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In less than 250 words Identify the relevant factors (demographic &

psychographic) used by the marketers to segment the rural market effectively

and also examine the difference in factors used with respect to the urban

market

Demographic Segmentation includes: Age, Gender, Family lifecycle, Generation, Income,Occupation, and Education

Psychographic segmentation is based on customer’s lifestyle, activities, interests, and opinions

etc.

Demographic Segmentation:

Age and Life cycle: With shifts in Life cycle stages, the product needs and brand preferences of consumers also change. This phenomenon is true in the case of both urban and rural consumers.

For example, confectionery and toys are more desirable in childhood, whereas young adults seek 

motorcycles, soft drinks, trendy clothes and music systems.

Family Structure: In rural areas, in addition to demographic characteristics like age and sex,family size and structure is also an important feature. The joint family system and large families

still predominate in rural India. As family size increases, so does the consumption of products. In

such a case, the family pack or the economy refill pack works very well. Similarly, large familieshave more breadwinners, which translate into higher family income and thus greater 

consumption of products. This leads to multi- brand consumption of a product category amongdifferent family members.

Income: Unlike urban where income for most people is regular, in rural the flow of income isusually seasonal or daily and weekly. That salaried class with a regular monthly income,

constitutes a very small segment, constitutes a very small segment of rural customers. Many

urbanites pay income tax, whereas agricultural income is not taxable.

Psychographic Segmentation:

While geographic and demographic segmentations depict the hardware configuration of the

market, the true dynamics of purchase behavior can be assessed only on the basis of the

psychographics of rural consumers. Psychographics include factors like personality traits,lifestyles and value systems.

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Social class: The structure of society represents a hierarchy of classes or grades of people. Social

class is determined by a combination of factors like education, occupation, income, wealth and

others.

Lifestyle: People exhibit many more lifestyles than is suggested by the social systems or class

structure to which they belong. Lifestyle is the overall manner in a person lives and spends timeand money. This concept enables us to grasp the importance of and predict buyers behavior.

Examples: Nirma vs HLL

Until about twenty ago, the rural market in India was considered a homogenous decade of the

1980s was a significant one for Hindustan Level Ltd (HLL), when the giant and undisputed

market leader in detergent (Surf) in Indian Suffered significant losses at the hands of a new and

small firm , Nirma Chemicals . Nirma immediately caught the fancy of the middle and lower-

income customers, who were finding it difficult to make both ends meet with their limitedmonthly income.

Nirma was the lowest –priced branded washing powder available in grocery and co-operative stores. The middle class house wife was happy as she could choose a lower priced

washing powder against Surf, Which was beyond her budget

Around 1984, HLL decided to take a fresh look at the market. Research conducted across

the country revealed that different income groups of consumers had varying expectations fromdetergent and washing powder. Thus, to counter the attack from Nirma, HLL launched Sunlight

(Yellow), Wheel (green) and Rin (blue) detergent powders for different market segments. This

strategy of segmenting the market helped HLL win back part of its lost market.

Others

• T-Series introduced audiocassettes at unbelievably low price and took away a huge share

from the market leader HMV.

• Cavin Kare studied the Shampoo market and came out with Chik Shampoo priced at 50

paisa per sachet and the brand became an instant hit in rural areas.• Titan has introduced Sonata brand watches; priced between Rs 350/- and Rs.800/- to

meet the requirement of price sensitive rural and semi urban consumers.

Sources: The Rural Marketing Book, Internet