote villages; inaccessible roads y Social taboos; difficulty in interacting with women respondents y Interviewing timing y Rule our revalidation of data
y

Rural research business

Main players are
y y y y y y y y y

NCAER: National Council for Applied Economic Research (NCAER) ORG-MARG NFO-MBL Sampark MART ORCN(Ogilvy rural communication network), New Delhi Rural communication & marketing (RC & M), New Delhi Initiative media Anurag-madison, Chennai

Future of Rural Marketing

Future of Rural Marketing

Focused marketing strategies y Product:  New product to meet the specific need  Strong R&D team  Rural centric approach to product development y Price:


 

We may see share of low unit packs coming down somewhat and economic packs gaining share(As rural income continue to rise) We may see companies shift their focus from trade to consumers( As reach of media and awareness level improve) Another factor favoring consumer schemes in future is the expected proliferation of multi brand open format stores which will take competition directly to consumer and better offer would be a definite incentive for the buyer , to choose a particular brand

Distribution: y Communication y Market research y Consumer finance y Rural vertical y Retail and IT models y Rural Managers y Glamorize rural Marketing y Public- private partnership
y