Chapter 5
Segmenting and Targeting Rural
Markets
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Rural Marketing, 3/Ed Pradeep Kashyap
Learning Objectives
• Describe the concepts of segmentation, target marketing
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and market positioning, stressing the need to recognise
heterogeneity amongst rural consumers
• Understand the major bases for segmenting rural
consumers and segmentation strategy
• Understand how companies identify attractive market
segments and choose target marketing strategy
• Realise how companies position their products for maximum
competitive advantage in the rural marketplace
Rural Marketing, 3/Ed Pradeep Kashyap
Introduction
• Marketers need to progress
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from traditional descriptive,
Segmentation geographic and democratic
traits to behaviour,
psychographics in rural
Targeting
• They also need to evolve
different targeting and
positioning strategies to
Positioning penetrate rural markets
Rural Marketing, 3/Ed Pradeep Kashyap
Segmentation
• Sub-division of a market into homogenous subsets of
customers which can be reached with a distinct marketing
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mix
• Profiles can be developed suitably
• Rural customers can be segmented as:
Self-employed farmers
Daily wage labour
Salaried employees
Traders
Micro-entrepreneurs
Rural Marketing, 3/Ed Pradeep Kashyap
Heterogeneity in Rural Markets
Socio-cultural differences
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Population size and density
Level of infrastructure development
Media exposure levels
Variations in literacy levels
Differences in income levels and income flow
Family structure
Rural Marketing, 3/Ed Pradeep Kashyap
Pre-requisites for Effective Segmentation
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Measurable Accessible
Differentia
Substantial
ble
Rural Marketing, 3/Ed Pradeep Kashyap
Degree of Segmentation
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Mass Segment Niche Micro
marketing marketing marketing marketing
• Considers all • Identifies • Serves • Focuses on
customers customers as selectively individuals or
homogeneous separate one or a few very small
• Companies groups customer groups
use this while • HUL – Hamam groups • Dabur’s
entering rural and Lifebuoy • Ghari using Anmol hair oil
markets enter quality of
water to
launch
variants
Rural Marketing, 3/Ed Pradeep Kashyap
Bases for Segmenting Rural Consumer
Markets
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Geographic Demographic
Psychographic Behavioural
Rural Marketing, 3/Ed Pradeep Kashyap
Geographic Segmentation
• By regions: North, south, west, east
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• Village size: <1,000; 1,000–2,000; 2,000–5000; >5,000
• Density: Low, moderate, high
• Climate: Summer, rainy, winter
• Culture: 56 socio-cultural groups
Regional Differences Among Consumers
Rural Marketing, 3/Ed Pradeep Kashyap
Demographic Segmentation
Age and Lifecycle • Children, teens, young adults, elders, seniors
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Family structure • Joint family, invidualized joint family, nuclear family
Gender • Male, female
Income • Deprived, aspirers, seekers, strivers, global
Land ownership • Landless, marginal, small and large
Education • Illiterates, semi-literates, literates
House type: • Pucca, semi-pucca, kuccha
Occupation • Self-employed farmers, daily wage labourers, salaried, traders
Religion • Hindu, Muslim, Christian, Sikh, Parsi
Caste • Upper caste, lower caste
Rural Marketing, 3/Ed Pradeep Kashyap
Psychographic Segmentation
• Upper
Social
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• Lower
Class • Middle
• Trendsetters
Lifestyle • Followers/adapters
• Traditionalists
• Authoritarian
Personality • Ambitious
Rural Marketing, 3/Ed Pradeep Kashyap
Psychographic Segments in Rural
India
Rural Demographic
SEC Rural Lifestyle
Characteristics
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Landlord farmers, educated, exposed to urban Aspiring to match urban lifestyle, technology adopters,
environment, children in schools, colleges in experiment with modern farming methods, eager for
nearby towns, owns durables like tractor, two additional sources of income socially and politically well
wheeler, TV, music system, steel cupboard, LPG, connected, high spenders on social occasions
R1 refrigerator, mixer-grinders
Rich farmers with about 5 acres of land, may not Want children to get educated, consult friends and
be educated, friends and relatives living in urban relatives in urban areas for technology adoption,
areas, owns durables like tractor, two wheeler, TV, conscious of status, aspire to be well known in social
R2 LPG and political circles
Average landholding 2 – 5 acres, manages small Opt for time-tested technology, low risk-taker, desire
savings, children sent to village school, owns more knowledge, followers, seekers
R3 durables like TV, tractor (self and rental)
Have little or no land, agricultural labour, living Laggards, averse to latest technology, risk averse,
below poverty line, a major purchaser from public uninformed
R4 distribution system
Rural Marketing, 3/Ed Pradeep Kashyap
Behavioural Segmentation
Occasions • Festivals, melas, jatras, weekly haats
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• Quality, convenience, value for money,
Benefits sought service, etc.
• Non-user, ex-user, first time user, regular
User status user, potential user
Usage rate • Light user, medium user, heavy user
Loyalty status • Strong, weak, non-loyal
• Village shop, haats, nearby town, melas
Place of purchase and jatras
Rural Marketing, 3/Ed Pradeep Kashyap
Behavioural Segmentation
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Rural Marketing, 3/Ed Pradeep Kashyap
Targeting
• Overall attractiveness by size, growth rate, accessibility, etc.
Evaluation of
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• Company objectives and resource competitiveness
Segments • Go to rural markets rather than wait for customer
Selection of • Rating on a pre-determined scale
Segments
• Undifferentiated marketing - Nirma
Coverage of • Differentiated/targeted marketing - Lifebuoy
Segments • Concentrated marketing – Multiple brands of soaps of HUL
Choosing a • Depends on company resources, product variability, product
lifestyle stage, and market variability
Coverage Strategy
Rural Marketing, 3/Ed Pradeep Kashyap
Positioning
• The act of designing the company’s offerings and image to
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occupy a distinctive place in the target segment
• Begins with construction of a visual map (perceptual
positioning map) of the customer’s mind
• Existing brands tend to cluster around particular spots
• Marketers need to position brands in new attractive spots:
Ghari in low price, high quality
Rural Marketing, 3/Ed Pradeep Kashyap
Positioning
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Identifying the Selecting the
Developing the Communicating
positioning positioning
concept the concept
concept concept
• Product • Attractive • Concept • How many ideas
differentiation • Distinctive development /differences to
• Service • Pre-emptive • Select promote?
differentiation • Affordable appropriate • Which
• People • Communicable media positioning to
differentiation promote?
• Image
differentiation
Rural Marketing, 3/Ed Pradeep Kashyap
Rural Marketing Case
Bru Instant Coffee Connect
1. What communication challenges did Bru face? Which
innovative media vehicle was chosen was chosen for
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reaching the target group? Why? What else could have
been used to improve the campaign?
2. What kind of impact was generated by the campaign?
How much rural growth was achieved as a result of the
campaign?
3. Identify different consumer segments among health food
drinkers in rural. Suppose a new brand “Health Plus” is
entering this market. As the brand manager of the
company, explain how you enter this market and address
the communication challenge for different segments.
Rural Marketing, 3/Ed Pradeep Kashyap
Successful Mantra in
Segmentation, Targeting and
Positioning in Rural Markets
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Do Not Over -Segment
Develop Segment-by -Segment
Invasion Plans
Rural Marketing, 3/Ed Pradeep Kashyap