Rural Consumer Buying Behaviour

Factors Affecting Consumer behaviour

Cultural factors1)Culture – child acquires a set of values,

perceptions, preferences and behavior, through the family or other key institution involved at each stage of life.

2)Collective social sanction – norms in general by community or of those in authority

3) Influence of social customs – Touching ones feet

4)Traditions – shampooing the hair – evil spirits – loose character

5) Influence of caste – harijan basti

• Sub cultureRegional influences – idli and sambha, Model incompatibility – Sikh farmer represented agricultural success in northern India. In South the communication was not relevant

Changing BehaviorEx: Revital pill as energy booster and health

supplement id now being consumed by farmers in rural Punjab. Bihar workers returning from Punjab (word of mouth)are consuming it as improves their productivity. Each pill cost Rs 6/-

• Money order repatriate

Social factors

• Ex: Anganwadi workers – influence villagers about primary health matters of children, they are also pre-school teachers and influencers.

• Family – traditional joint family is crumbling; individuals are branching off, to form nuclear families ( with separate cooking arrangements) they continue to live in the traditional family ground ( under one roof).

• The chief wage earner becomes the head of the nuclear family for all household matters, except in social matters where the family elders from the parent family continue to take decision

Role and status

• In rural sector, caste plays a very important role in defining status

• Individuals such as sarpanchs, caste leaders, medical practitioners, retired military personnel and priests enjoy a higher status in the village.

• Sarpanch is now an elected member. A progressive farmer is respected more than him

Products and status symbol

Ex: Rural consumer looks for ease of operation while urban looks for add ons or fancy features.

Ex: No frills Sampoorna model TV from LG was a great success

Ex: In Punjab, the horse power of the tractor and the company name determine the status

Sociability

• Rural people spend more time with family and friends compared to urbanites.

• A man may drop in at the house of another only to discuss some urgent matter.

Technological factors

• STD booths and PCO have emerged as the new community center in the villages for the exchange of news.

• DD reach ( urban + rural ) is 97% of the entire population of India

• AMUL AMCS ( automatic milk collection system)

Economic factors

• Banking is reaching out to the doorstep of more and more farmers.

• Women too are looking at income generation even on a small scale. Ex: SHG

Characteristics of the rural consumer

• Age and stages of the life cycle

AgeLife cycle stage Rural

Below 12 Child Toys, ice candy, daliya

13-19 Teenage Bicycle, television, cinema

20-40 Young Motorcycle, telephone, LPG, tailored/unbranded clothes, liquor, haat

40-60 Middle aged Tractor, kissan credit card, postal savings

Above 60 Old Chaupal, playing cards, pilgrimage

55% of India's population is below 25 years of age.

Occupation PatternsOccupation category Rural HH 9%)

Owner farmer 34

Shopkeeper/trader 8

Salary earner 13

Agri worker 20

Unskilled non agri labourer 17

Artisian 6

Rest ( leased farmer, livestock, poultry fishery, milkman)

2

Source: NCAER 1999

LifestyleDimensions Rural

Demographics Govt school, self-employed, large family, small/scattered population, ordinary spacious house

Activities Agriculture, physical sports, gossip, playing cards, cinema, religious congregation

Interests Desi food, milk, bright coloured clothes, jewellery, visiting towns, market/melas

Rural consumer classificationThe affluent HH owning car/jeep with other products 5.6 %

The well off HH owning any/all of these AC, motor cycle, scooter, washing machine, refrigerator, color tv with other durables but not car/jeep

5.8%

The climbers HH owning any/ all of these – mopeds, VCP/VCR, mixer grinder, sewing machine, audio equipments, B/W TV, geyser with other durables but not those mentioned under first two categories

22.4%

The Aspirants HH owning any/all of these – bicyle, electric fans, electric iron with other durables but not those mentioned under first three categories

44.6%

The Destitute HH other than those classified under categories 1 to 4 above ( owning any/all/none of these – wrist watches, pressure cooker, cassette recorder, transistor/radio

20.2

Source: NCAER , 2002

Personality and Self-concept

• When in social gatherings, rural youth prefer to buy pan masala, tea, namkeen.

• While travelling rural people carry food items from home or buy open food

Brand Name Brand Ambassador Brand personality

Coca cola Aamir Khan Smart colorful, youthful

Mahindra tractor Sunny Deol Rugged and relaxed, dominating

Rajdhoot Dharmendra Rugged, conventional, thrifty

Philips radio Rajnikanth Moder, colorful, social

Navaratna oil Govinda Jovial, youthful

Ruf and tuf jeans Akshay kumar Robust, self confident, go getter

Personality and Psychological factors

• Peer group pressure is not significant in rural areas. He is not driven by status symbol acquired by his neighbors.

• Aloofness for rural women

Perception and Brand belief

• The role played by additional features as a differentiation is not significant in influencing choice

• Products that create the perception of providing comfort or improve quality of every day life, price is not questioned or compared.

• Trust government services• Functionality is more important then style and frills• The difference between local brands and corporate

brands is not worthy of consideration. Any product is ok

Consumerism: The Shift

• The growing number of rural people working in urban India, but continuing to live in their village has bought items into the village.

• They have emerged as a new class of opinion.

Loose unbranded teaHome made sweets

Open vessel wood fire cookingCycle

Earthen vessel for cool waterSharbat, Nimbu pani

Packaged branded teaBranded biscuits

Pressure cooker cooking on LPGMotorcycle

Refrigerator for cold waterAerated drinks

Buying decision process

1) Need recognition2) Information search3) Evaluation of alternatives4) Purchase decision5) Post-purchase behaviour

Opinion leadership processOpinion leaders Areas of influence

Sarpanch/gram pradhan Village administration , resolving social and family conflicts, introducing new ideas of farming, purchase of technology products on farming or artisan work

College- educated youth/village working in urban centres

Influence in family and neighborhood, on purchase of durables like refrigerators, TVS, motorcycles

Diffusion of innovationType of consumer Percentage Rural profile

Innovator 2.5 Young progressive farmer, urban exposure, kissan credit card, additional income

Early adopter 13.5 Rich farmer, high disposable income, urban exposure, high social status, conscious evaluator, kissan credit card

Early majority 34 Mediocre farmer, member of cooperative society, ready for kisan credit card, willing to adopt technology products

Late majority 34 Member of cooperative society, hesitates to take agri-loan, adopts only time tested technology/product after approval from the opinion leader

Laggard 16 Marginal farmers using traditional forms of cultivation

Brand loyalty

• 80% of all packaged FMCG sold in rural markets are branded wither national or regional

• Brands like Ghari, parle-G, Lux, Fair and lovely, and Colgate were early entrants in rural markets and have gained acceptance over period of time.

• Availability is the prime driver.• Brand loyalty is in fact ‘brand stickiness’ in rural India

where villager stays with the brand not out of informed choice but because he does not know any better

• Ex: The detergent is able to clean the white dhotis/pyjamas at an affordable price which is what rural consumers expect. Issues such as life span of clothes and protection of hands from harsh chemicals in detergents are not important criteria for the rural consumer

• Ex: Mahindra village – where most tractors in the village are from one company. This is an example of brand stickiness

• Marketers have focused on creating awareness and making their brands available but have made little efforts to build relationship with their customers.

• Educate – develop interest – trigger desire – build confidence thru demonstration – and post engagement with consumers……. Leads to long term relationship's.