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IJSTE - International Journal of Science Technology & Engineering | Volume 2 | Issue 10 | April 2016

ISSN (online): 2349-784X

Factors Affecting Buying Behaviour of Rural


Consumers in Dilla, Ethiopia
Arun Korath
Department of Management
College of Business and Economics, Dilla University,
Dilla Ethiopia.

Dr. Sangheethaa .S
Department of Electrical & Computer Engineering
College of Business and Economics, Dilla University,
Dilla Ethiopia.

Berhanu Getinet
Assistant Professor
Department of Economics
College of Business and Economics, Dilla University, Dilla Ethiopia.

Abstract
The study is done to identify the factors affecting buying decisions of rural consumers and whether importance of these factors
varies with age and income of respondents. The factors taken into consideration by the rural consumers for purchasing a
commodity are price, quality, warranty, advertisement, brand, friends recommendations, family members recommendation and
packaging. It was found that factors have an impact on rural consumer and it varies with age and income. Importance of all
factors in buying behaviour of rural consumer found increasing trend with increase in their age and income. The effect of price
and quality on buying behaviour of rural consumer increases significantly with increase in age and income. Advertisement and
brand of products found significantly very important to high income rural consumers than lower income consumers. Friends and
family members recommendations had significantly more impact on buying decisions of lower income consumers than high
income consumers. Packaging had significantly more impact on buying decision of lower income consumers than high income
consumers.
Keywords: Buying behavior, factors
________________________________________________________________________________________________________
I.

INTRODUCTION

Thrust on rural development since 1950 eventually made Ethiopia into an attractive rural market (Ali et al., 2012). Increased
awareness along with rise in income levels influenced the rural marketing environment in the country (Velayudhan, 2002). Other
factors that contributed to the growth of rural markets are access of media, rising aspiration of rural people and good packaging
of products (Bijapurkar, Rama, 2000; Kotler et al., 2009). Rural market is not all about low price point and PR building. With
penetration of TV advertisement and other informative media, the awareness level of rural people is increasing gradually. The
urban markets got saturated with products and brands which forced marketers to turn towards rural markets (Nain and Kumar,
2009). According to Mckinsey survey 2007, rural India, with population of 627 million would become larger than the total
population of consumer markets in countries like South Korea or Canada in coming 20 years. Many experts and organizations
have differing views on what constitutes the term, rural. Collins Cobuild Dictionary (2001) describes the word rural as place
far away from towns and cities. According to Velayudhan (2002), rural marketing includes all those activities of assessing,
stimulating and converting the rural purchasing power into an effective demand for specific products and with the aim of raising
the standard of living. Rural marketing is any marketing activity in which one dominant participant is from rural area (Kotler, et
al., 2009).
Consumer behaviour is defined as activities people undertake when obtaining, consuming, and disposing of products and
services (Blackwell et al, 2001). The study of consumer behaviour does not only include reasons for buying but also the
consumption process of buying , consumers get driven by influences such as feelings, motivation, income, lifestyle, opinions,
culture, personality etc (Srivastava,2013).
II. REVIEW OF LITERATURE
Host of factors affect the consumer behaviour like socio-cultural, price, ads and any promotional scheme but in India is
increasingly getting more and more conscious of brands. The rural youth does not compromise for the quality of branded items
and even prepared to pay more prices for the branded product. The choice of brand ambassador has a very significant effect on
the purchase behaviour of rural consumer (Nain & Kumar, 2009). Rural consumers in Haryana not only aware of branded
products rather they purchase variety of branded products and concluded that rural consumers are willing to buy a variety of
products and brands if their prices are lowered in future. Income was found to be the most important factor followed by
education, occupation. Caste is one of the most important factors in rural Haryana affecting purchase decision of rural consumers

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Factors Affecting Buying Behaviour of Rural Consumers in Dilla, Ethiopia


(IJSTE/ Volume 2 / Issue 10 / 001)

(Kumar & Bishnoi, 2007; Kumar & Singh, 2008; Kumar & Singh, 2013 a). Srivastava (2013) reliability and product attributes
plays a very important role for low income and price conscious consumers. The consumers largely remain brand loyal.
Promotions and offers have considerable impact on household and young adults. At the same time where they are buying generic
products, they nourish aspiration value for branded products which remains restricted due to lack of money. Anandan. C et al.
(2007) found that quality was the major factor to prefer a particular brand in washing soaps in the rural market. If preferred
brands were not available, customers buy the available brands. High price and non-availability were the key reasons for
dissatisfaction of the rural consumers. Nagaraja (2004) impact of socio-economic influences on rural consumer behaviour in
terms of their buying practices, to the social status and level of income. Rural consumer was more rational as a buyer and
exhibits a higher level of rationality compared to the urban consumer. Kumar (2011) revealed that celebrity attributes likely to
influence consumer purchase intentions. The practice of celebrity endorsements has proliferated over time. Now a day it has
become a pervasive element of advertising industry especially in India. Marketers use celebrity endorsers to influence the
purchase decision of consumers in order to increase their sales and extend their market shares. Rajput et. al. (2012) stated that
people are more conscious and aware towards branded products. They are ready to pay any price for comfort and quality of
branded products. In India people have become more conscious presently only brand image is not only the significant factor in
choosing the products but other factors also like quality, verity, comfort, price and expectations. Prasad & Reddy (2003) found
the effect of celebrity ads and brand on consumers in their purchase decisions and to look into the appropriateness of such
celebrities to various products they support.
Mukherjee et, al. (2012) found that Indian consumers are heterogeneous. The disposable income is rising, consumption
patterns are changing and the level of brand consciousness is rising. They are price sensitive and therefore, appropriate pricing of
the product is crucial for market entry and penetration. Hence, it is important that retailers adopt appropriate market strategies to
target Indian consumers, know their demographic profile, income patterns, purchase behaviour and level of brand consciousness.
Ramachander (1988) concludes that the degree of brand loyalty, pricing, packaging and other variables such as culture and socio
economic factors influence consumer buying behavior. But brand factor are more inspire the consumer to choose the products.
Singh and Singh (2014) found that role of rural teenagers was found dominant across all decision stages in case of toothpaste and
bathing soaps however the male respondents of 16-19 years old played dominant role at information search & evaluation stage
and in brand selection at final purchase stage. It was found that influence of teenagers in family buying decisions of toothpaste
and bathing soaps increases with increase in their age and family income. Kumar and Singh (2013 b) stated that rural male
teenagers in the age group of 16-19 years belonging to high income class had significantly more influence in family buying of
cell phone than their counterpart.
III. OBJECTIVES OF THE STUDY
Study was conducted with following objectives:
1) To identify factors affecting buying decisions of rural consumers;
2) To study the importance of identified factors affecting buying decisions of rural consumers by age and income of
respondents.
IV. RESEARCH METHODOLOGY
Present study was conducted to identify the factors affecting buying decision of rural consumer and study their importance in
buying decision of ruralites across age and income. Data was collected from Dilla Ethiopia. Total of 180 samples were collected
out of which 146 were found suitable for study. Data was collected via questionnaire on five point scale. Frequency, mean and
ANOVA were used to analyze the data.
Table - 2
Profile of Respondents
Demographic variables
frequency
15-25 years
49
26-35 years
61
Age
36-45 years
24
46-55 years
12
Income
Up to 5000
63
6000-10000
54
11000-15000
24
16000-20000
5

Percent
33.6
41.8
16.4
8.2
43.2
37.0
16.4
3.4

Table 2 depicts the characteristics of respondents and shows that majority of the respondents are youth under age of 35 years.
It represents 16.4 % rural consumers of 36-45 years and 8.2 % were in the age group of 46-55 years. In this study 43.2 %
respondents are from lower income family earning upto 10,000 rupees per month and in the income bracket of 11,000-20,000
rupees there were 37%. Only 19.8 % represents elite class having income more than 20,000 rupees per month

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Factors Affecting Buying Behaviour of Rural Consumers in Dilla, Ethiopia


(IJSTE/ Volume 2 / Issue 10 / 001)

Table 3
Factors Affecting Buying Behaviour of Rural Consumers
Statements
Unimportant%
Neutral %
Important %
price of the product
11.0
2.7
86.3
quality of the product
3.4
1.4
95.2
warranty of the product
2.7
15.1
82.2
advertisement of the product
33.6
18.5
47.9
brand of the product
2.1
3.4
94.5
friends recommendations
40.4
18.5
41.1
Family
member 23.3
18.5
58.2
recommendations
packaging of the product
17.8
38.4
43.8

Mean
3.931507
4.308219
4.095890
3.171233
4.349315
3.082192
3.417808
3.328767

Table 3 shows that how important are these factors to villagers while they buy any products and their responses were recorded
on five point important scale. Study reveals that except advertisement and packaging of the products all others factors were
found very important to villagers while they buy any product. It was found that all factors found having effect on buying
behaviour of rural consumers as majority of the rural consumer reported that they consider these factors while purchasing
Table 4
Effect of Factors on Consumer Behaviour of Rural Consumer Behaviour by Age and Income
Statement
Age
Mean
F
Sig.
Income
Mean
15-25 years 3.734694
Up to 5000
3.698413
26-35 years 4.016393
6000-10000 4.018519
Price
3.513 .017
36-45 years 3.833333
11000-15000 4.375000
46-55 years 4.500000
16000-20000 3.800000
15-25 years 4.204082
Up to 10,000 4.063492
26-35 years 4.459016
6000-10000 4.351852
Quality
3.151 .027
36-45 years 4.041667
11000-15000 4.750000
46-55 years 4.500000
16000-20000 4.800000
15-25 years 4.081633
Up to 10,000 4.000000
26-35 years 4.098361
6000-10000 4.166667
Warranty
0.216 .885
36-45 years 4.041667
11000-15000 4.291667
46-55 years 4.250000
16000-20000 3.600000
15-25 years 3.081633
Up to 10,000 3.047619
26-35 years 3.262295
6000-10000 3.074074
Advertisement
0.358 .784
36-45 years 3.125000
11000-15000 3.666667
46-55 years 3.166667
16000-20000 3.400000
15-25 years 4.265306
Up to 10,000 4.190476
26-35 years 4.491803
6000-10000 4.333333
Brand
1.922 .129
36-45 years 4.166667
11000-15000 4.750000
46-55 years 4.333333
16000-20000 4.600000
15-25 years 2.897959
Up to 10,000 0.970639
26-35 years 3.278689
6000-10000 1.010255
Friend recommendations
1.541 .207
36-45 years 3.083333
11000-15000 1.100066
46-55 years 2.833333
16000-20000 0.000000
15-25 years 3.163265
Up to 10,000 0.932708
26-35 years 3.606557
6000-10000 0.934807
Family member recommendations
2.176 .093
36-45 years 3.416667
11000-15000 0.690253
46-55 years 3.500000
16000-20000 0.894427
15-25 years 3.285714
Up to 10,000 0.858678
26-35 years 3.360656
6000-10000 0.784190
Packaging
0.70 .976
36-45 years 3.333333
11000-15000 0.923721
46-55 years 3.333333
16000-20000 0.447214

Sig.

4.829

.003

8.353

.000

1.828

.145

3.031

.031

4.929

.003

3.600

.015

3.767

.012

2.631

.052

Table 4 shows that importance of all factors in buying behaviour of rural consumer found increasing trend with increase in
their age and income. The effect of price and quality on buying behaviour of rural consumer increases significantly with increase
in age and income as their p value is less than .05. Advertisement and brand of products found significantly very important to
high income
rural consumers than lower income consumers. Friends and family members recommendations had significantly more impact
on buying decisions of lower income consumers than high income consumers. Packaging had significantly more impact on
buying decision of lower income consumers than high income consumers.

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Factors Affecting Buying Behaviour of Rural Consumers in Dilla, Ethiopia


(IJSTE/ Volume 2 / Issue 10 / 001)

V. CONCLUSION
Study identified the eight factors i.e. price, quality, warranty, advertisement, brand, friends recommendations, family members
recommendation and packaging which rural consumers consider while making purchase decisions. It was found that factors
effect on rural consumer vary with age and income and found increasing with age and income. Importance of all factors in
buying behaviour of rural consumer found increasing trend with increase in their age and income. The effect of price and quality
on buying behaviour of rural consumer increases significantly with increase in age and income. Advertisement and brand of
products found significantly very important to high income rural consumers than lower income consumers. Friends and family
members recommendations had significantly more impact on buying decisions of lower income consumers than high income
consumers. Packaging had significantly more impact on buying decision of lower income consumers than high income
consumers.
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