Rural Market Segmentation

Rural market segmentation is the process of dividing a potential rural market into distinct sub markets of consumers with common needs and characteristics.

Rural market segmentation is the starting step in applying the rural marketing strategy.

The basic problem in segmenting the rural market is the heterogeneous nature of the market.

In spite of there being heterogeneous market, the buyer of any product can be divided into homogeneous groups of segments on the basis of their common needs, habits, preferences etc.

Learn about:- 1. Definitions of Rural Market Segmentation 2. Characteristics of Rural Market Segmentation 3. Approaches 4. Variables 5. Degrees 6. Benefits.

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Rural Market Segmentation: Definitions, Characteristics, Approaches, Variables, Degrees and Benefits

Rural Market Segmentation – Definitions Given by Different Experts

Rural market segmentation is the process of dividing a potential rural market into distinct sub markets of consumers with common needs and characteristics. Rural market segmentation is the starting step in applying the rural marketing strategy. Once, segmentation takes place, the marketer targets the identified customer groups with proper marketing mix, so as to position the product/brand of company as perceived by the target segments.

Market segmentation is a method for achieving maximum market response from limited marketing resources by recognizing differences in the response characteristics of various parts of the market. It is one of the most interesting and an effective tool in the hands of marketer. Marketer segmentation is the sub-division of a market into homogeneous subset of customers where any subset may conceivably be selected as a target market to be reached with a distinct market mix.

Market segmentation is based on the fact that markets are heterogeneous and not homogeneous. Homogenous market means a market where the prospective buyers of any product are found to be uniform in their needs, habits, choice, nature etc. Heterogeneous market refers to a market where the prospective buyers of any product are not found similar or homogeneous in their needs, habits, choice, nature etc.

The basic problem in segmenting the rural market is the heterogeneous nature of the market. In spite of there being heterogeneous market, the buyer of any product can be divided into homogeneous groups of segments on the basis of their common needs, habits, preferences etc.

There are various definitions of market segmentation.

Some of the definitions of market segmentation given by different experts are as follows:

According to American Marketing Association, “Market segmentation refers to dividing the heterogeneous markets into smaller customer groups having certain homogeneous characteristics that can be satisfied by the firm.”

According to Philip Kotler, “Market segmentation is the sub dividing of a market into homogeneous subsets of consumers, where any subset may conceivably be selected as a market target to be reached with a distinct marketing mix.”

According to William J. Stanton, “Market segmentation consists of taking the total heterogeneous market for a product and dividing it into several sub markets or segments each of which tends to be homogeneous in all significant aspects.”

According to Schiffman and Kanuk, “Market segmentation can be defined as the process of dividing a market into distinct subsets of consumers with common needs or characteristics and selecting one or more segments to target with a distinct marketing mix.”

In short we can say that market segmentation is a marketing concept which divides the complete market set up into smaller subsets comprising of consumers with a similar taste, demand and preference. It allows the firm to better satisfy the needs of its potential customers.

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Rural Market Segmentation – 6 Important Characteristics

It is difficult to effectively catch everybody in the market place, so business will aim their producers and services at specific parts of the market. After selecting a segment of the market, marketer should evaluates their choice carefully and ensure that they have made the right decision. If a business begins with promoting products of market segments without a full evaluation, it is risky, wasting time and money. A successful market segment will usually meet the various criteria.

To be useful, segmentation of market must exhibit some characteristics that are as follows:

1. Measurable:

The market segment must be measureable in order to calculate the market potential. The segment variables must be distinct, clear and measurable. The size, profit and other relevant characteristics of the segment must be measurable and obtainable in terms of data. If the information is not obtainable, no segmentation can be carried out.

Companies are unable to reach rural markets effectively due to lack of comprehensive data related to markets and consumers. In the absence of information related to size, purchasing power and profiles of rural consumers, these were considered similar to urban cities. Today rural markets are being studied by various companies to obtain valuable data that can be used for segmentation.

2. Accessible:

The segment should be accessible through existing network of people at a cost that is affordable. Reach is important to serve the segment. Now, while segmenting rural markets, it is important to ensure that the segmented market is conveniently reachable to the marketer to deliver products.

Till recently, marketers preferred urban markets to rural one because of the inaccessibility of the rural markets. But due to improvement in infrastructure and in connectivity of villages and other new channels of distribution, rural markets are becoming increasingly accessible. Rural consumers can be reached through vans and through village retailers visiting nearby town distributors and retail outlets.

Segments must be accessible in two senses. Firstly, marketers must be able to make them aware of products and services. Secondly, they must get these products to them through distribution system at a reasonable price. For example targeting rural population could be through television, radio and by opening outlets locally.

3. Differentiable:

The market segments have to be diverse that they show different reactions to different marketing maps, if not then there would have been no use to break them up in segments. Segments attract the consideration of marketers only when they have distinguishing features. Rural consumers are identified as different segments as their responses may be different from urban consumers at least for some products.

For Example – While buying a motorbike, rural consumers give more importance to sturdiness, mileage and carrying capacity of bike, whereas urban consumers look for style, power and aesthetics.

4. Substantial:

The segment should be large enough to be profitable. The segment should comprise either a large number of light users or a small number of heavy users so that marketing becomes beneficial to the company. It should consist of people, who are similar in perceptions, learning, attitude, preferences and actions. As such, covering them will be easy.

Rural areas are not homogenous. Region-wise differences are found in language, mind set and behaviour. So, it is difficult to design separate promotional programmes as the size of consumers is not large enough to make the effort viable.

5. Actionable or Feasible:

It has to be possible to approach each segment with a particular marketing programme and to draw advantages from that. The segments that a company wishes to peruse must be actionable in the sense that there should be sufficient finance, personnel and capability to take them. Hence, depending upon the reach of the company, the segments should be selected.

6. General Considerations:

Apart from the above requisites, the segment must have growth potential, be profitable, carries no unusual risk and has competitors, who do not fight directly with the product or brand. The firm must possess enough resources for market segmentation. The segment criteria should follow the instructions and guidelines issued by the government regarding distribution of a particular product.

The segment should be relatively stable over a period of time. The segment that emerge rapidly and disappear just as quickly will not be a good segment. So segment must be suitable, practicable and attractive to the firm.

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Rural Market Segmentation – 2 Main Approaches to Identify Rural Market Segments (With Examples)

Broadly speaking, we have two main approaches to identify market segments as given below:

I. People-Oriented Approach (Customer Personal Characteristics):

We can classify the customers by customer dimensions such as geographic location, demography, socio-economic characteristics and psychographic characteristics. These are variables and they are independent of any product or service and the particular situation encountered by the buyer in making buying decisions.

We try to find out the type of customer who will buy our products:

1. Geographic Location:

Geographic Location is the usual and popular basis for market segmentation. The market could be divided into urban and rural markets. While urban population is highly concentrated, rural population is scattered over a wide geographical area. Since 1980s, many companies are targeting rural consumers due to growing purchasing power. About 50 per cent of the rural population lives in about one lakh villages having a population of over 2,000 each and companies like HUL have been able to cover this segment by establishing retail network in these villages.

We have four regions, i.e., South, West, East and North. It has been observed that consumers in South, by and large, are conscious about cleanliness, health, education and culture. Due to hot weather conditions, there is increased use of talcum powder in South and Ponds has a high market share in this region. The demand for woollen dress materials is high in North during winter season compared to other regions in the country.

2. Demographic Segmentation:

In rural areas, the husband provides economic security to the members of the family and he makes purchase decisions. Nowadays, school-going children have high awareness about new products and they are influencing buying decisions in the family. Therefore, the marketers are targeting the younger lot for products like biscuits, chocolates, shampoos and soft drinks.

3. Socio-Economic Segmentation:

Major income still comes from agriculture though the share of non-farm income has gone up in recent years. Based on occupation, there are four important groups, who form the target population for consumer durables like colour TV, refrigerator and two-wheelers.

i. Farmers:

(a) The landlords which include Zamindars/Mitadars/Thakurs, traders and local moneylenders. They possess large acres of land and have spacious houses in the village. They have high disposable income. Their lifestyle can be compared to that of upper income group of urban areas. They have relatives staying in cities and in many cases abroad also. Their children go to urban schools.

(b) Affluent farmers who live in villages and follow modern methods of cultivation. They occupy a high position in the society that is above the normal population with respect to social and economic status in the village. They are hardworking and aspire for better living conditions. They have high disposable income and try to maintain their status in the village. The owner farmers who constitute 34 per cent of households, own about 30 per cent of durables.

The small and marginal farmers occupy low rank in the rural social hierarchy and their needs are basic, i.e., food, clothing and shelter.

ii. Traders:

The traders constitute about 8 per cent of the rural households and own between 15-20 per cent of the durables.

iii. Service Class:

The service class who includes teachers, clerks, mechanics, electricians in the villages and office and factory workers, who work outside the village, constitute about 13 per cent of rural households and own 30-40 per cent of durables.

Rural income is highly seasonal as it is dependent on agricultural activities. Therefore, most of the purchases of durables, jewellery and clothes takes place during post-harvest season and during festivals like Onam, Pongal, Diwali, Idd, Gudipadwa and Baisakhi.

Family life cycle exercises definite influence on consumer behaviour with regard to purchase of consumer goods.

Example – In rural areas, the users of shampoo are the young daughter or the daughter- in-law and the elderly women continue to use natural products like shikakai powder.

iv. Rural Youth:

The rural youth in the age group of 20-25 years, play a major role in the purchase decisions of the family. They view television and cinema and enjoy seeing cricket matches and action movies. They are the target group for products like toothpaste, shampoo, soft drink, deodorant, television model, audio system, mobile phone, etc. They are moving from bicycles to motor cycles. Even branded clothes and shoes have entered rural homes, though the sales volumes are low at present. Marketing researchers can meet them at telephone booth, playground, retailer shop and village square. However all decisions regarding agriculture and inputs are taken by the head of the family in most of the cases.

4. Psychographic Segmentation:

Personality traits such as dominance, aggressiveness, achievement orientation, motivation, etc., may influence buyer behaviour. Lifestyle can be measured by the products the person uses and the person’s activities, interests, opinions and values.

In a rural society, there are grades of people based on income, occupation and wealth. The educated youth, innovative farmers, village president are the important opinion leaders and marketers are targeting this group for promoting products and services.

II. Product-Oriented Approach (Customer Response Behaviour):

The customer response or buyer behaviour may be considered in relation to product benefits, product usage, store patronage and brand loyalty. We want to know why consumer buys a certain product. Example- Bullet Motor Cycle is considered as a sturdy vehicle (product benefits) and creates a ‘Macho Image’.

1. Use Pattern:

A buyer may be classified as heavy, medium, light user and non-user. The use of consumer products such as shampoo, hair oil, toothpaste, talcum powder is low in rural areas due to poor affordability and many marketers have introduced small unit packs of these products to meet the requirements of lower and middle class rural consumers. In agriculture, cotton farmers are heavy users of pesticides and the marketers have come out with large packs (20/25 liters) of the products to meet their special requirements.

2. Benefits Pattern:

Consumers buy products primarily to secure expected benefits. Rural buyers look for value for money while purchasing products. They look for quality but cannot afford high prices. They are concerned with utility of the products rather than mere good looks and frills. The rural consumers particularly the lower/middle income group are budget- conscious unlike, urban consumers who are comparatively more status-seeking.

Examples-

1. Bullet motor cycle is popular in villages due to its ruggedness.

2. HMT watches are seen on many a wrists for its utility value.

3. Rural consumers prefer strong tea (Kadak Chai).

4. Titan has introduced Sonata brand watches; priced between Rs.350 and Rs.800 to meet the requirements of price-sensitive rural and semi-urban consumers.

3. Brand Loyalty:

A rural consumer is price sensitive due to low purchasing power and lack of awareness about the quality of products available in the market. However, they will continue to patronise a brand once they are satisfied with the product.

Example – A few of the popular brands are Lifebuoy, Parle, Ponds, Nirma, Tata Salt, Colgate, Philips, etc.

4. Store Patronage:

It has been observed that rural consumer buys from the same shop. The retailer extends credit to the consumers and many have running credit account with the same retailer. He influences buying decisions of the consumers. Therefore, the marketers have to identify key retailers in rural markets and ensure product availability for success of business.

5. Predispositions towards Products and Brands:

The attitudes, perceptions, values, beliefs, intentions and preferences are the constituents of predisposition, indicating the consumers’ state of mind, predisposing the consumer to behave in a particular way towards a product, brand, dealer and the company. Segmentation studies based on buying motives, attitudes, perceptions and preferences give much better results regarding buyer behaviour than those obtained by demographic, socio-economic variables or determinants. While age, gender, usage, income can be measured objectively, personality traits, lifestyles, motives, attitudes, values and beliefs have to be inferred as they are subjective phenomena and cannot be objectively measured.

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Rural Market Segmentation – 4 Major Segmentation Variables Used for Rural Consumer’s Segmentation

The step towards developing a segmentation strategy is to locate basis for segmenting the market. There are different variables which are used for this purpose. The variables relate to consumer demographics, psychographics, geographical and behaviour. The variables used for urban segmentation may not necessarily fit into the scheme of rural consumer segmentation. But it is necessary to segment rural consumers in order to target them effectively.

There are four major segmentation variables used for rural consumer’s segmentation which is explained below:

Variable # 1. Geographical Segmentation:

The region, city size, its density whether urban, semi urban or rural and the climate matters a lot in segmenting the market on the basis of geographical segmentation. The main advantages of this segmentation base are that it reflect the physical location of the market and it’s climatic conditions.

Rural consumers can be segmented according to geographical factors like:

i. Region,

ii. State,

iii. District,

iv. Village and

v. Climate

i. Regions:

The region is divided into four zones – North, South, East and West. Regional diversity within rural India dictates that the real challenge lies in understanding the fragmented rural consumers if marketers want to succeed in convincing them to consume. There are variations in the cultural and behavioral traits of consumers across the four regions of the country.

Marketers need to evolve effective strategies around products that fulfill functional needs and the need gaps of different regions.

ii. Village Population and Density:

The census of India has categorized villages into different strata on the basis of their population. The rural life style changes with size of village due to a variation in the level of infrastructural and economic development. So far, most companies have targeted villages with a population of more than 2000, which have better infrastructural facilities and high purchasing power. What marketers need to do is to segment the village markets on the basis of development indicators relevant to the product category and target accordingly.

iii. Climate:

Climate conditions also play a significant role in the consumption of specific products. Agro based technology companies segment India into eight geo-climate regions based on the conditions of soil and the climate. The climate conditions have great impact over the purchase decision. For example coolers and Ac are not normally sold in hilly areas.

Variable # 2. Demographic Segmentation:

Demographic is also an important, most purposeful and commonly used basis. Demographic basis has various advantages. These are easy to recognize and easy to measure. Demographic data can be easily made available. Rural consumers can be segmented on the basis of demographic factors like age, income, family structure, landownership etc.

Some of the demographic variables are explained below:

i. Age and Life Cycle:

With the changing life cycle stage, consumer’s need for products and brand preferences also changes. This phenomenon is true for both rural and urban consumer. For example, in rural India, young adults make preference for mobile handsets with latest features and technology whereas elders are satisfied with second hand mobiles with simple and basic features.

ii. Family Structure:

In rural areas, family structure is an important factor for purchasing a product. As the family size increases, so does the consumption of products. In such a case, the family pack or the economy refill pack works very well. Similarly large families have more bread winners, which translate into higher family income and thus a greater consumption of products. This often leads to multi-brand consumption of a product category among different family members.

In past, there were mostly joint family system in rural areas but gradually rural India is moving from large joint family system to individualized joint family system (families staying together but with separate kitchen) and nuclear family system. This result into greater demands especially for consumer durables, because every new family unit living separately needs a T.V., Refrigerator, LPG connection, Pressure cooker etc.

iii. Occupation:

It is an important base to segment the market. The major occupation in rural India is self-employment in agriculture, labourer, and self-employment in non-agriculture and regular salary/wages. The variation in the major occupation groups necessitates the segmentation of rural markets on a different basis. Both product categories and consumption pattern change among different occupation groups. Therefore, marketers should consider occupation patterns while segmenting the rural market for their product category.

iv. Income:

In rural India, the flow of income is mostly seasonal (post-harvest for farmers or weekly/ daily for wage earners). The salaried class with a regular monthly income constitutes a very small segment of rural consumers. Many urbanities pay income tax, whereas agricultural income is not taxable. Also due to irregular income pattern and multiple source of income, an assessment of rural income is difficult.

So, urban income based segmentation strategy is not entirely appropriate in case of rural consumers.

v. Education:

Education provides knowledge and skill. Rural folks are mostly illiterate. But due to government launched literacy programmes, there is a considerable raise in the literacy level. Despite that, their thinking capabilities, in terms of divergence and association with images may be different to the urban.

vi. Religion and Caste:

Religion provides a “code of life” and links the visible real word with invisible world after death. Religion and caste play an important role in influencing the social economic, political and cultural behavior of certain community particularly in rural areas. The influence of religion on the consumer purchase behaviour is an important consideration for marketers.

The settlement of villages has historically taken place on the basis of caste and religion, villages often having a predominance of people belonging to one particulars caste or religion. Their differences are clearly visible in villages, where hamlets of the upper and lower casus are kept separate. Village shops are also decorated along similar lines in many cases.

This particular feature of caste dynamics cannot be ignored while segmenting the rural markets. However, when it comes to trade and commerce, caste does not play a significant role.

vii. Landownership:

Rural livelihoods, security, property sometimes are intrinsically linked to land. Urbanites tend to regard land as just another asset and they face to appreciate the emotional bond that farmers have with their land. Segmentation on the basis of land should include five factors, size of land holding, quality of land and area under cultivation, irrigation method, agricultural productivity and crop mix etc. Therefore, rural markets can also be segmented on the basis of land holding size into the following categories ‘large farmers, medium farmers, small farmers, marginal farmers.

Variable # 3. Psychographic Segmentation:

The psychographic segmentation is at the mind level. It is a recent approach to market segmentation which has emerged as a major alternative to the traditional approach. It segment the market on the basis that how people act.

Psychographics include factors such as:

i. Personality traits,

ii. Lifestyle and value system,

iii. Social class,

iv. Culture.

i. Life Style:

Life style is defined by the activities, interests and opinions of the persons. Lifestyle reflects the overall manner in which persons live and spend time and money. People with the same demographic group or social class can exhibit very different lifestyles and hence different psychographic profile.

With the advent of satellite Television and Cable networks all across the country, the rural people have been exposed to the rich life style of the urban households. Landlord, farmers and educated are exposed to an urban environment aspires to match with urban lifestyle. Whereas, average landholding farmer manages small saving and opt for time tested technology and fall in category of followers.

ii. Culture:

The culture of a region provides a window into the attitudes of the people who live there, their relationships and power structure. Cultural identities have diluted to some extent in urban areas due to the influence of western culture, but it is largely intact in rural areas.

iii. Personality:

Personality refers to the set of psychological and physical characteristics of an individual that determine human behaviour. These characteristics are unique, making individuals different from one another. Marketers by experience found that consumers buy those products or brands which match or fit with their self-perceived personality. Personality affects the consumption of many goods especially those which are consumed publicly. Personality can be designed with the help of characteristic like self-confidence, sociability, authority, creativity etc.

For example, a person with social nature and creative zeal is likely to prefer picnics, parties, photography. Marketers may offer restaurants with good feed and ambience, picnic spots, cameras etc., to satisfy his requirements.

iv. Social Class:

Society consists of a structure, which represents a hierarchy of classes or grades of people. The social class may be categorized as upper class, lower class, middle class etc. Upper class demands expensive and superior products like as a mobile phones, luxuries items etc. Middle class demands comforts products like cooler, scooter, furniture, crockery etc.

Lower class demands necessity products. The buying behavior of these classes differs significantly. This can also be used as base for segmenting the markets.

Variable # 4. Behaviourial Segmentation:

Behavior of consumers is a better guide to segment the markets. Behavioral segmentation involves various parameters like occasions, benefits sought, user status, loyalty status etc. Behavioural segmentation is based on the consumer response to his requirements.

i. Occasions:

Buyers can be segmented on the basis of the occasions on which they purchase a product. In rural areas, most durables are purchased after the harvest season because this is a time when farmers have cash after selling their agricultural produce. Like the Baisakhi season in Punjab, Onam and Ugadi in South India and Diwali and Dussehra in most parts of the country, are important festival occasions when villages prefer to buy new items.

Rural people prefer buying, when melas and haats are organized. Also weekly haats and shandis are the times to purchase daily use products, vegetables and spices.

ii. Benefits Sought:

Benefit segmentation emerges from the understanding the needs of consumers. Customer satisfaction depends upon product benefit such as economy, performance, durability, status, task etc. Many marketers do the segmentation on the basis of the benefits sought by the consumers to position their products in rural areas.

The benefits sought from a product vary from consumer to consumer. Rural consumer may buy a motor bike seeking one or more benefits like economy in purchasing, status symbol, convenience of transport. Rural consumers are more concerned with the utility of products than its appearance and sophistication.

iii. User Status:

On the basis of usage of a product, consumers may be categorized into first time user, regular user, potential user and non-user. In rural markets, the majority of consumers fall within the categories of potential users or first time user for most product categories. Therefore, a focus on product trials and demos is very crucial in rural areas, unlike urban consumers who are already expose to multiple brands and products through a number of channels.

iv. Usage Rate:

On the basis of usage rate, consumers may be categorized into light, medium and heavy users. Taking this into account, marketers have introduced different pack size to meet the requirements of different users. Now days, most of consumers goods are available in sachet packs for rural consumers and family packs for joint and large families. Though the heavy users are small in number but they show a high percentage to total consumption. Normally, heavy users consume four to ten times more than the light users. Therefore marketer likes to attract the heavy users.

v. Loyalty Status:

A marketer can be segmented on the basis of consumer’s loyalty for specific brands. The peculiar phenomenon of brand stickiness works in rural areas, which helps marketers to retain customers for longer periods with minimal efforts.

Rural buyers take a long time to decide on a particular brand, but once they are convinced, they are generally more brand loyal than the urban customers. Segmentation based on loyalty help the marketers to tailor the communication and product appeal to retain the loyal consumers or to attract new consumers from rival brands or converts non loyal buyers into loyal buyers.

vi. Place of Purchase:

Rural consumers buy different product and services from different markets place. In rural areas, place of purchase changes with change in product categories. This is unlike the situation in urban markets, where customers make most of their purchases from one place or even from one super market.

Taking advantage of this specific rural purchasing behaviour, marketers can promote their products by developing an understanding of the place where potential buyers congregate most often and from where, they prefer to buy specific products.

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Rural Market Segmentation – Degrees of Rural Market Segmentation

The marketer adopts several approaches to segmenting a rural market.

These approaches are also known as degrees of rural market segmentation which are as follows:

1. Mass Marketing:

Mass marketing is a philosophy which offers the same product and applies the same marketing mix to all consumers assuming that there is no significant difference among consumers in terms of needs and wants. Initially, a majority of companies that entered the rural market, related it an extension of the urban market.

They followed the trickly down theory and tried to sell urban products in rural markets. They have used the mass marketing approach in rural markets, not attempting any segmentation of consumers and treating all consumers as the same. This is the first step of marketing where marketers do not have much knowledge of the market.

For Example – Colgate, Palmolive successfully marketed the same Colgate toothpaste to all consumers in urban and rural markets till recently. However, the rural markets started to evolve and consumers become more demanding, Colgate introduced Cibaca.

In this approach company feels that no segmentation is necessary. This is undifferentiated marketing strategy.

2. Segment Marketing:

Segment marketing is still in its early stages in rural markets. It is only in recent years that marketers have realized the potential of different consumers segments that are substantial enough to target and have designed and launched low priced, innovative products for rural markets.

Hindustan Unilever uses two different approaches to market its two different brands – Hamam and Lifebuoy. On the one hand it tries to reach the whole market in one go by using the mass marketing approach for its brand Hamam. On the other, it has introduced four variants of its brand Lifebuoy – Active Red, Active Orange, Plus and Gold – to reach four different segments of the Indian market.

3. Niche Marketing:

A Niche is a very small group with a distinctive set of traits who seek a special combination of benefits. Niche is a narrowly defined group of customers that have a distinct and complex set of needs. In cycle industry, there might be segments like cycle for regular users, sports, racing, kids, girls etc.

Niche is created when cycle is required for physique club, physically handicapped with left and right hand working etc. In the niches, there are few or no competitors and the product might command a premium price. Niche marketing identified special sub groups within larger segments and offer different products and services.

4. Micro Marketing:

Micro marketing refers to the tailoring of products and programmes to satisfy a particular taste or need. Micro marketing occurs when target market is further bifurcated and the needs of the smaller customer groups are addressed on a local basis. Some specific models/styles, features products are made available at selected places on a local basis. One of the examples of micro marketing is Dabur’s Anmol Hair Oil, a mustard amla bases oil launched for northern Indian markets at INR 10 for a 50-ml pack, targeted at rural consumers using loose mustard oil. It includes local marketing and individual marketing.

(a) Local Marketing:

Local marketing involves designing brands and promotions to suit the needs and wants of local customer group on a geographical basis. As rural people do not have much exposure, local marketing has relevance in many cases. It helps in effective marketing in the face of differences in demographics and the lifestyles of communities in different regions. Regional and local brands are very good at local marketing since they operate in a limited geography, which helps them to develop a good understanding of local consumers and their specific needs.

(b) Individual Marketing:

Individual marketing is customized marketing or one to one marketing. The focus of rural marketer is further shifting from local basis to Individual customer basis. With the advancement in manufacturing because of breakthrough in information technology for example, use of computer-aided design and computer aided manufacturing, it has now become possible to manufacture a product as per the individual customer needs or of a buying organization.

Tailoring, forging and carpentry are the examples of individual marketing in rural set-up. In this approach an individual can get a product according to his specific needs. To address great diversity of rural markets different segmentation approaches have been attempted by marketer to reach rural consumers effectively.

5. Target Marketing:

The modern marketing concept starts with the definition of target markets. The target marketing has its roots in the marketing age. Target marketing helps the marketer to correctly identify the markets-the group of customers for whom the product is designed. There are two approaches that can be followed despite the fact that different customers have different needs.

First is to treat the target market as a single unit-one aggregate market and draft one marketing mix for them. This is known as shortgun approach.

Second, total market is viewed as consisting of small segments and the consumer differenced necessitates different marketing mixes for each of them. Based on the capabilities of a company, the selection of each segment take place. This is known as Riffle approach. Thus, there might be no market segmentation or complete market segmentation depending upon shortgun approach or riffle approach.

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Rural Market Segmentation – Top 8 Benefits 

Market segmentation can be very effective strategy to tap a market that is heterogeneous with respect to its response to a product category. Therefore, rural market being heterogeneous in nature is advisable to be segmented. Market segmentation ensures higher customer satisfaction and improve effectiveness of the marketing programme. It helps the marketers to match their products with the real needs the consumer groups. It is benefitted to both marketers and customers.

The benefits of rural market segmentation are:

1. Customer – Oriented Philosophy:

Market segmentation improves a company’s understanding of why customers do or do not buy certain product or services. It also provides an understanding that how a company can make adjustment to meet the changing market demands. Market segmentation results in many wars with in the segment such as Coke vs. Pepsi, Tata Salt vs. Captain Cook etc.

Each time a war goes on, customer is the winner. Consumer gains in terms of added quantity and variety. As the marketing mix will be determined on the basis of the homogeneous market segments, it helps in serving the needs of customers in an optimum manner.

2. Enables Development of Strong Position of Brand:

By segmentation in an effective manner, a marketer can increase the company’s sales volume. Each segment has different demand pattern and when the manufacturers satisfy the demand of different segments by changing their products, the total sales of the company increases. As the organization is serving the consumer needs in a highly customer oriented manner, it establishes a strong image of the organization in the target market.

3. Enable Tailoring of Marketing Programme:

When customer needs are fully understood, marketer is able to formulate and implement different marketing programmes which suits to the markets. In the absence of segmentation, a strong marketing programme will not be framed and which will not be effective for all consumer groups. Marketer can make better adjustments of his products and marketing appeals by segmenting the markets.

As the marketer is aware of the consumer needs, he can develop a customized and tailored marketing programme that can delight the consumer with benefits and the experience.

4. Help in Cutting of Wasteful Expenditure on Unwanted Consumers:

Rural market segmentation helps in cutting the wasteful expenditure on unwanted consumers. A marketer can focus and make expenditure on a particular customer segment which will be profitable for them.

Under market segmentation, marketers are in a better position to locate the target customers and compare marketing opportunities. In the market area where response of the customers seems to be poor, the strategy of company can be readjusted so that the sales can be pushed up.

5. Matches Needs and Wants of Specific Groups of Buyers to Firm’s Setting:

Market segmentation help the marketer to match the needs and wants of specific group of buyers with firm’s setting. All marketing activities are directed towards the satisfaction of consumers and with the help of segmentation it become easy to measure the level of segmentation in each segments and also to make improvements in the segmentation level. The company can fulfill the specific customer group’s needs by considering their resources and overall objectives.

6. Stimulates Demands through Multi-Product for Multi-Segments:

Rural marketing segmentation also helps in stimulating demand through multi products for multi-segments. In practical life, the marketer does not use single variable for market segmentation, rather it uses multi attribute segmentation.

7. Helps in Knowing Company Capability and Assessment of the Competitors

By looking at a particular segment company can carry SWOT analysis. SWOT analysis details out the strength and weakness within the company and opportunities and threat outside the company. Thus it keeps the marketer to adopt different strategies for different markets, especially in rural markets. It helps to know the level of competition in each segment. By knowing the strength and opportunities and controlling weakness and threat a company can enhance its capabilities for marketing its products in a particular segment in rural areas.

8. Provides Opportunities to Expand Market and Hence Enhances Marketing Efficiency:

By segmenting the market, a marketer is able to create new markets for their products It enhances marketing efficiency by offering specific pricing, sales promotion and distribution channel as per the requirement of different segments. Marketers get benefits in focusing the relevant segment more closely and look for changes in the market requirements. This all increases the marketing efficiency of the firm.

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