Rural Segmentation, Targeting &
Positioning
Module 6
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Introduction
▪ Rural market segmentation is the process of converting a heterogeneous market into a
homogenous market
▪ Market segmentation is dividing a market into small segments with similar needs and
preferences
▪ Rural market segmentation is the first step in the formulation of marketing strategies
▪ After the market segmentation, the segment is chosen as per the competencies of the
company and then is targeted with the marketing mix
▪ The most common problem faced in segmenting the rural market is its heterogeneous
nature
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Introduction
▪ After targeting the product is positioned in the target market
▪ Positioning is about creating a distinct image of the product in the minds of the customer
▪ The segmentation of the market should be carried out very carefully as it can make or mar
the marketing strategy of the companies
▪ Market segmentation is the most potent tool in the hands of the marketer
▪ There are different definitions of market segmentation given by experts but some of the
most prominent among them are as follows
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Introduction
▪ The American Marketing Association defines market segmentation as “a process of dividing
the heterogeneous markets into smaller segments having homogeneous characteristics
that can be satisfied by the firm”
▪ Philip Kotler in his book marketing management defines market segmentation as “the
process of dividing the market into homogeneous subsets of consumers, and then this
homogenous subset is targeted with a distinct marketing mix”
▪ Schiffman and Kanuk in their book on consumer behaviour define market segmentation as
the process of dividing a market into small segments with common needs and then
targeting them with different marketing mixes
▪ Thus taking into account different definitions given above it can be concluded that market
segmentation is about divided the complete market into small homogenous subsets.
Market segmentation helps the companies to better satisfy the needs of its target market
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Rural market segmentation: important characteristics
1. Measurable
▪ The market segment should not be too big and too small
▪ It must have an appropriate size which can be measured in terms of data so that the
market risk and potential can be calculated
▪ The market segment should be distinct, clear and measurable
▪ If the market segment is not measurable then it becomes a futile exercise
▪ Nowadays the rural markets are being studied by most of the marketing companies to get
the relevant data which would help in effective market segmentation
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Rural market segmentation: important characteristics
2. Accessible
▪ The market segment should be accessible at a cost that is affordable to the company
▪ Accessibility is the reach of the company to the market segment
▪ The market segment must be conveniently reachable to the company to satisfy the needs
of the customer
▪ Marketers prefer the segment of the urban market because of the better infrastructure in
the urban areas as compared to the rural market segments
▪ But lately due to better infrastructure and connectivity in rural areas also the rural markets
are becoming increasingly accessible
▪ The market Segments must be accessible due to two main reasons, firstly, the customers
should be aware of products and services and secondly, the customer should get the
products as at the right place, right time and at the right price
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Rural market segmentation: important characteristics
3. Differentiable
▪ The different market segments chosen by the company should have distinct characteristics
so that they are differentiable
▪ Each segment should have distinguishing features
▪ The Rural market segments responses differ from urban market segments for many
products
▪ For Example – In the case of a bike the rural consumers give more importance to strength
and average of the bike, whereas urban consumers look for features and aesthetics
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Rural market segmentation: important characteristics
4. Substantial
▪ The market segment should be substantial in size so that it remains profitable
▪ The market segment should either consist of large numbers of consumers who are light
users or the market segment should have a small number of consumers with heavy usage
so that the segment is profitable to the company
▪ Since the Rural areas are heterogeneous it becomes difficult for the companies to design
different marketing strategies
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Rural market segmentation: important characteristics
5. Actionable or Feasible
▪ Each market segment chosen by the companies must be actionable which means that the
company should have sufficient finance, marketing personnel’s and capability to serve the
market segment
▪ Therefore, the market segments should be selected, base on the reach of the company
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Rural market segmentation: important characteristics
6. Other Considerations
▪ Apart from the above characteristics, the market segment of the company must be
profitable and should have the least risks and competition
▪ The segment should be stable suitable, practicable and attractive to the firm
▪ The company should have the resources to satisfy the market segment effectively
▪ The various instructions and guidelines issued by the government from time to time should
also be given due importance
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Bases of rural market segmentation
The market can be segmented on four main bases they are:
▪ Geographic
▪ Demographic
▪ Behavioural
▪ Psychographic
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Rural market segmentation: important characteristics
1. Geographic Location
▪ Geographic Location is segmenting the market based on geography; this is one of the
popular bases for market segmentation
▪ Broadly the market can be segmented into Urban and rural market segments
▪ The urban markets are more concentrated as compared to the rural markets
▪ Companies like Hindustan Unilever Limited have been able to target the rural segment by
building a strong retail network in the villages
▪ Apart from this, the market can be segmented on the bases of regions like South, West,
East and North, country, state, city or even neighbourhood
▪ Different climatic conditions define the buying patterns in different geographic segments
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Rural market segmentation: important characteristics
2. Demographic Segmentation
▪ The main attributes used for demographic segmentation are Age, ethnicity, Life stage,
Gender, income Religion, and nationality
▪ Demographic segmentation helps in categorization the need of the customer
▪ In the present scenario, the children have high awareness about new products and act as a
strong influence in the buying decisions of the family
▪ Therefore, the marketers are targeting the youths for different kind of products
▪ This type of segmentation helps the companies in spending their marketing budget more
efficiently
▪ Various analytics software’s are used for demographic segmentation
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Rural market segmentation: important characteristics
3. Behavioural Segmentation
▪ Behavioural segmentation is segmenting the total market based on consumer buying
behaviour
▪ Behavioural segmentation is concerned with buying patterns like usage frequency, brand
loyalty benefits needed; occasion etc
▪ This type of segmentation is done keeping in mind the needs and wants of the consumer
based on their buying behaviour patterns
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Rural market segmentation: important characteristics
3. Behavioural Segmentation
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Rural market segmentation: important characteristics
4. Psychographic Segmentation
▪ Psychographic segmentation which was developed in 1971 is used to segment the market
based on shared psychological characteristics, consumer attitudes, motivations, to and
explain predict consumer behaviour
▪ Psychographic segmentation is a method which uses variables like personality traits,
beliefs, values, attitudes, and lifestyles for segmenting the market
▪ These characteristics may be abstract or observable
▪ This type of segmentation is very different from other segmentation methods
▪ But it complements demographic and socioeconomic segmentation and enables the
marketers to build their marketing communications accordingly
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Rural market segmentation: important characteristics
4. Psychographic Segmentation
▪ Every customer/consumer has a unique psychographic makeup
▪ For the urban and rural segments, it is very different
▪ When the target segment has different needs and responses to the offering then it
indicates that the process of psychographic segmentation has to start
▪ This segmentation is an important method to offer the same product to customers who
seems heterogeneous
▪ The psychographic segmentation yields the greatest payoff, in terms of purchase
frequency, lifetime loyalty, and more
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Rural market segmentation
The other method which is used by marketers to segment the market is based on the degree
of involvement
1. Mass Marketing
▪ Mass marketing is based on a philosophy in which one product is offered to the whole
market using the same marketing mix
▪ Initially, mass marketing was used for the rural markets in which it was believed the needs
of the rural consumer are the same
▪ But as the rural market started evolving and the consumer became more demanding mass
marketing can have its limitations
▪ In this case, the company does not feel the need for segmentation
▪ Mass marketing is also known as an undifferentiated marketing strategy
▪ For example: Bisleri water bottles
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Rural market segmentation
The other method which is used by marketers to segment the market is based on the degree
of involvement
2. Segment Marketing
▪ Segment marketing is still in its early stages in rural markets
▪ The companies have realized the importance of segmenting the market
▪ Companies like Hindustan Unilever limited use of different approaches to market their
brands for example–Hamam and Lifebuoy
▪ The Company tries to reach the whole market by using the mass marketing approach for its
brand Hamam whereas four variants of its Lifebuoy – Active Red, Active Orange, Plus and
Gold – are marketed to the different segments of the Indian market
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Rural market segmentation
The other method which is used by marketers to segment the market is based on the degree
of involvement
3. Niche Marketing
▪ A Niche is a very small segment with a distinct and complex set of needs
▪ In the fashion industry, there might be segments like regular wear, party and for fashion
shows; different types of clothes which constitutes a niche are required
▪ In the niches, the competition is very less there are few or no competitors and the product
commands a premium price
▪ Unlike mass audiences, which represent a large number of people, a niche audience is an
influential smaller audience
▪ For example: Designer Clothes
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Rural market segmentation
The other method which is used by marketers to segment the market is based on the degree
of involvement
4. Micro Marketing
▪ Micromarketing refers to the customization of products for the tightly targeted group
▪ Micromarketing occurs when the needs of the small segment are addressed on a local
basis
▪ The examples of micro marketing are Dabur’s Anmol Hair Oil, mustard amla bases oil
launched for northern Indian markets of a small pack, targeted at rural consumers using
loose mustard oil
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Rural market segmentation
The other method which is used by marketers to segment the market is based on the degree
of involvement
4. Micro Marketing
(a) Local Marketing
▪ Local marketing involves designing products to meet the requirements of the local
customer on a geographical basis
▪ Local marketing is most relevant for rural consumers
▪ It is a marketing strategy that targets customers on the basis location such as a city or
neighbourhood
▪ It is used by local businesses to reach the customers nearest to them
▪ A local company uses specific marketing strategies to target customers related to its
segment
▪ Local brands are very good at local marketing since they operate in a limited geography,
which helps them develop a good understanding of local consumers & their specific needs
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Rural market segmentation
The other method which is used by marketers to segment the market is based on the degree
of involvement
4. Micro Marketing
(b) Individual Marketing
▪ Individual marketing is also called as one to one marketing
▪ The rural marketers are shifting from local marketing to Individual marketing for example,
with the use of computer-aided design and computer aided manufacturing; it has now
become possible to manufacture a product as per the individual customer needs
▪ Tailoring is an example of individual marketing in the rural set-up
▪ In individual marketing, an individual can get a product according to his/her specific needs
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Rural market segmentation
The other method which is used by marketers to segment the market is based on the degree
of involvement
5. Target Marketing
▪ A target market is a subset of the total market for a product or service
▪ Target Marketing is breaking the market into small segments and then concentrating all the
marketing strategies on these segments, depending on how closely the need matches with
the offerings
▪ Target marketing helps the company to effectively identify the product is designed
▪ Two approaches can be followed for target marketing
▪ First is to treat the target market as a single unit using a single marketing mix
▪ Secondly, when the market has different segments and the consumer is targeted using
different marketing mixes
▪ Thus, in target marketing, the companies can choose the strategy of no market
segmentation or complete market segmentation depending upon the companies approach
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Case study: HUL
▪ What are the key geographic, demographic, and psychographic factors that HUL considers
when segmenting the rural market for Wheel detergent? How do these factors influence
HUL's marketing strategy?
▪ Discuss the advantages and potential challenges of HUL's multi-segment targeting strategy
for Wheel detergent in rural areas. How effective do you think this approach is?
▪ How does HUL's positioning of Wheel detergent as an affordable and effective product
resonate with rural consumers? What other positioning strategies could HUL consider to
strengthen its market presence?
▪ Evaluate the importance of product adaptation (e.g., different pack sizes and formulations)
in meeting the needs of rural consumers. How does this approach impact consumer loyalty
and brand trust?
▪ Discuss the role of competitive pricing in HUL's success with Wheel detergent in rural
markets. What are the potential risks associated with this pricing strategy?
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Case study: HUL
▪ How does HUL's extensive distribution network contribute to its success in rural markets?
What are some innovative distribution strategies that HUL could implement to enhance its
reach?
▪ Analyse the effectiveness of HUL's localized advertising campaigns for Wheel detergent.
How can the company leverage digital and social media to complement its traditional
promotional strategies in rural areas?
▪ Why is it important for HUL to incorporate local cultural elements into its branding and
advertising for Wheel detergent? Provide examples of how this approach can be applied to
other products.
▪ How do lifestyle and values influence the purchasing decisions of rural consumers in India?
Discuss how HUL's understanding of these factors helps in the marketing of Wheel
detergent.
▪ What are the main challenges HUL faces in maintaining and growing its market share for
Wheel detergent in rural India? Identify potential opportunities that HUL could explore to
overcome these challenges and drive growth.
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