International Journal of Advance Study and Research Work (2581-5997)/ Volume 3/Issue12/December 2020

A Study on Changing Pattern of Rural Consumers’

Buying Behaviour
Priyadarsini Patnaik
Ph.D. (Management)
Birla School of Management
Birla Global University, Bhubaneswar -751029
Email Id: pattnaikp2009gmail.com

DOI: 10.5281/zenodo.4351284

Abstract

Rural markets offer vast opportunities to marketers due to the different profile of rural consumers, large and scattered rural
population, and higher purchasing capacity which impact their decision-making. Over the past decade, there is a visible
change witnessed in sales of branded daily needs in the rural segment. Despite farm distress and stagnant incomes,
consumption of consumer goods has grown at a slower pace in rural places than in urban areas. The entry of smartphones
and the massive reach of telecommunication and media have set a new standard in rural marketing which is quite
challenging for marketers to meet. Today, consumption pattern in rural India is outpacing which is a positive sign for
marketers, hence marketers not only need to understand the purchase process in rural markets but also they need to
encourage rural people by effective communication and pricing strategy to convert their purchasing power into buying
decision to improve their standard of living. Since Indian marketers as well as multinationals are approaching towards the
rural market, will the ‘Go rural’ slogan be the new motto of marketer’s?
The research paper is an attempt to analyze the buying pattern of rural consumers and their purchase decision. The findings
can be adopted by marketers to meet the demands of new liberalized rural business development.

Key Words: Rural Markets, Urban Markets, Rural Consumer, Consumer Buying Behaviour

Introduction
“India lives in its villages” – Mahatma Gandhi
India is an agricultural country where about six lakhs villages and seventy percent of our population living in rural areas. In the
early days, the rustic market was the only source for those rural consumers. That was the place where they could get the things
they need; otherwise, they would have had to go to a distant city which means wastage of time, power, and money. Now the
time has changed and so does the rural development. Higher purchasing capacity, market growth, development of infrastructure
are the main reasons which improved rural life and reduced the gap between rural and urban development. The main factors of
change in a rural area can be placed in many aspects such as - social, economic, political, natural and technological. . Due to
increased literacy rate, better sources of income, increased means of communication and transportation and higher rates of
mobility among countries, liberalization and globalization, and awareness among many other reasons the rural population has
moved into a state of gradual urbanization. Rural buyers like to follow the urban pattern of life, they are keen on branded goods.
Even, some rural customers seem to be worldwide!
Changing lifestyle, increased disposable income, and demand for products of rural people have created a potential for
companies. Not only Indian companies but also multinationals companies are tapping these potential markets to take advantage
of the opportunities in the rural markets. However, due to the heterogeneous feature of rural markets, companies face a
challenge in understanding the behavior of consumers and develop models, particularly for these regions. So, the marketing
strategies have to be well thought of when companies consider marketing their products in rural markets.
Rural consumer behavior - The term consumer behavior is defined as the process which starts from need identification and ends
at the actual buying of the product. It is a very important step for every organization because clear consumer behavior is the
basic design that is used for planning further marketing strategies. It is somewhat difficult to arrange the behavioral
characteristics of rural consumers into well-defined categories. This explains to us the mindset, preferences, assumptions,
alternatives available to rural consumers.
As far as the Economic status is concerned, the rural consumer can be classified into 3 categories.

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 International Journal of Advance Study and Research Work (2581-5997)/ Volume 3/Issue12/December 2020

Traditionalists

• Price is a key factor to purchase

Steady climbers

• Aspire for a comfortable life style,

strive to have branded product

Village elites
• Desire the best product

Diagram -1
With the market modernization and globalization, the consumers have become more involved and sensitive both about the usage
and the disposal of the product. There are different factors which are influencing the consumer buying decision but for the study
of the rural market some factors which give the maximum contribution are as follows (Chetan Bajaj & Nandini Bajaj 2009):
 Psychological: The term psychology studies the mental attributes of an individual. It also involves the reactive attitude
of the customer towards various external marketing strategies. The key sub-factors are personality and motivation
which play a major role in the decision-making process of the bottom line consumers.
 Behavioural: This factor involves various aspects like brand awareness and loyalty towards the preferred brands. It
involves various reasons which are contributing to the satisfaction of the customers. It studies the day to day activities
of the consumers and also their environment analysis.
 Economical: This is a type of factor which is affecting almost all the sectors equally. If any customer is buying a
product then he studies what are his desired features and attributes of the product. The product is of how much worth
to the consumers and what extra benefits, discounts and offers they are getting. This factor is very much essential in
this competitive environment because it acts as a differential feature for every organization.
 Situational: This factor is the most dynamic and difficult to study. It is the temporary factor as the sub-factors are some
of the situations which are either creating or building up the needs of the customers. It involves different factors like
packaging, promotions, availability, and affordability.
 Social: Rural sector has a caste and position-dominated social system where people from upper caste and higher socio-
economic background are aspirational and symbol of status. They impact the decision making of other sets of people.

Purpose of the study

Considering the saturation level of many products in the urban market and assuming growth of the rural consumer markets in
India which is expected to be much faster than its urban counterpart, companies are moving towards rural consumers. For rural
consumers, a product is a need-satisfying entity that must satisfy the psychological and functional benefits of the rural
consumer. Today the rural consumers of India have an aspiration to consume and changed their thoughts towards the
social status across the income ship. At the same time due to their lower disposal income levels as compared to their urban
counterpart, they extremely price sensitive. Therefore the buying behavior of rural consumers has become an important topic for
discussion in recent time, and this "rural perception" is being an important topic of market analysis now. Rural markets today are
critical for every marketer for any product as a customer in a rural area is much aware of many products which are there in the
market place; hence many companies are tapping into the rural markets and educating them on newer products and services. So,
it is essential to understand the expectations of rural consumers for marketers to formulate strategies to tap the rural markets.
Thus, the marketer, while designing a product for the rural markets should take care that the products are simple and easy to
understand by the rural consumer with product features and affordable price.

Review of literature
Previous research says the rural market is an emerging market and rural consumers have significant growth in purchasing power.
As per the changing environment, a rural consumer is too changing his consumption habits Kanimozhi, C .et.al.(2020) ..Kumar,
R. (2019) in his research found that, for the manufacturers, it is very important to study the behavior of rural consumer to
increase their sales and capture the most of the market share. As per the research done by Gowda, K. R.,& Gopalakrishna, K. S.
(2018), marketers should customize their marketing strategies to focus on rural sales. V.Kaleeswari (2017) studied rural
consumer buying behavior, and found an increase in disposable income, awareness of product and affordability has brought
changes in the rural consumption pattern and they are becoming more brand conscious as well as look at the price and avail
discounts. So, a marketer who can develop strategies as per the needs of the customers in rural markets can be more successful.
(R. Dharmaraj (2017) revealed that price and quality are the most important features that rural consumers look for while making
purchases while advertisement plays an important role for consumers to collect information about products. Mayuri Jonathan
Farmer (2016) examined the changing demand of rural consumers and found consumption pattern and behavior of rural
consumers differ with family size. K T Kalaiselvi and D. Muruganandam (2015) analyzed the purchase behavior of rural

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 International Journal of Advance Study and Research Work (2581-5997)/ Volume 3/Issue12/December 2020

customers and found Price, quality, features, are factors that influence a purchase decision. N.Ratna Kishore (2013) aimed to
study rural consumer behavior and found there is a substantial change in lifestyle, increased disposable income, better awareness
of products among rural consumers, so companies have to adopt certain marketing strategies that are tailor-made for the rural
regions.

Statement of the problem

Research says low per capita income, low levels of literacy, deprived and dispersed markets, lack of communication facilities,
the prevalence of spurious brands, and seasonal demand are the major concern of rural consumer buying behavior. The rural
market is growing much faster and rural consumers of India have an aspiration to consume and changed their thoughts towards
the social status across the income ship, but it has been observed from the past studies that rural consumers are very much price
sensitive and are not loyal to brands. So, it is difficult to analyze the buying behavior of rural consumers and their perception of
the product. As the buying pattern of rural consumers keeps on changing, they are looking forward to the products which are
combined with utility and feature, not just the low prices. Again, marketing communication is a major problem of rural
communications for low literacy, diverse cultural backgrounds, and different languages. Marketers cannot communicate in
Hindi and English languages with rural customers which is the major problem of rural communications. The biggest challenge
today is to develop a model that can influence rural consumers’ psyche on a reasonable budget.

Scope of the study

This study aims in assessing rural consumer behavior and their changing pattern towards their decision-making process.

Research Objectives
 To study the changing patterns of rural customers.
 To suggest the measures for effective marketing to companies in rural areas

Research methodology
The study is mainly descriptive. Both primary and secondary data were collected for this study. Secondary data are collected
from various journals, books, and magazines, and primary data is collected using the survey method. Based on a literature
review and exploratory study, 25 items were identified for research. The study covers rural consumers in the nearby
Bhubaneswar area and includes 20 popular categories including consumer goods.
Sample for research -A sample of 150 respondents was selected from different rural areas close to Bhubaneswar based on non-
probability convenience sampling. Respondents belonged to different demographic and cultural background. The respondents
were asked to give responses to 25 items on 5 points Likert scale (5- Most Important to 1 –Least Important). The questionnaire
comprising of 25 items has been administered either personally or through shop owners.
Statistical tools - Factor analysis has been used to identify major factors influencing rural purchase decision-making.
Developing a questionnaire – Direct survey was conducted with the help of a questionnaire.

Sample profile -The detailed profile of the sample is given in Tables 1, 2,3, and 4 where income group-wise distribution of
households as gender-wise, education-wise & profession-wise have been explained respectively.

Table 1 Table 2
Sample Distribution By Gender
Male 85 Sample Distribution By Income
Female 65 HIG 37
Total 150 MIG 68
LIG 45
Total 150

Table3 Table 4
Sample Distribution By Education
Illiterate 34 Sample Distribution By Profession
Primary 48 Agriculture 48
Secondary 30 Wage Earners 34
Graduate 38 Business 30
Total 150 Service / job 38
Total 150

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 International Journal of Advance Study and Research Work (2581-5997)/ Volume 3/Issue12/December 2020

During this survey, what we found is Only 12% get influenced by the village head and about 17% still listen to the shopkeeper.
Even the role of the television is diminishing, with only 71% of the rural consumers getting influenced by claimed and celebrity
endorsements, said the study, which included discussions with rural consumers. Similarly, 43 % are price sensitive and 17% are
quality concerned.

Sales Influence

Word Of
mouth
Retailers

Advertisem
ent

Diagram 2

During this survey, we found 43% of people are price-sensitive, 40 % decision making of rural customers are influenced by
others,17 % of rural customers are quality concerned.

Decision Making Factors by Rural

Customers

Price
Quality
Others

Diagram 3

Table 5: Principal Component Analysis Items Initial Extraction

Items Initial Distraction
Shelf display 1.000 .455
Status 1.000 .714
Friend recommendation 1.000 .518
Lifestyle 1.000 .669
Personal values 1.000 .614
Brand endorsement 1.000 .658
Influence from urban relatives 1.000 .602
Brand awareness 1.000 .455
Loyalty 1.000 .673
Relationship marketing 1.000 .525
Satisfaction of consumer 1.000 .507
Repetitive buying 1.000 .658
Quality 1.000 .456
Need-based 1.000 .559
Quantity 1.000 .574
Size 1.000 .634
More features 1.000 .747

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 International Journal of Advance Study and Research Work (2581-5997)/ Volume 3/Issue12/December 2020

Free offers 1.000 .610

Intended benefits 1.000 .598
After-sale services 1.000 .606
Low price 1.000 .566
Affordability 1.000 .501
Promotion 1.000 .584
Availability 1.000 .570
Bright color Packaging 1.000 ..625

Data analysis was done with the help of factor analysis using SPSS. Table 5 presents the results of the principal component
analysis. All the extracted communalities are acceptable and all variables are fit for factor analysis as they show large extraction
values as shown in above table 5.

Table 6: Total Variance Explained

Extraction Sums of Squared Rotation Sums of Squared

Initial Eigenvalues
Loadings Loadings
Component
% of Cumulative % of Cumulative % of Cumulative
Total Total Total
Variance % Variance % Variance %
Status 4.03 16.119 16.119 4.03 16.119 16.119 3.112 12.447 12.447
Friend
recommendation 2.626 10.504 26.623 2.626 10.504 26.623 2.382 9.528 21.975
Lifestyle 2.278 9.113 35.735 2.278 9.113 35.735 2.2 8.799 30.774
Personal values 1.726 6.904 42.639 1.726 6.904 42.639 1.97 7.88 38.654
Brand
endorsement 1.538 6.15 48.789 1.538 6.15 48.789 1.886 7.462 46.116
Influence from
urban relatives 1.385 5.539 54.329 1.385 5.539 54.329 1.589 6.335 52.471
Shelf display 1.095 4.38 58.709 1.095 4.38 58.709 1.56 6.238 58.709
Brand
awareness 0.997 3.99 62.699
Loyalty 0.899 3.598 66.296
Relationship
marketing 0.846 3.385 69.681
Satisfaction of
consumer 0.755 3.021 72.702
Repetitive
buying 0.738 2.952 75.654
Quality 0.677 2.706 78.36
Need based 0.654 2.616 80.976
Quantity 0.59 2.359 83.335
Size 0.577 2.308 85.644
More features 0.558 2.231 87.875
Free offers 0.502 2.009 89.884
Intended
benefits 0.446 1.784 91.669
After sale
services 0.421 1.685 93.354
Low price 0.4 1.602 94.955
Affordability 0.379 1.517 96.472
Promotion 0.34 1.36 97.832
Availability 0.291 1.164 98.996
Bright color
packaging 0.251 1.004 100

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 International Journal of Advance Study and Research Work (2581-5997)/ Volume 3/Issue12/December 2020

Total variance explained by Principal Component Analysis is shown in Table 6. The first seven components (factors) in the
initial solution have Eigenvalues over 1 and they account for 58% of the observed variance in the behavior of rural consumers.

Table 7: Extracted Factors

Factors Factor Items
Designation
F1 Personal Personal Values, Loyalty, Quality, Free
Offers
F2 Behavioral Relationship Marketing, Satisfaction of consumers, Repeat Buy

F3 Psychological Influence from urban counterpart, Shelf Display, Intended Benefits after-sales
service
F4 Economic Need-based, Quantity, Size
F5 Situational Affordability, Availability, Bright Colour Packaging
F6 Social LifeStyle, Status
F7 Cultural Promotion, Brand Endorsements

Result & discussion

Based on the findings, this study can be interpreted as
Factors Affecting Purchase - Quality, price, availability of the products, and quantity are the factors that the respondents
consider when they buy the products. In the survey, respondents (15%) reported that quality is important in buying; other
respondents (40%) said that price plays a crucial role, few respondents (20%) reported the product availability, and the
remaining 5respondents (25%) the quantity is important.
Convenient Place of Purchase -Place of purchase is an important aspect in the formulation of penetration strategy as rural
customers prefer to buy their requirements from the place which is convenient to them.
Source of Information - Rural customers get product information from wide sources such as the Internet, Shopkeepers,
Television, Newspapers, and Friends.
Buying Decision -The involvement in buying products and services are men, housewives, and sometimes their children. In a
survey, respondents (60%) reported that buying decision is taken by a male in the family, other respondents (25%) reported
housewives and remaining, few respondents (15%) reported children.

Observations
1. The shopkeepers (44%) have a crucial role in making customers aware of the product variants and their usages.
2. Smartphones (36%), media, regional newspapers (15%) are the information source for rural customers.
3. Marketers have to ensure that their products are available at all local shops (72%) in villages as rural customers buy locally.
4. Men at large are the main decision-makers in rural families as their percentage is 60% followed by housewives and children.
5. Price (43%) is one of the factors which attract rural customers and some literate customers are attracted by quality (17%).
6. Rural customers' livelihood is increasing predominantly as the income group is increasing
7. Educated Youth, age group 21 -30 the people who are creating a difference in buying FMCG products in the rural market.

Suggestions
This research suggests the following
1. Since rural buying is male-dominated, marketers need to conduct an awareness program for the housewives to make the
buying decision.
2. Marketers have to make available their products at all retailers especially at village shops as shopkeepers are the main source
of information for the rural customers and motivate them in terms of promo offer.
3. Marketers have to work upon cutting down their overheads to reduce prices without hampering quality as rural customers are
price sensitive and quality concern.
4. Marketers have to make communication very effective through their advertisements and other promotions to influence rural
literate people as they are the decision-makers of buying.

Findings
With the changing time and increasing income level in the rural areas, the disposable income is increasing. More disposable
income combined with more awareness has resulted in a need for better quality things in their life. This has led to an increase in
their standard of living. They are getting more brand awareness and are not only confined to traditional trusted brands. This
change is the direct result of their desire for new products. Another major change in their behavior is that they no longer feel a
desire to save maximum, they are willing to spend on more things than bare necessary items. (Marketing White book, 2015–

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 International Journal of Advance Study and Research Work (2581-5997)/ Volume 3/Issue12/December 2020

2016) Another important finding was that rural markets were not homogeneous, and the rural consumers in different markets
behaved differently. Consumers in rural markets can have different reasons for buying and consuming products.

Limitation
The geographical area and the product category (FMCG products) are limited in this study. Keeping in mind these limitations,
further study can be conducted on different products, and in different locations.

Conclusion
The attitude of rural communities is gradually changing in terms of their purchasing power and consumption pattern. Though
this community is less dynamic than the urban community, this should not make anyone understand that there is no movement
in them. No matter how slow the speed of change is. It has been observed that, due to saturation in urban markets, for various
products, demand from rural markets contributes to major profitability to marketers today. So systematic segmenting, targeting,
and positioning have to be adopted by marketers to develop a long-lasting relationship with rural consumers. Exposure to
information and penetration of media and telecommunication in a rural segment has developed the aspirational level of rural
consumers. Moreover, growth in living standards has changed the way India’s rural consumers buy. So the product attributes
and price need to be targeted to this segment and the companies should think something beyond maintaining a transactional
relationship with the rural consumers.

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