The document discusses various ways to segment the rural market in India. It describes segmenting by geographic, demographic, psychographic and behavioral factors. It provides examples of companies like Nirma, HLL, T-Series that segmented and targeted specific rural market segments successfully. It also discusses segmentation approaches for the rural market based on village population size, location relative to towns, and landholding size of farmers.

1. Segmentation of Rural Market

2. Marketer 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. Levels of Market Segmentation Mass Marketing or Undifferentiated Marketing e.g. Ruf & Tuf Jeans, Segment Marketing - Cars Niche Marketing – specialize to a narrowly defined customer group – Temple jewellery for South Indian women wanting to take part in cultural programmes Local Marketing – Market around sector 44 Individual Marketing One to One Marketing Mass customization – ability to prepare on a mass basis individually designed products

4. Why is segmentation useful ? Segmentation helps firm tailor their marketing programs focuses an actionable and accessible set of the market. cuts of wasteful expenditures on unwanted consumers matches needs and wants of specific groups of buyers to firm’s offerings stimulates demands through multi-products for multi-segments resource allocation to segment specific marketing mix activities will be made more efficient Segmentation is a way to plan rather than explain

5. Bases Geographic - Rural / Urban; metropolis/city/town/village; modern retail stores/kirana stores / mandis/ haats Demographic – Age, Family Size (nuclear or joint ), gender, Income, Occupation, Education, SEC, religion, race, Nationality, social class Psychographic – Use of Psychology and demographics Lifestyle (AIO) – Nike, Benetton, * Personality – Femina – woman of substance * Values – HiDesign leather accessories – consumers who hold the value ‘style and elegance in a classical sense’ Behavioral Segmentation – next slide

6. Behavioral Segmentation - based on buyer’s knowledge of, attitude towards, use of, or response to a product Occasions – Marriage, Birth – Archies and Hallmark cards Benefits – In soaps - Dettol – antiseptic, Lux – Beauty User Status – Non users, first time users, potential users, regular user Usage rate – Light users, medium users, heavy users Buyer Readiness State – Cold Prospect, Hot Prospect Loyalty status – Hard Core Loyals, Split Loyals, Shifting Loyals, Switchers Attitude – enthusiastic, positive, indifferent, negative, hostile

7. Segmenting the Market: Nirma vs HLL Until about twenty ago, the rural market in India was considered a homogenous decade of the 1980s was a significant one for Hindustan Level Ltd (HLL), when the giant and undisputed market leader in detergent (Surf) in Indian Suffered significant losses at the hands of a new and small firm , Nirma Chemicals . Nirma immediately caught th fancy of the middle and lower-income customers, who were finding it difficult to make both ends meet with their limited monthly income. Nirma was the lowest –priced branded washing powder available in grocery and co-operatives stores. The middle class house wife was happy as she could choose a lower priced washing powder against Surf, Which was beyond her budget Around 1984 , HLL decided to take a fresh look at the market. Research conducted across the country revealed that different income groups of consumers had varying expectorations from detergent and washing powder. Thus, to counter the attack from Nirma, HLL launched Sunlight (Yellow), Wheel (green) and Rin (blue) detergent powders for different market segments. This strategy of segmenting the market helped HLL win back part of its lost market.

8. Segmenting the Markets T-Series introduced audiocassettes at unbelievably low price and took away a huge share from the market leader HMV. Cavin Kare studied the Shampoo market and came out with Chik Shampoo priced at 50 paisa per sachet and the brand became an instant hit in rural areas. Titan has introduced Sonata brand watches; priced between Rs 350/- and Rs.800/- to meet the requirement of price sensitive rural and semi urban consumers.

9. Utsav Time Asian Piants Ltd(APL) is India’s largest paints company and ranks among the top ten decorative coating companies in the world today. The company has come a long way since its small beginning in 1942. APl was the first Indian company to go rural In 1999 It launched Tractor enamel paint in rural markets, rural customers started using it to paint the horns of their bullock. APL survey the rural markets extensively with the able support of its advertising agency Ogilvy outreach. They found that there was a gap in demand in the market for paints used for houses. These were two choice available for rural people : the traditional chuan powder, which cost around Rs9 per kg and enamel paint which cost around Rs 50 per liter was very expensive for most rural customers. Chuan powder however was not long lasting . Hence APL launched Utasv distemper exclusively for rural markets in 1999. Utsav is good example of brand that used excellent STP for rural markets.

10. Segmentation Variables Geographic Variables Demographic variables Psychographics Variables Product Related Variables Segmentation variables are the parameters and characteristics of people comprising total market for o product category on which can segment them into groups.

11. Conditions fro Effective Market Segmentation 1.Measurable 2.Accessible Profitable Data Availability Customer Oriented Philosophy Enables Tailoring of marketing Programme Enables Development of strong positioning of Brand

12. Approaches for segmentation the rural market of India Based on Size of Village Population (The size of population residing in a village is a significant factor which determines the overall potential demand for a product or service in that village) Population No.of Villages % of total Villages Less than 200 114,267 17.9* 200-499 155,123 24.3* 500-999 159,400 25.0 1,000-1,999 125,758 19.7 2,000-4,999 69,135 10.8** 5,000-9,999 11,618 1.8** 10,000& above 3,064 0.5** Note:* Hardly any shop in these 2.7 lakh village ** 13% of villages falling in the last three categories account 50% rural population and 60% rural wealth.

13. Based on Location with Respects to Nearby Town Villages Near Urban Centers. Villages in Developing Districts Immobile and self sufficient Asiatic Villages

14. Based on Size of Farmland Marginal Farmer :holding upto 1.0 hectare Small Framer :holding 1.0-2.0 hectare Semi-medium :holding 2.0-4.0 hectare Farmer: Medium Farmer : holding 4.0-10.0 hectare Large Farmer :holding 10.0 hectares and above

15. Rural Market Segmentation Tools Thompson Rural Market Index. Mica Rural Market Rating Linquest Indian Market Demographic Business Intelligence Unit Lincompass ARCVIEW