MODULE-02

Rural Consumer
Behaviour

Dr.K.V.Deepak, BIT MBA

 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.

Dr.K.V.Deepak, BIT MBA

• 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.
Dr.K.V.Deepak, BIT MBA
• 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 hack, 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.

Dr.K.V.Deepak, BIT MBA

• 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 emulators.

Dr.K.V.Deepak, BIT MBA

 Definition
• 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?”
Dr.K.V.Deepak, BIT MBA
 Model of Consumer Behavior
Product Marketing
Marketingand
and Economic
Other
OtherStimuli
Stimuli
Price Technological
Place Political
Promotion Cultural

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

Product Choice Purchase

Buyer’s
Buyer’s Response
Response Timing
Brand Choice
Purchase
Dealer Choice Amount
Dr.K.V.Deepak, BIT MBA
Consumer-Buying Behaviour Models

Dr.K.V.Deepak, BIT MBA

 Factors Affecting Consumer Behaviour
• There is a whole range of influences that affect 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 accepted.

• Therefore, the needs and wants can quite different for rural and urban
India.
• 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.
Dr.K.V.Deepak, BIT MBA
SIMPLE MODEL FOR CONSUMER BEHAVIOUR

re So
ltu c ial
Cu
Motives
Attitudes

Needs Consumer
Purchase
Decision Learning
Business

Family
Perception

Personality

Economic

Dr.K.V.Deepak, BIT MBA

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

Dr.K.V.Deepak, BIT MBA

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 culture.
• 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.

Dr.K.V.Deepak, BIT MBA

 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.

Dr.K.V.Deepak, BIT MBA

 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

Dr.K.V.Deepak, BIT MBA

 Traditions

• 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).
 
Dr.K.V.Deepak, BIT MBA
 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 life.
• 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.
Dr.K.V.Deepak, BIT MBA
 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.

Dr.K.V.Deepak, BIT MBA

• Family
• Role & Status
• Products & Status Symbol
• Sociability

Dr.K.V.Deepak, BIT MBA

Comparison of Factors Affecting
Consumer Behaviour

Dr.K.V.Deepak, BIT MBA

 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 distances.
• 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.

Dr.K.V.Deepak, BIT MBA

• 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 PCOs now dot the landscape, providing instant
information channels to urban India and reaching out to
connect with the ‘sons of the soil’ across the seven seas.

• 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.

Dr.K.V.Deepak, BIT MBA

 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 is emptied into a
steel trough placed over a weighbridge where it is weighed
and the fat content is tested (by mlko-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.

Dr.K.V.Deepak, BIT MBA

• 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 efficiency.

Dr.K.V.Deepak, BIT MBA

 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.

Dr.K.V.Deepak, BIT MBA

• 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.

Dr.K.V.Deepak, BIT MBA

Characteristics of Rural
Consumer

Dr.K.V.Deepak, BIT MBA

 Age & Stages of Lifecycle
Classification of different age groups of a target
market on the basis of their life cycle stages,
because consumer needs and
desires change with age.
The four basic 'Age and life cycle' categories
are child, young adult, adult, and older adult.

Dr.K.V.Deepak, BIT MBA

 Occupation & Income
• In rural sector a range of goods & services
beyond the very basic one’s are consumer,
influenced by the occupation & Income.
• Fishermen buy boats
• Farmers buy pump sets & tractors
• Salary earners who have a fixed salary buy
other consumables
• Farmers & fishermen's income varies
Dr.K.V.Deepak, BIT MBA
 Economic Situation
• The purchasing power of an individual plays
an important role in choice of product
• Economic Situation is directly related with
savings, creditworthiness, attitude to spend.
• In India rural ES is poor
• Inequality exists in income generation

Dr.K.V.Deepak, BIT MBA

 Lifestyle
• 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.

• Life style includes Activities, Interests, Opinions &

Demography(AIOD)

Dr.K.V.Deepak, BIT MBA

 Typical lifestyle dimensions
• Activities: Allocation of time by the consumer/family
(work, hobbies, social events, entertainment)

• 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

Dr.K.V.Deepak, BIT MBA

 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.

Dr.K.V.Deepak, BIT MBA

• 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.

Dr.K.V.Deepak, BIT MBA

Dr.K.V.Deepak, BIT MBA
 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.

Dr.K.V.Deepak, BIT MBA

• 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 lifestyle.

• 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.

Dr.K.V.Deepak, BIT MBA

• 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 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

Dr.K.V.Deepak, BIT MBA

 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 purpose.

• 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 urban.

• 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.

Dr.K.V.Deepak, BIT MBA

Dr.K.V.Deepak, BIT MBA
Dr.K.V.Deepak, BIT MBA
Dr.K.V.Deepak, BIT MBA
Dr.K.V.Deepak, BIT MBA
 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.

Dr.K.V.Deepak, BIT MBA

• Therefore there is reliance on a set of leaders,
for a set of needs, products and services.

• 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.
Dr.K.V.Deepak, BIT MBA
Dr.K.V.Deepak, BIT MBA
Dr.K.V.Deepak, BIT MBA
 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 segments.
Dr.K.V.Deepak, BIT MBA
Dr.K.V.Deepak, BIT MBA
• 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
needs.

• 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.

Dr.K.V.Deepak, BIT MBA

 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.

Dr.K.V.Deepak, BIT MBA

• 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 money.

Dr.K.V.Deepak, BIT MBA

• 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.

Dr.K.V.Deepak, BIT MBA