RURAL MARKET

SEGMENTATION

Module 2 last
line
 Facts, rural market accounts for
54% of all Indian FMCG sales.

59% of durables (home appliances,

electronics, furniture, toys etc…)

100% of agri-input sales including

tractors.

10% - 50% of two wheeler and four

wheeler sales.
What is segmentation?
AQUAGUARD Rs. 8000/-
PUREIT  Rs. 2000/-
SWACH  Rs. 749
All 3 does the same function, it
purifies water.

But why 3 different prices?

Is it because of the brand?

Is it because of the buyer?

 What is segmentation?

Market Segmentation is dividing a market into

distinct groups of buyers who have distinct
needs, characteristics, or behavior and who
might require separate products or marketing
mixes.
Segmentation is mainly because of

◦ Occupational differences

◦ Income-level differences

◦ Different educational levels

Occupational differences:
The rural consumer could be a

◦ Person who is working in the nearest town.

◦ Small and marginal farmers.

◦ Agricultural labors.

◦ Artisans (furniture, clothing, jewellery, household

items, and tools)

◦ Rich farmers (land lords)

Income-level differences

Rural India has an average per capita

income that is half of that of urban India.

428 million people in rural India has an

annual income of less than Rs. 75000 per
annum against 49 million people in urban
India.
Different educational levels
26% of rural India’s chief wage earners are
illiterate compared to 7.9% of urban India.

For ex:
Punjabi farmer has a better standard of living
compared to farmers in Bihar and U.P. He likes to
spend a lot and is aware of several brands because
of television penetration.

The villagers in Bihar, UP and MP have low

literacy rates, caste affiliations. They lack supply
of electricity. The spending power is also lower.
Bases for segmentation

Geographic segmentation

Demographic segmentation

Behavioral segmentation
 Geographic segmentation
Variables Categories
Zones/region East, west, north, south
Climate Tropical, rainy, sunny
States 28 states and 7 union
territories

Villages Corridor villages (near to

town), accessible villages,
and remote villages

Population density High and low

Culture Traditional, modern,
religious regions.
Demographic segmentation
Variable Categories
Age Under 6, 6-12, 13-19, 20-40, 41-
60, 60+
Lifecycle Infants, children, teens, young
adults, elders, seniors.
Gender Male and female
Marital status Married and unmarried
Family size 1-2, 3-4, 5+
Income Rs. 25,000 and below, Rs 25,000
– 50,000, Rs. 75,000 – 100,000
and above
Land holding Landless, marginal, small and
large farmers.
Education Illiterate, school, college,
university
Religion There are plenty of religions
available in India.
Behavioral segmentation
Variables Categories
Occasion Family, religious,
national, weekends
User status Ex-user, first-time
user, regular user
Loyalty status Strong, weak, light
Place of purchase Retail outlets/ haats,
mobile vans
PROMOTIONAL
STRATEGIES
Rural Marketing
 Rural marketing is promotion of a company's products
in the rural market buy using strategies which differs
from that of urban market, the rural market is more
price sensitive but it has preference for quality.

 The concept of Rural Marketing in Indian Economy

has always played an influential role in the lives of
people. In India, leaving out a few metropolitan cities,
all the districts and industrial townships are connected
with rural markets.
  
EVOLUTION OF RURAL
MARKETING

 Period before 1960s -in this phase rural marketing was

referred to the marketing of rural products like food
grains, cotton, sugarcane, etc.

 Post 1960s -Green revolution ushered in scientific

farming practices like irrigation facilities, use of
fertilizers, pesticides.
 Cont…..
 The period from 1980's to the 1990's-was characterized
by a shift in focus to the consumer needs which in turn led
to an increase in the number of consumer products.

Another factor that led to a boom in choice was the

increased reach of the media and rising household incomes
bringing about a major change in lifestyle.

 Period between 1990s to present - During this phase,

industrial sector gained significance and maturity thereby
efforts were made by companies to market FMCG and
consumer durables to rural areas.
 
 Comparison between rural markets and
urban markets.
 Level of awareness: About products and brands which are
much lower in rural.

 Availability :Against 5000 odd town locations in urban,

there are 6 lac village locations in rural, a distribution
nightmare.

 Affordability :Is lower in rural as per capita incomes in

rural are less than half of what they are in urban.

 Low penetration of electronic and print media:

In rural, awareness creation has to be done using below
the Line media such as haats, mandis, melas etc.
 Rural promotional strategies:
  
Haats or weekly markets:- where people from surrounding
villages conduct trade on fixed days. Covering the needs of a
minimum of 10 to a maximum of 50 villages, drawing as
many as 4000 villagers.

 Melas :-gatherings of people for both entertainment as well

as the sale and purchase of goods and services. Over 25,000
melas are held in India annually that hold an average of 7.6
lakh visitors.

 Wall Paintings:-one of the most widespread forms of

advertising and are quite the favorite amongst the Indian
rural masses.
 Customer contact ‘touch points’: includes 'Home-to-
Home' campaigns and other such customer contact
programs that help initiate a close interaction

Van Campaigns:-one of the most popular modes of

communicating with rural consumers.
The main benefits of Van Campaigns are: 
◦ Better brand building
◦ Creating awareness about the brand and the company's
products.
◦ Product sampling
◦ Point of attraction around which people gather in large
numbers
◦ Retail merchandising and door-to-door campaigns.
Cont…
 Event Management: There are several folk forms of events
that are performed in different states all over India.
 Folk media: It consists of folk songs, dances, puppetry,
street theatre, magic shows etc.
 Interactive games: Many companies designs interactive
games that help draw large crowds where trials can be
induced, thus facilitating spot sales.

 Others: Other events like sports, drama and entertainment

programs etc.
 .

Cont….

Colgate - An effective way of

displaying the product Children smile at the
package is demonstrated camera during a
innovatively by Linterland successful Aim toothpaste
through Colgate promotion.
 4 A’s of Rural Marketing
1. Availability :
 
Challenge:

Regularly reach products to the far-flung villages.

India's 627,000 villages are spread over 3.2 million

sq km; 700 million Indians may live in rural areas

Hindustan Lever, to serve remote village, use auto

rickshaws, bullock-carts and even boats in the
backwaters of Kerala.

 
Affordability :
 
Challenge: to provide at cheaper price
 
Strategies: Introduce small unit packs.
 
Godrej introduced three brands of Cinthol, Fair Glow
and Godrej in 50-gm packs, priced at Rs 4-5 meant
specifically for Madhya Pradesh, Bihar and Uttar
Pradesh the so- called `Bimaru' States.
 
Coca-Cola has addressed the affordability issue by
introducing the returnable 200-ml glass bottle priced
at Rs 5.
 
Acceptability :
 
Challenge: to gain acceptability for the product or
service

Strategies:
Offer products or services that suit the rural
market.
Easy to understand.
 
Because of the lack of electricity and refrigerators
in the rural areas, Coca- Cola provides low-cost ice
boxes - a tin box for new outlets and thermocol box
for seasonal outlets.
 
Awareness :
 
Challenge: less exposure to the world, low literacy rate
 Strategies:
Opinion leaders play a key role in popularizing products and
influence in rural market so choose the appropriate opinion
leader.

Can use the following promotional methods:

 
•Personal Interference:
•One on One contact programs are extremely efficient manner
to reach the Rural Consumer.
 
Provides an opportunity to:
Induce Trial
Educate
Demonstrate
1. Personal Selling:

2. Events
 Hero Honda Company Profile:
Joint
Venture of Hero Group and Honda
Motors

Established in 1980s by Jagdish Lal Munjal

Manufacturing Facilities and Dharuhera and

Haryana

3.9 Billion bikes per year

Har Gaon … Har Aangan …

1,00,000 of 6,00,000 villages in country.

500 Sales Representatives

Average of 16000 bikes per month.

 Integrated Rural Development
Centre
IRDC- Spread Over 40 acres in Delhi-Jaipur
Highway.
Installation of deep bore hand pumps to
provide clean drinking water.
Constructing metallic roads and connecting
these villages to the National Highway (NH
-8).
Renovating primary school buildings and
providing hygienic water and toilet facilities.
 Raman Munjal
Foundation
Raman Munjal Vidya
Mandir

Education and Literacy

Raman Munjal Memorial Hospital

Surgical Instruments and Latest technology

Raman Munjal Foundation- II

Raman Munjal Sports Complex

basketballcourts, volleyball courts, and hockey

and football grounds are used by the local
villagers

Vocational Training Centre

26 batches comprising of nearly 625 women have

been trained in tailoring, embroidery and knitting.
Adult Literacy Mission
launched on 21st
September, 1999

villages of Malpura, Kapriwas and Sidhrawali

the process of imparting Adult Literacy

Capsules to another 100 adults by getting
village heads and other prominent villagers to
motivate illiterate adults.
Marriages of underprivileged girls
Marriages are organized from time to time,
particularly for girls from backward classes,
by the Foundation by providing financial help
and other support to the families

Rural Health Care

Regularly provides doorstep health care
services to the local community.
Free health care and medical camps
Ensuring a proper drainage system at
each of these villages to prevent water-
logging.

Promoting non-conventional sources of

energy by providing a 50 per cent subsidy
on biogas plants.
THANK YOU