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  • 1. European Journal of Social Sciences – Volume 21, Number 1 (2011) A Comparative Study of Social and Psychological Considerations of Rural and Urban Consumers Jagwinder Singh Dept. of Management, Dr B R Ambedkar National Institute of Technology Jalandhar-144011, Punjab, India Tel: 91- 95011- 03708 E-mail: jagwinpandher@yahoo.co.in Abstract India is one of the prominent markets now-a-days. Besides urban and semi-urban areas, rural India has a huge potential. Marketers need to understand the rural India in contrast to urban India. The study has been carried out with a view to understand differences between rural and urban households in terms of social and psychological influences on their buying. Three durable goods from three different product categories; Television (entertainment product), Refrigerator (home appliance), and an Automobile (two-wheeler, motorcycle and car/jeep) have been selected for study. A sample of 411 (204 from urban and 207 from rural areas) households across the Punjab state (India) have been selected on the basis of non-probability convenience sampling. No significant differences could be observed between the habitant groups in terms of psychological influences on their buying. However there had been insignificant differences between these groups in terms of social considerations. Keywords: Rural, Urban, Social, Psychological.1. IntroductionOne-sixth of the world’s population lives in India. Therefore, India is an attractive market (Ling andDawn, 2004). The economy witnesses increased potential for consumption, increased competition,availability of products both in terms of quality and quantity, and increased level of awareness amongconsumers. A large urban middle class and upper class, which constitutes one-third of the population,is a huge market for branded goods. The market for branded goods is increasing at 8 per cent perannum and in certain consumer goods; it is increasing at even 12 per cent. The Indian economy is thethird largest in Asia. It is expected to grow at 7 per cent. The decrease in import tariffs has allowedlarge inflow of products from the other nations. Besides this, the Indian companies are entering intostrategic alliances with the foreign reputed brands (Kinra, 2006). It has been forecasted that elderlypopulation by 2010 will only be 9 per cent of the population as against 19 per cent of US and 30 percent of Japan. This implies that the Indian consumers are comparatively younger as compared to theconsumers of other nations including developed ones (Ling and Dawn, 2004). Rahman and Bhattacharyya (2003 a) illuminate the characteristics of an emerging economy,which is primarily referred to a third world country. The country enjoys potential of substantialeconomic growth. The persistence of irrevocable trade liberalization process invites direct foreigninvestment. To facilitate marketing transactions, institutional infrastructure also persists, thoughcomparatively less than that of an advanced nation. Also a small portion of total population enjoys thelarger proportion of a national income. For instance in India, 20 per cent of the population accounts for34.1 per cent consumption of country’s goods and services. Though it is presumed that the diffusion 47
  • 2. European Journal of Social Sciences – Volume 21, Number 1 (2011)curve of new product will be bell shaped but in India it is a skewed diffusion as the other groups startconsuming immediately after the innovators start consuming because of fear of being left out. Indiancorporations have now recognized the importance of rural markets. Sangameshwaran (2002) highlighted the common mistakes which most of the foreignmarketers committed in Indian markets. These marketers overestimated the number of premiumcustomers whom they perceived willing to pay for quality and foreign label. Another misperceptionwas treating India as a single homogenous market, which instead is the amalgamation of severalregional markets with distinct tastes and preferences. People who are at the bottom of the pyramid too have aspirations to consume goods andservices, which are enjoyed by the high-end consumers. It makes difference in the buying behaviour ofthe consumers. A product being treated as a gift item in an urban area may be perceived as a necessityitem in the rural area. It may happen that the urban consumer buys any item out of impulse and forrural consumer it may be a planned activity to buy the same. The urban consumer may not dependupon the dealer for obtaining useful information about the product, but a rural consumer may heavilydepend upon the dealer for getting assurance about the product. Urban consumer may look forexclusiveness of designs in the products and on the contrary rural consumer may be more concernedabout the core functionality of the product, which he intends to buy. Narasimhan (2005) presentedNSSO consumer data collected between January-June, 2004, which revealed that the monthly percapita consumption expenditure of average urban household was 88 per cent greater than that of ruralhousehold. The data further revealed that the difference had been persisted consistently over a periodof time. In order to get success in the rural markets, marketers need to conduct deep study of thebehaviour the rural consumer. The rural India may be culturally different from urban India. Differentcultures may produce different attitudes. Moreover the culturally derived attitudes affect consumptionpatterns. Different members of a family may have different attitudes and in the collective decision-making, the buying becomes really complex. According to Sinha (2005), rural India in which more than 74 per cent of the population of thecountry resides; generates one-third of country’s GDP. There are several reasons to believe that ruralmarkets in India are blossoming. The central government at the center has provided large sums ofmoney at the hands of rural folks. The government decided to hand out compensation in cash. Thegovernment announced National Rural Employment Guarantee Scheme. It resulted into three benefits:building rural infrastructure, plugging pilferage of funds and boosting disposable income at the handsof rural households. The government has steadily raised the minimum support price (MSP) of the keycrops like wheat and paddy. The farmers have enjoyed copious harvests during the past couple ofyears. The increase in MSP has protected the farmers from the possibility of price crashing during therecession period. In the recessionary phase, the increase in crop prices are way ahead the input costs aswater and power are highly subsidized by most of the state governments and the increase in fertilizercost consequent to rise in the price of crude oil has also been absorbed by the government byincreasing fertilizer subsidy. Another boost for liquidity among farmers has come from loan waiver ofRs. 65318 Crore. So, while the urban consumers are tottering under the cash crunch, their ruralcounterparts are enjoying the easy liquidity. However farmers have always been exposed to seasonalrisks. Therefore, they preserve money and spend with caution. (Kar and Iyer, 2009).2. Literature ReviewThe demographic measures are not accurate predictors of consumer behaviour. The demographicfactors have remained relevant in the past. These are now obsolete due to narrowing differences inincome, education and occupational status. Another argument against using demographics is that thesehave generally failed to explain and predict consumption behaviour. Though these have remaineduseful in determining the buying behaviour at the broad product-class level items such as durableappliances, automobiles, and housing, yet these have failed to explain the brand-choice behaviour. The 48
  • 3. European Journal of Social Sciences – Volume 21, Number 1 (2011)rationale behind using the demographics includes their ease of collection and management as comparedto other approaches. Therefore, it is premature to rule out demographics all together (Sheth, 1977). Oneof the newest and most exciting approach is to select the target market is the lifestyle andpsychographic segmentation (Louden and Della Bitta, 2002). Psychographics is the method of defininglifestyle in measurable terms (Burns and Harrison, 1979). Using psychographics along withdemographics may help the marketers to understand their consumers better (Louden and Della Bitta,2002). Keeping in view the importance of the decision and the complexity of the buying situation, thegreater degree of rationalization may come after the actual purchase, if it was not produced at the timeof purchase. Therefore, indirect questioning and more subtle psychological approach are required forobtaining information regarding intrinsic factors that influence the buying action (Downham andTreasure, 1956). While considering the social class, one should not confine to only the adult male wage earner.Instead the characteristics such as employability and education of other family members should also beconsidered (Louden and Della Bitta, 2002). Similarly the effects of mobility and reference groupsshould also not be ignored (Zaltman and Wallendorf, 1979). Social class is superior to income in thecases where spending patterns differ among different social classes, though they belong to sameincome group. The product usage is more closely related to the income than to the social class incertain durable goods (Myers et al, 1971). Generally social class is dominant to income for consumerbehaviour in terms of goods that do not involve high expenditures. On the other side, the income isgenerally dominant to social class where the expenditures are substantial. There are goods such asclothing, make-up, automobile and televisions which are highly visible and moreover are the symbolsof social class within class. The combination of social class and income remains dominant in suchsituations (Shaninger, 1981). Social class and status are different concepts though these have animportant relationship. Status not only depends only on the social class but also depends upon manyindividual factors such as authority, power, ownership of property, income, consumption patterns, lifestyle, occupation, education, service, and associations (Louden and Della Bitta, 2002). Consumer sociology has already contributed to the body of knowledge relating to consumerbehaviour. Though all the work has not been done by the sociologists, others however had employedsociological variables and analysis. The concepts of role, reference group, class, status and prestigehave proved to be especially useful in the analysis of consumer behaviour. In order to investigate thebuying patterns, the analysts have employed both social class and social status as variables. But it isprobably true to say that the social class represents the status characteristics rather than class positions.Graham (1956) found that the acceptance of products differ according to the social class but not in asimple manner. Various studies have revealed that the people of different social strata tend to differ interms of their psychological and behavioural patterns (Williams, 2002). Television was accepted to thelarge extent by lower class members than by upper class members. Graham used occupation as themain indicator of the social class, though it was criticized later. But his hypothesis was substantiatedthat different classes will accept a given innovation to varying degrees. Some studies suggest that thepeople of higher social class positions are likely to be more innovative in their buying patterns. In spiteof lack of any substantiation, the idea was widely accepted that new products are first accepted byhigher classes and later transmitted to lower classes. Other sociological concepts of reference groupand role behaviour are widely employed in consumer behaviour. Consumer behaviour occupies amidway position between social sciences (sociology, psychology, economics and anthropology) andthe applied field of marketing. Consumer behaviour is used to refer the study of individual consumersand group of consumers such as families and the area of study covered is concerned with factors thatcause the spending units to behave as they do. The orthodox economic theory emphasizes on themaximization of utility to be gained from total purchases but does not explain the observed behaviourof the consumers who pay sometimes more for an identical product (Foxall, 1974). People with higher status occupations have characteristic personalities, motives and values.Education is related to the social class because it is closely related to occupation. People are also 49
  • 4. European Journal of Social Sciences – Volume 21, Number 1 (2011)socialized differently during their childhood. The children in lower social classes are characterized byorderliness, obedience, respect, conformity, rigidity and physical toughness. On the other hand, thechildren of high classes are characterized by independence, initiative, curiosity, self-control and self-expression. There are two types of evaluation criteria: utilitarian evaluative criteria and hedonicevaluation criteria. The former is related to objective, economic, rational, concrete and functionalpurchase dimensions while the later is related to experiential, abstract, subjective, emotional, symbolic,sensory, non-rational and aesthetic purchase attributes and benefits. The use of social class influencewas reduced by the marketers as they started using income dimension because it was easy for them touse it. But there has been the substantial support to the social class membership as a determinant ofnature and extent of consumer information search (Williams, 2002). Hansen (1976) presents the overview of psychologists’ approaches to consumer choice and hasgenerated several hypotheses for studying the choice process in different conditions. Choice ischaracterized by conflict, uncertainty and cognitive activity. In order to make a choice, there must be atleast two alternatives that must arouse conflict and the cognition must be aimed at reducing thatconflict. Most decisions of the consumers are controlled by the internal as well as environmentalfactors. The different decision processes occur because of different types of conflict situations. Withthe acquisition of new beliefs, values or knowledge; the consumers may try new behaviours. The psychology of consumer choice may be studied from three different perspectives: theexternal factors influencing consumer choice, the internal directive factors, and the internal dynamicfactors. Among the external factors, the prominent are the effects of product-relevant communicationsreceived from other persons, their past experiences with the products and their experience at the point-of-purchase. The internal psychological makeup of the consumer can be categorized into twocategories: the directive and the dynamic aspects of the personality. The directive aspects comprise ofstructural aspects of one’s personality that channel the information gathered either through one’s ownexperiences or from other people. This involves the successive steps of exposure, perception,comprehension, and agreement etc. The dynamic aspect is comprised of the motivational forces thatactivate and sustain the information processing and account for its termination. People tend to exposethemselves to the information to which they likely to agree and they have the tendency to avoidinformation, which is inharmonious. However in the actual situations, the tendency to avoid dissonantinformation is overridden by other considerations. The studies reveal that people seek out theinformation that is adaptive and novel and there are chances of receiving dissonant information. Theseveral studies point out that during information-processing, the consumer is often unconscious of whathe or she doing. The consumer may know how the decision was arrived at but actually what the persondescribes was not the one that might have been applied. The consumers are therefore; less aware oftrue basis for their purchasing actions, even when they think that they know the reasons. The directiveaspects describe the ‘how’ aspect of the information processing whereas dynamic aspects deal with‘whys’ behind the processing. The motives can be divided into two categories: the cognitive motivesand affective motives. The former stresses the person’s need for adaptive orientation towards theenvironment and for achieving a sense of meaning and the later stresses more on satisfying the feelingstates and to attain emotional goals. These two motives have been further categorized into twocategories: one those individuals who strive to maintain equilibrium and second those individuals whoaspire for further growth. The third basis for division is whether the person’s behaviour is activelyinitiated or represents the passive response to the circumstances. The final dichotomy is based onwhether the motives are directed toward achieving a new internal state or a new external relationshipwith the environment (MCGuire, 1976). This evolution had not developed simultaneously in all societies and there were considerabledifferences in the evolution process of each country. The necessity has both individual as well as socialdimension. The products are withdrawn from the markets either because of their functional wear andtear, or due to qualitative wear and tear, or due to psychological obsolescence. The consumer of todayis eager to be led by others. All these things have resulted into adding dimensions to the consumer 50
  • 5. European Journal of Social Sciences – Volume 21, Number 1 (2011)products beyond their utility characters and commercial value. The social symbols that consumers seekin the products help them to integrate with the social group and to the feeling of belonging to thecommunity of their choice. It also helps them to differentiate from the social group that they avoid orreject (de Rada, 1998). Consumers look beyond the functional or performance attributes of theproducts. Besides functionality, they seek products for symbolic purposes in order to satisfy theirintrinsic psychological needs (Kim et al, 2002). The most broadly used dimensions for cultural variability are individualism versus collectivism.In individualistic cultures, people tend to prefer independent relationship with others and tosubordinate the group goals to their personal goals. On the contrary, in collectivism; people tend toprefer interdependent relationships to others and subordinate their personal goals to the group goals.Other studies introduce further distinction within the framework of individualism versus collectivismi.e. horizontal (valuing equality) and vertical (preferring hierarchy). In vertical – individualist (VI)societies, people tend to be concerned with improving their individual status and with distinguishingthemselves from others via competition (e.g. United States, Great Britain, France). In horizontal-individualist societies, people prefer to view themselves as equal to others in status, with focus onone’s uniqueness and self-reliance (e.g. Sweden, Norway, Australia). In vertical-collectivist societies,people focus on enhancing the status of their group in competition with other groups, even bysacrificing their personal goals (e.g. Japan, Korea, India). In horizontal-collectivist societies, the focusis on sociability and interdependence with others in an egalitarian context (e.g. Israel). In consumerresearch, both individualistic and collectivistic cultural conditions tend to be vertical. (Maheswaran andShavitt, 2000). Owning a television in China particularly in rural areas is still a sign of personalsuccess where watching TV is an activity of immediate and extended family. People keep TV in focusfrom the street. It provides opportunity to Chinese consumers to support their integration to the societyand thus promoting collectivism (Piron, 2006). Maheswaran and Shavitt (2000) have also found thatIndian consumers favourably view foreignness and this attitude is more pronounced among consumerswho admire the lifestyles of economically developed countries. The removal of trade barriers hasopened up many avenues for the international players. India has emerged as one of the most promisingmarkets of the world due to increasing affluence of the middle class and increasing number of workingwomen. Though in general the imported products are welcomed in India, but it varies from product toproduct category. It has been further observed that in a richer country, people will be more individualistic perhapsdue to the reason they do not need the assistance of others, as wealth makes people independent. Thereis lower power distance and uncertainty avoidance in the country, which is more individualistic(Gronhoj, 2007). Triandis et al (1990) concluded that material comfort and urbanism have a positiveimpact on the degree of individualism. The presence of larger families and greater importance ofagriculture are inversely related to individualism. There are effects of political system and religion aswell on the culture of the nation. The rural-urban disparities are prevalent in many parts of the worldand particularly in developing countries. There are rural-urban inequalities in output, income andconsumption in China. There has been inequality within rural and urban populations and across theprovinces. Rather rural inequality is weightier than urban inequality (Yao et al, 2005). Though ruralmarkets provide a big opportunity, but rural consumer varies from region to region. The needs andlifestyle of farmer from Punjab is different from a farmer living in the other rural part of the country(Halan, 2003).3. Methodology AdoptedThe study, which is descriptive in nature, has been carried out in Punjab state. Three durable goodsfrom three different product categories Television (entertainment product), Refrigerator (homeappliance), and an Automobile (two-wheeler, motorcycle and car/jeep) have been selected for study. Asample of 411 (204 from urban and 207 from rural areas) households across the state have been 51
  • 6. European Journal of Social Sciences – Volume 21, Number 1 (2011)selected on the basis of non-probability convenience sampling. The data about current ownership orlikelihood of purchases in the next 24 months on the select durable goods (television, refrigerator andany type of automobile) were obtained. In case of additional purchase/replacement or their likelihoodin near future about the select items, the respondents were asked to give their responses only to thelatest/likely buying. All respondents had been found possessing at least one item of each selectproduct. Ordinal scale (5 point) has been used for data analysis. The study has been based on both primary as well as secondary data. In-depth interviews havebeen conducted to look into insights of the consumers’ behaviour with the help of a pre-tested bilingualquestionnaire that was served to the respondents to obtain important information as regards to theprime objectives of the study. H1 Social influences differ among rural and urban consumers. H2 Psychological influences differ among rural and urban consumers. The hypotheses have been constructed on the basis of literature reviewed and the observationsof the researcher. The p-values have been calculated for all the variables / statements and on comparingwith central value (3 representing indifference to the statement) their significance has been checked at95% confidence level. Similarly p-values have also been calculated to observe the significance (95%confidence level) of differences between the responses of rural and urban consumers. Discriminant analysis has also been carried out to observe the differences between rural andurban consumers. Two-way ANOVA (Analysis of Variance) has been applied to test the independenteffects and the interaction effects of habitat (rural or urban) and income, and habitat and selectdurables.4. Limitations of the StudyThe sample size is too small to generalize the findings. Moreover only three products (only oneproduct from three categories) have been selected. However there are large number of consumerdurables such as washing machines, water purifiers, air conditioners, generator sets, and kitchenappliances etc. There is again a variety of items within a product category and they carry differentutilities at different values for different strata of consumers. The study needs to be further extended interms of other variables such as differences in the behaviours of different socio-economic groups ofrural and urban consumers and other demographic considerations. Also more predictors can be addedin further studies. Similarly, similarities and dissimilarities among different occupational categories ofrural and urban consumers can be considered in terms of their behaviours towards consumer durables. Also only those households have been considered for study that had either all the three items(television, refrigerators and any type of automobile) or they were likely to buy in near future. Thereare many households which may have not any one or more of these select items and they were also notlikely to buy in near future. Some households had possessed some of the select durables for a longtime. The consumers’ preferences, considerations, and family life-cycle since then might have changedand the behaviour particularly as regards to the influences within the household might be different ascompared to the time of acquisition of that durable. Therefore, the likely buying of next 24 months hasbeen made the part of the study to minimize the impact of this limitation.5. Data Analysis and ResultsThe results are summarized here as under:5.1. TelevisionIn terms of social influences on the buying of the television sets (X1 to X4), both rural and urbanconsumers had significantly considered the television set as a product of social image (X4) and therehad been no significant difference between the behaviours of these groups for this variable. The urban 52
  • 7. European Journal of Social Sciences – Volume 21, Number 1 (2011)consumers at the time of buying television set considered significantly the liking of others (X1),observed the buying of others (X2), and had tendency to achieve the sense of belongingness with thepeople of their choice through the purchase of this product (X3). The rural consumers on the otherhand moderately considered these aspects. Significant differences had been observed in the behavioursof these groups for the variables X1, X2 and X3 (Table T 1). Two-way ANOVA reveals no interactionbetween income and habitat of consumers for all the select variables. No differences could be observedamong different income groups for all the select variables. There had been significant differencesbetween rural and urban consumers for the variables X1, X2 and X3 (Table T 1.1). Using discriminantanalysis, the structure matrix reveals the variable X2 be the highest discriminating variable followed byX3 and X1. However according to both standardized canonical discriminant function coefficients andtwo-way ANOVA, the variable X3 had been found the most discriminating variable. The classificationresults have found 70.1% of the groups that have been correctly classified (Table T 1.2).Table T 1: Social Considerations (Mean Values). S. No. Variables U p (1 t) R p (1 t) U-R p (2 t) U R X1 Importance of liking of others while buying this item. 3.53 <0.0001 2.92 0.1735 0.62 <0.0001 X2 Observe what others are buying and using. 3.81 <0.0001 3.10 0.1123 0.72 <0.0001 X3 Achieving a sense of belongingness with people of your choice through this purchase. 3.71 <0.0001 3.02 0.3679 0.69 0.0001 X4 This product is an expression of social image. 3.28 0.0001 3.36 <0.0001 -0.08 0.4184U = Mean Urban, R = Mean Rural, p (1 t) = p value one tailed, and p (2 t) = p value two tailed.Table T 1.1: Social Considerations (F ratio). S. No. Variables F ratio R/U IG R/U*IG (df =1) (df =4) (df =4) X1 Importance of liking of others while buying this item. 12.574* 1.259 1.009 X2 Observe what others are buying and using. 21.738* 2.252 1.216 X3 Achieving a sense of belongingness with people of your choice through this purchase. 36.789* 0.778 1.979 X4 This product is an expression of social image. 0.809 1.548 1.872R/U = Rural-Urban, IG = Income Group, and R/U*IG= Two-way interaction between R/U and IG.Table T 1.2: Social Considerations (Discriminant Analysis). Standardized Canonical Unstandardized Canonical Discriminant Function Discriminant Function S. No. Variables Coefficients Coefficients Structure Matrix 1 X1 0.180 0.725 X2 0.746 2 X2 0.577 -0.097 X3 0.734 3 X3 0.619 -0.139 X1 0.574 4 X4 -0.133 0.416 X4 -0.085 Constant -0.345 In terms of psychological considerations (X5 to X10), the urban consumers strongly believedthat buying an expensive brand of television provides prestige (X5) whereas; the rural consumers had 53
  • 8. European Journal of Social Sciences – Volume 21, Number 1 (2011)considered the same to the moderate extent. Both rural and urban consumers did not believe thattelevision is such a product through which they can enjoy showing their possessions (X6). The ruralconsumers did not think that the buying of latest and novel model of television would reveal anysuccess of their life (X8). However the urban consumers had given moderate consideration to the same.Table T 2: Psychological Considerations (Mean Values). S. No. Variables U p (1 t) R p (1 t) U-R p (2 t) U R X5 Buying an expensive brand provides prestige. 3.66 <0.0001 3.02 0.3679 0.63 <0.0001 X6 It is enjoyable to show possession of this product. 2.74 0.0016 2.85 0.0238 -0.11 0.3687 X7 If someone ridicules your product, you would feel irritated. 3.20 0.0036 3.29 <0.0001 -0.08 0.4014 X8 Buying latest and novel model reveals the proxy of success. 2.93 0.2020 2.72 <0.0001 0.21 0.0636 X9 Using this product to define and expressing ‘you’. 2.77 0.0032 3.07 0.1592 -0.30 0.0059 X 10 Seeing anyone using this model/brand tells a lot about that person. 2.73 0.0005 3.15 0.0250 -0.42 0.0002U = Mean Urban, R = Mean Rural, p (1 t) = p value one tailed, and p (2 t) = p value two tailed.Table T 2.1: Psychological Considerations (F ratio). S. No. Variables F ratio R/U IG R/U*IG (df =1) (df =4) (df =4) X5 Buying an expensive brand provides prestige. 23.867* 0.419 1.584 X6 It is enjoyable to show possession of this product. 0.000 1.739 0.912 X7 If someone ridicules your product, you would feel irritated. 0.047 0.487 0.252 X8 Buying latest and novel model reveals the proxy of success. 6.041* 0.469 1.537 X9 Using this product to define and expressing ‘you’. 5.721* 1.104 0.351 X 10 Seeing anyone using this model/brand tells a lot that person. 3.306 1.226 1.130R/U = Rural-Urban, IG = Income Group, and R/U*IG= Two-way interaction between R/U and IG.Table T 2.2: Psychological Considerations (Discriminant Analysis). Standardized Canonical Unstandardized Canonical Discriminant Function Discriminant Function S. No. Variables Coefficients Coefficients Structure Matrix 1 X5 0.747 0.725 X5 0.752 2 X6 -0.114 -0.097 X 10 -0.454 3 X7 -0.141 -0.139 X9 -0.335 4 X8 0.468 0.416 X8 0.225 5 X9 -0.376 -0.345 X6 -0.109 6 X 10 -0.397 -0.347 X7 -0.102 Constant -0.843 But both these groups had shown intolerance if anyone would ridicule their television set (X7).Urban consumers did not consider that the kind of a television used by a user could express anythingabout the user (X9 and X10). However, the rural consumers considered the same from moderate tosignificant extent respectively. The significant differences had been observed between the behavioursof these groups for the variables X5 and X10 (Table T 2). Two-way ANOVA reveals no interaction 54
  • 9. European Journal of Social Sciences – Volume 21, Number 1 (2011)between income and habitat of consumers for all the select variables. No differences could be observedamong different income groups for all the select variables. There had been significant differencesbetween rural and urban consumers for the variables X5, X8 and X9 with the highest F value for X5(Table T 2.1). The discriminant analysis has found X5 as the most discriminating variable. Theclassification results have found 66.2% of the original groups and 64.5% of the cross-validated groupscorrectly classified (Table T 2.2).5.2. RefrigeratorTable R 1: Social Considerations (Mean Values) S. No. Variables U p (1 t) R p (1 t) U-R p (2 t) U R X1 Importance of liking of others while buying this item. 3.58 <0.0001 2.86 0.0381 0.72 <0.0001 X2 Observe what others are buying and using. 3.87 <0.0001 3.04 0.3012 0.83 <0.0001 X3 Achieving a sense of belongingness with people of your choice through this purchase. 3.75 <0.0001 2.99 0.4435 0.76 <0.0001 X4 This product is an expression of social image. 3.33 <0.0001 3.25 0.0002 0.08 0.4242U = Mean Urban, R = Mean Rural, p (1 t) = p value one tailed, and p (2 t) = p value two tailed.Table R 1.1: Social Considerations (F ratio). S. No. Variables F ratio R/U IG R/U*IG (df =1) (df =4) (df =4) X1 Importance of liking of others while buying this item. 19.739* 1.406 1.271 X2 Observe what others are buying and using. 31.662* 2.394* 1.422 X3 Achieving a sense of belongingness with people of your choice through this purchase. 44.523* 0.819 1.853 X4 This product is an expression of social image. 0.518 1.214 1.366R/U = Rural-Urban, IG = Income Group, and R/U*IG= Two-way interaction between R/U and IG.Table R 1.2: Social Considerations (Discriminant Analysis). Standardized Canonical Unstandardized Canonical Discriminant Function Discriminant Function S. No. Variables Coefficients Coefficients Structure Matrix 1 X1 0.205 0.182 X2 0.770 2 X2 0.601 0.596 X3 0.720 3 X3 0.571 0.573 X1 0.602 4 X4 0.027 0.026 X4 0.074 Constant -4.658 In terms of social influences on the buying of the refrigerators (X1 to X4), both rural and urbanconsumers had significantly considered the refrigerator as a product of social image (X4) and there hadbeen no significant difference between the behaviours of these groups for this variable. The urbanconsumers at the time of buying refrigerators considered significantly the liking of others (X1),observed the buying of others (X2), and had tendency to achieve the sense of belongingness with the 55
  • 10. European Journal of Social Sciences – Volume 21, Number 1 (2011)people of their choice through the purchase of this product (X3). The rural consumers on the otherhand were less likely to consider the liking of others. They observed the buying of others and hadtendency to achieve the sense of belongingness with the people of their choice moderately through thepurchase of this product. Significant differences had been observed in the behaviours of these groupsfor the variables X1, X2 and X3 (Table R 1). Two-way ANOVA reveals no interaction betweenincome and habitat of consumers for all the select variables. No significant differences could beobserved among different income groups for all other select variables except variable X2. There hadbeen significant differences between rural and urban consumers for the variables X1, X2, and X3 withthe highest F value for X3 (Table R 1.1). Using discriminant analysis, the structure matrix reveals thevariable X2 be the highest discriminating variable followed by X3 and X1. The classification resultshave found 71.5% of the groups that have been correctly classified (Table R 1.2).Table R 2: Psychological Considerations (Mean Values) S. No. Variables U p (1 t) R p (1 t) U-R p (2 t) U R X5 Buying an expensive brand provides prestige. 3.66 <0.0001 3.02 0.3718 0.63 <0.0001 X6 It is enjoyable to show possession of this product. 2.74 0.002 2.85 0.0238 -0.11 0.3687 X7 If someone ridicules your product, you would feel irritated. 3.20 0.0036 3.29 <0.0001 -0.08 0.4014 X8 Buying latest and novel model reveals the proxy of success. 2.93 0.2020 2.72 <0.0001 0.21 0.0636 X9 Using this product to define and expressing ‘you’. 2.89 0.1113 2.94 0.1565 -0.05 0.6747 X 10 Seeing anyone using this model/brand tells you a lot about that person. 2.90 0.1129 2.96 0.2740 -0.06 0.5964U = Mean Urban, R = Mean Rural, p (1 t) = p value one tailed, and p (2 t) = p value two tailed.Table R 2.1: Psychological Considerations (F ratio). S. No. Variables F ratio R/U IG R/U*IG (df =1) (df =4) (df =4) X5 Buying an expensive brand provides prestige. 23.867* 0.419 1.584 X6 It is enjoyable to show possession of this product. 0.000 1.739 0.912 X7 If someone ridicules your product, you would feel irritated. 0.047 0.487 0.252 X8 Buying latest and novel model reveals the proxy of success. 6.041* 0.469 1.537 X9 Using this product to define and expressing ‘you’. 0.211 1.567 0.949 X 10 Seeing anyone using this model/brand tells you a lot about that person. 0.804 1.305 1.297R/U = Rural-Urban, IG = Income Group, and R/U*IG= Two-way interaction between R/U and IG.Table R 2.2: Psychological Considerations (Discriminant Analysis). Standardized Canonical Unstandardized Canonical Discriminant Function Discriminant FunctionS. No. Variables Coefficients Coefficients Structure Matrix 1 X5 0.920 0.892 X5 0.891 2 X6 -0.202 -0.171 X8 0.267 3 X7 -0.289 -0.287 X6 -0.129 4 X8 0.410 0.365 X7 -0.121 5 X9 -0.175 -0.161 X 10 -0.077 6 X 10 0.011 0.010 X9 -0.060 Constant -2.161 56
  • 11. European Journal of Social Sciences – Volume 21, Number 1 (2011) In terms of psychological considerations (X5 to X10), the urban consumers strongly believethat buying an expensive brand of refrigerator provides prestige (X5) whereas; the rural consumers hadconsidered the same to the moderate extent. Both rural and urban consumers did not believe thatrefrigerator is such a product through which they can enjoy showing their possessions (X6). The ruralconsumers did not think that the buying of latest and novel model of refrigerator would reveal anysuccess of their life (X8). However the urban consumers had given moderate consideration to the same.However both these groups had shown intolerance if anyone would ridicule their refrigerator (X7).Both rural and urban consumers moderately considered that the kind of a refrigerator used by a usercould express anything about the user (X9 and X10). The significant differences had been observedbetween the behaviours of these groups for the variable X5 (Table R 2). Two-way ANOVA reveals no interaction between income and habitat of consumers for all theselect variables. No significant differences could be observed among different income groups for allthe select variables. There had been significant differences between rural and urban consumers for thevariables X5 and X8, with the highest F value for X5 (Table R 2.1). The discriminant analysis hasfound X5 as the most discriminating variable. The classification results have found that 66.7% of theoriginal groups and 66.4% of the cross-validated groups have been correctly classified (Table R 2.2).5.3. AutomobileTable A 1: Social Considerations (Mean Values). S. No. Variables U p (1 t) R p (1 t) U-R p (2 t) U R X1 Importance of liking of others while buying this item. 3.62 <0.0001 2.95 0.2633 0.68 <0.0001 X2 Observe what others are buying and using. 4.06 <0.0001 3.91 <0.0001 0.15 0.0880 X3 Achieving a sense of belongingness with people of your choice through this purchase. 4.00 <0.0001 3.42 <0.0001 0.58 <0.0001 X4 This product is an expression of social image. 3.33 <0.0001 3.25 0.0002 0.08 0.4242U = Mean Urban, R = Mean Rural, p (1 t) = p value one tailed, and p (2 t) = p value two tailed.Table A 1.1: Social Considerations (F ratio). S. No. Variables F ratio R/U IG R/U*IG (df =1) (df =4) (df =4) X1 Importance of liking of others while buying this item. 12.853* 2.702* 0.815 X2 Observe what others are buying and using. 7.332* 0.103 4.818* X3 Achieving a sense of belongingness with people of your choice through this purchase. 33.827* 1.448 3.001* X4 This product is an expression of social image. 0.518 1.214 1.366R/U = Rural-Urban, IG = Income Group, and R/U*IG= Two-way interaction between R/U and IG. In terms of social influences on the buying of the automobiles (X1 to X4), both rural and urbanconsumers had significantly considered the automobile as a product of social image (X4) and there hadbeen no significant difference between the behaviours of these groups for this variable. The urbanconsumers at the time of buying automobiles considered significantly the liking of others (X1),observed the buying of others (X2), and had the tendency to achieve the sense of belongingness withthe people of their choice through the purchase of this product (X3). The rural consumers on the otherhand moderately considered the liking of others. They observed the buying of others and had thetendency to achieve the sense of belongingness with the people of their choice significantly through the 57
  • 12. European Journal of Social Sciences – Volume 21, Number 1 (2011)purchase of this product. Urban consumers had the greater tendency to achieve the sense ofbelongingness through this purchase (Table A 1). Two-way ANOVA reveals interaction betweenincome and habitat of consumers for the variables X2 and X3. No significant difference could beobserved between different income groups for all other select variables except variable X1. There hadbeen significant differences between rural and urban consumers for the variables X1, X2 and X3 withthe highest F value of variable X3 followed by X1 (Table A 1.1).Table A 1.2: Social Considerations (Discriminant Analysis). Standardized Canonical Unstandardized Canonical Discriminant Function Discriminant Function S. No. Variables Coefficients Coefficients Structure Matrix 1 X1 0.634 0.549 X3 0.770 2 X2 0.104 0.117 X1 0.742 3 X3 0.653 0.684 X2 0.215 4 X4 0.035 0.034 X4 0.100 Constant -4.909 Using discriminant analysis, the structure matrix also reveals the variable X3 followed by X 1be the highest discriminating variables. The classification results have found 67.6% of the originalgroups and 66.9% of cross-validated groups correctly classified (Table A 1.2).Table A 2: Psychological Considerations (Mean Values).S. No. Variables U p (1 t) R p (1 t) U-R p (2 t) U R X5 Buying an expensive brand provides prestige. 3.94 <0.0001 3.54 <0.0001 0.40 <0.0001 X6 It is enjoyable to show possession of this product. 3.83 <0.0001 3.62 <0.0001 0.21 0.0250 X7 If someone ridicules your product, you would feel irritated. 3.82 <0.0001 3.48 <0.0001 0.35 0.0005 X8 Buying latest and novel model reveals the proxy of success. 3.90 <0.0001 3.57 <0.0001 0.33 0.0006 X9 Using this product to define and expressing ‘you’. 4.01 <0.0001 3.33 <0.0001 0.68 <0.0001 X 10 Seeing anyone using this model/brand tells you a lot about that person. 4.04 <0.0001 3.35 <0.0001 0.69 <0.0001U = Mean Urban, R = Mean Rural, p (1 t) = p value one tailed, and p (2 t) = p value two tailed.Table A 2.1: Psychological Considerations (F ratio).S. No. Variables F ratio R/U IG R/U*IG (df =1) (df =4) (df =4) X5 Buying an expensive brand provides prestige. 1.129 7.977* 2.063 X6 It is enjoyable to show possession of this product. 0.212 5.726* 3.339* X7 If someone ridicules your product, you would feel irritated. 0.653 10.077* 0.730 X8 Buying latest and novel model reveals the proxy of success. 1.280 7.250* 1.384 X9 Using this product to define and expressing ‘you’. 23.848* 5.865* 0.717 X 10 Seeing anyone using this model/brand tells you a lot about that person. 24.480* 5.581* 0.730R/U = Rural-Urban, IG = Income Group, and R/U*IG= Two-way interaction between R/U and IG. In terms of psychological considerations (X5 to X10), both rural and urban consumers stronglybelieved that buying an expensive brand of automobile provides prestige (X5). But the extent of 58
  • 13. European Journal of Social Sciences – Volume 21, Number 1 (2011)agreement had been found significantly greater among urban consumers as compared to their ruralcounterparts. Both rural and urban consumers strongly believed that automobile is such a productthrough which they can enjoy showing their possessions (X6). The urban consumers had given significantly greater consideration as compared to the ruralconsumers. Both rural and urban consumers had opined significantly that buying the latest and novelautomobile reveals the proxy of success (X8). This perception had also been observed significantlygreater among the urban consumers as compared to the rural consumers. Both these groups had shownintolerance if anyone would ridicule their automobile (X7). The urban consumers had been foundsignificantly greater intolerant than rural consumers. Both rural and urban consumers significantlyconsidered that the kind of an automobile used by a user could express anything about the user (X9 andX10). Urban consumers had been found giving significantly greater consideration than the ruralconsumers in this aspect. The significant differences had been observed between the behaviours ofthese groups for all the select variables (Table A 2).Table A 2.2: Psychological Considerations (Discriminant Analysis). Standardized Canonical Unstandardized Canonical Discriminant Function Discriminant Function S. No. Variables Coefficients Coefficients Structure Matrix 1 X5 0.403 0.398 X 10 0.892 2 X6 0.164 0.160 X9 0.890 3 X7 0.041 0.041 X5 0.484 4 X8 -0.003 -0.003 X8 0.422 5 X9 0.206 0.218 X7 0.418 6 X 10 0.632 0.658 X6 0.256 Constant -5.449Table 3: Two-Way Anova (Habitat and Product Categories) S. No. Variables F ratio R/U PC R/U* PC (df =1) (df =2) (df =2) X1 Importance of liking of others while buying 106.020* 0.425 0.225 X2 Observe what others are buying and using. 102.639* 39.963* 14.148* X3 Achieving a sense of belongingness with people of your choice 145.420* 15.853* 0.912 through this purchase. X4 This product is an expression of social image. 0.209 0.142 0.861 X5 Buying an expensive brand provides prestige. 90.855* 20.653* 1.689 X6 It is enjoyable to show possession of this product. 0.000 92.293* 2.685 X7 If someone ridicules your product, you would feel irritated. 1.063 22.532* 6.240* X8 Buying latest and novel model reveals the proxy of success. 16.302* 98.610* 0.431 X9 Using this product to define and expressing ‘you’. 3.591 71.104* 24.338* X 10 Seeing somebody else using this model/brand tells you a lot about that 1.267 67.654* 28.498* person. Two-way ANOVA reveals no interaction between income and habitat of consumers for allother variables except X6. There had been significant differences between different income groups forall the select variables, with the highest F value for variable X7. There had been significant differencesbetween rural and urban consumers for the variables X9 and X10 with the highest F value for variableX10 (Table A 2.1). The discriminant analysis has also found X10 as the most discriminating variable. Theclassification results have found that 66.8% of the original groups and 65.1% of the cross-validatedgroups have been correctly classified (Table A 2.2). 59
  • 14. European Journal of Social Sciences – Volume 21, Number 1 (2011) In terms of social considerations there had been no interaction between habitat and the productcategories for all other select variables except X2. There had been significant differences between ruraland urban consumers for all other select variables except X4 with the highest F value for X3 followedby X1. There had been significant differences between the behaviour of these consumers for the threedifferent select products only in terms of variables X2 and X3 with the highest F value for X2 followedby X3. In terms of psychological considerations, there had been an interaction between habitat and theproduct categories for the select variables X7, X9 and X10 with the highest F value for X10 followedby X9. There had been significant differences between rural and urban consumers only for the selectvariables X5 and X8 with the highest F value for X5. There had been significant differences betweenthe behaviour of these consumers for the three different select products in terms of all select variableswith the highest F value for X8 followed by X6.6. Discussion and ConclusionsThe discussion and conclusions of the study are as under:6.1. Social ConsiderationsBoth rural and urban consumers equally and significantly consider all these products as the products ofsocial image. This is in conformity to the findings of Shaninger (1981) that found the dominance ofsocial class clubbed with income in case of buying of socially visible goods. The urban consumers atthe time of buying these products consider significantly the liking of others whereas; the ruralconsumers consider the liking of others to the moderate extent in case of televisions and automobiles.However in case of refrigerators, the rural consumers tend to consider less likely the liking of others. Incase of automobiles, the consideration of liking of others also differs among different income groups.This is so because the rural consumers look more at the necessity of the item as well as their budget.The urban consumers observe the buying of other consumers and through the purchase of theseproducts; they tend to achieve the sense of belongingness with the people of their choice. This is inconformity to the findings of de Rada (1998) stating that consumers seek social symbols in theproducts that help them to integrate with the social group and to the feeling of belonging to thecommunity of their choice. It also helps them to differentiate from the social group that they avoid orreject. The rural consumers in case of televisions and refrigerators do the same to the moderate extent.However in case of automobiles, the rural consumers too significantly observe the buying of others andtend to achieve the sense of belongingness with the people of their choice through its purchase. In thelater case, the tendency of the urban consumer is significantly greater than the rural consumers.However these differences differ among different income levels of these habitants. In case ofrefrigerators, the act of observing the buying of others also differs among different income groupsindicating the dominance of both social class and income as revealed by Shaninger (1981) about thehighly visible products. Considering all the select products, there have been differences between ruraland urban consumers for all other select variables except considering the product as an expression ofsocial image. Product based differences do exist among consumers in terms of observing the others’buying and achieving a sense of belongingness with others through the purchase of products. Thedifferences in the former case differ between rural and urban consumers. Overall there areconsiderable differences between rural and urban consumers for the buying of televisions andrefrigerators.6.2. Psychological InfluencesThe urban consumers strongly believe that buying an expensive brand of television, refrigerator orautomobile provides prestige whereas; the rural consumers consider the same to the moderate extent 60
  • 15. European Journal of Social Sciences – Volume 21, Number 1 (2011)for television and refrigerator and to the large extent for an automobile. In case of an automobile, thedifferences also exist among different income groups. The high value of the product certainly adds tothe prestige. Both rural and urban consumers do not believe that television and refrigerator areostentatious possessions, which is inconsistent with the findings of Piron (2006) that found theperception of buying of television as a personal success particularly among rural households. This isdue to the fact that there can be different consumption patterns in different regions (Halan, 2003). Onthe contrary, in case of automobiles, both the groups believe opposite. Such a tendency is greateramong urban consumers as compared to their rural counterparts. The differences differ among differentincome levels of habitants for this variable. The rural consumers do not think that the buying of latestand novel models of television and refrigerator would reveal any success of their life. The urbanconsumers give moderate consideration to the same. But in case of automobiles, both the groups givesignificant consideration and urban consumers in comparison to the rural consumers give greaterconsideration. The differences also exist among different income groups for this variable in case ofautomobile. Both these groups have intolerance if anyone would ridicule their television, refrigeratoror automobile. In case of an automobile, the intolerance is comparatively greater among urbanconsumers than their rural counterparts. The differences also exist among different income levels forthis variable in case of automobile. In case of an automobile, both urban and rural consumers consider that the kind of anautomobile used by the user expresses something about the user. The differences also exist amongdifferent income groups for this variable. This perception is significantly greater among the urbanconsumers than the rural ones. In case of refrigerator, both rural and urban consumers moderatelyconsider that the kind of a refrigerator used by a user may express anything about the status of the user.However in case of television, urban consumer does not and the rural consumer moderately thinks so.This has conformance to the view point of Kim et al (2002) that all products carry some symbolicmeaning. In some cases the symbolic role may be salient and rich. Many products provide importantnonverbal cues that must be seen, heard, tasted, felt or smelled. Considering all the select products,there have been differences between rural and urban consumers only for the perception of prestige bybuying an expensive brand and revelations of success by buying the latest / novel models. Productbased differences do exist for all the select variables exhibiting conformance to the study ofMaheswaran and Shavitt (2000). However these differences in terms of irritation on ridiculing theproduct and the use of the product expressing something about the user; differ between rural and urbanconsumers. Overall there are insignificant differences between rural and urban consumers for all theselect products.7. Managerial ImplicationsThe study has the tremendous scope. Very few studies have been carried out to understand thebehaviour of rural consumer in India. Moreover the studies on consumer durables are further less.Negligible attempts have been made particularly in India to differentiate the rural consumer from theurban one. The model can be applied to understand the differences between the behaviours of rural andurban consumers of the other states of the country as well as for different categories of products. It willhelp the marketers to understand the consumers’ dynamics better so as to formulate and execute thedistinct and complete marketing offerings while approaching their target territories. The study can befurther extended to other sub groups that can be classified on the basis of income, occupation, andeducational levels, etc. The marketers in their advertising messages must associate their products withthe social class of their target segment so that consumers find the sense of belongingness with aparticular social class through the purchase of these products. They may also exhibit the liking of brandby a particular social class. Associating products with social class may help the marketers to make abreakthrough in the rural mindset as the income of rural consumer increases further. 61
  • 16. European Journal of Social Sciences – Volume 21, Number 1 (2011) The marketing offer of an automobile should be entirely different from that of other twoproducts. In case of products like television and refrigerator, the urban consumer relates price of thebrand to his status. The latest technology and novelty in the models does not create any excitementamong the urban consumers. So the marketers must display rareness and exclusiveness of brand whiletargeting urban consumers. The automobile is a product that is demonstrated by both rural and urbanconsumers as a proxy of their success. They also tend to express themselves or make perceptions aboutothers through this product. Therefore, marketers must make sure that all such psychologicalaspirations are an integral part of their marketing offering. Though the same should be more prominentin the marketing offering for urban consumers, yet the rural consumer should be given equal offering.This is so because that these aspirations would further increase among rural consumers with increase intheir incomes in future.References[1] Burns, A.C. and Harrison, M.C. (1979), A Test of Reliability of Psychographics, Journal of Marketing Research, Vol. 16 (1), pp 32-38.[2] de Rada, V. D. (1998), A single consumer or different types of consumer: an analysis of social types according to their consumer habits, British Food Journal, Vol. 100 (7), pp 326-336.[3] Downham, J. S. and Treasure, J. A. P. (1956), Market Research and Consumer Durables, The Incorporated Statistician, Vol. 7 (3), pp 108-117.[4] Foxall, G. R. (1974), Sociology and the Study of Consumer Behaviour, American Journal of Economics and Sociology, Vol. 33 (2), pp 127-135. Graham, S. (1956), Class and conservatism in the adoption of innovations, Human Relations, Vol. 9 (1), pp 91-100.[5] Gronhoj, A. (2007), The consumer competence of young adults: a study of newly formed households, Qualitative Market Research: An International Journal, Vol. 10 (3), pp 243-264.[6] Halan, D. (2003), Rural Marketing is a Different Ballgame, Indian Management, Vol. 42 (11), pp 60-64.[7] Hansen, F. (1976), Psychological Theories of Consumer Choice, The Journal of Consumer Research, Vol. 3 (3), pp 117-142.[8] Kar, S. and Iyer B. (2009), Bharat Rescues India Inc, Indian Management, Vol.48 (4), pp 12- 21.[9] Kim, J-O., Forsythe, S., Gu, Q. and Moon, S. J. (2002), Cross-cultural consumer values, needs and purchase behavior, Journal of Consumer Marketing, Vol. 19 (6), pp 481-502.[10] Kinra, N. (2006), The effect of country-of-origin on foreign brand names in the Indian market, Marketing Intelligence and Planning, Vol. 24 (1), pp 15-30.[11] Ling, S-S. and Dawn, T. P. (2004), Adopters of new food products in India, Marketing Intelligence and Planning, Vol. 22 (4), pp 371-391.[12] Louden, L. L. and Della Bitta, A. J. (2002), Consumer Behavior, Tata McGraw-Hill, 4th., pp 206-216.[13] Maheswaran, D. and Shavitt, S. (2000), Issues and New Directions in Global Consumer Psychology, Journal of Consumer Psychology, Vol. 9 (2), pp 59-66.[14] MCGuire, W. J. (1976), Some Internal Psychological Factors Influencing Consumer Choice, The Journal of Consumer Research, Vol. 2 (4), pp 302-319.[15] Myers, H.J., Stanton, R. R. and Haug, A.F. (1971), Correlates of Buying Behavior: Social Class vs. Income, Journal of Marketing, Vol. 35, (October), pp 08-15.[16] Narasimhan, C. R. L. (2005), Persistent rural-urban divide, http://www.hindu.com/biz/2005/12/ 19/stories/2005121900151500.htm [Accessed on May 13, 2007].[17] Piron, F. (2006), China’s changing culture: rural and urban consumers’ favourite things, Journal of Consumer Marketing, Vol. 23 (6), pp 327-334. 62
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