Rural market segmentation and

Targeting & Rural Marketing

Research
Submitted To
Sanmeet Sidhu

Submitted By
Arsh Koul
Navpreet
Manish Mehra

What is marketing
The right product, in the right place, at the right time,
and at the right price.
According to Kotler Marketing is the social process
by which individuals and organizations obtain what
they need and want through creating and exchanging
value with others.

What is rural marketing

Rural marketing involve delivering manufactured or
processed inputs or services to rural producers or
consumers.
Rural Marketing is also defined as any marketing activity
in which one dominant participant is from a rural area.
Rural marketing is a two- way marketing process that
includes the flow of goods and services from rural to
urban areas and the flow of goods and services from
urban to rural areas as well as the flow of goods and
services within rural areas.

What is segmentation
A market segment is a classification of potential private
or corporate customers by one or more characteristics,
in order to identify groups of customers, which have
similar needs and demand similar products or services
concerning the recognized qualities of these products,
e.g. functionality, price, design, etc.
Segmentation is the process of dividing a
heterogeneous market into several sub- markets or
segments, each of which tends to be homogeneous in
all significant aspects. The division is based on the
premise, that different people have different
preferences.

Segmentation can be done on basis of

1.
2.
3.
4.
5.

Geographic Segmentation
Demographic Segmentation
Psychographics Segmentation
Behavioral Segmentation
Multi Attribute Segmentation

Geographic Segmentation
Segmentation on the basis of geography is done
depending on various factors such as
Region: North, South, East and West.
Proximity to the feeder town:
Density: The number of people per sq. km
Climate: Moderate, rain fed or dry with scanty rainfall.
Level of Irrigation: Whether good, moderate or scanty.

Demographic Segmentation

Demographic segmentation calls for grouping of their

demographic characteristic

It is based on the population, age group, literacy level

and income of the rural consumer.

Psychographics Segmentation

Such segmentation which is done using variables such

as Lifestyle of the people, (whether rigid, traditional or
changing), Occasion, (whether on a regular day or a
special occasion), Benefits sought from the product
(such as Quality, Price and Service), and Loyalty to
brands (whether Low, Medium or High.)

Behavioral Segmentation

It takes into account the specific behavior of a

consumer related to occasions, benefits, user accounts
etc.

Multi Attribute Segmentation

In practical terms it is very difficult for a marketer to

depend on a single variable for segmenting the market.
It is a complex function since it depends on multiple
factors that define market dynamics. In order to
identify smaller, well defined, meaningful target groups
marketers use several variables.

What makes rural market attractive.

Untapped rural potential
6,27,000 villages across the country account for 70% of
population
60% of national demand for various product categories
comes from rural areas
41 million kisan Credit Card have been issued

Targeting
Once segmentation has been done the marketer needs
to evaluate each segment to decide which segment to
target.
Targeting involves evaluating various segments and
selecting how many and which one to target.

ASPECTS

Targeting

EVALUATION
SELECTION

COVERAGE

Evaluation

1.
2.

While evaluating market segments two broad factors

are considered
Overall attractiveness of each segment
Companys objective and resource competencies.

Overall attractiveness of each segment

While evaluating segments in rural one should not be

impressed by size alone. This is because in rural the
size of market may be big but purchasing power on
people in rural area is limited. Therefore the growth of
rural markets for different product categories should be
evaluated while targeting the market.

Companys objective and resource

competencies

Marketers should evaluate the segment opportunity

with reference to their short term and long term
objectives. If a companys objective is to achieve long
term sustainable sales volume by expanding its
customer base then it has to go rural instead of
expecting consumers to come to urban markets to
purchase the products and services.

COVERAGE

Undifferentiated
Marketing

Differentiated
or
Targeted Marketing

Concentrated
Segmentation

Undifferentiated Marketing

Undifferentiated Marketing takes into consideration what

is common among consumers and tries to include it in
offer. It majorly relies on mass distribution and mass
advertising. Only one product line keeps down the cost
of research and product management. Due to low cost
incurred in production and distribution the company can
afford to set its price low.

Differentiated/Targeted Marketing
Differentiated marketing strategy investigates and
identifies differences between segments and tries to
match the market offer to desires and expectations of
each segment.
This strategy results in: Strong identification of company in product category.
More costs but higher sales and profitability.
More loyal consumers.

Concentrated Segmentation

Due to small number of consumers in each segment,

targeting only one segment would spread marketing
efforts thinly over a vast area. As companies invest a
great deal of time, effort and money to reach rural
markets, it is important that they should have a multi
segment strategy rather than single segment strategy to
ensure adequate returns on investment.

In the case of single segment there is a risk of change

in the preference if consumers although there is a lower
risk of this in rural, as the pace of change in preference
if consumers is slower. This is also known as niche
marketing. EG HLL dominates the mass market in rural
with a series of niche brands each aimed at small
section of consumers. With brands like LUX, LIRIL etc
HLL targets different consumer segment in rural
market.

Rural market research

Research is the guidepost to laying the

foundations of a successful marketing
program, it must be planned, keeping in
mind what is the objective of conducting
research. It must also be designed in order
to get maximum inputs, on an accurate
and authentic framework, in order to yield
the right results.

According to American Market

Association
Marketing research is a function which links the
consumer, customer and public to marketer through
information. Information used to identify and define
marketing opportunities and problem, generate refine
and evaluate marketing actions, monitor marketing
performance and improve understanding of marketing
as a process.

Rural Marketing Research

Types

Primary Sources

Secondary Sources

Primary Source
Primary data are collected especially to address a specific
research objective. A variety of methods ranging from
qualitative research to surveys may be employed.
Some of the sources are
1. Retail shops
2. Tea stalls
3. Schools
4. Melas
5. Influence groups

Secondary Sources
These are the readymade sources of information that a
marketer can use for his or her research. This kind of
data can be collected from government publication
websites, research agencies.
Some best sources from where marketer can get
information are
1. Government Websites
2. Private Bodies
3. Publications