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Rural Consumer
 To meet the wants and needs of select customers, it is important to
understand consumer behaviour.

 It is this behaviour that guides and directs the entire set of activities that
constitute the marketing programme.

 Demand estimation, segmentation, targeting, product development,

positioning, developing the 4Ps of the marketing mix and finally the
marketing efforts to eliminate post-purchase dissonance and ensure
customer retention.

 Unfortunately, consumer behaviour is extremely complex to study and

understand, despite the most precise procedures for mapping and
 An uncertainty that is even more difficult to get a
fix on in India, because of the demographics of the

 India has the second largest population of the world

scattered across an area that would comfortably
encompass most of the European Union.

 Densely populated in parts and as sparsely

populated in others.

 With scientists, IT experts, space technologists, on

the one hand and illiterate tribes, on the other, who
perhaps see a strange face once a year.
 A nation that has over the centuries of its civilization,
witnessed countless travelers and merchants from across the

 Conquerors who came to loot and plunder stayed back,

became part of the people, contributing something to the
culture, customs, and beliefs.

 This complexity is even more exaggerated, in a nation that has

recently opened its doors to globalization.

 It is only now experiencing the heady mixture of

telecommunications, global media and the Information age.
 We have woken up to find the world at our doorstep while the
familiar and the traditional still goes on in our houses.
 Consumer behaviour in the rural markets is even more
perplexing because of a singular lack of consistency in groups
which are homogeneous in parameters of demographics—age,
occupation, education, and income .

 This is compounded by the influences of caste and religion and

the undercurrents of power and politics in society.

 For high-involvement products such as consumer durables,

there is marked disparity in consumer behaviour.

 Perhaps because for such products, they play a primary role of

adding to the status of the buyer rather than the utility and
value obtained from it. This becomes an object of display and
discussion with each buyer having his own follower group of
 Consumer Buying Behavior refers to the
buying behavior of final consumers
(individuals & households) who buy goods
and services for personal consumption.

 Study consumer behavior to answer:

“How do consumers respond to marketing
efforts the company might use?”
Model of Consumer Behavior
Product Marketing and Economic
Other Stimuli
Price Technological
Place Political
Promotion Cultural

Buyer’s Characteristics
Decision Buyer’s Black Box Affecting
Process Consumer

Product Choice Purchase

Brand Choice
Buyer’s Response Timing
Dealer Choice Amount
Behaviour Models
Factors Affecting Consumer
 There is a whole range of influences that affects overall consumer
behaviour in rural India.

 Influences like traditions, social customs and caste determine behaviour

in everyday life.

 In urban India on the other hand, these factors have limited influence,
evident largely during marriage and festivals.

 On a day-to-day basis, urban priorities are determined by economic and

time pressures in the relentless effort to succeed and be socially

 Therefore, the needs and wants can quite different for rural and urban
 A mixer-grinder will be an essential gadget for are urban working
woman hard pressed for time, whereas her rural counterpart may prefer
hand- pound spices because of her belief, that they retain their flavour
better than machine ground spices.


Needs Consumer

Decision Learning



Factors Affecting
Consumer Behaviour

1. Cultural Factors
2. Social Factors
3. Technological Factors
4. Economic Factors
1.Cultural Factors :Culture
 Culture is the most fundamental determinant of the person’s behaviour.

 This is fundamentally true, more so in rural India than for urban India and
its residents, because rural India lives in a society which is bound by
 As a child grows up in the rural environment, he acquires a set of values,
perceptions, preferences and behaviours, through the family or other key
institutions involved at each stage of his life.

 The time-tested true behaviour exhibited by a collective group is therefore

determined by culture.

 The degree of impact culture will have on behaviour however, will depend
on the narrowness of a culture, or its intermingling with other cultures, the
influence of sub-cultures and the evolving of a hybrid culture.
Collective Social Sanction
 Our societies are bound by perfect norms being followed by the set of
people. The norms dictate the ways and means of behaving, working,
addressing and conducting ourselves in society.

 Due to a variety of factors, like the pace of life and economic priorities, these
are not so rigidly followed in urban India.

 However, in rural India, these norms are strong & are rigorously followed.

 Violation of, or deviation from, these social norms in rural India can even
lead to being cast out of that society.

 Most behaviour in rural society is governed by the acceptance of particular

norms in general by the community, or of those in authority, who initiate the
process finally becoming collective social sanction.
Influence of Social Customs
 Customs are socially acceptable norms that
have been in practice over a long period of
time in Rural India.
 In urban India, however, in the due course of
time, many of the customs have changed
and continue to change, a change that is
accelerated when a new generation adopts
new value systems and practices
 Traditions are long-standing beliefs that are
believed to be true in nature and often practice
- in a ritualistic manner, without knowing the
origin, or questioning the need to do so.

 However traditions do influence the way

humans behave and could therefore lead to the
acceptance - rejection of behaviour (and
therefore the product associated with it).
The Influence of Caste
 Caste plays a key role in the behaviours
of the community.
 In rural India, the up - and the lower caste
differences still continue and are
considered an important facet everyday
 The upper class houses will be located on
one side & the other on the other side.
 There will be clear demarcation of the
natural resources.
2. Social Class
 Social classes are defined on the basis of occupation
and education in the urban sector.

 In rural India, it is difficult to do so due to multiple

and changing occupations related to opportunities in
different seasons.

 This creates difficulties in estimating their annual

income with accuracy and Consistency.

 Also, the fact that they do not file income tax returns
complicates the problem.
 Family
 Role & Status

 Products & Status Symbol

 Sociability
Comparison of Factors
Affecting Consumer Behaviour
3. Technological Factors
 The rapid entry of contemporary technology
and its applications has changed the way urban
India lives, works and seeks entertainment. It
has also compressed the world and shrunk
 Rural India too, is beginning to experience this
impact of technology, leading to major changes
that are transforming the countryside.
Opportunities, products, services, knowledge,
information are all exploding.
 Introduced with the purpose and need to create an instant
network for good governance, telecommunications has
transformed rural India in so many other ways that is of interest
to marketers.

 The growing presence of telecommunications in rural India has

led to new patterns of consumer behaviour.

 STD booths and mobile phones now dot the landscape,

providing instant information channels to urban India and
reaching out to connect with farming community.

 These booths have emerged as the new community centre in

the villages for the exchange of news and views for every age
group and therefore an important place for marketers to display
brand communication messages.
 Amul milk cooperative of Amul has implemented an automated
system of milk collection in more than 5000 village societies using a
PC-based system (known as Automatic Milk Collection System -

 Each milk producer is allotted a specific code number and issued an

identification ((0) card, The milk is emptied into a steel trough
placed over a weighbridge where it is weighed and the fat content
is tested (by mllko-tester).

 The milk quantity and fat content Is instantly displayed on the LCD
display screen and the PC simultaneously calculates the amount
due the farmer based on the fat content of the milk.
 The total value of the milk is printed on a payment slip and given
to the farmer who collects cash from the adjoining window.

 The system stores individual milk collection details, undertakes

yearly analysis Of data, facilitates

 Complete financial accounting Of the Cooperative society,

maintains records of cattle feed, ghee and other local milk sale of
the society, monitors animal breeding, health and nutrition
programmes, and maintains records of the members assets

 This system has helped in faster collection of milk and reliable

measurement of fat and weight thereby bringing transparency
and speedy payment to the milk producers arid in data
management Of the society, thus improving overall operational
4. Economic Factors
 To understand whether the rural customer really constitutes a market in terms
of ability and affordability, it is important to understand the economic factors
that make rural India fertile ground for marketing, ready to accept goods and
services, provided to them in terms of wants and needs.

 The entire economic environment of rural India shows a much improved

prosperity due to repeated monsoons, new and improved techniques, higher
quality of inputs and increasing awareness and education on agriculture.

 More and more land previously not put to productive use is now being
harnessed for agriculture.

 Improved rural channels and infrastructure have come up and are expanding
rapidly to market additional agricultural produce.
 Farmers are becoming conscious of supplementing
agricultural incomes with income from other sources,
leading to a host of non-agriculture-linked industries and
enterprises in rural India, where the sole occupation
earlier was only linked to land.

 Women, too, conscious of opportunities of additional

income and the potential of investing and spending the
same are looking at income generation, even if on a
small scale.

 Banking is reaching out to the doorstep of more and

more farmers. Finance is now more readily available and
so is credit.
Characteristics of Rural
Age & Stages of Lifecycle
 The purchase of products & services
and their forms & nature are influenced
by age & life cycle of consumers.

 This gives direction to estimation of

demand, segmentation, targeting &
product mix decisions.
Occupation & Income
 Fishermen buy boats
 Farmers opt for tractors & pump sets
 Teacher buys chalk

Income is another factor which influence

the marketing mix
Economic Situation
 Purchasing power
 Savings
 Debts
 Credit worthiness
 Disposable Income
 Attitude to spend
 Lifestyle deals with everyday behaviorally oriented facets
of consumers, as well as their values, feelings, attitudes,
interests and opinions.

 It embodies the patterns that develop and emerge from

the dynamics of living in a society.

 There is a vast difference in the lifestyles of rural and

urban consumers, because of the differences in the
social and cultural environment, values and daily mode
of living.

 Extensions of urban positioning therefore can become

totally irrelevant.
Typical lifestyle dimensions
 Activities: Allocation of time by the
consumer/family (work, hobbies, social events,

 Interests: Consumer preferences and priorities

(food, fashion, family, recreation)

 Opinions: Consumer attitudes to events/issues

(politics, education, social issues, future, culture)

 Demographics: Age, education, income,

occupation, family size, geography, dwelling
Personality and Self-Concept
 Personality is the sum total of the unique individual
characteristics that determine and reflect how a person
responds to his/her environment.

 It provides a framework within which consistent and

long-lasting behavior can be developed.

 Self-concept or self-image is the way we perceive

ourselves in a social framework.

 There is a natural tendency to buy those products and

services that we think fit or match with our personality.
 In order to elate personality to the products people
purchase, there are two aspects to be considered:
situation and person.

 When in social gatherings, rural youth prefer to buy pan

masala, tea, and namkeen, whereas urban youth enjoy
popcorn and coffee/cold drinks.

 While traveling, rural people carry food items from their

homes, or buy open food. Their urban counterparts, on
the other hand, buy mineral water and packaged foods.
Personality and Psychological Factors
 The rural consumer, unlike his urban
counterpart, is quite content to satisfy his basic
needs, relevant to his environment.

 He is less adventurous, averse to taking risk and

prefers to stay with the tried and tested.

 A lot of persuasion by an influencer is required

to convince him to try new products.

 Opinion leaders too play a significant role.

 Unlike the urban consumer, peer group pressure
is not very significant in initiating product trial.

 He is not driven by ‘status symbols’ acquired by

his neighbors in order to upgrade to a better

 Though high in self-esteem, he is quite content

with his everyday life, resigned to adverse
circumstances and less ambitious about comfort
and material possessions, except those that
seen to provide security.
 Typically, through his life cycle, an urban consumer
moves through 5, or at least 4 of the five segments of
Maslow’s model of the

 Motivational Pyramid, i.e. Basic Needs and Needs of

Security, Social Needs, Needs of Self Esteem and Needs
of Self Actualization.

 The rural consumer Actual Usation however, is mostly,

quite content to stay all his life in the lower two sections
needs of the pyramid.
4.Esteem needs
3.Social needs
2.Security needs
1.Basic Needs
Consumer Buying Process
Buying-Behavior Patterns
 The level of involvement in buying products and services depends
on various factors such as price, availability, variety, knowledge and

 A product like a wristwatch is less affordable to a rural consumer

and hence considered a high-involvement product, whereas for an
urban consumer it would be a low-involvement product.

 The brand differentiation is perceived as high in both rural and


 Therefore, buying a wristwatch is characterized as variety-seeking

buying behavior in the urban sector, whereas it is complex-buying
behavior in the rural areas.
Opinion Leadership Process
 A person, whose word, acts and actions, informally
influence the action or attitude of others is an opinion
leader. The influence is informal and usually verbal.

 However, the opinion leadership’s influence on

opinion seekers could also be non-verbal, based on
observation of behaviour.

 This leadership comes from social status, power or

success in public life.

 In urban India, opinion leadership is largely governed

by perception of opinion seekers about the
specialized knowledge of the leader.
 Therefore there is reliance on a set of
leaders, for a set of needs, products and

 In contrast, rural India has traditionally

had the grim: sarpanch, whose opinion
leadership is universal, by virtue of their
knowledge, gained from
exposure/interaction with external world,
through mass media and interaction with
the government/administrative machinery.

 Villagers approach them for all matters,

social, personal and even purchase of
products and services.
Diffusion of Innovation
 The flow of technology from international boundaries to metros, to cities, to towns,
to the kasba (feeder town), to the village, to the rural consumer— is a long chain.

 This long chain ensures that the rural consumer is less exposed to and therefore less
aware of, the products and services evolving regularly in the market.

 Also, the reach of communication achieved here is often through word of mouth,
especially in large areas not covered by the mass media.

 While the external environment is restricting, the rural consumer is also limited in
his ability or desire to adopt innovations due to low levels of literacy.

 The theoretical concept of adoption of innovation remaining the same, the role
played by different consumers in the different stages varies in the urban and rural
 Brand, brand value, brand image and brand loyalty are terms and
concepts long familiar to the urban consumer.

 But the rural consumer is only now beginning to appreciate the

relevance of brands and their relevance to meeting wants and

 The number of FMCG brands available in rural markets is less than

half of those available in urban shops.

 Some brands like Lux, Fair & Lovely and Colgate were early entrants
in rural markets and have gained high acceptance over a period of
time. With virtually no competitions.

 Loyalty to a particular brand is high in rural markets.

Customer Relationship Management

 This has become a buzzword in recent times

with the urban marketing fraternity, because of
the fact that it is far cheaper to retain existing
customers than to create new ones.

 In rural markets, the ethos of strong

relationships as an integral part of the society
and community life had ensured that Customer
Relationship Management got established as a
practice a long time ago.
 These relationships were further
strengthened by social interaction and
the extension of credit.

 The latter played an important part in

cementing relationship with customers
as the shopkeeper could not afford any
disharmony if he had to recover his
 The number of outlets is far fewer in rural
India and each satisfies the needs of specific
communities and sub-groups and rarely
competes with each other.

 As each shop has a set of dedicated

customers, it makes it easier to build long-
term relationships.
Rural Market
 The rural market still remains the 'Great Indian

 Its a 'black box' for urban marketers, who having

no previous exposure to rural India, do not
understand the behavior and practices of the rural
buyers-what motivates them to buy, who
influences them or where do they shop.

 For most marketers, there is no knowledge and

understanding of the rural consumer.
 Despite seeing their world changing rapidly and dramatically
in the last decade, due to the advent of information
technology, telecommunications, media and global
competition, firmly entrenched in their midst in urban India,
they prefer to hold on to the mistaken belief, that rural India
is still behind.

 Unfortunately, rural India has changed and is still changing.

 Changes that are totally altering the paradigm on which

consumer behaviour and actions.

 Therefore marketing planning and strategy are to be re-

 For others, rural India often seems like a
'Pandora's Box', better left untouched,
because it seems so different from their
known and familiar urban India.

 Indeed marketers are forced to venture

into unknown territory, because of the
competition and saturation in urban
 There is a crying need to understand rural India
and its beliefs and practices, to understand the
rural consumer and his behaviour.

 Research is, therefore, an indispensable part of

any successful rural marketing intervention.

 Unfortunately, there are not many appropriate

market research tools to map rural consumer

 Illiterate and semi-literate rural people make the

research more difficult.
 Lack of exposure to many concepts and practices of rural India can
make their visual depiction incomprehensible.

 Western ranking and rating tools often hold little relevance by the
rural respondent as a framework of evaluation.

 Further, rural India is highly scattered, remote and inaccessible,

making data collection difficult.

 Therefore, rural research needs to be seen in a different


 There is need to adapt to conventional mapping tools and

techniques and innovate in areas of design and methodology and

 There is also a need to re-look at planning and strategy from the

rural perspective.
Planning the Rural Research
 Because research is the guidepost to
laying the foundations of a successful
marketing programme, it must be
planned, keeping in mind what is the
objective of conducting research.
 It must also be designed in order to get
maximum inputs, on an accurate and
authentic framework, in order to yield the
right results.
Research Objectives and
 As most companies are now entering the
rural market, research is at a very
preliminary stage and more exploratory and
investigative in nature.

 Customer satisfaction, brand tracking or

market share measurement studies are
presently, not the subject of research, as
companies are still looking for a road map to
enter rural markets.
Types of Rural Studies
 Since the penetration and consumption of
most product categories is low, the market is
still at a budding stage of development and
has not matured.

 Hence, the need for quantitative studies for

most product categories is not felt as yet.

 It is qualitative studies on certain specific

areas that bother most companies.
These would be:
 4 As of Rural Marketing-Acceptability,
Affordability, Awareness and Availability

 U&A (Usage and Attitudes) or KAP (Knowledge,

Attitude and Practices)

 Feasibility

 Mapping, distribution, promotion and

communication channels
Rural Marketing Research
1. Define Business & Research Objectives
2. Determine the research Budget
3. Designing the research: Approach, data sources,
research tools
4. Sampling method & size
5. Designing the research instruments:
6. Fieldwork
7. Data collection & analysis
8. Reporting the findings for decision making
Secondary Data Research

 There are several secondary

sources for rural data, but most of
them are centered around
demography and are not product
related and hence not usable by
Largest compilation of rural demographic data
Census of India
2. NCAER Largest sample surveyor in the country, compiles data on
demographics, durables and non-durables
(National Council for Applied
Economic Research)
3. NSSO (National Sample Survey Consumption and expenditure- related data on major products and
Organization) services

4. CSO (Central Statistical Organization) State-wise compilation of demographics, economic indicators,

infrastructure, and welfare -related data up to the district level

5. DRDA Compilation of district- 1 eve I data on government-aided projects

(District Rural Development
6. State Statistical Abstract Every stats has a State Statistical Officer, who maintains all statistical
(available with State Statistical records on demographics, welfare, economic indicators, and
Officer) infrastructure.

7. District Statistical Handbook Every district has a District Statistical Officer, who maintains all
statistical records on demographics, welfare, economic
(available with District Statistical indicators, and infrastructure.
8. ICDS (Integrated Child Compilation of village-level information mainly on health by
Development Scheme) ariganwadi workers

9. Panel hay at office Compilation of village-level information ho use ho Id- wise on

demographics, health, etc.

10. Rural Panels of MR companies ORG-MARG and IMRB own rural panels that collect data on consumption and
expenditure on a daily basis.
Primary Data Collection
 There is a scarcity of data on rural
consumers and markets.

 Secondary data are available from the

developmental sector perspective which
cannot fit into the framework of a marketing
information system.

 Hence, companies need to conduct market

research to generate primary data for
developing their marketing plans.
Data Collection Methods
 Normally in-depth interviews and focus group discussions are
used to collect data in rural areas.

 But rural people don't understand and appreciate the value of

market research.

 Therefore, the researcher should make the purpose of his visit

clear and explain how it could benefit villagers in the long run.

 This would also reduce the suspicion rural people have when
urban strangers knock at their doors, or enter their homes
Participatory Rural Appraisal
 Participatory Rural Appraisal (PRA) technique, a
participatory tool that gets the participants of the research
process (respondents) to be actively involved in the

 PRA is a set of approaches and methods to enable rural

people to share, enhance and analyze their knowledge
of life and conditions, to plan and, to act.

 Therefore, it arouses the curiosity and interest of people

and they voluntarily and eagerly get involved in the
process and they enjoy sharing and analysing about
Questionnaire Design
 The GIGO principle (garbage in garbage
out) applies equally to rural research
questionnaire design.

 If the question is ambiguous, the answer

will be vague; if it is framed clearly, the
response will also be clear.
Certain points need to be kept in mind while
designing questionnaires for a rural survey:

1. Questions should be simple and direct.

2. Questions should be self-explanatory.

3. Questions should not be ambiguous

4. Questions should have a logical flow, moving from

general to specific and from macro to micro.

5. Questions should be in the local language.

Factors affecting sampling
While finalizing the sampling plan in rural
areas, certain demographic factors should
be kept in mind:

 Population spread

 Scattered and remote location

 Heterogeneity
a.Population spread
Typically, villages can be categorized into four
population classes:

 Large villages : > 5,000

 Medium villages : 2,000-5,000

 Small villages : 1,000-2,000

 Tiny villages : < 1,000

b. Scattered and remote
 Typically, tiny villages having a
population of less than 1,000 are
widely scattered across a wide
geography; they are located in
remote corners and are connected
only a kuccha road, making travel
logistics difficult.
c. Heterogeneity
 Rural markets are heterogeneous
markets having different categories,
income classes, occupations, religions
and castes.

 If a sample requires perceptions from

all walks of life, then this heterogeneity
needs to be kept in mind.
Sample size determination
 The respondent should be made to feel he is
leading the interview, since it is observed that
villagers like to be in control of situations.

 The interviewer should talk a good deal about

general topics, partly to show that he
understands the conditions and partly, that he is
interested in acquiring new knowledge.
 Occasional physical contact, such as touching the arm
of a young male interviewee, establishes kinship but it
can be done only after building some rapport.

 But male researcher should never try to do this with a

woman and elderly people, because the latter are held in
high respect and touching them would suggest trying to
equal them in status.

 Issues sensitive to respondents should be carefully

handled, e.g. literacy level.
 Male researchers should always approach a woman respondent
through her husband, or another male member of her family, or a
man known to her.

 Rural people can handle only limited information at a time. So a

series of direct questions one after another should be avoided, even
when the respondent has shown a willingness to talk.

 It is therefore better to intersperse subject-specific questions with

some general questions to provide a mental break.

 The researcher may find it difficult to interact with villagers on a

one-to-one basis because normally villages gather in a crowd in
front of strangers.

 Moreover, the strong desire to obtain social sanction in rural areas

leads to interaction on a group basis. It is, therefore, difficult to get a
truly individual response.
 To handle this situation, the interviewer should
request people gathered around not to prompt

 Interviewers should avoid being overfriendly

as respondents may give biased responses.

 The researcher should always carry food, water

and a first-aid kit with him and take necessary
precautions to avoid health problems.
Attributes of rural researchers

 Mindset

 Effective Communication

 Discerning Ability

 Good Memory

 Patience
The place for conducting
research should be a:
 Caste-neutral place in the village
 Easy to locate

 Where it is easy to find people

Where it is easy to initiate a conversation Some of the
suitable places are:
 Retail Shop / STD Booth
 Tea Stall
 Playground

 Book Chaupal
 Haat
Limitations of Rural Research
 Low literacy levels
 Poor media exposure, low product and brand
awareness /
 Local language communication
 Scattered and remote villages; inaccessible
 Social taboos; difficulty in interacting with
women respondents
 Interview timing
 Rule out revalidation of data
The Rural Research Business

 The Indian market research industry is worth

Rs. 4,000 crore, out of which under 5 per cent
is estimated to be rural.

 According to ORG-MARG, the rural market

research industry is Rs. 50 crore.

 The size of the rural market research industry

though small today has the potential of
becoming big in the coming years as more and
more corporates decide to go rural.
Major players with key
 NCAER conducts large-scale national sample surveys on demographics,
consume durables and non-durables both in urban and rural,

 The Social and Rural Research Institute (SRI) was set up in 1990 with
the objective conducting social research and research of and for rural

 Social research deals with research on causes and issues that can
contribute to action, which will bring social change.

 Rural research pertains to research in, of and for rural areas, both fo
social issues as well as for rural marketing.
 The ORG Centre for Social Research has emerged as one of the
largest social research consultancy organizations, offering its
services in almost all fields of development planning and
management, from conceptualization to final implementation.

 MART was set up in 1993 as a specialist rural marketing and
livelihoods promotion! agency.

 It has utilized its experience and learning in the field of

implementing income- generation programmes and promoting
social development in rural India to introduce a successful
innovations in the 4Ps of rural marketing.

 In rural research, it has conducted | several path-breaking studies

on haats and melas, spurious products, rural distribution, traditional
media, rural youth and women as buyers and other important
Thank You