Market segmentation

1. Segmentation of Indian
Rural Market
Dr. Syed Mohd Jamal Mahmood
Assistant Professor, School of Management
GD Goenka University

2. Introduction
Ma.rketer 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 .

3. What is Segmentation?
 Segmentation is the process of dividing a
heterogeneous market, into several sub- markets
or segments, each of which tends to be
homogeneous in all significant aspects.
 Heterogenity
Population size, socio cultural difference
between regions, difference in income level,
family structure.

4. Segmentation
 Market Segment: A group of consumers who respond in
a similar way to a given set of marketing efforts.
 Market Segments helps distinguish one customer profile
from another within a given market.
 Segmentation facilitates in understanding the needs of
target buyers.

5. Segmentation
 75% of people in rural India are engaged in agriculture,
but they cannot all be clubbed under one omnibus
category of farmers.
 There are;
 large farmers,
 medium farmers,
 small farmers,
 marginal farmers and
 agricultural labourers.
 Their income levels, lifestyles and behaviour are
different from each other.

6. What are Prerequisites for an
effective Segmentation:
Measurable- The variables in each segment should be distinct,
clear and measurable.
Accessible- It is important that marketers should access each
segment so that they can serve it.
Differentiable- Each segment should differentiate from the
other.
Substantial- A segment should posses the following
characteristics i.e. homogeneous (similar in terms of perception,
learning, attitudes and action), large.

7. Degrees of Segmentation:
Mass Marketing
Segment Marketing
Niche Marketing
Micro Marketing (i)Local Marketing
(ii)Individual Marketing
Mass Marketing : Most marketers used this in rural markets.
All consumers being treated the same.
Company could target maximum no. of consumers. First step in
marketing-less market knowledge

8. Segment Marketing
 Identifies customers as different groups


E.g.1: Colgates 10Rs sache in 2000 aimed rural consumer
Eg2: LG s low cost television Sampoorna(1999)

9. Niche Marketing

Niche marketing is used when there is as small group with specific
need .Indian rural market is not matured to this level
Eg: Hero Honda bikes, Nokia mobiles

10. Micro Marketing

In this marketers focus on individuals or on very small groups just to satisfy a
particular taste or need of customer.
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.

11. Micromarketing is divided into Two..
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 TamilNadu Engavettu superstar.
In TN Rajnikanth is the superstar.
-- Castrol Using Rajani Kanth Too.

12.  In Andra pradesh they launched the campaign maa inti megastar.
 In AP Chiranjeevi is the megastar This strategy helped them to
increase their television sales by 25-30%
Similarly Coca cola India Used Chiranjeevi in Thumbs Up
Promotions.

13. Individual Marketing
This involves designing the products according to the exact need of
Individuals’ can get the product made exactly to his need.
Eg: carpentry, tailoring .

14. Why is segmentation useful ?
Segmentation helps a firm in tailoring their marketing programs
Firm’s can focus, take action and access new set of the market.
It helps in reducing wasteful expenditures on unwanted consumers
Firm’s can easily match needs and wants of specific groups of
buyers to firm’s offerings
Segmentation stimulates demands through multi-products for multi-
segments.
It helps in resource allocation to segment specific marketing mix
activitiesand make it more efficient
Segmentation is a way to plan rather than explain.

15. Bases
Geographic - Rural Urban, Zones, Climate, States,
Districts, Population, Culture.
Demographic – Age, Lifecycle, Gender, Marital
Status, Family Size, Income, Occupation, Land-
Holding, Education, Religion.
Psychographic –
•Lifestyle –Trend Setters, Chameleons
•Personality– Pleasant and Assertive.
Behavioral Segmentation- Occasion, User Status, Usage
Rate, Loyalty, Place of purchase, product possession
categories.
Basis of Segmentaion

16. Geographic Segmentation:
Zones- East, West, North, South
Climate- Tropical, Rainy and Cool
States- 30 States including UT
Districts- With different market potential
Villages- Corridor Villages (close to feeder town), Accessible Villages,
Remote Villages
Population Density- High and Low
Culture- Traditional Vs Modern.
Beautiful
SOUTH
Sensual, Rational, Diligent
http://www.facebok.com/mr.fortyseven

17. Demographic Segmentation
Age- Under 6, 6-12, 13-19, 20-40, 41-60, 60+
Life Cycle- Infants, Children, teens, young adults, elders, seniors
Gender- Male, female and others
Marital Status- Married and Unmarried
Family Size- 1 to 2, 3 to 4, 5+
Income- Below 25k, 25k-50k, 50k-75k, Above 75k
Occupation- Student, Farmer, Labour, Businessman, Govt. or Private
Employee.
Land Holding- Landless, Marginal, Small, Large
Education- Illiterate, Elementary School, High School
Religion- Hinduism, Islam, Christianity

18. Psychographic Segmentation
Lifestyle- Trend Setters, Traditionalist, Chameleons
Women- Capable homemaker, Career Woman, A free Sprit
Personality- It can be define with the help of self confidence,
sociability, adaptability, assertiveness, autonomy, sensitivity,
creativity, autonomy etc.

19. Some examples are
 Affordability Has changed the Life style
-Godrej introduced three brands of Cinthol, Fair Glow and Godrej (soap)
in 50-gram packs, priced at Rs 5.
 Adidas and Reebok increased their sales by 50% in rural markets by
reducingprices. Size and design changes
 Videocon introduced a washing machine without a drier for US$60;
 Philips launched a low-cost smoke less 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 ice boxesas regular power outages meant
families could not depend on refrigerators.

20. Behavioural Segmentation
Occasions- Family, Religious, national, political and weekends
Benefits sought- Emotional, rational and moral
User Status- Ex-user, first time, regular, and potential
Usage Rate – Heavy, Medium, Light
Loyalty- Strong, Weak, non- loyal
Place of Purchase- Retail outlets, haats, feeder towns, mobile vans
Product Possession- Product Hierarchy

21. Socio-economic Classification
It is a measure used to classify and target
consumers based on certain parameters, as
defined by Market Research Society of Indian
(MRSI) in 2011.
SEC Classification is based on two variables-
A) Education of Chief Earner-
B) Numbers of Consumers Durables owned by family.
11 durables- Electricity connection, Ceiling fan, LPG Stove,
Two Wheeler, Colour TV, Refrigerator, Washing Machine, PC/
Laptop, Car, AC, Agricultural Land.

22. Grades Of SEC System:
Based on these two variables 12 grades are being identified in
SEC system
• A1,A2, A3
• B1, B2
• C1, C2
• D1, D2
• E1, E2, E3
These 12 groups are applicable to both urban and rural India

23. The Grid of SEC

28. Thank You