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.

THANK YOUTHANK YOU