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MODULE-02

Rural Consumer
Behaviour

Introduction
 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
prediction.

 An uncertainty that is even more difficult to get a
fix on in India, because of the demographics of the
country.

 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
globe.

 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.

and income .  Perhaps because for such products. 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. 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 emulators.  This is compounded by the influences of caste and religion and the undercurrents of power and politics in society. occupation. . education.  For high-involvement products such as consumer durables. there is marked disparity in consumer behaviour.

 Study consumer behavior to answer: “How do consumers respond to marketing efforts the company might use?” . Definition  Consumer Buying Behavior refers to the buying behavior of final consumers (individuals & households) who buy goods and services for personal consumption.

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 Behavior Product Choice Purchase Brand Choice Buyer’s Response Timing Purchase Dealer Choice Amount .

Consumer-Buying Behaviour Models .

the needs and wants can quite different for rural and urban India.  Influences like traditions.  A mixer-grinder will be an essential gadget for are urban working woman hard pressed for time. urban priorities are determined by economic and time pressures in the relentless effort to succeed and be socially accepted. .pound spices because of her belief. that they retain their flavour better than machine ground spices.  On a day-to-day basis.  In urban India on the other hand.  Therefore. social customs and caste determine behaviour in everyday life. whereas her rural counterpart may prefer hand. Factors Affecting Consumer Behaviour  There is a whole range of influences that affects overall consumer behaviour in rural India. these factors have limited influence. evident largely during marriage and festivals.

SIMPLE MODEL FOR CONSUMER BEHAVIOUR Motives Attitudes Needs Consumer Purchase Business Decision Learning Family Perception Personality Economic .

Economic Factors . Technological Factors 4.Factors Affecting Consumer Behaviour 1. Social Factors 3. Cultural Factors 2.

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. he acquires a set of values. because rural India lives in a society which is bound by culture.  This is fundamentally true.  The degree of impact culture will have on behaviour however.  As a child grows up in the rural environment. preferences and behaviours. 1. the influence of sub-cultures and the evolving of a hybrid culture. perceptions. or its intermingling with other cultures. . more so in rural India than for urban India and its residents.Cultural Factors :Culture  Culture is the most fundamental determinant of the person’s behaviour. will depend on the narrowness of a culture.

 Most behaviour in rural society is governed by the acceptance of particular norms in general by the community. or of those in authority.  Due to a variety of factors. or deviation from. . these are not so rigidly followed in urban India. 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. like the pace of life and economic priorities. who initiate the process finally becoming collective social sanction. these social norms in rural India can even lead to being cast out of that society. in rural India.  Violation of. working. these norms are strong & are rigorously followed. addressing and conducting ourselves in society.  However.

in the due course of time.  In urban India. Influence of Social Customs  Customs are socially acceptable norms that have been in practice over a long period of time in Rural India. a change that is accelerated when a new generation adopts new value systems and practices . however. many of the customs have changed and continue to change.

.in a ritualistic manner.  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).Traditions  Traditions are long-standing beliefs that are believed to be true in nature and often practice . or questioning the need to do so. without knowing the origin.

the up . .  In rural India.  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. The Influence of Caste  Caste plays a key role in the behaviours of the community.and the lower caste differences still continue and are considered an important facet everyday life.

the fact that they do not file income tax returns complicates the problem. .  This creates difficulties in estimating their annual income with accuracy and Consistency. it is difficult to do so due to multiple and changing occupations related to opportunities in different seasons.  In rural India.  Also. Social Class  Social classes are defined on the basis of occupation and education in the urban sector. 2.

 Family  Role & Status  Products & Status Symbol  Sociability .

Comparison of Factors Affecting Consumer Behaviour .

services. is beginning to experience this impact of technology. leading to major changes that are transforming the countryside. products. knowledge. Technological Factors  The rapid entry of contemporary technology and its applications has changed the way urban India lives.3. It has also compressed the world and shrunk distances. works and seeks entertainment. information are all exploding. Opportunities. .  Rural India too.

 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. telecommunications has transformed rural India in so many other ways that is of interest to marketers. . providing instant information channels to urban India and reaching out to connect with farming community. Introduced with the purpose and need to create an instant network for good governance.  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 AMCS  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 - AMCS).  Each milk producer is allotted a specific code number and issued an identification ((0) card. .  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 milk is emptied into a steel trough placed over a weighbridge where it is weighed and the fat content is tested (by mllko-tester).

monitors animal breeding. The total value of the milk is printed on a payment slip and given to the farmer who collects cash from the adjoining window. undertakes yearly analysis Of data. thus improving overall operational efficiency. maintains records of cattle feed. 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. facilitates  Complete financial accounting Of the Cooperative society. .  The system stores individual milk collection details. ghee and other local milk sale of the society. health and nutrition programmes.

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. provided to them in terms of wants and needs. ready to accept goods and services. 4.  The entire economic environment of rural India shows a much improved prosperity due to repeated monsoons. Economic Factors  To understand whether the rural customer really constitutes a market in terms of ability and affordability.  Improved rural channels and infrastructure have come up and are expanding rapidly to market additional agricultural produce. . it is important to understand the economic factors that make rural India fertile ground for marketing. new and improved techniques.

 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
Consumer

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 .

 There is a vast difference in the lifestyles of rural and urban consumers. as well as their values. interests and opinions. .  It embodies the patterns that develop and emerge from the dynamics of living in a society. attitudes.  Extensions of urban positioning therefore can become totally irrelevant. because of the differences in the social and cultural environment. feelings. values and daily mode of living. Lifestyle  Lifestyle deals with everyday behaviorally oriented facets of consumers.

geography. education. entertainment)  Interests: Consumer preferences and priorities (food.Typical lifestyle dimensions  Activities: Allocation of time by the consumer/family (work. social issues. recreation)  Opinions: Consumer attitudes to events/issues (politics. culture)  Demographics: Age. fashion. occupation. family size. education. dwelling . hobbies. future. family. income. social events.

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.  There is a natural tendency to buy those products and services that we think fit or match with our personality.  Self-concept or self-image is the way we perceive ourselves in a social framework.  It provides a framework within which consistent and long-lasting behavior can be developed. .

rural youth prefer to buy pan masala. whereas urban youth enjoy popcorn and coffee/cold drinks. tea. .  While traveling. rural people carry food items from their homes. and namkeen.  When in social gatherings. there are two aspects to be considered: situation and person. Their urban counterparts. buy mineral water and packaged foods. on the other hand. In order to elate personality to the products people purchase. or buy open food.

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 A lot of persuasion by an influencer is required to convince him to try new products. is quite content to satisfy his basic needs. averse to taking risk and prefers to stay with the tried and tested. . unlike his urban counterpart.  He is less adventurous. relevant to his environment.Personality and Psychological Factors  The rural consumer.  Opinion leaders too play a significant role.

 He is not driven by ‘status symbols’ acquired by his neighbors in order to upgrade to a better lifestyle. Unlike the urban consumer. .  Though high in self-esteem. he is quite content with his everyday life. except those that seen to provide security. resigned to adverse circumstances and less ambitious about comfort and material possessions. peer group pressure is not very significant in initiating product trial.

through his life cycle. quite content to stay all his life in the lower two sections needs of the pyramid.  The rural consumer Actual Usation however.Security needs 1.Esteem needs 3. or at least 4 of the five segments of Maslow’s model of the  Motivational Pyramid. an urban consumer moves through 5. Social Needs. Basic Needs and Needs of Security. Needs of Self Esteem and Needs of Self Actualization. Typically. is mostly.e. i. 4.Social needs 2.Basic Needs .

Consumer Buying Process Buying-Behavior Patterns  The level of involvement in buying products and services depends on various factors such as price.  Therefore. knowledge and purpose. availability.  The brand differentiation is perceived as high in both rural and urban. . variety.  A product like a wristwatch is less affordable to a rural consumer and hence considered a high-involvement product. buying a wristwatch is characterized as variety-seeking buying behavior in the urban sector. whereas for an urban consumer it would be a low-involvement product. whereas it is complex-buying behavior in the rural areas.

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 In urban India. the opinion leadership’s influence on opinion seekers could also be non-verbal. . whose word.  This leadership comes from social status. opinion leadership is largely governed by perception of opinion seekers about the specialized knowledge of the leader.Opinion Leadership Process  A person.  However. power or success in public life. based on observation of behaviour. acts and actions. The influence is informal and usually verbal. informally influence the action or attitude of others is an opinion leader.

products and services. gained from exposure/interaction with external world. by virtue of their knowledge. . social. rural India has traditionally had the grim: sarpanch. through mass media and interaction with the government/administrative machinery.  Villagers approach them for all matters. personal and even purchase of products and services. for a set of needs. whose opinion leadership is universal.  In contrast. Therefore there is reliance on a set of leaders.

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to the village.  The theoretical concept of adoption of innovation remaining the same. to the kasba (feeder town). the role played by different consumers in the different stages varies in the urban and rural segments.  While the external environment is restricting. Diffusion of Innovation  The flow of technology from international boundaries to metros. the reach of communication achieved here is often through word of mouth. the products and services evolving regularly in the market. 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. . to towns. the rural consumer is also limited in his ability or desire to adopt innovations due to low levels of literacy. to cities.  Also. especially in large areas not covered by the mass media.

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 But the rural consumer is only now beginning to appreciate the relevance of brands and their relevance to meeting wants and needs.  The number of FMCG brands available in rural markets is less than half of those available in urban shops. Fair & Lovely and Colgate were early entrants in rural markets and have gained high acceptance over a period of time. .  Some brands like Lux.  Loyalty to a particular brand is high in rural markets. brand value. brand image and brand loyalty are terms and concepts long familiar to the urban consumer. Brand. With virtually no competitions.

. 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.  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.

.  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 money. These relationships were further strengthened by social interaction and the extension of credit.

 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 Research .

do not understand the behavior and practices of the rural buyers-what motivates them to buy.  For most marketers.  Its a 'black box' for urban marketers. who having no previous exposure to rural India. Introduction:  The rural market still remains the 'Great Indian Mystery'. . there is no knowledge and understanding of the rural consumer. who influences them or where do they shop.

rural India has changed and is still changing. telecommunications. media and global competition.  Changes that are totally altering the paradigm on which consumer behaviour and actions. due to the advent of information technology. .  Therefore marketing planning and strategy are to be re- designed. Despite seeing their world changing rapidly and dramatically in the last decade. they prefer to hold on to the mistaken belief. that rural India is still behind. firmly entrenched in their midst in urban India.  Unfortunately.

better left untouched. rural India often seems like a 'Pandora's Box'.  Indeed marketers are forced to venture into unknown territory. . For others. because it seems so different from their known and familiar urban India. because of the competition and saturation in urban markets.

there are not many appropriate market research tools to map rural consumer behaviour. . therefore. an indispensable part of any successful rural marketing intervention. to understand the rural consumer and his behaviour.  Research is. There is a crying need to understand rural India and its beliefs and practices.  Illiterate and semi-literate rural people make the research more difficult.  Unfortunately.

 Therefore. remote and inaccessible.  Western ranking and rating tools often hold little relevance by the rural respondent as a framework of evaluation. rural India is highly scattered. rural research needs to be seen in a different perspective. making data collection difficult.  Further.  There is also a need to re-look at planning and strategy from the rural perspective. Lack of exposure to many concepts and practices of rural India can make their visual depiction incomprehensible.  There is need to adapt to conventional mapping tools and techniques and innovate in areas of design and methodology and implementation. .

Planning the Rural Research  Because research is the guidepost to laying the foundations of a successful marketing programme. . keeping in mind what is the objective of conducting research. on an accurate and authentic framework. in order to yield the right results.  It must also be designed in order to get maximum inputs. it must be planned.

not the subject of research. Research Objectives and Design  As most companies are now entering the rural market. research is at a very preliminary stage and more exploratory and investigative in nature. as companies are still looking for a road map to enter rural markets.  Customer satisfaction. . brand tracking or market share measurement studies are presently.

Types of Rural Studies  Since the penetration and consumption of most product categories is low.  It is qualitative studies on certain specific areas that bother most companies. the need for quantitative studies for most product categories is not felt as yet.  Hence. the market is still at a budding stage of development and has not matured. .

These would be:  4 As of Rural Marketing-Acceptability. Affordability. distribution. promotion and communication channels . Awareness and Availability  U&A (Usage and Attitudes) or KAP (Knowledge. Attitude and Practices)  Feasibility  Mapping.

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

but most of them are centered around demography and are not product related and hence not usable by marketers. .Secondary Data Research  There are several secondary sources for rural data.

etc. infrastructure. .1 eve I data on government-aided projects (District Rural Development Authority) 6. 7. Rural Panels of MR companies ORG-MARG and IMRB own rural panels that collect data on consumption and expenditure on a daily basis. who maintains all statistical (available with State Statistical records on demographics. Panel hay at office Compilation of village-level information ho use ho Id. NCAER Largest sample surveyor in the country. welfare. economic indicators. ICDS (Integrated Child Compilation of village-level information mainly on health by Development Scheme) ariganwadi workers 9. and welfare -related data up to the district level 5. Largest compilation of rural demographic data 1 Census of India 2. economic (available with District Statistical indicators. DRDA Compilation of district. and infrastructure. State Statistical Abstract Every stats has a State Statistical Officer. economic indicators. compiles data on demographics. and Officer) infrastructure. NSSO (National Sample Survey Consumption and expenditure. welfare. health. who maintains all statistical records on demographics. 10. District Statistical Handbook Every district has a District Statistical Officer. Officer) 8. CSO (Central Statistical Organization) State-wise compilation of demographics. durables and non-durables (National Council for Applied Economic Research) 3.related data on major products and Organization) services 4.wise on demographics.

Primary Data Collection  There is a scarcity of data on rural consumers and markets.  Hence. companies need to conduct market research to generate primary data for developing their marketing plans. .  Secondary data are available from the developmental sector perspective which cannot fit into the framework of a marketing information system.

 This would also reduce the suspicion rural people have when urban strangers knock at their doors. the researcher should make the purpose of his visit clear and explain how it could benefit villagers in the long run.  But rural people don't understand and appreciate the value of market research.  Therefore. . Data Collection Methods  Normally in-depth interviews and focus group discussions are used to collect data in rural areas. or enter their homes unannounced.

a participatory tool that gets the participants of the research process (respondents) to be actively involved in the research. 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 themselves.  Therefore. .Participatory Rural Appraisal (PRA)  Participatory Rural Appraisal (PRA) technique. to plan and. to act. enhance and analyze their knowledge of life and conditions.  PRA is a set of approaches and methods to enable rural people to share.

 If the question is ambiguous. if it is framed clearly. the answer will be vague. Questionnaire Design  The GIGO principle (garbage in garbage out) applies equally to rural research questionnaire design. the response will also be clear. .

. Questions should be in the local language. 2. 3. 5. moving from general to specific and from macro to micro. Questions should have a logical flow. Certain points need to be kept in mind while designing questionnaires for a rural survey: 1. Questions should be self-explanatory. Questions should not be ambiguous 4. Questions should be simple and direct.

Sampling .

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. villages can be categorized into four population classes:  Large villages : > 5.000  Tiny villages : < 1.000 .Population spread Typically.000-2.000-5.000  Medium villages : 2.000  Small villages : 1.

b. Scattered and remote location  Typically.000 are widely scattered across a wide geography. . making travel logistics difficult. they are located in remote corners and are connected only a kuccha road. tiny villages having a population of less than 1.

income classes. religions and castes.  If a sample requires perceptions from all walks of life.c. occupations. then this heterogeneity needs to be kept in mind. . Heterogeneity  Rural markets are heterogeneous markets having different categories.

. that he is interested in acquiring new knowledge. since it is observed that villagers like to be in control of situations.  The interviewer should talk a good deal about general topics. Sample size determination  The respondent should be made to feel he is leading the interview. partly to show that he understands the conditions and partly.

e.  But male researcher should never try to do this with a woman and elderly people. establishes kinship but it can be done only after building some rapport. such as touching the arm of a young male interviewee. . literacy level.  Issues sensitive to respondents should be carefully handled.g. Occasional physical contact. because the latter are held in high respect and touching them would suggest trying to equal them in status.

even when the respondent has shown a willingness to talk. or a man known to her. Male researchers should always approach a woman respondent through her husband. the strong desire to obtain social sanction in rural areas leads to interaction on a group basis.  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. difficult to get a truly individual response.  It is therefore better to intersperse subject-specific questions with some general questions to provide a mental break. So a series of direct questions one after another should be avoided. therefore. or another male member of her family.  Rural people can handle only limited information at a time.  Moreover. It is. .

water and a first-aid kit with him and take necessary precautions to avoid health problems. To handle this situation. .  Interviewers should avoid being overfriendly as respondents may give biased responses.  The researcher should always carry food. the interviewer should request people gathered around not to prompt respondents.

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 .

inaccessible roads  Social taboos. low product and brand awareness /  Local language communication  Scattered and remote villages.Limitations of Rural Research  Low literacy levels  Poor media exposure. 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.000 crore. the rural market research industry is Rs. 4.  According to ORG-MARG.  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. 50 crore. out of which under 5 per cent is estimated to be rural.

 Rural research pertains to research in. IMRB (SRI)  The Social and Rural Research Institute (SRI) was set up in 1990 with the objective conducting social research and research of and for rural markets. consume durables and non-durables both in urban and rural. which will bring social change. of and for rural areas. both fo social issues as well as for rural marketing. .Major players with key strengths NCAER  NCAER conducts large-scale national sample surveys on demographics.  Social research deals with research on causes and issues that can contribute to action.

rural distribution.generation programmes and promoting social development in rural India to introduce a successful innovations in the 4Ps of rural marketing. .AC Nielsen ORG-MARG  The ORG Centre for Social Research has emerged as one of the largest social research consultancy organizations. from conceptualization to final implementation. rural youth and women as buyers and other important studies. MART  MART was set up in 1993 as a specialist rural marketing and livelihoods promotion! agency. offering its services in almost all fields of development planning and management. spurious products.  In rural research.  It has utilized its experience and learning in the field of implementing income. traditional media. it has conducted | several path-breaking studies on haats and melas.

Thank You .