RURALCONSUMER BEHAVIOUR

The understanding of consumers has to invariably come from the consumer. The information relating to
consumer behaviour has to be necessarily based on an enquiry into their purchase process. The purchase act
by a consumer is governed by various factors such as economic, social and psychological.

CONSUMER BEHAVIOUR refers to the acts of individuals directly involved in obtaining and using goods and
services and includes the decision process that provide a purchase. Consumer Behaviour is not only the
study of what people consumes but also where, how often and under what conditions’ the product is
consumed.

RCB is influenced by

I) Environmental Factors
a) Economic b) Political c) Technological d) Legal

II)Socio-Cultural
a) Culture and Sub-Culture b) Social Classes (Reference group, family, etc.)

III)Personal Factors
a) Age & Life Cycle b) Occupation c) Life Styled d) Self-Concept

IV) Psychological
a) Motivation b) Perception c) Belief & Attitude d) Learning

SHOPPING HABITS

I) Role of Retailers
II) Preference for small/medium package
III) Mandi Towns
IV) Haats/Weekly Markets
V)Village Markets
VI) Paan Shops b) Grocery Shops

Inferences drawn from some of the recent studies:

•A majority of rural consumers draw information from friends and neighbours.

•More rural consumers gather information from retailers, compared to those in urban areas.
•About 70% of the rural consumers were advised by the retailer to buy a specific brand.
•Friends and Retailers are the most reliable sources of information, compared to other sources in both rural
and urban areas, and retailers play a vital role in rural markets, particularly for convenience products.
•Very few consumers feel that advertisements through mass media have made any impact.
•In a little more than 50% of the cases, family members would select the brand in both rural and urban areas.
•Higher income consumers in rural areas are fairly conscious of brand use and social prestige.
•About 70% of rural consumers use the same brand that is used by their neighbours and friends etc. Among
these, a majority are from the lower income group.
•Price is relatively important in case of durable products and less important for non-durables for both rural and
urban consumers.
•Consumers in both rural and urban areas generally perceive a product to be of inferior quality when it is priced low and
vice-versa.
•Higher income consumers are less price sensitive and fairly brand loyal for all the products.
•A majority of the consumers buy the convenience products from the same shop, indicating high shop loyalty; however rural
higher income consumers buy from outside the village.
•Rural Consumers buy durables, mostly during the post-harvest season, outside the village (nearby towns).

Services in Rural India

The rural market in India is a huge unorganized market as well as much of it is still untapped in various
domains. A huge scope for services exists in these markets where still major companies have directed their
focus on. Since major of Indian population exists in rural segment, prospects of huge demand exists for the
products offered by various companies or service providers.
But the demand and supply pattern in the rural segment is majorly different than those in the urban segment.
This difference is due to vast difference in:
• Income level
• Expenditure capacity
• Taste and preferences
• Educational level
• Social, Cultural and environmental

These differences results in Gaps between Service provider and the consumers/customers in both the market
segments. Hence a service provider clearly needs to understand these gaps and the strategies to fill these
gaps effectively. Therefore the mantra for successful strategy implementation in rural markets for service
delivery is “Think Global Act Local”
Analysis of Services Requirements in Rural Markets:
Following Service areas have great potential in rural markets:

1. Agricultural consultancy:
Rural customers require proper consultancy services about the best methods, timings and seasons,
technology, tools, prices and best markets for selling their farming products.

2. Banking, microfinance and loan facilities:

The rural market has huge potential for banking services for providing following facilities at affordable prices:
• Agricultural loans
• Educational loans
• Housing loans
• Savings accounts and safe deposits
• Automobile loans
• Personal loans

3. Healthcare:
There is a huge demand for medical and health facilities in rural markets as there is large population in India
that resides in Rural areas and lack proper facilities for proper health care. The availability and location of
these services is of great concern as most of the areas either do not have any or many rural and remote areas
needs to be dependent on very few and distantly located Hospitals.

4. Telecomm services:
Due to increased awareness and improved telecomm infrastructure across India, the demand for telecomm
(Fixed and wireless) and internet services have increased drastically. Even the government’s policies for
reduced tariffs, call rates, lesser mobile handset prices and private participation involvement has helped in
increasing the level of competition, continuous improvement in technology and thus has resulted in the growth
of the rural telecomm market. Hence the rural market has now become attractive and lucrative for many
National and Global telecomm companies, who now are focusing more on this huge untapped market.

5. Automobiles Services:
There has been a huge increase in the number of two wheeler, four wheeler and Agricultural tools and
vehicles in past few decades because of reduction in prices and government support to the rural population.
This has give rise to a new business for providing maintenance and repair services to these vehicles with
more attractive service quality, location and availability. This segment has huge potential in the upcoming
trends of services to the rural markets.

6. T.V. Channels Services:

Due to the increased awareness, arenas of interest, leisure requirements, and number of entertainment
options like televisions and computers due to reduced & affordable prices, the demand for entertainment
services like T.V. entertainment channels have increased. This provides a huge potential for cable and Direct
to Home services providers to tap the rural markets to meet their demands. Many companies have already
gained profits by targeting rural markets which include Airtel (DISH TV), Reliance (BIG TV), and Tata (SKY).

7. Travel and reservation Services:

The travel and reservation booking and organizing services for booking train, busses, taxies and tour
consultancy has also been observed to create a huge demand in last few decades as more and more rural
population need to mobilize for business and personal needs. Hence these services hold a huge potential for
service providers.

8. Low Cost Hotels:

Due to increased mobilization because of business and personal needs, there is also increased demand for
hotel and lodging services to the travellers but majorly driven by the pricing of such services and facilities.
Hence provide a great platform for the service providers to focus on these demands to capture a big untapped
market.

9. Event Managements:
The rural population are majorly involved in celebrating and organizing festivals, which require lightning
arrangements, venue decoration, food, lodging, transportation, catering and event planning etc. for:
i. Family gatherings, Marriages, engagements, birthday parties,etc.
ii. Festivals like Diwali, Onam,Christmas, lorhi, Eid, Dushera, Kannada Rajamahotsava, Navratri, Garba and
Dandia mahotsava etc.
iii. Religious/Caste based events like poojas, various ceremonies, etc.
Hence these services also have great potential to meet the rural customer’s demand for event management.

10. Beauty Parlours:

As there has been major improvement in the quality of life style and increased awareness among the rural
customers (especially females), there has been great demand observed for beauty products and services. A
huge increase in the demand for FMCG products like shampoos, beauty soaps, beauty creams, cosmetics,
etc. has also been observed lately in rural India. This market is still dominated by unorganized and local
players who lack adequate tools, methods, skills, process, technology and beauty products to meet the
demand of rural population. Hence focusing on this segment would be a profitable business for any company.

11. Affordable Movie theatres:

Till now the entertainment service providers for movie theatres at affordable prices in rural markets are
dominated by local and unorganized players who lack proper facilities and infrastructure as well as quality
delivered. Focusing on this market is a good profitable business

12. Educational and Career consultancy:

The rural markets lack adequate and quality educational services which are majorly catered by government
agencies and bodies. But due to lack of proper infrastructure, expertise, knowledge, talent, funds and
participation of the service provider, this sector is unable to meet the desired level of service expectation of
the rural customer for career building. Hence there a great business opportunity for any company if it is able to
fill this gap effectively and would also be imparting its social responsibility to the growth of the society and
country.

With all the above mentioned arenas for Services in rural markets, there is a huge demand and growth
opportunities that exists to be exploited by the companies which can make best market expansion and
profitability by investing in Rural India.
7 P’s analysis of Rural and Urban Marketing

The most potential among all the above described services is the Rural Banking Service. Lets us examine this
sector on the basis of difference between Rural and Urban markets on the grounds of 7 P’s of Marketing.

1. Product:
The Products (Services) provided to Rural customers differ from that of urban customers as rural segment
have more demand for agricultural loans, lower limits for savings accounts, microfinance, lower amount of
loans for education, automobiles, small & medium scale industry and personal loans. The duration for these
loans, schemes and capacity also differs from that of urban customers.

2. Price:
The price of these services as expected by the rural customer is lesser as compared to urban customer due to
the fact that income level as well as savings pattern of the rural customer are lesser. The risk appetite and
affordability is also a matter of concern for the rural markets as they are lesser as compared to urban markets.

3. Place:
The place of availability is of very intense concern in rural markets due to lack of adequate and proper
transportation facilities in rural India. The rural customers face major problems with the availability of service
location in vicinity and thus are reluctant to derive benefits due to lack of travel support.

4. Promotions:
The promotional strategies in rural marketing needs to be more personalized and simple as compared to the
urban markets which needs to reach more remote areas as rural markets lack more in means of
communications and technology. The promotional tools also need to be customized according to the regional
languages so that it clearly states the service details and benefits.

5. Physical evidence:
The physical evidence provided to the rural segment differ from that of the urban markets as they need to be
more simple, colourful, artistic and personalized as most of the rural customers lack adequate education or
low educational background and thus need to be clearly explained about the features and benefits of the
services thus provided.

6. People:
The people and staff appointed for the service delivery for rural banking services needs to be properly
selected, recruited and trained to properly understand the rural customer’s needs and requirements. They
need to be made well aware of the regional, cultural, social, economic and technological needs of the
customers. The employee involvement in the service delivery to the service (banking) sector is more in rural
markets than urban markets as the employees need to constantly educate and assist the customers about the
service process, price, product and simultaneously communicate the benefits as well as the precautions and
risks involved with the services being offered.

7. Process:
The process of rural banking differs from that of urban banking sector as it needs to be more simple and thus
less documentation involved and more customized as per the economic capacity of the customers. The
process of banking in rural markets is observed to be more affected by the Government policies and rural
customer psychology driven. Hence the process needs to be more frequently reviewed and flexible to
accommodate the changes due to these factors. The process also need to be timely revived and revised to
remove any complexity arising due to inclusion of new economic policies and changing demand & supply
patterns.

Product in Rural Market.

A prime need for any firm to emerge as a strong player in the rural market is by carefully identifying gaps in
the rural market and crafting the right product offering for consumers. Chalking out a product strategy for rural
market differs in many aspects when compared to urban counter parts. Needs and demand of rural consumer
might be contrasting to that of urban consumer and therefore its necessary to hit the right chord when entering
the rural market. The prime objective is to design products to suit rural requirements.

Conventional wisdom on rural marketing states that the needs of the rural consumers are similar to those of
the urban consumers. Hence, the products made to urban specifications should suit the requirements of the
rural consumers. However, this is not true in many cases, as there is a market difference between rural and
urban environments. For instance, Kerosene or LPG gas stoves, where the flame can be controlled, are used
for cooking in urban areas, while an open fire or ‘Chulha’ is used in rural areas. Pressure cookers with
handles on one side suit the urban consumers, but not the rural consumers for use on an open fire or a
‘chulha’. Perhaps, a wide-bodied cooker within handles on opposite sides may suit rural requirements.
Therefore, while designing and developing products, the requirements of the rural consumers are to be
considered and rural-specific products developed.

During the late eighties, shampoo sales boomed when it was introduced in sachet pack, because it suited the
consumers in low income groups. Hindustan Motors (HM) launched a utility vehicle the RTV (rural transport
vehicle), aimed at rural market. Hence, product development for rural consumers is necessary .

Though marketers are still trying and experimenting ways to successfully tap the rural arena, below are few
product strategies which have been widely adopted and have proved themselves to work in the rural
landscape:

Small unit packing: This method has been tested by products life shampoos, pickles, biscuits, Vicks cough
drops in single tablets, tooth paste, etc. Small packings stand a good chance of acceptance in rural markets.
The advantage is that the price is low and the rural consumer can easily afford it.
Another example is the Red Label tea Rs. 3.00 pack which has more sales as compared to the large pack.
This is because it is very affordable for the lower income group with the deepest market reach making easy
access to the end user satisfying him.
The small unit packings will definitely attract a large number of rural consumers.

New product designs: Keeping in view the rural life style the manufacturer and the marketing men can think
in terms of new product designs.
For e.g. PVC shoes and chappals can be considered sited ideally for rural consumers due to the adverse
working conditions. The price of P.V.C items is also low and affordable.

Sturdy products: Sturdiness of a product is an important factor for rural consumers. The experience of torch
light dry battery cell manufacturers support this because the rural consumers preferred dry battery cells which
are heavier than the lighter ones. For them, heavier weight meant that it has more over and durability.
Sturdiness of a product either or appearance is an important for the rural consumers. 

Utility oriented products: The rural consumers are more concerned with utility of the product and its
appearance Philips India Ltd. Developed and introduced a low cost medium wave receiver named BAHADUR
during the early seventies. Initially the sales were good but declined subsequently. On consumer research, it
was found that the rural consumer bought radios not only for information and news but also for entertainment.

Brand name: For identification, the rural consumers do give their own brand name on the name of an item.
The fertilizers companies normally use a logo on the fertilizer bags though fertilizers have to be sold only on
generic names. A brand name or a logo is very important for a rural consumer for it can be easily
remembered.
Many times rural consumers ask for ‘peeli tikki’ (Yellow Bar) in case of conventional and detergent washing
soap. Nirma made a ‘peeli tikki’ (Yellow Bar) specially for those peeli tikki users who might have experienced
better cleanliness with the yellow colored bar as compared to the blue one although the actual difference is
only of the colour.

HOW TO DEVELOP YOUR RURAL BRANDING STRATEGIES ?

If you are planning a rural branding strategy, you should go beyond your marketing orthodox.
As a marketer, you can feel the heat of competition around you. The urban markets are already
impregnated with sellers, it’s a good time to taste the rural market with your brands.
It’s true that branding at a rural market is way different from urban areas. Commensurable with
the rural need you must develop your own brand development strategy to tap the rural market.

Why You Need a Rural Branding Strategy?

A stiff competition in the metros and big cities has pushed the corporate houses to think out of the box to
stake a claim on larger rural markets.
Well, I’ll not claim that all the Companies are averted to the rural market, but in most of the cases, they are.
and behind such a rural compulsion you can sense a few reasons like creeping profitability.
The saturated urban market and cutthroat competition among the market players have taken a toll on their
margins, operating in urban areas.
It has created an atmosphere for the marketers to rush to the rural population and predictions are on, that the
rural markets are also going to be competitive in the near future to come.
So, the marketers ought to take things urgently and prepare their rural branding strategy to establish their
product brands at the earliest to tap the untamed rural market.

What is Rural Branding?

The Rural Branding is the process of creating an identity about a product through a unique name and image
in the mind of the rural population focusing primarily on their economic condition and spending nature.
It shouldn’t be something like extending the brand of the product used in urban areas to the rural market.
Unlike regular branding, you have to build a sense of kinship between the product and the people while doing
rural branding.
In fact, a generalized approach of branding in the rural market often harms the companies beyond its
expectation.

Results of Poor Rural Branding

You may have learned hundreds of sales tricks, but Rural Branding requires an in-depth study of
the rural economy and the necessities.
In a rural economy like India, where a majority of the population is dependent on agriculture,
costly lifestyle products may not have mass takers. According to the  Food and Agriculture
Organization of the India, about 70% of India’s rural population is dependent on agriculture for
their livelihood.

Although the rural economy around the globe is moving fast, the average per capita income is
still lower than that of the urban economy. Market specialization is very important in this regard.

Some of the major consequences the corporate houses may face due to poor rural branding are:
1. Poor acceptability of the product.
2. Sale degradation due to poor knowledge of the product.
3. Growing uninterested about the product due to an unmatched utility with the environment.

How to Do Rural Branding?

Branding strategies for rural markets are quite different from that of the normal one. In a market where the
literacy rate is below the national average, you have to obtain different approaches to tap the market.
Here I have enumerated certain steps of branding strategies meant for rural economy and how to make it
acceptable for a larger class.

Step 1: Select a Brand Name

Your rural branding strategy begins with the selection of a brand name. It’s the pivotal point of your brand.
A name gives an impression about your product. If you are targeting the rural market, it should go with the
masses especially the lower income groups.
To have a competitive advantage over others, it’s important to do research on the target market and
observe their culture, tradition, language, education and most importantly their likings.
If you take these things into consideration, you may realize that the rural people are much comfortable and
feel at home with simple names, local and culturally bonded.
Even the multinational companies like Samsung, LG and many more have created products and brands
incommensurate with the mentality of the rural people.
Samsung has named one of its mobile series as ‘Guru’. ‘Guru’ is a Sanskrit word which means the teacher
whose position is very respectable in our society.
People find this type of names very native and feel comfortable in using it.
The brand name and pricing of the mobile phones were done by Samsung India keeping in mind the rural
population of the Country. And it proved to be a very successful brand.
The bottom line is that your brand should be easy to recognize as well as easy to recall.

Step 2: Positioning The Brand

If you are a marketer, probably you won’t have any issue understanding the concept and
importance of Brand Positioning. For a non-marketer let me explain the things in an  easier way.
Brand Positioning refers to the art and science of placing a product or a service in a broader market
segment/s in such a way as to set it meaningfully apart from the competition. In simpler terms, Brand
Positioning means take your brand name in such a position that it is embedded in the minds of the
people.
Positioning the Brand is a step-by-step approach starting with assessing the current position of your brand
to testing the efficacy of your of brand positioning.
In a rural economy, people are more regionalized. A global outlook may not fetch you the best results while
selling goods in a rural area. Mere internationalization often treated as an alien thing.
Obviously, a localized approach has a better reach ability than any other techniques practiced globally.
Regional or local names, tag-lines and slogans in native languages, describing features in easy and local
languages, easy to remember symbols, advertisements in vernacular languages etc. work better in
penetrating rural and semi-rural markets.
For example, Shree Cement Limited has introduced cement named  Shree Ultra Jung Rodhak
(Anti Rust) Cement.
This brand created an image in the minds of the people especially in rural areas that this is the
cement that protects your house from rusting. The idea clicks and a notion is created among the
masses which stimulates revenues.
Step 3: Enhancing Recognition of The Brand

While doing rural branding, brand recognition is extremely important. In fact important than your product.
Yes, you read it right.
To establish your brand in rural areas, your brand certainly needs recognition which is beyond your practiced
business techniques.
A large part of the rural population does not even recognize the products with their generic names. An easy to
identify mark or symbol extends you the opportunity to recognize your brand.
For example, your logo or symbol with materialistic elements surrounding us draws more attention than any
other abstract art.
Suppose you are using a symbol of small metallic water pot (‘lota’ in Hindi) on a matchbox produced by you.
Rural people where the literacy rate is not that high, they remember such things very easily. They will go to
the shop and say ‘lota wala machish dena’; please give me the match with a symbol of ‘lota’. Here is your
victory.
In another example, you can see below that a popular packaged drinking water brand ‘Bisleri‘has adopted a
localized approach like vernacular product packaging to enter the Indian rural market.
It gives them better accessibility with easy to read the name and linguistic sentiment for their
brand recognition.

Step 4: Building a Brand Image

While endorsing your products or services, you ought to have a strong brand image. An image that
downplays all your competitors.
In the case of rural branding, it has been observed on many occasions; people buy products out of faith than
to utility.
When you do branding for a geographical location you should be cautious about selecting a brand name.
People in the rural areas often overwhelmed with customary rituals, mythical beliefs and traits.
Keep your brand away from such taboo subjects. While doing an endorsement, do not indulge yourself or your
brand name in any controversies that hurt people’s sentiment. Otherwise, none of your marketing tricks would
work.
Your brand names should be such that radiate respect, proud and trust. Like Mahindra & Mahindra
Ltd. introduced tractor series brand called Arjun. This is the name of a main central character from the
great Hindu Epic Mahabharata and believed to be the best archer in the world.
People in a country like India has unbounded faith in these mythological characters. People when buy
products of those brand names, they feel proud and create a strong bond with the brands.

Step 5: Countering Spurious Brands

The fifth and the most important step while planning your rural branding strategy is to fight
against the spurious brands.
You won’t believe, but Spurious Brands are the real threats every brand faces in the rural areas.
In fact, in a situation like unattended follow up or interrupted supply chain, such brands may even
engulf your one.

What are the Spurious Brands?

Spurious Brands Stand for those goods and services which are claimed to be genuine or portray itself to be
genuine products but are not so. In simple terms, they often called as duplicate brands.
This is what differentiates branding in urban areas to rural areas. Sounds odd, but the fact is your own brand
has to fight against lots of brands that look alike, spells alike and the products which look desperately
duplicate.
The primary reason behind such apathy is the lack of brand awareness.
The Brand Awareness comprises of two things. Brand Recognition and Brand Recall. Brand recognition is
the ability of a consumer to recognize the brand when they are asked questions about that
brand.
Whereas brand recall is the potential of a customer to recover a brand from his memory when given the
product class/category.
Since rural customers are less literate and largely away from corporate beckons, the brand recognition and
brand recall have lesser implications.
Manufacturers of spurious brands mostly ride piggyback on the advertising campaign of large players and
establish their own brands in the region. This eventually affects their post-purchase decisions and can harm
the image of the company.

A few steps that can counter spurious brands are:

1. Set-up a task force to curb the menace of duplicate manufacturers. Involve police and administration to
take stringent action against unscrupulous traders and marketers.
2. Packaging upgradation is one of the effective tools to counter spurious brands. But don’t do it more often
because constant changing of packets may leave you at a loss.
3. An uninterrupted supply and better distribution network will help manufacturers to be present in rural areas
which ultimately results in the ouster of fake and spurious brands from the market.

Conclusion

A new study has revealed that branding with social perspective especially in the rural areas has better
exposure than anything else.
If companies are interested in augmenting their brand values social campaigns often help them reach their
desired goals. This has a two-way advantage.
One the people of the rural areas will be aware of the brands’ presence in the market which the Company is
striving for and secondly, the living standards of the people can be elevated through social changes.