MODULE 3

CLASSIFICATION OF RURAL CONSUMERS

The Affluent Group The Middle Class The Poor

WHY COMPANIES GO RURAL ???

Penetration levels of consumer durables in the rural sector

Emergence of women customers

SELECTING AND ATTRACTING MARKETS

Involves three key decisions, viz., segmenting, targeting and positioning (STP).

Segmenting is the process of dividing or categorizing market into different groups based on one or more variables.

Targeting is selecting the market segments, which can be served efficiently and profitability. It is, deciding on market coverage strategies.

Positioning is a market attraction strategy, which involves placing the brand in the minds of the customers in the target market.

DEGREES OF SEGMENTATION

MASS MARKETING

Entire market treated as homogenous mass production and mass distribution

SEGMENT MARKETING

buyers differ in their needs, wants, demands and behaviors

need for segment marketing arises when: Consumers have become more

diverse, sophisticated and choosy. Competition has become tough

NICHE MARKETING

Niche is a very small group with a distinctive set of traits, who seek a special combination of benefits.

Niche marketing identifies special sub-groups within larger segments and offers different products and services.

MICRO MARKETING

Micro Marketing involves tailoring products and programs to suit the tastes of specific locations and individuals.

Includes local marketing and individual marketing.

Local marketing: It involves and programs to suit the tastes of specific locations and wants of local customer groups on a geographical basis.

Individual marketing: Individual marketing is customized marketing or one-to-one marketing. Tailoring units, hotels, tourist operators and doctors provide individualized services. Building contractors build houses or flats to the specific requirements of customers.

BASES OF SEGMENTATION

Geographic Demographic Psychographic Behavior

GEOGRAPHIC

Zone Density Climate Culture

DEMOGRAPHIC SEGMENTATION

Age and Life-cycle Gender Marital Status Family Size Income Religion

DEMOGRAPHIC SEGMENTATION

PSYCHOGRAPHIC SEGMENTATION Social class Life style Personality

BEHAVIOR SEGMENTATION

When do people buy? Occasions Why do people buy? Benefits sought Do they buy? Once? More? User status How much do they buy? Usage rate Do they repeat the buy? Loyalty status Where do they buy? Place-retail outlet. What do they buy? Products

possessed.

TARGETTING

Targeting involves evaluating the various segments and selecting how many and which ones to target.

Three aspects in targeting are: Evaluation Selection Coverage

EVALUATION OF SEGMENTS

(a) Profitability Sales volumes Distribution costs Promotion costs Sales revenues Profit margins

(b) Attractiveness (c) Growth rate (d) Company objectives (e) Limitations

(ii) Selection of Segments

(iii) Coverage of Segments

THREE COVERAGE STRATEGIES TO SUIT THEIR SEGMENTATION APPROACHES.

(a) Undifferentiated strategy (b) Differentiated strategy (c) Concentrated strategy

CHOOSING A COVERAGE STRATEGY

MULTIVARIABLE SEGMENTATIONTHOMPSON RURAL INDEX

Developed by Hindustan Thompson Associates Ltd.

They compiled a data out of 335 districts, based on 26 variables

it has strong correlation with 10 selected agriculture-related variables .

Agricultural laborers Gross cropped area Gross irrigated area Area under non-food crops Pump sets Fertilizer consumptions Tractors Rural credit Rural deposits Villages electrified

POSITIONING

The act of finding a place in the minds of consumers and locating the brand therein.

Involves three tasks— 1. Identifying the differences of the offer vis-a-

vis competitors offers. 2. Selecting the differences that have greater

competitive advantage. 3. Communicating such advantages effectively

to the target audience.

IDENTIFY DIFFERENCES

(a) Product differentiation (b) Services differentiation (C) People (d) Image

SELECTING THE RIGHT DIFFERENCES Attractive — Does it provide value to

the customer? Distinctive — Is it different from that of

its competitors? Preemptive — Is it very difficult for

competitors to copy it‟? Affordable — Can buyers pay for it?