STP in Rural Markets

The STP Process

Marketing Decision Segmenting Target Marketing Actions to be Undertaken Identifying and developing profiles of market segments Evaluating segments and deciding the market coverage strategy Identifying , selecting and communicating competitive advantages

Positioning

Source: The Rural Marketing Book- Khasyap. P & Raut. S

Heterogeneity in Rural India

Variable Socio Cultural Differences Population Size & Density Example Caste Based Habitations in Villages Kerala Vs Andhra Pradesh

Difference in Infrastructure
Media Exposure levels

BIMARU states Vs Karnataka

Kerala Vs Orissa

Literacy Levels
Income levels & patterns

Himachal Pradesh Vs Bihar

Farmers & Daily Wage Earners

Family Structure

Joint Families & Nuclear Families

Segmentation: Issues & Options

Measurability- Accessibility- Differentiability & Profitability Is it easy to measure segments in rural areas? What are the issues in accessing rural markets? Is it necessary to segment underdeveloped markets? ( need for differentiation) What is the appropriate pay back period by focusing on a segment? Mass Segment Niche Micro approaches

Geographic Segmentation
Region
Geographic Village Density Climate Culture (CSR: Avadh, Bundelkhand, Rohilkhand, Purvanchal & Braj in UP

Demographic SEC Classification

Media Research Users Council and Market Research Society of India Three variables Education of chief wage earner durable ownership- type of house

Following is the exact division in the Rural Sector:

(Source: Ficci Press Release)

SEC R1

Rural Characteristics, Aspirations & Lifestyle Landloard farmers, educated, exposed to urban env, children in schools/college in nearby towns, aspiring to match urban lifestyles, tech adopters, experiment with modern farming methods, eager for additional sources of income, socially & politically well connected, big spender on social occasions, owns durables like tractor, 2 wheelers, TV, music sys, steel cupboards, LPG, fridge, mixer Rich farmers with about 5 acres of land, may not be educated, but wants children to be educated, in contact with friends & relatives in urban, consults them for tech adoption, conscious of status, aspires to be well know in social & political circles, owns durables like tractors, 2 wheelers, TV, LPG Avg landholding of 2-5 acres, manages small savings, children sent to village school, opts for time-tested tech, low risk taker, owns durables like TV, tractor (self & rental) Had little or no land, agri labour, living below poverty line, a major purchaser from public distribution system

R2

R3

R4

Source: The Rural Marketing Book- Khasyap. P & Raut. S

Behavioural Segmentation

Occasions Benefits Sought User Status Usage Rate Loyalty Status Place of Purchase

Effective Market Targeting

Segment attractiveness must match company objectives and resources

Undifferentiated marketing- Coca Cola Differentiated marketing Tractor Marketing Single segment concentration Deciding the appropriate coverage strategy

Positioning

A distinctive place in the mind of the consumer Identifying the unique features of the product/ service Differences with respect to competition Selecting differences having a greater competitive advantage

Communicating the best advantage to the consumer

Issues in Positioning

Attractiveness-Distinctiveness-Pre-emptive -Affordability - Communicability

Under positioning over positioning confused positioning