targeeso er aidlyyin Me =149Us, yy rapidly’ Ce for different customer qT q . ‘kets effectively. 4 markets an attracting involves three key id ing customers in ; ting, targetin: g and positioning (STP). segmenting» Segmenting decisions, Viz» 2.2.2, Segmenting the Rural Market: Rural Market Segmentation = fe Nurket SpSenabe is the proce: ing the total market ‘market is broken up into a number of sub-markets. The heterog' e into a number of relatively homogeneous units. Market segmentation is as important in rural marketing as it is in urban marketing. Most firms assume that rural markets are homogeneous. It is unwise on the part of these firms to assume that the rural market can be served with the same product, price and promotion combination. ) sues mee ee can = made taking income levels into unt, besides age, profession and life style. Market segmentation is required because products can be used or be needed by ae a part of the entire population. The concept of segmentation focuses on the particular group or class of customer who would be definitely rece in the product. ( A history textbook will be of interest to th f \ t : ; le stud 2 f history. Spices used in cooking will be needed by eee Mee es and in hotels. Can a customer group afford to buy a Re ith ugh it may have a need for it? For example, can low-income ee me anjing Rural Consumer and STP (Unit 2) m™ S51 OY give watch worth four thousand is remai i A ae > id rupees? This remains the business im ep rural India. The population can therefore be divided into ie seine gr0U & nish poor and mid-income groups. Depending on the product to be sold, further narrow classification can be done. Segmentation of markets is done on the basis of demographics, ite geographic conditions, benefits needed, usage and ey chesmphice ), 5 22.21. Prerequisites for Effective Segmentation cr There are following prerequisites for making segmentation effective: ee The size and purchasing power and disposable income ~ of the segment can be measured. There are automobile buyers who ty want high performance, styling, status and luxury model cars but it is essential to measure and know the size of such buyers. It is essential that sufficient data or information in terms of customer behaviour and size of market so that a new segment can be business opportunity. 2) Substantial: It is the degree to which the proposed segments are from consumer demand and profitable to the marketer, for considering a separate marketing plan and programme. 3) Accessible: It is the degree to which the proposed segment can be Ze effectively reached and served. Whether the distribution system and “the promotion can effectively reach them. While segmenting rural “markets, it is important for the marketer to ensure that the segmented market is conveniently reachable for the quick and efficient delivery of products. significant improvement in connectivity of villages and : sed interest in using traditional ‘haats’ and other new channels for distribution, rural markets are becoming more and more accessible. 4) Differentiable: Each segment of the market should be different With from others in terms of its needs and wants. Each segment requires ‘different’ marketing strategies because it responds to different _ Strategies differently. For example, while buying a motorcycle, _ Tural consumers give more importance to the sturdiness, mileage " and carrying capacity of the vehicle, whereas urban consumers look for style, power and aesthetics. » “Actionable: ‘A segmentation variable should help marketers develop 4 effective marketing programs to attract and serve potentialvivo Y75 bein 0 taleun: powTy Understanding Rural Consumer and STP (Unit 2) 53 iy Culture: Villages with population below 1,000 depend o: ent : shandies. Promotion by the media will be effective when fessabes Ito are designed in accordance with the cultural values, traditions, habits, and norms of people in a particular region. As s political division is immaterial for the various ee Gnnea has divided the country into 56 Socio-Cultural Regions (SCR). 2 Demographic Segmentation: The next commonly used basis for market segmentation is the demographic characteristics of the market. In demographic segmentation the market is divided into _groups on the basis of variable such as age, family size, family life- cycle, gender, income, occupation, education, religion, race, generation, nationality and social class. Demographic variables are of ~ the most popular bases for distinguishing customer groups. Some of of the demographic variables used are: © i) Age and Life-Cycle Stage: The age and life-cycle classification ~ applicable to urbanites is valid for rural people as well. Consumer's wants and liabilities change with age. On the basis of age, a market can be divided into four parts viz., children, young, adults and old. 3 ii) Gender and Sexual Orientation: When God created human 5 * being he made Males and Females and gave them distinct survival needs. The gender segmentation is one of the most common forms of segmentation as around the globe man and woman have always been vocal about their separate needs. iii) Marital Status: Life style of a person depends on whether he is "married or not. An unmarried bachelor prefers to enjoy life and his purchase behaviour will show more of food and entertainment and less of furniture. But a married person will purchase house and the furniture. ne: The rural rich buy premium brands like the urban rich. It is interesting that today even the low-income groups buy some brands that the rich rural people buy. The sale of the premium brands to low-income groups has been made possible through the sachet revolution. Products offered in sachets such as Velvette shampoo, Dairy top and Colgate are highly successful in rural markets. An observation by researchers is that durable products have a hierarchy that corresponds to income levels. At the low end, demand is for black-and-white T.V.s, radios, bicycles, stripped models of mobile phones, moulded plastic chairs, simple kitchen appliances, etc. At the higher end, demand exists for home theatres, nun. » eare iPods. washing machines. refriveratore s asys longing 10 a particular caste yurth Semester use ~ cu 1 found that large families with as, it is f ) vy Family Bes In rural ee durables like pec incomes ne ti ec temonsumables as “family produc! ev Nistse ee a pl ac brand of @ product to meet specific buy more ol jail preferences and tastes. . i ion of a product may be there As such, multi-brand Seay Bee Ccew While Colgate is percely’ as Seta: ee a, with young members and adequate buying power and co-exists with Colgate. >) Occupational Segmentation/Occupation: Various occupations can influence the buying behaviour. People in sales and people in academic training will have different purchase behaviour. In urban, occupations are predominantly desk oriented, whereas in rural they are mostly farm based. The variation in major occupation groups necessitates the segmenting of rural markets on a different basis. Both product categories and consumption patterns change among different occupation groups. Therefore, marketers should consider occupation patterns while segmenting the rural market for their product category. i ee ere anova the educational level of rural P 4S not as strong as urban people, but the education level neers ae Dene of tural people to some extent as luired in purchasii me Braet Toes of some day today viiif Religion: Religious ri iti dissestie ae id cee traditions and cultures also learly visible in terms of lower castes are where the hamlets ‘and long smc’ ScParately, Village ee historically tapes MARY cases, The settlement of lages often pay Pace On the basis of caste and faving a Predominance of e Ownershi or religion, Be Pe econamin UP? Land holding :. religion, vilTu ith On ay fig ‘nderstanding Rural Consumer and STP (Unit 2) % nor income. The landlords may have good but not stable incomes. The implications for marketers are: a) Those holding land need farm-related goods, training and information; b) They will invest in gold, farms and real estate; and c) They can be induced to deposit money in banks and purchase insurance. Further segmentation in this category can be based on the size of land holding — small and large. Large land holdings allow the buying of farm machinery and bulk purchase of seeds, fertilisers, etc. 3 Psychographic Segmentation: Often it has been seen that two consumers with the same demographic characteristics may act in an tirely different manner. Even though the two may be of the same __age, from the same profession, with similar education and income, ~ each of the customers may have a different attitude towards risk- taking” and new product and stores. Psychographic segmentation includes the following: vs Social Class: Many Companies design products and services for specific social classes. It has a strong influence on the preference in having automated agriculture machineries like tractors, threshers, cultivators, seeders, spraying machines etc. in order to facilitate _ and | to have a productive agriculture system. Rural consumer might prefer, on basis, of social class, their clothing, their exteriors and interiors of home, decisions regarding whether to have pet animals or not and their requirement regarding the overall lifestyle belonging to the rural region. Sometimes it has been seen that social class has a major impact over the eating habits of the rural people like what will they prefer as their appetiser/ starter, as their _ main course and as dessert, It has a strong influence on preference in cars, clothing, home furnishings, leisure activities, reading habits etc. Many Companies design products and services for specific social classes. il) Life Styles: Lifestyles are defined by AIO (Activities, Interests and Opinions). With the advent of satellite television and penetration of cable networks across the country, the rural populace has been exposed to the lifestyle of the urbanites. _ Awareness cannot lead to adoption because of certain limiting factors. For example, rural students may not have access to5t their adoption of the lifestyle of the modern urban youth ei ‘i Given the same set of ine/sports star). oe es and opportunities in both rural ae Peet cee te fT d different lifestyles influenced by cul Is of Saar opinions and behaviours of reference groups co A sie ai personality characteristics. C nality: Marketers have used personality variables to f) tae markets. They endow their products with brand oe is to consumer personalities. ality that correspond: ’ iv)/Values: Some marketers segment by core values, ie. belief systems that underlie consumer attitudes and behaviour. Core values go much deeper than behaviour or attitude and determine, at-a basic level, people’s choices and desires over the long term. Marketers who segment by values believe that by appealing to people’s inner selves it is possible to influence their outer-selves, their purchase behaviour. De Beliefs: This is one of the parameters of segmentation used by marketers to sell products. People according to their situation and bringing up develop their own beliefs. i) Attitudes: People have different attitudes towards different aspects of life, which affect their consumption pattern also: Some people who develop a very negative attitude towards life o not enjoy and hence behaves in a very different manner from Hd a ee attitude is to always have fun and live life to apne ee marketing decision makers have taken this ‘gment the population. Behavioural Segm - . 4 the actions, or ee Behavioural segmentation deals wit! Be used in paneer vidual consumers. Four common iY Buyer Readiness: pour are: market is buyer euieaey Variable used for segmenting (he oF preparedness to buy the produc! At any given time, by » Duyers. There are unaware bean at different stages of readines* interested, people who are interecen 4 We are aware but 0! € interc Pe lastly, those who will positively buy ame coiross to buy and uct. impact (modelled afer a ¢ aUsderstanding Rural Consumer and STP (Unit 2) 57 eo uit es vi) b) Religious Occasions: Festivals (Sankranti, Deepavali, Dussehra, Christmas, Ramadan, etc.), melas, village God festivals, jaataras, Kalyanam of Gods, Brahmostavams, etc. c) National Occasions: Independence Day, Republic Day, etc. d) Political Occasions: Elections and meetings. e) Weekends: Shandies and haats. User Status: Consumers are divided into non-users, first-time users, and repeat users. Markets can separate first-time user from non-users by campaigns encouraging a trial purchase. An increasingly common approach is to single out repeat users, or current customers as a priority segment, because the cost to retain existing customers is much lower than to obtain new ones. Marketers can further segment current users into smaller groups based on user frequency. User Rate: Current users are divided into light, medium, and heavy user. Pack sizes are designed differently to meet the requirements of different users. For example, Pepsi markets 300ml bottles priced at %9. It introduced the Chota Pepsi (200ml) at 77 to meet the consumption needs of light users Product Use Situations: One of the important bases is the product use situations. Different customers may use the same product in different use situations. For example, Cherry Blossoms is shown as being used in different situations in the rural area as compared to the urban consumer. In the villages of Punjab most farmers and owners of dairies use cherry blossom to polish their buffalos in order to blink their skin and get looked them beautiful. Benefits Segmentation: Here, the marketer identifies benefits that a customer looks for when buying a product. This has been a very effective method of segmenting the market for watches, where a customer may buy for just knowing the time, or durability, or as a gift/ an accessory/ a dress item/ a jewellery item. The benefits sought from a product depend basically on the needs of customers, though Variations may be found from consumer to consumer based on their socio-economic circumstances. Benefits can be classified into economic, aesthetic, emotional, rational and moral benefits. The benefits sought by rural consumers in vinta tailat cnan and mahile nhana are «pUTU mes | —-—_} legant, Ft onabie t cost cility, call at all and sis of rural ade. sland wand orted ting band ag of + and ‘oday esas veral “-atanding Rural Consumer and STP (Unit 2) 59 portance of Rural Market Segmentation segment the market to identify specific groups of customers in theit rea on Whom their selling ‘efforts can be concentrated. The 4 ‘of segmenting the market is as follow: 1) Adjustment of Product and Retail Marketing Appeals: Retail » Market segmentation presents an opportunity to understand the are of the market. The retailer can adjust his thrust to attract the jnaximum number of customers by various publicity media and ‘appeals. Fighting Competition Effectively: The segmentation helps the etailers to face the competition of competitors effectively. This s in adopting different policies, programmes and strategies for different markets based on rivals’ strategies, policies and programmes. anding and Meeting the Needs of Consumers: It helps ilers to fully understand the needs, behaviour, habits, tastes expectations of the consumiers of different segments so that ise and clear décisions can be taken to harness retail marketing snities. It is possible to satisfy a variety of customer needs “with a limited product range by using different forms, bundles, incentives and promotional activities. 4A g Aggregation Risk: By dividing the retail market and designing specific retailing mix to each segment, segmentation reduces the risk of aggregation, which is defined as the risk of not being able to satisfy customer needs with one retail marketing mix all segments. 5) Targeted Marketing: Targeted marketing plans for particular segments allow to individually approach customer groups that otherwise would look out for specialised niche players. By segmenting retail markets, retailers can create their own niche products and thus attract additional customer groups. 6) Development of Marketing Mix: Segmentation helps a retailer in identifying the target population and developing a customised marketing programme in terms of product/service offering, pricing Strategy, and promotional program. 7, Understand Customer Behaviour: Segmentation helps a retailer to Bain insight into why the target group acts the way it does. The buying behaviour of the target segment can be understood once the Market is segmented. This can help in the development of an effective marketing strategy.~ Jess, but strength 1s more. They receive the grants from government and reap the benefits of many such schemes and may move towards the middle class. In recent years, this group has received the benefits of several social, educational and economic programmes. Over time, a good part of this group may advance economically and join the middle class. Already, at the aspirational level, a good part of this group is a part of the middle class. The farmers of Bihar and Orissa fall under this category. 4) The BPL Section: The BPL (Below Poverty Line) section is the fourth category. It is also large in size. It does not form part of the demand base for most branded consumer products. The category is, however, projected to shrink substantially in the coming years, meaning that a part of this section will advance and emerge as consumer for some branded consumer products. 2.3.4.7 Consumer Buying Decision Process People will try to understand consumer Behaviour in the rural context by examining the buying decision process. The buying decision process follows a logical sequence of five steps as shown in figure 2.1: Purchase Post- Decision Purchase Behaviour Alternatives Figure 2.1: Consumer Buying Decision Process Stage 1: Need Recognition: The buying process starts when the buyer Tecognises a gap between his desired state and the actual state. Such Tecognition may be caused by stimuli either internal (within oneself) of ©xternal (by environment or marketer). A Tural student may feel the need for food (natural phenomenon of ger) and demand a pizza on observing friends (social comparison} On being aware of its availability in a nearby place with a disccnnt met (marketing stimuli). He may enjoy eating it with his friends in Style with the feeling that he is one among the trendy, adventurcus Youth (social environment stimuli) of the day.Pr oe Pe Liebe should help consumers to identify thei, At this stage, latent needs. To do this roblems and felt or >t sae ae nto” research consumer problems and needs ang ers. r cone them to the consumer effectively. th: Generally, consumers try to fing Aan = 2 ReaD Sac that will satisfy their wants in order a sks she alan choices. A consumer may obtain information from sources like personal (family, friends, neighbours), commercia, (advertisements, publicity, salespeople, displays), public (TV, Tadio, internet, and print media) and experiential (handling, examining is using the product). ications for Marketers arch expands with the availability of time. Marketers have to take this aspect into cognisance and design offers to induce immediate buying Keeping in mind the information needs of consumers, marketers should design communication Programs to reach the consumers and provide adequate and relevant information to them. In view of the low literacy level, audio-visual media become important in rural marketing, TV has been the biggest contributor in bringing consumer awareness in rural India. It is, of course, the traditional marketing methods - demonstrations, displays at fairs and festivals, mobile video vans — that continue to be the marketing man’s support system in rural communication strategy. The importance of Positive word-of-mouth advertisement need not be overemphasised. Stage 3: Evaluation of Alternatives: How do consumers evaluate the brands that they have come to know and like to consider when making a decision to purchase? Evaluation Process and Criteria: The evaluation process varies from product-to-product depending upon the perceived risk in buying: y Convenience Goods: In case of Convenience goods (ice creams, Soft drinks, toilet soaps, shampoos, edible oils, etc.) that are purchased for one-shot or short-period consumption, the evaluation Process will be short and criteria applied are essentially quality and Price. Occasionally, the consumer may indulge in impulse buying {mpted by the attractiveness of the product or offer. Evaluation «i! _ be done carefully, mixing emotional and logical thought Processes. Shopping Goods: In case to durables, the evaluation Process will be longer, the criteria considered will be functional benefits operal image views price, done licati imcetet from the students | Biase 4 A se some bri consume be consi set. Thr choice s Howeve choice i at this fi For ex: of his bh the min Implic: Market and is z moral : reducec endors: centres social-; advisor leaders ~Stage answer — Po pre ex) mex] co.ng m al is “Jadertanding Rural Consumer and STP (Unit 2) 1 tional advantages, maintenance costs and facilities, brand _ epee, and social endorsement. In case of clothing and jewellery, ree of family members and other social groups, current fashion, price, and quality will figure inthe list of criteria Evaluation will be Fone more carefully and logically. _Amplications for Marketers ‘Marketers can Jearn product-specific evaluation criteria and processes from their field studies or from surveys conducted by management students and academicians. _ Sage 4: Purchase Decision: All the existing brands in the market make ‘a total set. Through information search consumers will become aware of ‘some brands in the total set. Awareness set consists of brands that the consumer is aware of and those that meet the initial buying criteria will te considered for further evaluation. They make-up the consideration set, Through application of the final criteria, the consumer evolves his e set. All the brands in this set are acceptable to the consumer. yer, the final choice will be made in favour of one brand. The choice is dependent upon factors influencing the mind of the consumer at this final stage. Srey For example, a person is interested in buying cement for construction ‘of his house. The marketer should be aware of the place his brand has in the mind of the prospective buyer through the buying process. os 0 li for Marketers Marketers in this stage encounter a consumer who has made a decision and is about to implement it at the opportune time. The consumer needs moral support to go ahead with his decision. Perceived risk can be reduced by assurance through ads (messages like No. 1 in the market, endorsements of consumers who purchased it, etc.), establishing service -cenlres at nearby locations and personal-selling tactics. Support of socidl-group members can be won by tie-ups with NGOs and farm advisory agencies, retailer training, and salespersons visiting opinion Atage 5: Post-Purchase Behaviour: Marketers should. know the answers to the following: x “Post-Purchase Feelings: A buyer feels satisfied when the perceived Product performance is close to er expectations. If it exceeds expectation, the customer is delighted. If it falls short of ions, the customer is disappointed. Then, he develops