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Segmenting, Targeting and positioning Rural Markets.

Stressing the Need to recognize Heterogeneity among Rural Customers
by

Sesha Sai

on 11 March 2013

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Transcript of Segmenting, Targeting and positioning Rural Markets.

IN Segmenting,Targeting and Positioning Segmentation Targeting Positioning Rural Markets In India. Dividing heterogeneous market into sub markets.

Heterogenity
Population size, socio cultural difference between regions, difference in income level, family structure. 
Measurable

Accessible

Differentiable

Substantial
 Requisites for effective segmentation 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 Identifies customers as different groups
Eg1: Colgates 10gm sache in 2000 aimed rural consumer Eg2: LG s low cost television Sampoorna(1999)

-Niche marketing is used when there is as small group with specific need .Our rural market is not matured to this level

Eg: Hero Honda bikes, Nokia mobiles Focus on individuals or very small groups
To satisfy a particular taste or need
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.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. 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.. Eg 2.MRF introduced nylon bullock cart tyres.They used the muscleman symbol as well as their leadership in tyres.Finally the communication revolved around the brandname and its meaning viz.,
Pahalwan Muscleman.
MRF became the leader
Individual can get the product made exactly to his need
Eg: carpentry,tailoring, Saloons.
Process of diving a heterogeneous market into several sub markets or segments, each of which tends to be homogeneous in all aspects.

1.Geographic
2.Demographic
3.Psychographic
4. Behavioral Segmentation
Targeting involves evaluating and selecting various segments.
Steps
1. Evaluation and Selection of segments
2. Coverage It is the act of designing the company's offering and image so that it occupies a distinctive place in mind of the target segment.It serves as a platform for the brands to reach target customers. Degrees of segmentation 1. Mass Marketing.
2. Segment Marketing.
3. Niche Marketing.
4. Micro Marketing.
i) Local Marketing.
ii) Individual Marketing. 1.Mass marketing: 2.Segment marketing 3.Niche marketing 4.Micro marketing ii)Individual marketing Population.
Village Population and Density size of population
-a major factor that determines the overall potential demand for a product/service.
Class I-population over 5000.
Class II-population between 1000-5000
Class III-population less than 1000
Climate: Climatic conditions play an important role.
Eg: talcum powder in hot and humid regions,
and health tonics in winter.
Culture: Society and culture provide insights into the attitudes of people and their needs.



Pain of Nation Building(Post Independence)
Pain of Liberalization(1985 onwards)
Liberalization Children( 1990 onwards)
Millennium Children( 1997 Onwards)
Marketers target the age group of 8 -15,exposed to urban markets; education;
Old age and above the age of 35-influenced by traditional customs. Demographic Segmentation Age and Life Cycle Family Structure

-Joint family and large families still predominate.

-Increase in family size-increase in consumption.
- Also leads to multibrand consumption.

-Increasing nuclear families-greater demand of
products, esp. consumer durables like TV,Cooker,
LPG etc.. Demographic Segmentation. Contd..
Income
Income is seasonal( post harvest for farmers)
or Weekly/daily( Wage Earners) .
Multiple sources of income( agriculture, dairy etc) Agricultural income is not taxable Demographic Segmentation. Contd.. Landownership

55% of income in rural areas coming from agriculture.
Marginal Farmers-holding upto 1 Acre.
Small Farmers-1-2 Acre.
Semi-medium Farmer-2-4 Acre.
Medium Farmer-4-10 Acre.
Large Farmer-10 Acre and more. Demographic Segmentation, cont...
Occupation
Farm based occupations.
Cultivators: farm owners, marginal farmers.
Agri and non agri labour. Poultry, dairy
Salary earners: doctors, teachers.
Traders, micro entrepreneurs. Demographic Segmentation Contd.. Education and House types
Education: Illiterate,
Below SSC, SSC/HSC,
College
Houses: Pucca, Semi -Pucca, Kuccha.

Religion and castes
Differences in religion and caste visible in terms of settlement patterns in villages. Village shops are demarcated along similar lines. Demographic Segmentation Contd.. Psychographics
include
personality traits, lifestyle & valuesystem. -The slowdown experienced by India on account of the IT (information technology),real estate, financial services and automobile sectors was an urban phenomenon .

-15.6 million middle class house holds inrural India
-Rural households form 72% of the total households. The above Factors have made the Manufacturers to come to rural.. 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 sold100,000 sets in the first year;
Coca-Cola provided low-cost ice boxesas regular power outages meant families could not depend on refrigerators. Some Examples

Occasions
Benefits sought
User status
Usage rate
Loyalty status
Place of purchase Behavioral Segmentation While evaluating market segments, two broad factors are considered:

(Size, Growth rate, Accessibility, Profitability, Low risk) 2.Companies objectives and Resource Competencies Long term and short term objectives of companies,
Its resources and capabilities should also considered. 1.Over all attractiveness of each segment Evaluation and Selection 1. Indifferentiated Marketing It take into consideration what is common requirements among consumers, and try to include it in the offer.
Ex : Medimix---claims it as a beauty care ayurvedic family soap Coverage Strategies. Coverage Strategies Contd.. Differentiated marketing strategy investigates and identifies the difference between segments and tries to match the market offer to the desire and expectations of each segment.

Ex : Tractors 25 -30HP for small/marginal
and
50HP for large farmers 2. Differentiated/Targeted Marketing Concentrate on single segment,
also known as niche marketing-
Risk of changing preference of customers
HUL dominate the mass market in the rural with a series of niche brands, each aimed at small section of customers.
Ex-Lifebuoy, Lifebuoy Active, Lifebuoy Gold 3.Concentrated Strategy Coverage Strategies Contd.. Choosing a Coverage Strategy 1.Identifying the USP of the product as well as that of the competitors.

2.Selecting the differences that have greater competitive advantage.

3.Communicating those advantages to the target customers. POSITIONING INVOLVES Identifying the Positioning Concept. 1. Product Differentiation.
2. Service Differentiation.
3. People Differentiation.
4. Image Differentiation. Selecting,developing,
Communicating.
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