Rural Market Segmentation

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Rural Market Segmentation

Market Segmentation: Market segmentation involves dividing a market into subsets of consumers with common needs and characteristics, allowing marketers to target these segments with tailored marketing strategies. For rural markets, segmentation helps in understanding and addressing the specific needs and behaviors of rural consumers.

Characteristics of Effective Segmentation

  • Measurable:
    • Definition: The segment must be quantifiable in terms of size, purchasing power, and other relevant characteristics.
    • Importance: Accurate data is needed to assess the potential and size of the segment.
    • Challenges: Historically, rural markets lacked comprehensive data, but improvements in data collection are addressing this.
  • Accessible:
    • Definition: The segment should be reachable through existing distribution networks.
    • Importance: Marketers need to ensure they can effectively deliver products to the segment.
    • Challenges: Rural markets were less accessible, but advancements in infrastructure and distribution networks are improving reach.
  • Differentiable:
    • Definition: The segment must exhibit distinct responses to different marketing strategies.
    • Importance: Distinguishing features of each segment help in designing targeted marketing mixes.
    • Example: Rural consumers may prioritize durability and mileage in vehicles, unlike urban consumers who focus on style.
  • Substantial:
    • Definition: The segment should be large enough to be profitable.
    • Importance: A segment must have enough potential to justify the marketing efforts.
    • Challenges: Rural areas are heterogeneous with varying sizes of consumer groups, affecting the viability of segmentation.
  • Actionable or Feasible:
    • Definition: It must be possible to approach and serve the segment with specific marketing programs.
    • Importance: The segment should be manageable within the company's resources and capabilities.
    • Challenges: The company must have the financial, human, and logistical resources to target and serve the segment effectively.
  • General Considerations:
    • Growth Potential: Segments should have the potential for growth and profitability.
    • Stability: The segment should be relatively stable over time.
    • Regulatory Compliance: Segments must adhere to government regulations and guidelines.

Major Segmentation Bases

  • Geographic Location:
    • Definition: Segmentation based on geographical regions.
    • Characteristics: Rural markets are widespread, and preferences vary by region.
    • Example: In South India, talcum powder is popular due to hot weather, whereas woolen products are in demand in North India during winter.
  • Demographic Segmentation:
    • Definition: Segmentation based on demographic factors such as age, gender, and family life cycle.
    • Characteristics: In rural areas, family roles influence purchasing decisions. For instance, younger family members might influence the choice of products like biscuits or shampoos.
    • Example: The head of the family often makes decisions, but younger members are increasingly influencing purchases.
  • Socio-Economic Segmentation:
    • Definition: Segmentation based on income, occupation, and social status.
    • Characteristics: Different socio-economic groups have varying needs and purchasing power.
    • Groups:
      • Farmers:
        • Landlords: High-income, modern lifestyle, urban connections.
        • Affluent Farmers: High disposable income, aspire for better living conditions.
        • Small/Marginal Farmers: Basic needs, limited disposable income.
      • Traders: Own a significant share of durable goods.
      • Service Class: Includes professionals and workers with moderate to high ownership of durables.
    • Income Seasonality: Rural income is seasonal, affecting the timing of major purchases.
  • Rural Youth:
    • Definition: Young individuals in rural areas who influence family purchasing decisions.
    • Characteristics: Interested in modern products, influenced by media.
    • Example: Rural youth are targeted for products like mobile phones, branded clothes, and motorcycles.
  • Psychographic Segmentation:
    • Definition: Segmentation based on personality traits, lifestyles, and values.
    • Characteristics: Rural consumers are categorized based on income, occupation, and social status.
    • Opinion Leaders: Educated youth, innovative farmers, and local leaders are influential in shaping purchasing behavior.
  • Product-Oriented Approach (Customer Response Behavior):
    • Definition: Segmentation based on how consumers respond to products.
    • Characteristics: Consumers are categorized by usage patterns and benefits sought.
    • Use Pattern:Heavy, medium, light users, or non-users.
      • Example: Farmers use large packs of pesticides; rural consumers may buy smaller packs of products due to affordability issues.
    • Benefits Pattern:Focus on utility rather than luxury.
      • Example: Rural buyers prioritize durability and value for money.
  • Brand Loyalty:
    • Definition: The degree to which consumers consistently purchase a particular brand.
    • Characteristics: Rural consumers are price-sensitive but loyal once satisfied.
    • Example: Brands like Lifebuoy, Parle, and Tata Salt are popular due to their perceived value and reliability.
  • Store Patronage:
    • Definition: The tendency of consumers to buy from specific retailers.
    • Characteristics: Rural consumers often have ongoing credit relationships with local retailers.
    • Importance: Identifying key retailers is crucial for ensuring product availability and success in rural markets.