rural market segmentation-1
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RURAL MARKET RURAL MARKET SEGMENTATIONSEGMENTATION
Module 2 Module 2 last linelast line
Facts, rural market accounts Facts, rural market accounts forfor
54% of all Indian FMCG sales.
59% of durables (home appliances, electronics, furniture, toys etc…)
100% of agri-input sales including tractors.
10% - 50% of two wheeler and four wheeler sales.
What is segmentation?What is segmentation?
AQUAGUARDAQUAGUARD Rs. 8000/- Rs. 8000/-
PUREIT PUREIT Rs. 2000/- Rs. 2000/-
SWACH SWACH Rs. 749 Rs. 749
All 3 does the same All 3 does the same function, it purifies water.function, it purifies water.
But why 3 different prices?
Is it because of the brand?
Is it because of the buyer?
What is segmentation?What is segmentation?
Market Segmentation is dividing a market into distinct groups of buyers who have distinct needs, characteristics, or behavior and who might require separate products or marketing mixes.
Segmentation is mainly Segmentation is mainly because ofbecause of
◦Occupational differences
◦Income-level differences
◦Different educational levels
Occupational differences:Occupational differences:The rural consumer could be a
◦Person who is working in the nearest town.
◦Small and marginal farmers.
◦Agricultural labors.
◦Artisans (furniture, clothing, jewellery, household items, and tools)
◦Rich farmers (land lords)
Income-level differencesIncome-level differences
Rural India has an average per capita income that is half of that of urban India.
428 million people in rural India has an annual income of less than Rs. 75000 per annum against 49 million people in urban India.
Different educational Different educational levelslevels 26% of rural India’s chief wage earners
are illiterate compared to 7.9% of urban India.
For ex:Punjabi farmer has a better standard of
living compared to farmers in Bihar and U.P. He likes to spend a lot and is aware of several brands because of television penetration.
The villagers in Bihar, UP and MP have low literacy rates, caste affiliations. They lack supply of electricity. The spending power is also lower.
Bases for segmentationBases for segmentation
Geographic segmentation
Demographic segmentation
Behavioral segmentation
Geographic segmentation Geographic segmentation Variables Categories
Zones/region East, west, north, south
Climate Tropical, rainy, sunny
States 28 states and 7 union territories
Villages Corridor villages (near to town), accessible villages, and remote villages
Population density High and low
Culture Traditional, modern, religious regions.
Demographic Demographic segmentation segmentation
Variable Categories
Age Under 6, 6-12, 13-19, 20-40, 41-60, 60+
Lifecycle Infants, children, teens, young adults, elders, seniors.
Gender Male and female
Marital status Married and unmarried
Family size 1-2, 3-4, 5+
Income Rs. 25,000 and below, Rs 25,000 – 50,000, Rs. 75,000 – 100,000 and above
Land holding Landless, marginal, small and large farmers.
Education Illiterate, school, college, university
Religion There are plenty of religions available in India.
Behavioral segmentationBehavioral segmentation
Variables CategoriesOccasion Family, religious,
national, weekends
User status Ex-user, first-time user, regular user
Loyalty status Strong, weak, light
Place of purchase Retail outlets/ haats, mobile vans
PROMOTIONAL PROMOTIONAL STRATEGIES STRATEGIES
Rural MarketingRural Marketing Rural marketing is promotion of a company's
products in the rural market buy using strategies which differs from that of urban market, the rural market is more price sensitive but it has preference for quality.
The concept of Rural Marketing in Indian Economy has always played an influential role in the lives of people. In India, leaving out a few metropolitan cities, all the districts and industrial townships are connected with rural markets.
EVOLUTION OF RURAL EVOLUTION OF RURAL MARKETINGMARKETING
Period before 1960s -in this phase rural marketing was referred to the marketing of rural products like food grains, cotton, sugarcane, etc.
Post 1960s -Green revolution ushered in scientific farming practices like irrigation facilities, use of fertilizers, pesticides.
Cont…..Cont….. The period from 1980's to the 1990's-was characterized
by a shift in focus to the consumer needs which in turn led to an increase in the number of consumer products.
Another factor that led to a boom in choice was the increased reach of the media and rising household incomes bringing about a major change in lifestyle.
Period between 1990s to present - During this phase, industrial sector gained significance and maturity thereby efforts were made by companies to market FMCG and consumer durables to rural areas.
Comparison between rural Comparison between rural markets and urban markets.markets and urban markets.
Level of awareness: About products and brands which are much lower in rural.
Availability :Against 5000 odd town locations in urban, there are 6 lac village locations in rural, a distribution nightmare.
Affordability :Is lower in rural as per capita incomes in rural are less than half of what they are in urban.
Low penetration of electronic and print media: In rural, awareness creation has to be done using below
the Line media such as haats, mandis, melas etc.
Rural promotional Rural promotional strategies:strategies:
Haats or weekly markets:- where people from surrounding villages conduct trade on fixed days. Covering the needs of a minimum of 10 to a maximum of 50 villages, drawing as many as 4000 villagers.
Melas :-gatherings of people for both entertainment as well as the sale and purchase of goods and services. Over 25,000 melas are held in India annually that hold an average of 7.6 lakh visitors.
Wall Paintings:-one of the most widespread forms of advertising and are quite the favorite amongst the Indian rural masses.
Customer contact ‘touch points’: includes 'Home-to-Home' campaigns and other such customer contact programs that help initiate a close interaction
Van Campaigns:-one of the most popular modes of communicating with rural consumers.
The main benefits of Van Campaigns are: ◦ Better brand building◦ Creating awareness about the brand and the company's
products.◦ Product sampling◦ Point of attraction around which people gather in large
numbers◦ Retail merchandising and door-to-door campaigns.
Cont…Cont… Event Management: There are several folk forms of events
that are performed in different states all over India.Folk media: It consists of folk songs, dances, puppetry,
street theatre, magic shows etc. Interactive games: Many companies designs interactive
games that help draw large crowds where trials can be induced, thus facilitating spot sales.
Others: Other events like sports, drama and entertainment programs etc.
Cont….Cont….
Colgate - An effective way of displaying the product
package is demonstrated innovatively by Linterland
through Colgate
Children smile at the camera during a successful Aim toothpaste promotion.
.
4 A’s of Rural Marketing
1. Availability : Challenge:
Regularly reach products to the far-flung villages.
India's 627,000 villages are spread over 3.2 million sq km; 700 million Indians may live in rural areas
Hindustan Lever, to serve remote village, use auto rickshaws, bullock-carts and even boats in the backwaters of Kerala.
Affordability : Challenge: to provide at cheaper price Strategies: Introduce small unit packs. Godrej introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh the so- called `Bimaru' States. Coca-Cola has addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs 5.
Acceptability : Challenge: to gain acceptability for the product or service Strategies: Offer products or services that suit the rural market.
Easy to understand. Because of the lack of electricity and refrigerators in the rural areas, Coca- Cola provides low-cost ice boxes - a tin box for new outlets and thermocol box for seasonal outlets.
Awareness : Challenge: less exposure to the world, low literacy rate Strategies: Opinion leaders play a key role in popularizing products and influence in rural market so choose the appropriate opinion leader. Can use the following promotional methods: •Personal Interference:•One on One contact programs are extremely efficient manner to reach the Rural Consumer. Provides an opportunity to:Induce TrialEducateDemonstrate
2. Events
1. Personal Selling:
Hero Honda Company Hero Honda Company Profile:Profile:
Joint Venture of Hero Group and Honda Motors
Established in 1980s by Jagdish Lal Munjal
Manufacturing Facilities and Dharuhera and Haryana
3.9 Billion bikes per year
Har Gaon … Har Aangan Har Gaon … Har Aangan ……
1,00,000 of 6,00,000 villages in country.
500 Sales Representatives
Average of 16000 bikes per month.
Integrated Rural Integrated Rural Development Centre Development Centre
IRDC- Spread Over 40 acres in Delhi-Jaipur Highway.
Installation of deep bore hand pumps to provide clean drinking water.
Constructing metallic roads and connecting these villages to the National Highway (NH -8).
Renovating primary school buildings and providing hygienic water and toilet facilities.
Raman Munjal Raman Munjal FoundationFoundation
Raman Munjal Vidya Mandir
Education and Literacy
Raman Munjal Memorial Hospital
Surgical Instruments and Latest technology
Raman Munjal Raman Munjal Foundation- IIFoundation- IIRaman Munjal Sports Complex
basketball courts, volleyball courts, and hockey and football grounds are used by the local villagers
Vocational Training Centre
26 batches comprising of nearly 625 women have been trained in tailoring, embroidery and knitting.
Adult Literacy MissionAdult Literacy Mission
launched on 21st September, 1999
villages of Malpura, Kapriwas and Sidhrawali
the process of imparting Adult Literacy Capsules to another 100 adults by getting village heads and other prominent villagers to motivate illiterate adults.
Marriages of underprivileged girls Marriages are organized from time to
time, particularly for girls from backward classes, by the Foundation by providing financial help and other support to the families
Rural Health Care Regularly provides doorstep health
care services to the local community.
Free health care and medical camps
Ensuring a proper drainage system at each of these villages to prevent water-logging.
Promoting non-conventional sources of energy by providing a 50 per cent subsidy on biogas plants.
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