Approaches to Rural Segmentation
First level segmentation could be done on the basis of occupation, i.e. farm and nonfarm activities. The compilation of an index could then be attempted with farmers categorized into five prosperity levels, ranging from very poor to very prosperous.
Regions : East, West, North and South
Village size : <500, 501-1000, 1001-2000, 2001-5000, >5000 . Rural lifestyle changes with village size due to variation in the level of infrastructural and economic
Density : Low, moderate, high (Villages with high population density have better infrastructural facilities and higher purchasing power.
Climate : Summer, Rainy, Winter (Talcum Powder is used more in hot and humid
Culture (culture affects language, dress, food habit and location)
Age and life cycle : Children, teenagers, young adults, elders, seniors (Confectionary and toys are more desirable in childhood, whereas young adults seek motorcycles, soft drinks, trendy clothes and music systems)
Family structure : Nuclear, joint (Family pack or economy refill packs work very well
with joint families, Joint family translates to greater consumption of products) Gender : Male, female
Income : Due to irregular income patterns and multiple sources of income, assessment of rural income is difficult.
Landownership : Land owners, rich farmers, small or marginal farmers, agricultural labourers. Segmentation on the basis of : size of landholding, area of land under cultivation, irrigation method, crop mix and rate of money realisation. Education & House type
Occupation : Cultivators, shopkeepers, poultry, artisans
Religion & Caste : Settlement of villages on the basis of religion and caste. Eg. Rajput village.
Social class –Social class is determined by a combination of factors like education, occupation, income, wealth and others. Classified rural consumers into five classes:
Affluent, The Well off, The Climbers, The Aspirants and the Destitutes on the basis of three variables : Education of the chief wage earner, Ownership of durables, and Type of house.
Lifestyle –Overall manner in which a person lives and spends time and money. Personality
Occasions : Festival, mela, jatra, weekly haat. In rural areas, most durables are purchased during or after the harvest season because this is when farmers have cash in hand after selling their agricultural produce. Melas offer products at attractive prices and weekly haat days are the time to purchase daily-use products, vegetables and spices.
Benefits sought : Quality, convenience, value for money, service. Rural consumers are more concerned with the utility of the product than its appearance and sophistication.
User status –Rural consumers fall into the category of first-time users for most product categories. Therefore, the focus on product trials and demonstrations is very crucial in rural market. Tag line for Ghariwas Detergentkarein‘ induce customers to try out the product.
Usage rate –Usage for most FMCG products is relatively low among rural consumers due to poor affordability. Marketers have launched sachet packs for rural consumers and family packs for joint families.
Loyalty status –Rural buyers take a long time to decide on a particular brand, but once they are convinced, they are more brand loyal than their urban counterparts.
Place of purchase –Village shops (Tea, kerosene), Haats (Food grain, pulses, vegetables), Nearest town (Fertilisers, seeds), Melas (Clothes, cheap jewelry)
Thomson rural market index –Overall indicator of rural market potential and considers 10 variables : Agricultural labourers, Gross cropped area, Gross irrigated area, Area under non-food crops, Pump sets, Fertilizer consumption, Tractors, Rural credit, Rural deposit, Villages electrified.
MICA Rural Market Ratings: Used to segment rural markets. For each district the socio-economic indicators are classified as: Demographics, Major occupations, Communication methods, Educational profiles, Shops and other establishments, Commercial banks, Agricultural data, Medical facilities, Major crops.