a) Market segmentation is the process of dividing a broad consumer or business market into

smaller, more manageable groups based on shared characteristics. This enables

businesses to develop marketing strategies that effectively address the specific needs and
preferences of each segment (Wandschneider, 2025). Hindustan Lever Ltd (HLL), a
subsidiary of Unilever, employs various segmentation strategies to ensure its products
reach the right consumers, particularly in the rural areas of India. By understanding
consumer behavior, geographical differences, demographic characteristics, and
psychographic traits, HLL has positioned its brands to cater to a wide customer base,
ensuring both affordability and accessibility in its markets.

One of the primary bases of segmentation used by HLL is geographic segmentation, which
involves dividing the market based on location, climate, or population density (Kumari, 2023). In
India, a country with vast rural populations, the company adjusts its marketing strategies to suit
these unique environments. Unlike urban markets where television and digital advertisements are
widely used, rural areas require more direct and localised marketing techniques. HLL reaches
consumers by selling products in local markets, commonly referred to as haats, where company
representatives use loudspeakers to explain the benefits of their products. This approach ensures
that rural consumers, who may not have access to mainstream media, are still informed about the
advantages of using branded goods. The company also takes its marketing efforts to religious
festivals and trade fairs, where it conducts interactive demonstrations to educate consumers on
the importance of hygiene. By using ultraviolet light wands to show the presence of germs on
people’s hands, HLL conveys the necessity of its hygiene related products, thereby influencing
consumer behavior and increasing sales. This strategy is similar to Coca-Cola’s geographic
segmentation approach, where the company adjusts product distribution based on climate and
region, ensuring that coolers and air conditioners are not marketed in hilly areas where they may
not be in demand (ibid, 2023).

Demographic segmentation is another important strategy used by HLL, as it focuses on

measurable characteristics such as age, gender, income, and education (Tarver, 2023). In rural
India, where many consumers belong to lower income groups, HLL recognises the need to
provide high quality, affordable products. While some multinational companies have been
criticised for targeting expensive branded goods at low-income consumers, HLL takes a different
approach by innovating cost effective solutions that meet local needs. One example is the
development of a low cost soap that serves as both a body and hair cleanser, recognising that
many rural women use a single soap for both purposes (Kumari, 2023). By catering to specific
demographic groups with targeted products, HLL ensures that even consumers with limited
financial resources can afford high quality branded goods, reinforcing the idea that branding is
not exclusive to wealthy populations.

Behavioural segmentation is also part of HLL’s market strategy. This form of segmentation
categorises consumers based on their purchasing behaviour andproduct usage (Wandschneider,
2025). In rural India, consumer behaviour is influenced by factors such as hygiene awareness,
frequency of product use, and loyalty to traditional practices. HLL therefore incorporates
educational marketing into its strategy, using live demonstrations and storytelling techniques
rooted in rural folklore to communicate the benefits of its products. This approach encourages
consumers to adopt better hygiene habits while also creating brand loyalty. A similar strategy is
observed in the case of Duolingo, a language learning application that segments its users based
on behaviour. Duolingo realises that most language learners eventually lose motivation, so it
creates user segments based on engagement levels and milestone achievements, ensuring that
learners stay committed to their language goals (Kumari, 2023). In the same way, HLL segments
its rural consumers based on product awareness and usage patterns, continuously engaging them
through culturally relevant marketing strategies that highlight the benefits of frequent and
consistent product use.

Psychographic segmentation further increases HLL’s ability to connect with its rural consumers.
This type of segmentation considers consumers’ values, lifestyles, personalities, and social class,
allowing companies to market products that resonate with specific aspirations and beliefs
(Tarver, 2023). HLL understands that rural consumers do not merely purchase products based on
price; they also seek quality, trust, and personal connection with the brand. To understand
consumer aspirations better, HLL requires its management trainees to live in rural villages. This
approach is similar to Apple’s use of psychographic segmentation, where the company creates a
brand personality that appeals to consumers who value innovation and luxury. Apple
acknowledges that its customers are not just purchasing a product but are buying into a lifestyle
and a sense of prestige (Kumari, 2023). Similarly, HLL acknowledges that rural consumers want
branded goods that improve their quality of life, highlighting the importance of strategic
innovation in building a strong connection with the target market.

b) The elements of the marketing mix: product, price, place, and promotion, can be either
standardised or customised to suit different markets, depending on consumer needs and
purchasing behavior. In emerging markets, companies often need to adapt their strategies
to accommodate factors such as income levels, retail structures, and media access. While
standardisation offers cost efficiencies and brand consistency, customisation allows firms
to address the specific demands of local consumers (Eaton Business School, 2024).
However, each approach has its drawbacks, including potential cost implications,
logistical challenges, and market competition.

In terms of the product element, accessibility is key in emerging markets, as consumers typically
opt for the most readily available product to meet their needs (Prahalad, 2012). A common
customisation strategy is sachet marketing, where companies sell products in small, affordable
packages to accommodate consumers who cannot afford larger quantities (Singh, Ang, & Sy-
Changco, 2009). This approach is like HLL selling shampoo, detergent, and toothpaste in
sachets, making them more accessible to low-income consumers. Standardising product offerings
across markets may work for premium brands targeting wealthier segments, but it could lead to
limited market penetration in low income regions. Additionally, standardisation does not always
consider local preferences, such as taste modifications in the food and beverage industry. For
example, Coca-Cola adapts its formulas to suit regional taste preferences (Kumari, 2023).

Pricing strategies in emerging markets often differ from those in developed economies due to
varying income levels and consumer preferences. Thompson (2012) explains that companies
either adopt a high margin, low volume model or a low margin, high volume model. In emerging
markets, consumers tend to prefer affordable products that offer acceptable quality at the lowest
possible price (Morrison, 2010). This preference drives companies to customise their pricing
strategies by offering lower cost alternatives, installment payment options, or bulk discounts. For
example, multinational companies often introduce budget friendly product lines to cater to price
sensitive consumers. Standardised pricing, on the other hand, can work in premium market
segments where customers are willing to pay for brand value (Kumar et al., 2013). However, this
approach may exclude a large portion of emerging market consumers, reducing potential sales
volume. The drawback of customising pricing is that companies may face lower profit margins
or struggle with price competitiveness against local brands (ibid, 2013). Moreover, currency
fluctuations and economic instability in emerging markets can complicate pricing strategies,
making it difficult to maintain consistency across regions.

The place element in emerging markets is characterised by fragmented retail structures, making
distribution a critical factor in marketing success (Parment, 2008). Unlike developed markets
with concentrated retail chains, emerging markets rely heavily on small local shops, informal
vendors, and traditional markets (Dawar & Chattopadhyay, 2002). To accommodate these retail
structures, companies must customise their distribution strategies by ensuring product
availability in small, widely dispersed retail outlets. Hindustan Unilever Limited’s Project Shakti
exemplifies this approach, employing rural women as micro distributors to reach remote villages
(Kumar et al., 2013). Standardisation of distribution channels may work in urban centers where
modern retail formats exist, but it would be ineffective in rural areas where consumers purchase
items in smaller quantities and require localised access. The challenge with customised
distribution is that it increases logistical costs, requiring further investment in supply chain
infrastructure (ibid, 2013). However, companies that adapt their distribution networks can gain a
competitive advantage by ensuring product availability even in hard to reach areas.

Promotion in emerging markets requires an approach that considers media accessibility and
consumer engagement. While mass media advertising through television and radio is effective in
developed markets, its reach in emerging markets is limited due to infrastructure challenges and
media consumption patterns (Parment, 2008). Large sections of the population live in rural areas
with limited access to broadcast media, requiring companies to use alternative promotional
methods such as localized community engagement, word-of-mouth marketing, and direct product
demonstrations (Dawar & Chattopadhyay, 2002). HLL, for instance, educates rural consumers
about hygiene by conducting live demonstrations at local fairs and markets, using interactive
tools like ultraviolet light to showcase the effectiveness of its products. Standardising
promotional strategies across markets may not be effective, as consumers in different regions
have varying levels of access to digital and traditional media (Eaton Business School, 2024).

Despite the advantages of customisation, companies must also navigate challenges such as slow
growth in developed markets, declining growth rates in emerging economies, demographic
shifts, and increased competition from local firms (Eaton Business School, 2024). The high costs
associated with customised marketing strategies can strain financial resources, particularly for
companies expanding into multiple emerging markets. Additionally, customisation requires a
deep understanding of cultural and economic factors, making it difficult for businesses to achieve
consistency in their global brand positioning.

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