Segmentation Targeting Positioning in Rural Markets Session II

Segmentation, Targeting & Positioning in Rural Markets Session II Xavier Institute of Management, Bhubaneswar

Orientations to the Market Selling orientation - Product orientation - Marketing orientation C K Prahalad and V Ramaswamy – Co- creating value with customers Market as a target to “ Market as a forum” The “ contribution revolution” “Customer is the king/ queen” Understanding the customer is vital The Mahatma’s words at railway stations Foundation of the STP process

The STP Process Marketing Decision Marketing Actions to be Undertaken Segmenting Identifying and developing profiles of market segments Target Evaluating segments and deciding the market coverage strategy Positioning Identifying , selecting and communicating competitive advantages Source: The Rural Marketing Book- Khasyap. P & Raut. S

Heterogeneity in Rural India Variable Example Socio – Cultural Differences Caste Based Habitations in Villages Population Size & Density Kerala Vs Andhra Pradesh Difference in Infrastructure BIMARU states Vs Karnataka Media Exposure levels Kerala Vs Orissa Literacy Levels Himachal Pradesh Vs Bihar Income levels & patterns Farmers & Daily Wage Earners Family Structure Joint Families & Nuclear Families

Segmentation: Issues & Options Measurability- Accessibility- Differentiability & Profitability Is it easy to measure segments in rural areas? What are the issues in accessing rural markets? Is it necessary to segment underdeveloped markets? ( need for differentiation) What is the appropriate pay –back period by focusing on a segment? What should be the appropriate market targeting strategy? Mass – Segment – Niche – Micro approaches

Basis & Approaches to 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 MRUC and IRS Three variables – Education of chief wage earner – durable ownership- type of house

Multi – Attribute Segmentation Thompson Rural Market Index Mica Rural Market Ratings 1. Developed by HTA 1. 42 socio – economic indicators for ranking districts 2. 26 variables 3. Demographics, agriculture, electrification and banking facilities 4. Weights are given to variables 5. Data from 383 districts collected 6. Classification into A, B, C, D and E markets 2. Linear combination of six variables for measuring market potential of districts 3. Classification into A, B , C , D & E markets

Cont’d Rural market ratings by RK Swamy BBDO Lincompass by Linterland ( Lintas IMAG)

Effective Market Targeting Segment attractiveness must match company objectives and resources Undifferentiated marketing- Coca Cola Differentiated marketing – Tractor Marketing Single segment concentration Deciding the appropriate coverage strategy Coca Cola – “ An arms length from desire”

Positioning A distinctive place in the mind of the consumer Identifying the unique features of the product/ service Differences with respect to competition Selecting differences having a greater competitive advantage Communicating the best advantage to the consumer

Issues in Positioning Attractiveness-Distinctiveness-Pre-emptive - Affordability - Communicability Under positioning – over positioning – confused positioning

Close of Session Thank You