unit5 rural marketing
DESCRIPTION
TRANSCRIPT
PROFILE OF RURAL MARKET
RURAL CONSUMER
MARKETING RESEARCH
RURAL MARKET RESEARCH
RURAL SEGMENTATION –TARGETING & POSITIONING
RURAL MARKETING STRATEGYRURAL PRODUCT
RURAL PRICE
RURAL DISTRIBUTION
RURAL SALES FORCE MANAGEMENT
RURAL COMMUNICATION
TOPICS
Why should we do this course? Why should we do this course?
Agriculture’s share in GDP is going down, but, India still lives Agriculture’s share in GDP is going down, but, India still lives
in her villages in her villages
Urban markets are crowded and saturated Urban markets are crowded and saturated
The understanding of “rural” is diffused and sometimes The understanding of “rural” is diffused and sometimes
confusing confusing
Is “rural marketing” different from “urban marketing” ?Is “rural marketing” different from “urban marketing” ?
Session Coverage Session Coverage
Rural India – Some definitional issues Rural India – Some definitional issues
Phases/ stages in rural marketingPhases/ stages in rural marketing
Scope of rural marketing Scope of rural marketing
How is rural India changing?How is rural India changing?
Schools of thought- Approaches to Rural Markets Schools of thought- Approaches to Rural Markets
Strategic Issues & Directions in rural marketing Strategic Issues & Directions in rural marketing
What is Rural
Government agencies like IRDA (Insurance RegulatoryAnd Development Agency and NCAER (National Councilfor applied Economic Research) define Rural as villageswith a population <5000 with 75% male population engagedIn agriculture etc”
Concept of Rural from the perspective of marketing has Indeed been dynamic.- gradually changed over the timesWas not India a so called Village/Rural for the world a couple of decades back
Census
Towns are actually rural areas but satisfyThe following criteriaMinimum Population>=500075% of the mail population engaged inNon –agri activity
RB1 Location with population up to 10000 Considered Rural Semi Urban 10000 to 100000
NABARDAll locations upto a population of 10000Will be considered Rural
Sahara
All locations having shops/establishments’Upto 10000 (not population related) areTreated as Rural
LG Elect.The rural and semi urban area is definedAs all cities other than major metros
NABARD National Bank for Agriculture & Rural Dev
What is Rural Marketing
Developing of the market in the area as defined as RuralHence it could be aptly said that it encompasses the Activities such as developing the process to meet thisObjective – Right product at the right price to the right peopleat the right time. Exchange between rural and Urban is aFactor . Could be Urban to Rural: Rural to Urban, Rural to Rural
Reasons for Going Rural
Size of the market
Largely Untapped
Too crowded Urban Market
Income on the rise/disposable income
Income from other than agriculture
Income flow from urban /abroad
Better exposure - mediaGreat success storiesHLL 50%Colgate 50%LG 50%Asian Paints 60%Dabur 40%Videocon 40%Cadbury’s 25%Hero Honda 40%Sorce ORG Marg and Fransis Kanoi
Points to Note with Regard to Rural Markets
Extremely Diverse Market Villages – Size, Population, Spread, Income Literacy levels , awareness level, languages
Urban Market – scope and saturation
Flow of funds – from Urban National /International
Literacy levels on the rise
Media Penetration
Encouraging Indicators/Initiatives for Rural Market Growth
Scientific methods – major impetus to Production of food grains
Export on the rise – Increase in agriculture and handicrafts
Initiatives taken by banks for more branches and Kisan credit card to buy seeds, fertilizers, consumer goods on installment basis
Reputed Companies helping in changing lifestyles – Levers Britania ,Dabur, LG, Honda,Videocon
Media creating an impact-creating awareness levels
Government Policies – White Revolution – Milk products Yellow Revolution (poultry and edible oils) Blue Revolution – Aqua culture
Employment Schemes – JRY(Jawahar Rojgar Yojna, PMRY,Small Industries Training,
Rural Electrification, Spend on Health and Sanitation, Medical and Health, Primary Education,
Credit card for farmers
Waiver of Loans
Initiatives by leading organization in spreading awareness Hindustan Levels Shakti, ITC Reliance etc
Move to Rural Market …encouraging Data
Rural India buys
Soft Drinks approx 45% of all soft drinksAlmost 50% motor cyclesApprox 55% of cigarettesHalf the total market for TV, Fans, pressure cooker, bicycles Washing soap, tea, blades, salt, toothpowder
Coca Cola is growing over 35% in Rural areas compared to Over 22 % in Urban
According to Hasna Research , a market research farm thatHas published a Guide to Indian Markets 2006Consumer durables in Indian Villages risen sharplyTV Sales up by 200%Motorcycle by 77%
There are 3000 households in rural area that earn > 50 lakhs
PROBLEMS
IN
RURAL
MARKETING
Low per capita income
Low disposable income
Inadequate fixed income(daily wages)
Majority – depends on AgriculturalIncomeAcute dependence on monsoonConsumption linked to harvest
Infrastructure problemsRoads, power
Low awareness
Communication- difficult & expensive
Too many languages
Geographic Spread
Digging for Diamond
Urban & Rural Markets
Per capita Income
Disposable Income
Literacy levels
Infrastructure
Communication
Geographical Spread
Customer has many choices
Key Differences
Profile of the Rural Consumer
Profile of the Rural Consumer
>Low Literacy Level>Low Income Level>Massive Geographic Spread Urban population concentrated 3200 cities town Rural scattered over 630000 villages >Reference Group Health Workers Doctors Teachers Panchayat Members
Rural Bank Managers District Managers
Occupation – Principal Farming Trading Handicrafts Cattle & Poultry Farming>Media Habits Fond of music T.V Radio Video Films
Generally they have a lot of reservation/inhibition rigid in their behaviour
RURAL CONSUMER CLASS
The Affluent Class
The Middle Class
The PoorRURAL CONSUMER BEHAVIOR
How does an individual decide to spread hisAvailable resources (time,money effort) onConsumption-related products.
That is – what they buy why they buy when they buy where they buy it how often they buy it how often they use it
Poor
AspirantClimbers
Well Off
Very Rich
Simple Model of Rural Consumer Behaviour
Need Recognition
Pre Purchase Search
Evaluation of Alternatives
Purchase Decision
Post purchase behaviour
Factors that Influence Rural Behaviour
StimuliInputs to any sensesProductsPackageCommercialsBrand imageReferenceInformation cues about the characteristics of the product
Perception Depends on
Exposure InterpretationEg IFB had not adequately Educated farmers about the Washing machine-they thought It was a churn for making large quantities of lassi (prosperous village of Punjab)
Iodex – muscular painReliever used on animalsAfter hard days work in MPGodrej hair dye on BuffaloesTo make them look better inVillage haats in Raichur
Attitude>Consumer beliefConsumer feelings
Key
Challenges
4A
Awareness
Affordability
Availability
Acceptability
4 Ps 4 As
Promotion Awareness
Price Affordable
Product Acceptable
AvailablePlace
RURAL MARKET RESEARCH
Marketing Research is a formalized means of obtainingInformation to be used in making marketing decisions
Market research
Issue Information Required to address
Design Method of Collecting Information
Manage The data collection process
Analyze The results
Communicate Finding and implication
SOURCES
FOR
CONDUCTING
RURAL
MARKET
RESEARCH
Primary Sources
Retail shops/STD booths
Tea Stalls
Playgrounds/schools
Chaupals (meeting point old/middle aged/ influential)
Haats & Melas
Influence GroupSecondary Sources
Government website www.censusindia.com www.indiastat.com www agroindia.com
Private bodies (market research advertising agencies Indian Market Research Bureau Thompson Rural Index Guide to Rural Markets Publications
Tool Kits Used for Rural Market Research
Tool Kits Used for Rural Market Research
Faces
Color Wheel Same Color – Different shades
Different Color
Happy ………Sad
Number of Coins
Ladder
Playing Cards
POINTS TO REMEMBER
FOR
RURAL MARKETING RESEARCH
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
Remember …
RURAL MARKET
SEGMENTATION TARGETING & POSITIONING
SEGMENTATION Very Varied –hence proper segmentation very essentialGeographic:Region North, East, West and SouthVillage sizeClimate
DemographicAgeFamily SizeGenderIncomeOccupationEducationCaste
Psychographics (consists of psychological: sociology: anthropological)Lifestyle Rigid ,changing attitude, urban influencePersonality Authoritarian, Ambitious
BehavioralOccasions Regular, special occasionBenefits User status regular user, first time user, non userUsage rate Light, medium, heavyLoyalty None, medium, strongAttitude to ) positive, negative, hostileProduct )
Different variables could be used.. multilevel segmentation
Class Rural Consumer Classification1995-96 2006=2007
The Affluent/Very Rich Households owning 1.60% 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
color 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 foll26.00
% 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 above61.40
% 20.20%
Households owning any/all of the foll
wristwatch,pressure cooker,cassette recorder
transistor/radio
Source - NCAER
DEVELOP THE PROFILE
Select the Target MarketEvaluate the MarketEvaluate the Segment size growth rate profitability accessible compatible with firm’s resources & capabilities
Easy Hard
Low
High
Ease of Implementation
Value to Rural Customer
TARGETING
>Select Target Segment
>Formulate Market a marketing strategy for the target market
POSITIONING
One shoe fits all !!!! …….
Everything for Everyone !!!
It is “Something for Someone”
How to Position
USP of the product – uniqueness of the productSpecial needs – either address partially/ unaddressedNoticeable gap in the products availablePositioning Concept
Study the possible motives of the rural customerThen figure out how to appeal to them(USP, Price Quality Uses, Class, Culture etcSelect & Develop the Concept
Bridge gap between the product and the target market.
Communicate the ConceptAdvertise and Reach (Media)
Offer ProductAfter STP (Segmentation, Targeting and Positioning)Post Sales Feedback & After Sales Service
RURAL MARKETING STRATEGY
ENTERINING
THE
RURAL
MARKET
New Entrant
Company starts Rural Market first & then ventures in Urban Market
(eg Cavin Kare Chik & Meera Shampoo)Mid- Entrant
Company starts Rural Market after success in Urban Market
(eg HLL, LG)
Late - Entrant
Company starts Rural Market after success in Urban Market for long
(eg Cadbury)RGA
RetainGrowAdd
Purpose the market
RURAL MARKETING STRATEGYPLANNING
EXECUTION
FEEDBACK
Profile the Rural Market
Profile the Consumer
Market Behaviour & MR
Segmentation Targeting Positioning---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rural Product
Rural Pricing
Rural Distribution
Rural Sales Force Management
Rural Communication
Monitor the Rural Strategy
Feedback & Control
1
2
3
DEVELOPMENTAL MARKETINGDevelopmental marketing is a process through whichawareness is created
>could be demonstration>could be presentation>Free samples>could be through up eg tie up with Bank tie up with Petrol/Diesel pumps (Hyundai did with IOC and PNB and SBI subsidiaries >30% sale of Hyundai from Rural/Semi Urban areas)Awareness
Trial
Purchase
Post-Purchase Satisfaction
Colgate – program Operation Jagruti Switch from Charcoal to Colgate tooth powder
HLL - Free samples of LifebuoyCavin Kare – Free sample of Chik Champoo
Marico Industries – Parachute coconut oil“Sudhata ki pehchan” –smell to differentiate between real and spurious
RURAL PRODUCT
RURAL PRICE
RURAL DISTRIBUTION
RURAL SALES FORCE MANAGEMENT
RURAL COMMUNICATION
Rural Product
Product to be marketed with the requirements of the Rural Consumer should not be an extension of urban offerings(Philips launched Free Power Radio – does not requireBattery/electricity you wind it with a lever and radio runsFor approximately 30 min.
Classification
Of
Rural
Products
FMCG(HLL, Dabur, Marico, Colgate=PalmoliveCoke, Pepsi)
Consumer Durables TV ,Fridge, Fan, Presssure Cooker,Cycle, Two wheelers, Sewing machines,watch, mixer grinder, radio, music system, Fans, Washing machines(Philips, LG, Videocon, Onida )
Services Telecom, Banking, Health care ,Insurance (Airtel, BSNL, SBI, PNB,Dena bank,)
Agri-inputsSeeds, pesticides, tractors (Rallis India, Bayer,)
ProductLife
Cycle(PLC)
Launch
Take Off
Maturity
Decline
Points to note
Rural Products
Easy to Use After sales supportConveniently packed- success of SachetsProduct literature to be simpleHave a logo – easy to identify eg Thums Up
Rural Packaging
Packaging material –plastics, poly packs, unbreakable materialsLooks - attractive colors (like all tea companies)Size and convenience- small is beautifulRural Branding
1. Brand Name 2 Create Brand Identity3 Enhance Recognition 4 Build a Brand Image5 Countering Spurious brands Look alike Spell alike Duplicates
Enhancing Brand Strategies with Social PerspectiveSoaps for HygieneCooking gas for environmentCreating need by more awareness
Partnering with a long term perspective requires total belief andCommitment - to the people, to the processes, to their own employee.Need to work for a cause – ITC, Hindustan Petroleum, HLL , Colgate Palmolive , Several Banks are a few such examples
RURAL PRICE
Pricing In Rural Market plays a key role in the success of a product
RURAL PRICING OBJECTIVES
Have a long run perspective
Idea is to penetrate first Increase Volume Make using the product a habit Volumes to take care of the Margins Keep eye on Competition Price
The following may help in addressing the issue Low cost –less amount (small packages- sachets) Simple but colorful packaging – eg. success of biscuits Refill packs Value engineering – eg soya protein in place of milk protein
METHODS OF PRICING
1. Cost –Plus Pricing = cost of product +distribution +profit2. Value Pricing (VFM-Value for Money) High Benefit3. Power Price – eg Re 1, Rs 2, 3, 5,104. Penetration Price – Introduce at low and hike price after
success5. Differential Pricing –Different price for different market 6. Price Gap – Comp prices – range
RURAL DISTRIBUTION
Physical Distribution Channel of Distribution
Transportation
Warehousing Communication
PHYSICAL DISTRIBUTION
Transportation Railways, Roads ,Waterways, Animals
Communication ITC using internet, Mobile users by fisherman
Warehousing (Three Tier Rural Warehousing Set Up)Central/State Warehousing
CooperativesRural Godowns
WHY CHANNELS OF DISTRIBUTION
Geographical Spread
Dealers are few – hence required to bank on a number of resources
Financial Viability
Inadequate Bank and Credit Facilities
TO ADDRESS THE ABOVE CHALLENGES
Rely on Private Village Shops
Supply Chain Stores
Rural Super Market
Small companies tie up with large companies – Leverage/Syndicate Distribution network of Marico to sell Tide by P&G
Satellite Distribution
Whole-SalerTown
D
D
D
D
SD
SD
SD
SD
SD
SD
SD SD
SD
SD
SD
SD
SD
SD
SD
SDSD
R
D-dealerSD- Sub DealerR-Retailer
PLANNING FOR SALES FORCE MANAGEMENT
SET THE PERSONAL SELLING OBJECTIVES
FORMULATE THE SALES POLICIES
STRUCTURE THE SALES FORCE
SIZE OF THE SALES FORCE
ASSIGNING SALES TARGETS
CREATING SALES FORCE- SELECT, RECRUIT, TRAIN
SALES FORCE COMPENSATION, MOTIVATION, SUPERVISION
SALES COMMUNICATION & REPORTING
SALES COORDINATION/SALES CONTROL
TRAITS OF A RURAL SALESPERSON
Hardworking
Have Empathy
Enthusiastic
Perseverance
Knowledge
Attitude
Skills
Willingness to work in Rural Areas
Adopting to cultural differences
Down to earth approach
Fluent in local language
Developmental approach – Create not only Communicate
Common to bothUrban & Rural Sales person
Additional traits for making it Big in Rural Areas
The Success of Organizations depends on lot on the Sales Force
They are the face of the Organization – the Ambassador
They are the ones who have direct interaction with
The Potential Consumer/Customer The Users The Dealers The Distributors The Retailers
They are a major link to the chain and establish the link
They are the ones who help in building Trust
They need to break the rigid ideas and preconceived notions
RURAL COMMUNICATION
Effective Communication goes a long way in establishing the rightMessages and thereby more interaction with Potential CustomersCommunication, however, is not complete if there is no feedbackIt is very important to re enforce messages in Rural areas
Factors Affecting Rural Communication
Literacy level
Media Habits
Traditional approach
High resistance – more so initially
Lavish at occasions (eg Marriage)
Purchasing power also depending on weather- the crops
Inequitable distribution of wealth
Too many languages
Culture
RURAL MEDIA
Mass Media(Conventional)
Traditional Media(Non Conventional)
T.V /Cable networkSatellite Channels
Radio
Cinema/Theatre
Word ofMouthVideo onWheels
Puppet Shows
Folk Theatre/Opera
Demonstration
Haats and Mela
Wall painting
Post card and posters
Booklets/CalendarAdvantages>Excellent ReachLess expensive ,wider coverage
DisadvantagesAt times unnecessary coverageNo customized messages
Companies using this mediumLevers, Onida, VideoconMahindra Tractors, Eveready
Advantages>High involvementHigh InterestLocalized administered at low cost
DisadvantagesCoverageRepeat /Re enforcementSkill of performer
Companies using this mediumBajaj, Levers, HUL, ITC
You are the Marketing Director of A Company dealing in Consumer Durables (TV, Fridge, Washing Machine Music System, Microwave etc).
Your business has been growing steadily in theUrban Market – however, you are aware that theBusiness will grow manifold if you also cater to theRural market. (Present growth rate has been 8%. You are targeting a growth of 14%)
Present your case to the Managing Director and theBoard – How you intend going achieving the desiredObjective – with your plans for opening up theRural Market
Take into account the followingThe Target AudienceThe Product propositionDistribution Strategies and Sales ForecastPricing StrategiesPromotional Strategies
How the above strategies will help in achieving the Business Objectives.
While making the presentation – you need to be clear on1. Why you chose to launch the particular product2. Why did you chose the particular location (Opportunity Assessment)
Defining Rural India Defining Rural India
Organisation Organisation Definition Definition Limitations Limitations
NSSO NSSO ( Census) ( Census)
Population density < 400 / Sq Km Population density < 400 / Sq Km 75 percent of the male working population is 75 percent of the male working population is engaged in agriculture engaged in agriculture No Municipal corporation / board No Municipal corporation / board
rural not defined rural not defined
Planning Planning Commission Commission
Towns upto 15,000 population are considered Towns upto 15,000 population are considered rural rural
Town characteristics Town characteristics not defined not defined
Cont’d Cont’d
LG Electronics LG Electronics All places other than the 7 All places other than the 7 metros metros
Only clarifies what are the Only clarifies what are the cities cities
NABARD NABARD All locations with a All locations with a population upto 10, 000 population upto 10, 000 considered “ rural” considered “ rural”
Village & town Village & town characteristics not defined characteristics not defined
Sahara Sahara Commercial establishments Commercial establishments located in areas servicing less located in areas servicing less than 1000 population than 1000 population
Population characteristics Population characteristics unknown unknown
Source: The Rural Marketing Book- Text & Practice, Kashyap. P and Raut. S ( 2007)
Defining Rural Marketing Defining Rural Marketing
National Commission on National Commission on Agriculture Agriculture
NGOs NGOs Corporate Rural Marketing Corporate Rural Marketing Definition Definition
Decisions to produce Decisions to produce saleable farm commodities saleable farm commodities involving all the aspects of involving all the aspects of
the market system or the market system or structure, both functional structure, both functional and institutional, based on and institutional, based on
technical & economic technical & economic considerations and includes considerations and includes
the pre & post harvest the pre & post harvest operations. operations.
Marketing products Marketing products produced in rural areas to produced in rural areas to
urban areas urban areas
Marketing products Marketing products produced in rural areas in produced in rural areas in
rural markets rural markets
Function that manages all Function that manages all activities involved in activities involved in
assessing, stimulating and assessing, stimulating and converting the purchasing converting the purchasing power of rural consumers power of rural consumers into effective demand for into effective demand for
specific products and services specific products and services to create satisfaction & a to create satisfaction & a
better standard of living for better standard of living for achieving organisational achieving organisational
goals.goals.
Phases in Rural Marketing Phases in Rural Marketing
Sr. No Sr. No Time FrameTime Frame Key Events & Trends Key Events & Trends
1 1 Phase One( Pre 1960’s) Phase One( Pre 1960’s) Marketing rural products in Marketing rural products in rural and urban areas rural and urban areas Agricultural inputs in rural Agricultural inputs in rural areas areas ““Agricultural marketing”Agricultural marketing”Farming methods were Farming methods were primitive and mechanisation primitive and mechanisation was lowwas lowMarkets unorganised Markets unorganised
Cont’d Cont’d
22 Phase Two ( 1960s to 1990s) Phase Two ( 1960s to 1990s) Green RevolutionGreen RevolutionCompanies like Mahindra Companies like Mahindra and Mahindra, Sri Ram and Mahindra, Sri Ram Fertilisers and IFFCO Fertilisers and IFFCO emergeemergeRural products were also Rural products were also marketed through agencies marketed through agencies like KVIC like KVIC
3 3 Phase Three( 1990s to Present)Phase Three( 1990s to Present) Demand for consumables Demand for consumables and durables riseand durables riseCompanies find growth in Companies find growth in urban markets stagnating or urban markets stagnating or falling falling
Scope of Rural Marketing Scope of Rural Marketing
Keenly debated topic Keenly debated topic
Definitions based on organisational/ institutional vision, Definitions based on organisational/ institutional vision,
mission & goals mission & goals
Need for a Need for a comprehensive and modularcomprehensive and modular understanding understanding
Rural Marketing is a “ work in progress” Rural Marketing is a “ work in progress”
Multi – disciplinary approach is necessary for sharper Multi – disciplinary approach is necessary for sharper
understanding understanding
Domain of Rural Marketing Domain of Rural Marketing
To
Rural Urban
From
Rural
Urban
Source: M. Jha, Rural Marketing- Some Conceptual Issues, EPW, 1988
Scope of Rural Marketing Scope of Rural Marketing
Domain of Domain of Rural Rural MarketingMarketing
Dimensions of the transactionDimensions of the transaction
Participants Participants Products/ Products/ services services
Modalities Modalities Norms Norms Outcomes Outcomes
Rural to Rural to Rural Rural
Rural to Rural to Urban Urban
Urban to Urban to Rural Rural
Changes in Rural India Changes in Rural India
Diverse change levers in rural India
The “ pull of the cities & towns” – migration and its side
effects
Effect of government programmes
Civil society interventions
Natural & manmade disasters
Slow but sure change
Transitions In Rural India Transitions In Rural India
• Food Grain Crops
• On land activities
• Farm Activities
•Non –food, cash crops
•Livestock & fisheries
•Manufacturing & services
Rural Employment Patterns( Male)Rural Employment Patterns( Male)
Sector Sector Year – 1987 ( % share in employment)Year – 1987 ( % share in employment) Year -2004 ( % share in Year -2004 ( % share in employment)employment)
Agriculture Agriculture 75 75 67 67
Transport & Transport & CommunicationCommunication
22 88
Trade & Hotels Trade & Hotels 55 7 7
Construction Construction 44 77
Manufacturing Manufacturing 77 8 8
Source: NSSO data, Mckinsey Global Institute Study, 2004-05
Rural India – Population TrendsRural India – Population Trends
19711971 19811981 19911991 20012001
Total Total Population Population (in million) (in million)
548.2548.2 683.3683.3 848.3848.3 1026.91026.9
Rural Rural Population Population (in million)(in million)
524.0524.0 628.8628.8 741.6741.6
As a As a proportion proportion
of total of total population population
76.776.7 74.374.3 72.272.2
Decadal Decadal Variation Variation
19.819.8 16.716.7 15.215.2
Source: Census 2001Source: Census 2001
Cont’d Cont’d
The joint family system is being replaced by the The joint family system is being replaced by the
nuclear family system nuclear family system
The occupational pattern shows a predominance of The occupational pattern shows a predominance of
cultivators and wage earners cultivators and wage earners
Cultivators( 40.86 %) and Wage Earners( 35.28 %) Cultivators( 40.86 %) and Wage Earners( 35.28 %)
according to NCAER studies (2002) according to NCAER studies (2002)
Rural Settlement & Habitation Rural Settlement & Habitation TrendsTrends
Key findings from 2001 census Key findings from 2001 census
Population density 253/ sq kilometer and total number of Population density 253/ sq kilometer and total number of
villages is 638, 588 villages is 638, 588
Villages having less than 500 population are falling Villages having less than 500 population are falling
Villages having 2000 + population most prosperousVillages having 2000 + population most prosperous
What are the implications of these trends?What are the implications of these trends?
Cont’d Cont’d
Size of villages/ habitations are changing Size of villages/ habitations are changing
Role & influence of towns is changing Role & influence of towns is changing
Social interaction is a mix of rural and urban Social interaction is a mix of rural and urban
Let’s look at some key trends in detailLet’s look at some key trends in detail
Rural Income Trends Rural Income Trends
Annual Income ( at Annual Income ( at 1998-99 prices)1998-99 prices)
Income Class Income Class 1989-90( % 1989-90( % Households) Households)
1998-99 ( % 1998-99 ( % Households) Households)
<= 35,000 <= 35,000 LowLow 67.367.3 47.9 47.9
35,001- 70,000 35,001- 70,000 Low Middle Low Middle 23.923.9 34.834.8
70,001 – 1,05,00070,001 – 1,05,000 Middle Middle 7.1 7.1 10.4 10.4
1,05,001- 1,40,0001,05,001- 1,40,000 Upper Middle Upper Middle 1.21.2 3.9 3.9
> 1,40,000> 1,40,000 High High 0.5 0.5 3.0 3.0
Source: National Council for Applied Economic Research, 2000
Rural Marketing- Schools of Rural Marketing- Schools of Thought Thought
Determinist School Determinist School
Activist School Activist School
What is the right approach?What is the right approach?
Dependent on level of market development, stage in the PLC Dependent on level of market development, stage in the PLC
and access to resources and access to resources
Amul & ITC prominent examples Amul & ITC prominent examples
No water-tight compartmentalisationNo water-tight compartmentalisation
Strategic Issues & Directions in Strategic Issues & Directions in Rural Marketing Rural Marketing
Evolutionary Vs revolutionary changes in rural marketsEvolutionary Vs revolutionary changes in rural markets
Role of state & market forces Role of state & market forces
ICT based interventions ICT based interventions
Partnership innovations Partnership innovations
Developmental role of rural marketing Developmental role of rural marketing
Scalability & replication of rural marketing programmes Scalability & replication of rural marketing programmes
ICT in Rural Markets ICT in Rural Markets
Category Category GovernmentGovernment Private Private NGO/ PPP NGO/ PPP
Infrastructure Infrastructure Provision Provision
NIC NIC N- Logue N- Logue Simputer Simputer
Rural Services Rural Services Bhoomi( Karnataka) Bhoomi( Karnataka) Sewa Sewa
Agri Marketing Agri Marketing Agmarknet Agmarknet E- Choupal E- Choupal Ozhwar Sandhiyes Ozhwar Sandhiyes
Agri extension Agri extension Universities Universities EID ParryEID Parry
Introduction to Rural Introduction to Rural Marketing Marketing
““The first five years of the new The first five years of the new millennium will belong neither to millennium will belong neither to the urban markets which have the urban markets which have reached saturation and where reached saturation and where margins are under pressure not to margins are under pressure not to the export markets, which suffer the export markets, which suffer from inadequate infrastructure from inadequate infrastructure back home, and uncompetitive back home, and uncompetitive prices overseas. It will belong to prices overseas. It will belong to rural marketing.”rural marketing.”
RURAL MARKETINGRURAL MARKETING
In the India context, the word In the India context, the word ‘RURAL’ is so much associated ‘RURAL’ is so much associated with with agricultureagriculture and farmers that rural and farmers that rural marketing tends to be seen as a marketing tends to be seen as a marketing of inputs or outputs marketing of inputs or outputs related to agriculture.related to agriculture.
What is Rural Marketing?What is Rural Marketing?
Rural marketing is a function which manages Rural marketing is a function which manages all those activates involved in assessing, all those activates involved in assessing, stimulating and converting the purchasing stimulating and converting the purchasing power into an effective demand for specific power into an effective demand for specific products and services, and moving them to the products and services, and moving them to the people in rural area to create satisfaction and a people in rural area to create satisfaction and a standard of living to them and thereby standard of living to them and thereby achieves the goals of the organization.achieves the goals of the organization.
Rural v\s UrbanRural v\s Urban
OCCUPATION:OCCUPATION:
Rural:Cultivators n few non –Rural:Cultivators n few non –agricultural pursuits.agricultural pursuits.
Urban:manufacturing,trade,commerce,pUrban:manufacturing,trade,commerce,professionsrofessions
Size of communitySize of community
Rural:open farms & small Rural:open farms & small community are –vly co-relatedcommunity are –vly co-related
Urban:urbanity & size of community Urban:urbanity & size of community are +vly co-relatedare +vly co-related
Density of populationDensity of population
Rural:density of population is lower than Rural:density of population is lower than urbanurban
MobilityMobility
Rural:social mobility less.More migration Rural:social mobility less.More migration from villages to town.from villages to town.
Urban:social mobility inreases with urbanityUrban:social mobility inreases with urbanity..
System of interactionSystem of interaction
Rural:less numerous contacts per Rural:less numerous contacts per man.Predominance of personal & relatively man.Predominance of personal & relatively durable relations.durable relations.
Urban:Greater complexity,superficiality & Urban:Greater complexity,superficiality & standarized formality in relations.standarized formality in relations.
Although the melting of the urban - rural Although the melting of the urban - rural divide will take a while, this is not for want of divide will take a while, this is not for want of the availability of the means but for want of the availability of the means but for want of the rural consumer's mindset to change; which the rural consumer's mindset to change; which has its own logic, which is driven by tradition, has its own logic, which is driven by tradition, custom and values that are difficult to shed, custom and values that are difficult to shed,
Attractiveness of rural marketAttractiveness of rural market
Rural markets have become the new targets to Rural markets have become the new targets to corporate enterprises for two reasons :corporate enterprises for two reasons :
1. Urban market has become congested with 1. Urban market has become congested with too many competitors.too many competitors.
2. The market have reached a near saturation 2. The market have reached a near saturation point.point.
Various factors which have made rule Various factors which have made rule markets viable:-markets viable:-
1.1. Large population Large population 2. Raising prosperity2. Raising prosperity 3. Growth in consumption3. Growth in consumption4. Life-style changes4. Life-style changes5. Life-cycle advantages5. Life-cycle advantages6. Market growth rates higher than 6. Market growth rates higher than urbanurban7. Rural marketing is not expensive7. Rural marketing is not expensive8. Remoteness is no longer a problem8. Remoteness is no longer a problem
Now for some facts and figures. The Indian rural Now for some facts and figures. The Indian rural market today accounts for only about Rs 8 billion (53 market today accounts for only about Rs 8 billion (53 per cent - FMCG sector, 59 per cent durables sale, per cent - FMCG sector, 59 per cent durables sale, 100 per cent agricultural products) of the total ad pie 100 per cent agricultural products) of the total ad pie of Rs 120 billion, thus claiming 6.6 per cent of the of Rs 120 billion, thus claiming 6.6 per cent of the total share. So clearly there seems to be a long way total share. So clearly there seems to be a long way ahead.ahead.
Time and again marketing practitioners have waxed Time and again marketing practitioners have waxed eloquent about the potential of the rural market. But eloquent about the potential of the rural market. But when one zeroes in on the companies that focus on when one zeroes in on the companies that focus on the rural market, a mere handful names come to mind. the rural market, a mere handful names come to mind. Hindustan Lever Limited (HuL) is top of the mind Hindustan Lever Limited (HuL) is top of the mind with their successful rural marketing projects like with their successful rural marketing projects like 'Project Shakti' and 'Operation Bharat'. 'Project Shakti' and 'Operation Bharat'.
Clearly the main challenge that one faces Clearly the main challenge that one faces while dealing with rural marketing is the basic while dealing with rural marketing is the basic understanding of the rural consumer who is understanding of the rural consumer who is very different from his urban counterpart. Also very different from his urban counterpart. Also distribution remains to be the single largest distribution remains to be the single largest problem marketers face today when it comes problem marketers face today when it comes to going rural. "Reaching your product to to going rural. "Reaching your product to remote locations spread over 600,000 villages remote locations spread over 600,000 villages and poor infrastructure - roads, and poor infrastructure - roads, telecommunication etc and lower levels of telecommunication etc and lower levels of literacy are a few hinges that come in the way literacy are a few hinges that come in the way of marketers to reach the rural market of marketers to reach the rural market
In 1998 HuL’s personal products unit initiated In 1998 HuL’s personal products unit initiated Project Bharat, the first and largest rural home-Project Bharat, the first and largest rural home-to-home operation to have ever been prepared to-home operation to have ever been prepared by any company. The project covered 13 by any company. The project covered 13 million rural households by the end of 1999.million rural households by the end of 1999.
During the course of operation, HuL had vans During the course of operation, HuL had vans visiting villages across the country distributing visiting villages across the country distributing sample packs comprising a low-unit-price pack sample packs comprising a low-unit-price pack each of shampoo, talcum powder, toothpaste each of shampoo, talcum powder, toothpaste and skin cream priced at Rs. 15. This was to and skin cream priced at Rs. 15. This was to create awareness of the company’s product create awareness of the company’s product categories and of the affordability of the categories and of the affordability of the products.products.
Khaitan fans' ad on a horse cartKhaitan fans' ad on a horse cart
The greatest challenge for advertisers and The greatest challenge for advertisers and marketers continues to be in finding the right marketers continues to be in finding the right mix that will have a pan-Indian rural appeal. mix that will have a pan-Indian rural appeal. Coca Cola, with their Aamir Khan ad Coca Cola, with their Aamir Khan ad campaign succeeded in providing just that. campaign succeeded in providing just that.
"Yaara da Tashan...” ads with Aamir "Yaara da Tashan...” ads with Aamir Khan created universal appeal for Khan created universal appeal for
Coca ColaCoca Cola
"Yaara da Tashan..." ads with Aamir Khan "Yaara da Tashan..." ads with Aamir Khan created universal appeal for Coca Colacreated universal appeal for Coca Cola
Coca-Cola India tapped the rural market in a Coca-Cola India tapped the rural market in a big way when it introduced bottles priced at Rs big way when it introduced bottles priced at Rs 5 and backed it with the Aamir Khan ads. The 5 and backed it with the Aamir Khan ads. The company, on its behalf, has also been investing company, on its behalf, has also been investing steadily to build their infrastructure to meet the steadily to build their infrastructure to meet the growing needs of the rural market, which growing needs of the rural market, which reiterates the fact that this multinational has reiterates the fact that this multinational has realised the potential of the rural market is realised the potential of the rural market is going strength to strength to tap the same.going strength to strength to tap the same.
For HLL, a one rupee or a five rupee sachet or For HLL, a one rupee or a five rupee sachet or the Kutti Hamam (the small Hamam) helps in the Kutti Hamam (the small Hamam) helps in giving the consumers a trial opportunity. giving the consumers a trial opportunity. While it does help in generate volume but not While it does help in generate volume but not in terms of values. "Till the time that volume - in terms of values. "Till the time that volume - value equation is managed better. value equation is managed better.
Ultimately, the ball lies in the court of rural Ultimately, the ball lies in the court of rural marketers. It's all about how one approaches marketers. It's all about how one approaches the market, takes up the challenge of selling the market, takes up the challenge of selling products and concepts through innovative products and concepts through innovative media design and more importantly media design and more importantly interactivity.interactivity.
Amul is another case in point of aggressive Amul is another case in point of aggressive rural marketing. Some of the other corporates rural marketing. Some of the other corporates that are slowly making headway in this area that are slowly making headway in this area are Coca Cola India, Colgate, Eveready are Coca Cola India, Colgate, Eveready Batteries, LG Electronics, Philips, BSNL, Life Batteries, LG Electronics, Philips, BSNL, Life Insurance Corporation, Cavin Kare, Britannia Insurance Corporation, Cavin Kare, Britannia and Hero Honda to name a few.and Hero Honda to name a few.
Interestingly, the rural market is growing at a Interestingly, the rural market is growing at a far greater speed than its urban counterpart. far greater speed than its urban counterpart. "All the data provided by various agencies like "All the data provided by various agencies like NCAER, Francis Kanoi etc shows that rural NCAER, Francis Kanoi etc shows that rural markets are growing faster than urban markets markets are growing faster than urban markets in certain product categories at least. The share in certain product categories at least. The share of FMCG products in rural markets is 53 per of FMCG products in rural markets is 53 per cent, durables boasts of 59 per cent market cent, durables boasts of 59 per cent market share. Therefore one can claim that rural share. Therefore one can claim that rural markets are growing faster than urban marketsmarkets are growing faster than urban markets
Satellite dish antennas reach rural IndiaSatellite dish antennas reach rural India
In 2000, ITC took an initiative to develop direct In 2000, ITC took an initiative to develop direct contact with farmers who lived in far-flung contact with farmers who lived in far-flung villages in Madhya Pradesh. ITC's E-choupal villages in Madhya Pradesh. ITC's E-choupal was the result of this initiative.was the result of this initiative.
So the fact remains that the rural market in So the fact remains that the rural market in India has great potential, which is just waiting India has great potential, which is just waiting to be tapped. Progress has been made in this to be tapped. Progress has been made in this area by some, but there seems to be a long way area by some, but there seems to be a long way for marketers to go in order to derive and reap for marketers to go in order to derive and reap maximum benefits. Moreover, rural India is maximum benefits. Moreover, rural India is not so poor as it used to be a decade or so not so poor as it used to be a decade or so back. Things are sure a changing back. Things are sure a changing
Typical shop in rural India stocked Typical shop in rural India stocked with sachets, etcwith sachets, etc
Segmentation, Targeting & Segmentation, Targeting & Positioning in Rural Markets Positioning in Rural Markets
Orientations to the Market Orientations to the Market Selling orientation - Product orientation - Marketing orientation Selling orientation - Product orientation - Marketing orientation C K Prahalad and V Ramaswamy – Co- creating value with C K Prahalad and V Ramaswamy – Co- creating value with
customers customers Market as a target to “ Market as a forum” Market as a target to “ Market as a forum” The “ contribution revolution” The “ contribution revolution” ““Customer is the king/ queen” Customer is the king/ queen” Understanding the customer is vital Understanding the customer is vital The Mahatma’s words at railway stations The Mahatma’s words at railway stations Foundation of the STP process Foundation of the STP process
The STP Process The STP Process
Marketing Decision Marketing Decision Marketing Actions to be Marketing Actions to be Undertaken Undertaken
Segmenting Segmenting Identifying and developing Identifying and developing profiles of market segments profiles of market segments
Target Target Evaluating segments and Evaluating segments and deciding the market coverage deciding the market coverage strategy strategy
Positioning Positioning Identifying , selecting and Identifying , selecting and communicating competitive communicating competitive advantages advantages
Source: The Rural Marketing Book- Khasyap. P & Raut. S
Segmentation of Rural Segmentation of Rural MarketMarket
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 .
Levels of MarketSegmentation
Mass Marketing or Undifferentiated Marketing e.g. Ruf & Tuf Jeans,
Segment Marketing - Cars
Niche Marketing – specialize to a narrowly definedcustomer group – Temple jewellery for South Indianwomen 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 amass basis individuallydesigned products
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 mademore efficient
Segmentation is a way to plan rather than explain
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 – consumerswho hold the value ‘style and elegance in a classical sense’
Behavioral Segmentation – next slide
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
Segmenting the Market: Nirma vs HLLSegmenting the Market: Nirma vs HLL
Until about twenty ago, the rural market in India was considered a Until about twenty ago, the rural market in India was considered a homogenous decade of the 1980s was a significant one for Hindustan homogenous decade of the 1980s was a significant one for Hindustan Level Ltd (HLL), when the giant and undisputed market leader in Level Ltd (HLL), when the giant and undisputed market leader in detergent (Surf) in Indian Suffered significant losses at the hands of a detergent (Surf) in Indian Suffered significant losses at the hands of a new and small firm , Nirma Chemicals . Nirma immediately caught th new and small firm , Nirma Chemicals . Nirma immediately caught th fancy of the middle and lower-income customers, who were finding it fancy of the middle and lower-income customers, who were finding it difficult to make both ends meet with their limited monthly income.difficult to make both ends meet with their limited monthly income.Nirma was the lowest –priced branded washing powder available in Nirma was the lowest –priced branded washing powder available in grocery and co-operatives stores. The middle class house wife was grocery and co-operatives stores. The middle class house wife was happy as she could choose a lower priced washing powder against happy as she could choose a lower priced washing powder against Surf, Which was beyond her budget Surf, Which was beyond her budget Around 1984 , HLL decided to take a fresh look at the market. Around 1984 , HLL decided to take a fresh look at the market. Research conducted across the country revealed that different income Research conducted across the country revealed that different income groups of consumers had varying expectorations from detergent and groups of consumers had varying expectorations from detergent and washing powder. Thus, to counter the attack from Nirma, HLL washing powder. Thus, to counter the attack from Nirma, HLL launched Sunlight (Yellow), Wheel (green) and Rin (blue) detergent launched Sunlight (Yellow), Wheel (green) and Rin (blue) detergent powders for different market segments. This strategy of segmenting powders for different market segments. This strategy of segmenting the market helped HLL win back part of its lost market.the market helped HLL win back part of its lost market.
Segmenting the MarketsSegmenting the Markets
T-Series introduced audiocassettes at unbelievably T-Series introduced audiocassettes at unbelievably low price and took away a huge share from the low price and took away a huge share from the market leader HMV.market leader HMV.
Cavin Kare studied the Shampoo market and came Cavin Kare studied the Shampoo market and came out with Chik Shampoo priced at 50 paisa per sachet out with Chik Shampoo priced at 50 paisa per sachet and the brand became an instant hit in rural areas.and the brand became an instant hit in rural areas.
Titan has introduced Sonata brand watches; priced Titan has introduced Sonata brand watches; priced between Rs 350/- and Rs.800/- to meet the between Rs 350/- and Rs.800/- to meet the requirement of price sensitive rural and semi urban requirement of price sensitive rural and semi urban consumers.consumers.
Utsav TimeUtsav Time Asian Piants Ltd(APL) is India’s largest paints company and ranks Asian Piants Ltd(APL) is India’s largest paints company and ranks
among the top ten decorative coating companies in the world today. among the top ten decorative coating companies in the world today. The company has come a long way since its small beginning in 1942.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 APl was the first Indian company to go rural In 1999 It launched Tractor enamel paint in rural markets, rural customers started using it Tractor enamel paint in rural markets, rural customers started using it to paint the horns of their bullock. APL survey the rural markets to paint the horns of their bullock. APL survey the rural markets extensively with the able support of its advertising agency Ogilvy extensively with the able support of its advertising agency Ogilvy outreach. They found that there was a gap in demand in the market for 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 paints used for houses. These were two choice available for rural people : the traditional chuan powder, which cost around Rs9 per kg people : the traditional chuan powder, which cost around Rs9 per kg and enamel paint which cost around Rs 50 per liter was very and enamel paint which cost around Rs 50 per liter was very expensive for most rural customers. Chuan powder however was not expensive for most rural customers. Chuan powder however was not long lasting .long lasting .
Hence APL launched Utasv distemper exclusively for rural markets in Hence APL launched Utasv distemper exclusively for rural markets in 1999. Utsav is good example of brand that used excellent STP for 1999. Utsav is good example of brand that used excellent STP for rural markets.rural markets.
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.
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
Approaches for segmentation the rural Approaches for segmentation the rural market of Indiamarket of India
Based on Size of Village PopulationBased on Size of Village Population(The size of population residing in a village is a significant factor which determines (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)the overall potential demand for a product or service in that village)
PopulationPopulation No.of VillagesNo.of Villages % of total Villages% of total VillagesLess than 200Less than 200 114,267114,267 17.9*17.9*200-499200-499 155,123155,123 24.3*24.3*500-999500-999 159,400159,400 25.025.01,000-1,9991,000-1,999 125,758125,758 19.719.72,000-4,9992,000-4,999 69,13569,135 10.8**10.8**5,000-9,9995,000-9,999 11,61811,618 1.8**1.8**10,000& above10,000& above 3,0643,064 0.5**0.5**Note:* Hardly any shop in these 2.7 lakh villageNote:* Hardly any shop in these 2.7 lakh village** 13% of villages falling in the last three categories account 50% rural population and ** 13% of villages falling in the last three categories account 50% rural population and
60% rural wealth.60% rural wealth.
Based on Location with Respects to Based on Location with Respects to Nearby TownNearby Town
Villages Near Urban Centers.Villages Near Urban Centers. Villages in Developing DistrictsVillages in Developing Districts Immobile and self sufficient Asiatic VillagesImmobile and self sufficient Asiatic Villages
Based on Size of FarmlandBased on Size of Farmland
1.1. Marginal FarmerMarginal Farmer :holding upto 1.0 hectare:holding upto 1.0 hectare
2.2. Small FramerSmall Framer :holding 1.0-2.0 hectare:holding 1.0-2.0 hectare
3.3. Semi-medium Semi-medium :holding 2.0-4.0 hectare:holding 2.0-4.0 hectare
Farmer:Farmer:
4.4. Medium FarmerMedium Farmer : holding 4.0-10.0 hectare: holding 4.0-10.0 hectare
5.5. Large FarmerLarge Farmer :holding 10.0 hectares and above:holding 10.0 hectares and above
Rural Market Segmentation ToolsRural Market Segmentation Tools
Thompson Rural Market Index.Thompson Rural Market Index. Mica Rural Market RatingMica Rural Market Rating LinquestLinquest Indian Market DemographicIndian Market Demographic Business Intelligence UnitBusiness Intelligence Unit LincompassLincompass ARCVIEWARCVIEW
Heterogeneity in Rural India Heterogeneity in Rural India
Variable Variable Example Example
Socio – Cultural Differences Socio – Cultural Differences Caste Based Habitations in Caste Based Habitations in Villages Villages
Population Size & Density Population Size & Density Kerala Vs Andhra Pradesh Kerala Vs Andhra Pradesh
Difference in Infrastructure Difference in Infrastructure BIMARU states Vs Karnataka BIMARU states Vs Karnataka
Media Exposure levels Media Exposure levels Kerala Vs Orissa Kerala Vs Orissa
Literacy Levels Literacy Levels Himachal Pradesh Vs Bihar Himachal Pradesh Vs Bihar
Income levels & patterns Income levels & patterns Farmers & Daily Wage Earners Farmers & Daily Wage Earners
Family Structure Family Structure Joint Families & Nuclear Joint Families & Nuclear Families Families
Segmentation: Issues & Options Segmentation: Issues & Options Measurability- Accessibility- Differentiability & Profitability Measurability- Accessibility- Differentiability & Profitability Is it easy to measure segments in rural areas? Is it easy to measure segments in rural areas? What are the issues in accessing rural markets?What are the issues in accessing rural markets? Is it necessary to segment underdeveloped markets? ( need for Is it necessary to segment underdeveloped markets? ( need for
differentiation) differentiation) What is the appropriate pay –back period by focusing on a What is the appropriate pay –back period by focusing on a
segment?segment? What should be the appropriate market targeting strategy?What should be the appropriate market targeting strategy? Mass – Segment – Niche – Micro approaches Mass – Segment – Niche – Micro approaches
Basis & Approaches to Segmentation Basis & Approaches to Segmentation Segmentation Criteria
Relevant Variables ( Indicative)
Geographic • Region & SCRs • Village Size and density • Climate
Demographic • Age • Gender • Income: ( NCAER ) • Landownership • Education ( SEC Classification) • Occupation ( SEC Classification) • Type of home ( SEC Classification)
Psychographics • Lifestyle – Rural, Urban & “Rurban”• Personality
Behavioral • Occasions • Benefits sought • Loyalty & usage status / rate
Demographic – SEC Classification Demographic – SEC Classification MRUC and IRS MRUC and IRS Three variables – Education of chief wage earner Three variables – Education of chief wage earner
– durable ownership- type of house – durable ownership- type of house
Multi – Attribute Segmentation Multi – Attribute Segmentation
Thompson Rural Market Index Thompson Rural Market Index Mica Rural Market Ratings Mica Rural Market Ratings
1.1. Developed by HTA Developed by HTA
2.2. 26 variables 26 variables
3.3. Demographics,agriculture, Demographics,agriculture,
electrification and banking electrification and banking
facilities facilities
4.4. Weights are given to variables Weights are given to variables
5.5. Data from 383 districts collected Data from 383 districts collected
6.6. Classification into A, B, C, D Classification into A, B, C, D
and E markets and E markets
1.1. 42 socio – economic indicators 42 socio – economic indicators for ranking districts for ranking districts
2.2. Linear combination of six Linear combination of six variables for measuring market variables for measuring market potential of districts potential of districts
3.3. Classification into A, B , C , D Classification into A, B , C , D & E markets & E markets
Cont’d Cont’d Rural market ratings by RK Swamy BBDORural market ratings by RK Swamy BBDO Lincompass by Linterland ( Lintas IMAG) Lincompass by Linterland ( Lintas IMAG)
Effective Market Targeting Effective Market Targeting Segment attractiveness must match company Segment attractiveness must match company
objectives and resources objectives and resources Undifferentiated marketing- Coca Cola Undifferentiated marketing- Coca Cola Differentiated marketing – Tractor Marketing Differentiated marketing – Tractor Marketing Single segment concentration Single segment concentration Deciding the appropriate coverage strategy Deciding the appropriate coverage strategy Coca Cola – “ An arms length from desire” Coca Cola – “ An arms length from desire”
Positioning Positioning
A distinctive place in the mind of the consumerA distinctive place in the mind of the consumer
Identifying the unique features of the product/ service Identifying the unique features of the product/ service
Differences with respect to competition Differences with respect to competition
Selecting differences having a greater competitive Selecting differences having a greater competitive
advantageadvantage
Communicating the best advantage to theCommunicating the best advantage to the consumer consumer
Issues in Positioning Issues in Positioning
Attractiveness-Distinctiveness-Pre-emptive -Attractiveness-Distinctiveness-Pre-emptive -
Affordability - Communicability Affordability - Communicability
Under positioning – over positioning – confused Under positioning – over positioning – confused
positioning positioning
Reference
New Perspective in Rural & Agricultural MarketingY Ramkishen
Rural Marketing Book – Pradeep Kashap & Siddhartha Raut
Cases In Rural Marketing – An Integrated ApproachCGS Krishnmacharyulu & Llith Ramkrishnan
