Understanding the Rural

Customer
1. Introduction
2. Profile of the Rural Consumer
3. The Rural Consumer
4. Factors affecting The Rural Consumer
5. The Rise of Consumerism
6. The Rural Consumer Behaviour
7. Factors Influencing The Rural Consumer
Behaviour
 700 million people living in 6,38,667 villages
 90% village population concentrated in
villages with population <2000
 Agriculture being the main business
 Rural consumer started purchasing branded
and value added products
 Rural consumer profile is made available by
IMRB and NCAER
 Profile of rural consumer –
◦ Literacy rate is low
◦ Maximum education till primary school or high
school level
◦ Print media & hoardings can not make significant
impact
◦ Product demo become integral to the rural market
promotional strategy
◦ Average money earned by rural consumer is much
lower than urban counterpart
 Traits of rural consumer –
◦ Low purchasing power
◦ Lower standard of living
◦ Low per capita income
◦ Lower economic and social position
 Reference groups in rural areas – Primary
health workers, doctors, teachers and
panchayat members
 Rural customers are scattered over large area
 Principal occupation in rural areas – farming
,crafts, trading , and other odd jobs like
plumbing, electric works etc.
 Rural people are fond of folk music and
folklore
 Culture, language, religion, caste and social
customs are some other important variables
for profiling rural consumers
 Classification of rural consumers based on
economic status -
◦ Affluent group (150 million people) – cash rich wheat
farmers in Punjab and chilli merchants in AP fall in this
category
◦ Middle class (300 million people) – It forms the base
for demand for manufactured goods in the country.
Sugarcane farmers in UP and Jute farmers in WB
◦ Poor (250 million people) –Purchasing power low and
size is large. Farmers growing Jowar, bajra etc. of
Bihar & Orissa
 2008 Hansa report says that rural population of
India is larger than total population of US & the
EU
 The spread of education and availability of TV ,
cable & satellite has a huge impact on
consumption and ownership of a whole range of
products & services
 Indian rural customer is marred largely by
illiteracy & poverty
 Rural consumer –

◦ Buy in small quantities

◦ Does not have concept of storing goods

◦ Does not block capital into goods

◦ Need credit or EMI systems for larger products

◦ Important to induce first time purchase and trails

◦ Hardly any brand stickiness in rural consumption

◦ Packaging of products play important role
1. Efforts of GOI to enhance standard of living of
the rural population –NAREGA
2. Rural population is largely self dependent and is
able to produce most of its consumption needs
locally
3. Social status of rural regions is likely to be low
4. Range of traditional values and superstitious
beliefs
5. Lack of infrastructure
 Age & stages of life cycle
◦ Product & services at different life cycle stages may be quite
different between urban & rural
◦ Eg. Age group 20-40 in rural market needs Motorcycle
,telephone, LPG or tailored /unbranded clothes
 Occupation & Income
◦ In rural sector range of goods and services beyond very basic
ones are influenced by occupation & income
◦ Fisherman buy boat & large nets whereas farmer opts for
tractor & pump set
◦ Consumer behaviour is also guided by working status of
earning member
 Economic Circumstances
◦ Purchasing power plays important role in choice of products
◦ Rural income are largely dependent on good monsoons
◦ Majority in rural sector are self employed increases risk of
stability of income
 Lifestyle
◦ Deals with everyday behaviourally oriented facets of
consumers, as well as their values, feeling, attitudes,
interests, and opinions
◦ Extension of urban positioning can become totally irrelevant
to rural consumers
 Personality & Self Concept
◦ Self –concept or self image is the way we perceive
ourselves in a social framework
◦ Rural youth prefers to buy pan masala, tea & namkeen
◦ Rural people carry food items from their homes or buy
open food
 Personality & Psychological factors
◦ Rural consumer is quite content to satisfy his basic needs
relevant to his environment
◦ He is less adventurous, averse to taking risks and prefers
to stay with tried and tested
 Perception & Brand Belief
◦ Perception being an individual concept ,acts more
as a barrier to trial and acceptance for products in
case of rural consumers
◦ Familiar and known sources such as a retailers, act
as a strong spokesperson for low involvement FMCG
◦ For high involvement products – an outlet away
from rural environment & retailers closely identified
with the brand act as strong reinforcement for the
brand
 Information Search & Pre –purchase Evaluation
◦ Rural consumer primarily seeks & gets his
information from opinion leaders & influencers,
rather than media
◦ In the case of high involvement products, the
information search needs to be supplemented
by an ‘out of village’ visit to a company outlet
with an opportunity for personal interaction
◦ In rural India, seeing is not sufficient to believe,
using is.
 Growing number of rural people working in urban
India, but continuing to live in their village has
brought items of conspicuous consumption into
the village
 Villagers who have migrated to urban India, but
visit their village during holidays with gift for
their family & friends
 Migrated villagers are emerged as new class of
opinion leaders and influencers
 Occupation & consumption pattern in Rural India

◦ NSS & NCAER provide data on occupation

◦ 30% rural population is employed in non farm sector

◦ 11% rural population is salary earners

◦ 50% rural population is self employed & income

stream differs from them from those working for

others

◦ 35% population constitute labour & are daily earners

 Changing face of rural customer –
◦ Due to Media exposure and increasing literacy levels,
people in rural India are now demanding better
lifestyle
◦ Rural Youth working in urban areas send back money
home to his family resulted in increase in disposable
incomes & surge in demands for consumer goods
◦ A radical change in the attitudes of the marketer
towards the vibrant and ever growing rural market is
called for
 Overcoming the roadblocks–
◦ Companies have shifted their focus on rural markets
and developing affordable products which are easily
available and accessible to the rural consumers
◦ Rural market needs –
 Low cost products
 Proper inventory planning to cater to large spread of
villages
 Availability of local transportation is a key determinant
of the warehousing network
 Rural consumers are highly influenced by several
demographic factors and personal factors
 This leads to prefer basic offering, durable
products and brand loyalty based on past
experience
 Rural consumer income is seasonal which is
reflected in their purchase behaviour
 Rural consumer has 2 or 3 brands to choose from
whereas urban one has many more choices
 Buying Behaviour Patterns –
◦ The level of involvement in buying products &
services depends on various factors such as
price, availability, variety, knowledge and
purpose
◦ Rural & Urban consumer behaviour is
different to same product
◦ Wrist watch buy may be low involvement
product for urban consumer whereas same is
high involvement product for rural consumers
 Buying Behaviour Patterns –
◦ Medical services buy may be low
involvement product for rural consumer
due to limited or no choice whereas same
is high involvement product for urban
consumers as they have options of general
physicians, speciality and super specialty
doctors and surgeons
 Simple Model of Rural consumer Behaviour –
1. Need recognition – eg. Nimbaram of village
Takaligaon wants to buy a colour TV (CTV)
2. Pre purchase search – He searches in nearby
city & visit showroom
3. Evaluation of alternatives –pick the best
alternative from available CTV options such as
Videocon, Onida, LG .
 Simple Model of Rural consumer Behaviour –
4. Purchase decision – Friends, urban relatives
influence the decision
5. Post purchase behaviour – This is the final
step. Buyer’s relationship with the seller does
not come to an end with the purchase.
 Stimuli
◦ Sensory inputs
◦ Information cues about characteristics of the product
◦ Include products, packages, brand names, commercials
etc

 Perception
◦ Process of selecting, organising and attaching meaning
to events happening in the environment
◦ Factors that affect perception are exposure and
interpretation
 Attitudes
◦ Inner expressions or feelings
◦ Composite of a consumer's belief, feelings and
behavioural intentions toward some object within the
context of marketing

 Changing effects
◦ Uses the approach of classical conditioning ’pair’ the
product with a liked stimulus
◦ Dharmendra riding Escorts bike with punchline ”Jandaar
sawari, shandaar sawari’
 Changing Belief
◦ Trying to modify people’s belief
◦ Eg. Ala fabric bleach of HUL attacks people’s belief by
communicating that the real colour of whiteness is ala
whiteness

 Changing behaviour
◦ Rural consumers are used to charcoal, neem sticks, salt
etc of oral hygiene
◦ Colgate used Operation Jagruti to persuade people to
convert to oral hygiene products
 Needs & motives
◦ Need is state of deprivation of some basic satisfaction
◦ Marketers have to adapt products to suit rural needs
◦ Eg. sachet shampoo
◦ Rural priority in outlays can also be non traditional
 Demographics
◦ Family size, age, gender, income, occupation, education,
caste are important demographic profiles
◦ The problem of rural demographics is that there is often no
good correlation between personal characteristics of
consumers and what they want to buy
 Culture
◦ Refers to values, ideas, attitudes, and meaningful
symbols, as well as artefacts
◦ It is the total of learned beliefs, values, and customs,
including material elements that serve to regulate the
consumption patterns of members of a particular society
◦ Eg. joint family system

 Beliefs & values

◦ Behavioural patterns of an individual depends on his or
her beliefs and values
 Social class
◦ Involves stratifying people into groups
◦ Caste system though no longer powerful but still has
tremendous influence on rural society

 Role of rural women

◦ Rural women role is changing
◦ They are educated and more aware about the health &
education needs of family
◦ Women involvement in family buying decision process is
also increasing
 Buying roles
◦ Buying roles are similar in urban and rural
◦ Men choose personal care products
◦ Women choose utensils & other things of use in the home
◦ Purchasing High involvement products is collective decision

 Influence group
◦ The group used by an individual as a standard of reference
against which he or she compares himself/herself.
Influence group involves reference groups, opinion
leadership, family & innovation
 Reference groups

◦ Primary Reference groups – members of

family, school teachers or mukhiya of

the village

◦ Secondary Reference groups – Choupals

where rural folks get together

 Opinion Leaders

◦ Individuals may be Opinion Leaders, opinion

seekers or opinion recipients

◦ Women & children are demand generators

◦ Old orders- successful farmers, elders

◦ New orders – Youngsters who go to nearby

town to study in a college or to work

 Innovations
 Innovations are used to spread new products,
ideas to other people.
 Companies use various ways to influence rural
consumers such as -
◦ Magic shows
◦ Nautanki performance
◦ Puppet show
◦ Wheel of fortune game at the Nauchandi Mela
 It is important for marketers to understand
consumer behaviour –
◦ How a consumer behaves ,Interprets & analyse
a product ,Communication , Pricing, Purchase
action
 A rural marketer has to do a critical analysis of
the behaviour of rural consumers
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