Rural Markets

Segmentation
 Segmentation
It is the process of dividing a
heterogeneous market into several
sub-markets or segments.
 Pre-requisites for Effective Segmentation

Measurable
Accessible
Differentiable
Substantial
 Degrees of Segmentation
Mass Marketing
Segment Marketing
Niche Marketing
Micro-Marketing: Local Marketing or
Individual Marketing
 Major segmentation variables used
for rural consumer segmentation
Geographic Segmentation
Regions: East, West, North, South
Population Density: rural, urban, sub urban
Village size: <1000, 1000-2000, 2000-5000,
>5000
Climate: summer, rainy, winter
Culture: 56 socio-cultural regions (eg,
Avadh, Bundelkhand, Rohilkhand,
Purvanchal and Braj in UP)
 Geographic Segmentation
Regions- Country is divided into following
four zones:
North: UP, Rajasthan, J&K, Himachal
Pradesh, Punjab, Haryana.
South: Tamil Nadu, Andhra Pradesh,
Kerala, Karnataka.
East: Bihar, West Bengal, Orissa, Assam
and Northeast states.
West: MP, Gujarat, Maharashtra.
 Major segmentation variables used
for rural consumer segmentation
Demographic Segmentation
Age and Lifecycle: Children, teens, young adults, elders,
seniors.
Gender: Male, female
Income: Deprived, aspirers, seekers, strivers, global
Education: Illiterates, semi-literates, literates
Family Structure: Joint family, individualized joint family,
nuclear family.
Religion: Hindu, Muslim, Sikh, Christian, Parsi
Caste: Upper caste, lower caste
Occupation: Self-employed farmers, daily wage labourers,
salaried, traders
House type: Pucca, semi-pucca, kuccha
 Socio-Economic
Classification
The level of education and type of
dwelling are important indicators in
understanding the profile of rural
consumers. The two variables have
been used to segment rural
consumers into four socio-economic
groups- R1, R2, R3 and R4.
 Major segmentation variables used
for rural consumer segmentation
Psychographic Segmentation
Social Class: upper, lower, middle
Personality: Authoritarian, ambitious
Lifestyle: Trendsetters,
Followers/adopters, traditionalists
Psychographic Segments in Rural
India
Socio-economic classification (SEC) &
Rural Demographic Characteristics
R1 Landlord farmers, educated,
exposed to an urban
environment, children in
schools/colleges in nearby
towns, owns durables like
tractor, refrigerator, mixer-
grinder, etc.
R2 Rich farmers with about 5
acres of land, may not be
educated, friends and relatives
living in urban areas, owns
durables like tractor, two-
wheeler, LPG etc.
Rural Lifestyle
Aspiring to match urban
lifestyle, technology adopters,
experiment with modern
farming methods, eager for
additional sources of income,
socially and politically well-
connected, high spender on
social occasions.
Want children to get educated,
consult friends and relatives in
urban areas for technology
adoption, conscious of status,
aspire to be well known in
social and political circles.
Psychographic Segments in Rural
India
Socio-economic classification (SEC) &
Rural Demographic Characteristics Rural Lifestyle
R3 Average landholding 2- Opts for time tested
5 acres, manages small technology, low risk-
savings, children sent to taker, desires more
village school, owns knowledge, largely
durables like TV, tractor followers, seekers.
(self and rental).

R4 have little or no land, Laggards, averse to

agricultural labour, living latest technology,
below poverty line, a uninformed, risk
major purchaser from PDS. aversive.
 Major segmentation variables used
for rural consumer segmentation
Behavior Segmentation
Benefits Sought: Quality, convenience, value
for money, service etc.
Loyalty status: Strong, weak, non-loyal
Usage Rate: Light user, medium user, heavy
user.
User Status: Non-user, ex-user, first time
user, regular user, potential user.
Occasions: Festivals, melas, jatras, weekly
haats
 Behaviour Segmentation
The brand stickiness phenomenon
works more in rural India than brand
loyalty. It is a form of behaviour
whereby the villager stays with a
brand and doesnt experiment easily,
since he is not aware of any better
choice.
 Behaviour Segmentation
In some parts of Gujarat, it was
found that farmers were buying big
50-hp tractors, when their actual
need was for much smaller tractors,
typically 25-30 hp. Further
investigation revealed that the
reason behind this was the
compulsion to keep up with the
neighbours.