Module 3

Module Objectives
Factors affecting rural consumer behaviour:
Cultural
Social
Technological
Economic
Political
Socio-Economic classification of rural consumers
Consumer buying process, purchase behaviour,
opinion leadership process, diffusion of innovation
and brand loyalty

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 Consumer Buying Behaviour Models

Product Economic Cultural Problem Product

Marketing Stimuli

Buyers Decisions
Characteristics
Recognition Choice Brand

Buyers Decision
Other Stimuli

Price Technologic Social Informatio Choice Dealer

Buyers

Process
al n Search Choice
Place Personal Evaluation Purchase
Politics Post Timing
Promotio Psycholo Purchase Purchase
n Cultural gical Behaviour Amount

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Levels of Influence - Culture
MACROSYSTEM

EXOSYSTEM

MESOSYSTEM

Point of Purchase
MICROSYSTEM
Peer Family
Group
Customs
Experts

Consumer Culture
attitudes,
behaviour, values
ideologies Work

Neighbourhood
Areas

Social
Norms 4
Culture
Rural society bound by culture
Deviation from norms in rural India could evoke
strong passions
Strong belief in social customs and traditions
Impact on communication
Role of caste in rural India

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Sub-Culture
Regional Influences with little desire to change
Social Class determined on the basis of education and
occupation in urban India
In rural India occupations change due to opportunities
in different seasons
There is no income tax on agricultural income. Hence
it is difficult to measure incomes
Socio Economic Classification in rural is therefore
done on the basis of education and type of house

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SEC Classification - Rural
Type of House
Education
Pucca Semi Pucca Kucha
Illiterate R4A R4A R4B
Below SSC R3A R3B R4A
SSC/HSC R2 R3A R3B
Some College Not Graduate R1 R2 R3B
Graduate/PG (General) R1 R2 R3A
Graduate/PG (Professional) R1 R2 R3A

SEC Rural % of rural SEC Urban % of urban

population population
R1 4 A 10
R2 11 B 17
R3 37 C 21
R4 48 D 23
E 28
Source: IRS 2003-04
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Definition of SEC Classes - Rural
SEC Behaviour, Aspirations and Lifestyle
Educated, landlord farmers, aspiring for urban lifestyle,
technology adopters, experiment with modern farming methods
R1 Socially and politically connected, high spenders on social
occasions, owner of durables like tractors, 2 wheelers, TV, LPG,
refrigerators
Rich farmer with about 5 acres of land, wants children to be
educated in urban, consults urban friends for technology
R2
adoption, status conscious, aspirer, owns durables like tractors,
refrigerators
Average land holding 2 to 5 acres, manages small savings,
R3 children sent to village schools, opts for time tested technology,
low risk taker, owns television, rents/owns tractor
Has little or no land, agricultural labour, living below poverty
R4
line, a major purchaser from public distribution system
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Social Factors
Emergence of institutions in rural India:
Integrated Child Development Scheme (ICDS)
Auxiliary Nurse Midwife (ANM
Self Help Groups (SHG)
Community Based Organisations (CBO)
Primary Agricultural Cooperative Societies (PACS)
Nehru Yuva Kendra
Non government organisations (NGO)

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Family
The traditional joint family breaking down due to
higher aspirations of the younger generation
Concept of individualised joint families
Individual decisions but elders still a strong influence
Strong bonding with the joint family on social customs
like births, deaths and marriages

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Roles and Status
Roles and status in urban segment based on material
wealth or profession
In the rural segment it is more on caste, medical
practitioners, retired service professionals and
religious heads
They act as role models for purchase decisions
Sarpanch losing importance as influencer since seen as
part of Government machinery

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Products and Status Symbols
Rural Urban

Social Status Educational Degree

Tractor Car

Pucca and Size of House Locality of house

Childrens job School/College of Children

Landholding Air Conditioners

Telephone Club Membership

Pilgrimage Holiday Abroad

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Sociability
In rural, more time spent on informal interactions
Reference points are family and friends as against office
colleagues in urban
Friends are actually an extension of the family and are
consulted for purchase decisions
Particulars Urban Rural
Choupal, community
Place of meeting Parties, social gatherings
meetings
Frequency of
Once in a while Almost daily
meeting
Meeting new people Frequently Rarely
Keeping in touch Over the phone In person

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Technological Factors
Communications
PCOs becoming the community centres in villages
Growing internet penetration aided by corporates
increasing livelihood of rural sector
Media
Increasing reach through terrestrial and satellite
Doordarshan continues to dominate

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Economic Factors
Improved prosperity due to:
Benevolent monsoons
Higher quality of inputs
New and improved techniques
Increased education on agriculture
More land being harnessed for agriculture
Improved rural channels and infrastructure
Women looking for additional income
Banking and credit expansion in rural areas
Slow shift to formal financial instruments

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Political Factors
The most potent force in a developing economy
Wooing the masses in rural India has created a
nouveau riche class which has emerged as the
reference group and new opinion leaders
Empowerment of panchayati raj through channeling
of development funds
30% compulsory representation of women in local
bodies encouraging entrepreneurship amongst rural
women

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Age and Stages of the Life Cycle
Products and Services

Age Life Cycle Stage Urban Rural

Video games, chocolates, health

Below 13 Child Toys, ice candy, daliya
drinks
Cell phones, internet, motor
13 to 19 Teens Bicycle, television, cinema
cycle
Motor cycle, telephone, LPG
Car, personal computer,
20 to 40 Youth connection, country liquor,
branded clothing, alcohol, malls
haats
Luxury car, house, health Tractor, kissan credit card,
41 to 60 Middle Aged
insurance, holiday trips postal savings, melas

Chaupal, playing cards,

Over 60 Old Clubs, theatre, parks
pilgrimage

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Occupation and Income
Purchase of goods influenced by occupation and
income
A farmer buys on basis of pre-harvest and pro-harvest
income
Salary earner has regular income and hence purchase
decisions are different
Consumption of FMCG is uniform while expenditure
on durable varies

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Occupation and Income
Rural Occupation and Consumption Pattern
TV 2 wheeler Refrigerators
Occupation Rural
Ownership Ownership Ownership
Category HH(%)
(%) (%) (%)
Owner Farmer 34 33 33 31
Shopkeeper/trader 8 14 16 20
Salary Earner 13 31 39 40
Agri worker 20 6 3 2
Unskilled non-agri labourer 17 9 4 6

Artisan 6 6 4 2
Rest ( livestock, poultry,
fishery, milkman, leased 2 2 1 1
farmer)
Source: NCAER data analysed by Bijapurkar and Murthy 1999
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Economic Circumstances
Dictated by disposable income, savings and debts, credit
worthiness and attitudes towards spending and savings
Purchasing power of rural consumer unpredictable leading
to high variations in demand pattern
Saving habit in rural more inclined towards fixed deposits
and small savings
Lions share of urban income goes into rentals, education,
health, transport and telephone costs
No such major expenses for rural hence relatively more
buying power in rural

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Lifestyle
Typical lifestyle dimensions are activities, interests,
opinions and demographics
Rural lifestyles changing through satellite TV and literacy
levels
Comparison of Rural and Urban Lifestyles
Dimensions Urban Rural
Convent educated, salary earner, Government school, self employed,
Demographic small nuclear family, large dense large family, scattered population,
population, apartments ordinary spacious house
Office jobs, Internet surfing, Agriculture, physical sports, gossip,
Activities health club, shopping, clubs and playing cards, cinema, religious
parties congregation
Chinese , continental foods, Desi food, milk, bright coloured
Interests designer clothes, beauty salons, clothes, jewellery, visiting towns,
holiday trips markets/melas

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Lifestyle
Comparison of Rural and Urban Lifestyles 1995-96 2006-07
The Affluent Households owning personal car/jeep with other
1.6 5.6
/Very Rich products
Household owning any/all of these mopeds, VCR/VCP,
The Well Off mixer grinder, sewing machines, refrigerator, colour TV 2.7 5.8
with other durables but not car/jeep
Household owning any/all of these mopeds, VCR/VCP,
mixer grinder, sewing machines, audio equipments,
The Climbers 8.3 22.4
B&W TV, geyser with other durables but not those
mentioned in first two categories
Household owning any/all of these - bicycle, electric
The Aspirants fans, electric irons with other durables but not those 26.0 44.6
mentioned in first three categories
Households other than those classified under Categories
1 to 4 above (owning any/all/ none of these wrist
The Destitutes 61.4 20.2
watches, pressure cooker, cassette recorder,
transistor/radio
Source: NCAER Indian Market Demographic Reports
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Personality and Self Concept
Personality Sum total of unique individual
characteristics that determine responses to the
environment
Self-concept is the way we see ourselves
Natural tendency to buy products and brands which fit
our personality
Marketers have to look at situation and persons
(Example behaviour of rural and urban youth in
social gatherings)
Use of separate brand ambassadors for rural
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Personality and Psychological Factors
Rural consumer content
with meeting basic needs 5
Self
Actualisation
More risk averse Needs

Persuasion by influencer 4
required to try new Estimation Needs

products 3
Social Needs
Not driven by status
symbols but looks for
security 2
Security Needs

Content to stay at the

lower two sections of
Maslows Hierarchy of 1
Basic Needs
Needs
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Motivation
Maslow (theory of motivation)

Self actualization- krishi pandit award

Esteem needs- refrigerators,

coolers, jeeps

Social needs- entertainment

equipment's, kitchen appliances

Productivity needs- tractors, cycle,

insurance, two wheelers

Basic needs houses, seeds,

agriculture implements, bullock carts
Perception and Brand Belief
Perception acts as a barrier to trial in rural
Exposure to media does not create impatience with
present products/brands
Prices compared to improvement in productivity and
comfort in rural consumers mind
Retailers play a major influence for FMCG products in
rural markets
Rural consumers have inherent trust in products and
services brought out by Government

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Information and Pre-purchase Evaluation
Rural consumers seek information from influencers
and opinion leaders rather than from media
Exhibitions and road shows enhance the search
through relaxed personal interactions
In case of high involvement products, visit to
company showrooms supplement the search
Touch feel experience very important in rural

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The Rise of Consumerism
Growing number of migrant labour leading to rise of consumerism in
rural
Increasing penetration of non-essential items
Reasons for shift need for freshness, convenience and time saving

Loose unbranded tea Packaged, branded tea

Jaggery for sweets Biscuits
Open vessel cooking Pressure cookers
Bio mass stove LPG stove
Earthen vessel for cool water Refrigerators
Sharbat; nimbu paani Aerated drinks

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Consumer Buying Process
Level of involvement in buying products depends on
price, availability, variety, knowledge and purpose
Buying of wrist watches is variety seeking in urban but
complex in rural
With limited options, rural consumer is highly
satisfied with government aided block level dispensary
while the urban looks for options

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Stages in the Buying Process
URBAN (Car) RURAL (Tractor) Need Identification/Problem
Awareness
Status Productivity

Fellow owner, nearby

Media
dealer
Information Gathering

Analysis of technical Consults opinion

specifications, test leader, live field Evaluation of alternative solutions
drive demonstration

Buyer is decision
Collective decision, no
maker, family for
say of women Selection of appropriate solution
colour

After sales service not a Higher satisfaction, Post purchase evaluation of

major issue lower dissonance
decision
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Roles
Role of women changing rapidly
Purchasing a motor cycle
Buying Role Urban Rural

Son (majority); father

Initiator Young man
(some cases)

Friends and colleagues Friends and urban

Influencer
after evaluation on print relatives

Decider Young man Father since he finances

Young man goes to dealer Young man with friends

Buyer
and buys and relatives

User Young man Son and father

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Purchase Behaviour
Place of purchase
Durables from towns; daily needs from village shop or
haat
Chappals for daily use from local store while those for
special occasions from towns
Credit buying from village shops while cash buying from
haats
Frequency of purchase
Rural people buy more things on daily and occasionally
than their urban counterparts

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Opinion Leaders
A person whose words actions influence the attitudes
and actions of others
Derived from social status, power and success in public
life
Rural India has traditionally depended on the pradhan
or sarpanch
The teacher started gaining acceptance as education
spread
College educated youth and those working in urban
centres are now the new opinion leaders
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Diffusion of Innovation
Adoption of innovation in the rural follows:
Innovators: Young progressive farmer with urban
exposure and additional income
Early adopters Rich farmer with high disposable income,
high social status, conscious evaluator
Early majority Mediocre farmer, member of cooperative
society
Late majority Hesitates to take agri loan, adopts only
time tested technologies
Laggard Marginal farmers using traditional forms
of cultivation

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Brand Loyalty
80% of all packaged FMCG sold in rural markets are
national or regional brands
Availability is the prime driver of brand loyalty in rural
Rural consumers satisfied with core benefits and not
looking for augmented benefits

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Customer Relationship Management
Markets need to create a sense of caring with
consumers to build enduring relationships
Consumer education, interactive communication, and
live demonstrations will help to build long term
relationships
Extension of credit and handing out of freebies to
children help rural trade to cement relationships with
the consumer

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