Segmentation, Targeting & Positioning in Rural Markets

1. Segmentation, Targeting & Positioning in Rural Markets UNIT II Atul Kumar Agarwal Head of Department Kanpur Institute of Technology-Kanpur

2. Steps in Segmentation, Targeting, and Positioning 6. Develop Marketing Mix for Each Target Segment Market Positioning 5. Develop Positioning for Each Target Segment 4. Select Target Segment(s) Market Targeting 3. Develop Selection Criteria 2. Develop Profiles of Resulting Segments Market Segmentation 1. Identify Bases for Segmenting the Market

3. SEGMENTATION • Process of subdividing a total market into different subsets or groups. • Where the marketer may select one or more segments. • To be reached with an appropriate marketing mix.

4. Basis for market segmentation On the basis of consumer’s personal characteristics (non-behavioral correlates) On the basis of consumer responses (behavioral correlates) Geographic Psychographic Usage based Benefits Loyal status Demographic Socio-economic

5. Geographic Segmentation Subdividing the whole market into different geographical units which can be further sub-divided into smaller units. A national marketer may take whole nation as his market. For example-in the detergent market Hindustan Levers and Procter and Gamble are all national marketers in India. A multinational company may divide the global market on the basis of continents. Like Pepsi and Coca-cola.

6. Geographical features of India Source: India 2000, Publication Division, Government of India

7. Demographic Segmentation • Subdividing the market in terms of demographic features of a country or a region. • Variables that may be considered are age, gender, marital status, family size, etc. • Demographic data is essential for estimating the size of the target market.

8. Demographic features of India Source: Census of India,1991 and 2001

9. Socio-economic segmentation • Variables that may considered for market segmentation are Income, occupation, education, religion, social classes, etc. • This segmentation is used for durable products such as automobiles, PCs, etc. Psychographic segmentation • Sub division of different groups on the basis of personality, life style and values. • Marketers of cosmetics, textiles, fast food providers etc. must understand the life style of the target market. • Automobile manufacturers must consider different personality traits in dividing the market.

10. Benefit segmentation Toothpaste Segmented on the basis of benefits sought by consumers General benefits that consumers seek are cleanliness and hygiene in all segments. Other key benefits are:- Cosmetic Fluoride Herbal Protection against foul smell, modernity and cosmic value. Eg-Colgate, Prudent Family health, extra protection for children. Eg-Colgate Fluoride, Cibaca Fluoride. Family health and welfare. Traditionally good for health. Eg-Neem, Dabur.

11. Consumers’ perceived benefits of Two-wheelers

12. Usage based segmentation Loyal buyers Market segmented into High buyers Medium buyers light buyers • Relationship seekers: buyers who want to develop long term relationships with their suppliers or retailers. • Loyal buyers of particular brand: buyers who seek a particular brand among competing brands.

13. Muti Variable Segmentation a)Thompson Rural Market IndexDeveloped by HTA Ltd. In 1972 and improved in 1986. They Compiled Data from 335 districts based on 26 variables.It is considered to be overall indicator of rural market poetntial. As it has strong corelation with 10 selected agricultural related varaibles: 1.Agricultural labourers 2.Gross cropped area 3.Gross irrigated area 4.Area under non-food crops 5. Pump sets 6.Fertilizer consumptions 7. Tractors 8.Rural credit 9. Rural deposits and 10. Villages electrified

14. Classification of Markets: based on index numbers

15. MICA rating • MICA has developed “MICA Rural Market Rating”. It is available in a CD-ROM with digital maps and provides the relative market potential of a particular district. The ratings have been arrived at by using six parameters. • Total value of agricultural output • Bank advances • Cropped area • Irrigated area • Number of cultivators, and • Fertilizer consumption • It also highlights the village haats- when and where they are held and the proximity to the centre by road and rail

16. Lin Quest: Initiative Media developed Lin: Quest, a software package that providesm marketers with data on rural India. The data can be sorted on five parameters: • Demographic • Agricultural • Income • Literacy • Civic amenities Depending on the product being launched, marketers will be interested in certain parameters such as literacy levels, male-female ratios, bank deposits, income levels, accessibility (via road,rail and water), dispensaries, schools, and distance from the nearest town. The software allowsmarketers to assign a weighted average on each of these. The package then lists all the placesthat satisfy the marketer’s criteria. For the rural launch of a regional daily newspaper theparameters could be villages (population over 10,000), income (over Rs.2000) distance from thenearest town (not more than 45 km) and literacy levels. Lin: Quest provides a list of districts andvillages within the district

17. Evaluation of segmentation • Measurable • Substantial • Accessible • Differentiable • Actionable

18. Targeting • Once the firm has segmented the total market ,it should select the target market segment or segments for marketing. • Investing in a particular segment should be sensible in terms of company’s mission, objectives, skills and resources.

19. Targeting Strategies Multi segment strategy or differentiated marketing strategy Undifferentiated marketing strategy Single segment concentration strategy

20. Single segment concentration strategy • The firm selects a single segment or market and fully concentrate its marketing efforts to try and seek maximum advantage. Semi-luxury segment (Expensive) Single marketing mix Car maker Small car segment (affordable,less expensive) Luxury car segment (very expensive)

21. Multi-segments strategy • Here the firm may select two or more then two or may be all the segments and approach each segment with an appropriate marketing mix programme. Car maker Marketing Mix Marketing Mix Marketing Mix Semi-luxury segment Luxury segment Small car segment

22. Undifferentiated Marketing Strategy • The firm ignores the market segment differences and goes ahead with 1 single product offer for all segments. Single marketing mix Essential commodity manufacturer.

23. Market Positioning • Positioning of a product or service is creating an “image” in the consumers’ mind. • Consumers generally buy “images” rather than actual product. • Marketers mostly use advertising as a tool to build up brand or corporate “image”.

24. Positioning strategies

25. Positioning strategies

26. Health drink market Competing brands in the health drinks market Advertising claims Complan Horlicks Bournvita Boost Viva “complete planned food” for growing children. Contains 23 vital nutrition “The great nourisher-with extra calcium” “Health strength and energy”.contains protiens,vitamins, menerals and carbohydrates. “Energy Ah! Energy” “Double action drink” Health Drink Market

27. Determining a competitive positioning strategy • Identification and selection of good positioning strategy • With the help of marketing research Steps in determining a competitive positioning strategy • Identify the strategy group • Understand the consumers’ perception of competitive brands of strategy group • Determine consumers’ needs and aspirations • Select the best one for advertising campaign

28. Identify the strategic group Strategic Groups Marketing Mix Target Consumer Groups I Hero Honda CD 100 Kawasaki Bajaj Yamaha & Bullet Upper middle and middle income classes High Tech High styling High power High price II Hero Honda TVS Suzuki Middle and lower middle income classes High style High economy Medium price III TVS EXL Champ Hero Puch Low styling High economy Low price Low Tech Lower income classes

29. Determine consumers need and aspirations • Price • Fuel efficiency • After-sales service • Warranty • Stylish looks • Easy to ride • High pick up and trouble free Select the best one for advertising campaign A sample of respondents can be asked to select the best among the alternatives and the same can be used for the advertising campaign

30. Thank you