Rural Consumer Behaviour

1. RURAL CONSUMER
BEHAVIOR
“There is an invisible market waiting at the bottom of
the world economic pyramid”- C.K Prahalad

2. Content
• Introduction
• HUL Lifebuoy Case
• Buying decision process
• Factors influencing Decision
making process
• Buyer characteristics
• Buying behavior pattern
• Brand loyalty
• Innovation adoption

3. Introduction
• What comes from Rural India
• 70% of India’s population
• 56% of income
• 64% of expenditure
• 33% of savings
• 54% FMCG sales
• 59% durables sales
• 10-50% of 2 wheeler and 4 wheeler sales

4. In recent years, HLL’s
focus on differentiating
products based on a
health platform-
diarrhea
Hands are the
main reason for
any disease
The hand washing habit
differs in urban areas
and rural areas
Change
consumer
behavior and
beliefs
media
Group research
and observation
interview
Teamed with O &
M to design a
behavior change
education
campaign
focused on
uniting health
attribute

5. BUYING DECISION
PROCESS
RURAL MARKET
Need
Recogni-
tion
Informa-
tion
Search
Evalua-
tion of
Alternat-
ives
Purchase
Decision
Post
Purchase
Behavior

6. 1. Need Recognition – High involvement product,
productivity drives consumer’s recognition for need.
2. Information Search – From opinion leaders and
influencers. Fuelled by exhibitions and road shows.
• Sources
- Personal
- Commercial
- Public
- Experiential

7. 3. Evaluation of Alternatives – Depends upon the type of
product- convenience or shopping. More importance to price
and quality and operational advantages respectively.
• Evaluation Models
- Expectancy Value Model
o Identifies necessary attributes.
o Evaluates relative importance of each.
o Arrives at overall brand impression for further comparison.
- Lexicographic Model
o Attributes arranged in order of priority.
o Selection made if first attribute is satisfactory.
o If not, second attribute forms the basis for evaluation.

8. - Conjunctive Model
oConsumer selects product that satisfies the integral attributes.
- Disjunctive Model
oAbrand is selected that has satisfying levels of a chosen
attribute.

9. 4. Purchase Decision – collective decision guided by the
perceived risks associated with the product plus the key
influencers.
• Perceived Risk Factors
- Personal
- Product
- Information availability
- Financial
- Situational

10. 5. Post Purchase Behavior – higher satisfaction and
lower dissonance. Risk taking and expectation level is
low.
Customer satisfaction is the key to building a profitable
and sustainable relationship with customers.

11. Marketer Implications
• A prudent marketer should take initiatives that can assist the
consumer in his decision making process and thereby gain from
the consumer’s behaviour.
• The marketer should become connected with what excites the
consumers most and try to find out ways to direct their
behaviour

12. Environmental Factors Influencing the
Decision Making Process:
1. Sociocultural
2. Technological
3. Economic
4. Political Environment
S
T
E
P

13. Overview of Topic
• Socio Cultural Factors
a) Culture
b) Social Class
• Groups
a) Associated Groups
b) Reference Groups
c) Opinion Leaders
• Family
a) Family Orientation
b) Family Size
c) Family as a buying unit
• Sociability
a) low sociability villages
b) High Sociability villages

14. Socio Cultural Factors:
(a) Culture: (Behavior, Norms, Belief, Values and Customs)
1.Collective Process: Collective Social Sanction (Wisdom of
elders, advice of educated, suggestion of leader’s)
2.Values: They value simplicity, honesty, unity and hard work
(Escorts Villages, Nirma Villages)
3.Customs & Traditions: Local Myths, Belief in religion and
Worship, marriage systems, joint family systems
4.Social Norms: “Respect for elders", "Save for future", "Don’t
Lend or Borrow", "Be Simple and honest", "Service to humanity is
Service to god",
These Norms Guide rural customers Decision making

15. IMPLICATION FOR THE MARKETERS:
1. Conservative in their outlook
2. Take longer time to get influence
3. Traditional ceremonies and social norms can be regarded as
opportunities
4. Occasions for purchases must be utilized

16. Social Class (Rural Customers are
Heterogeneous Based on their incomes)
1.Lower income Group: (Leased Land Farmers and Labors):-
Buy's Essential commodities “Food, Clothing, Shelter"
2.Middle Income Group Members: (Shop Keepers and Small
Business man):- Sewing Machines, two-wheelers, Mixer-Grinder
and refrigerator or a piece of land (Income Yielding asset)
3.Upper Middle Income Group: (Govt Teachers, Doctors,
Engineers, Officer )Close Substitutes of Premium Products.
4. Higher Income Group: (Sarpanch, Landlord’s, Contractors)

17. IMPLICATIONS OF MARKETERS:
1. Make Them Spend On Consumables
2. Providing Value for money products
3. Improvement of lifestyle rather than spending
on assets like gold and jewelry
4. Stimulus creation with the help of Media.

18. Groups
Rural people live in small group/communities detached from
mainstream of urban life. (They have close knit relationships)
(a) Associated Groups:
1.Primary Groups: Informal groups regular and influential (family,
friends and neighbors)
2.Secondary group: Formal Groups (Offices, Political groups
and self-help groups) Ex. Yuvashakti Groups, D.W.A.C.R.A.
(Development of Women and Children in Rural Areas)
(b) Reference Groups : ( aspirational groups (sport teams,
Cultural associations)

19. Groups Contd.
Types of influence:
• Informational influence: Fellow members use the same products
• Normative influence: Serves the hedonic needs and is utilitarian
• Identification influence: Provides vale expressive influence
(c) Opinion Leaders:
• Sarpanch, Teacher, Village Development Officer, Doctor, Social Worker

20. IMPLICATIONS OF MARKETER’S:
1. Making use of group Dynamics
2. Spotting opinion leaders
3. Positive word of mouth
4. Colgate Tapped into school teachers to reach school kids
"Bright Smiles Bright futures Programmed"

21. Family
Family: A Collective Organization of peoples serving various
purposes
• Family Orientation: It is very strong in rural areas. Children
shape their values and perceptions by observing and socializing
with Parents.
• Family Size: It is a key factor in rural India joint family structures
are an attractive proposition for marketers
1. Family as a buying unit makes a buying decision.
2. Traditional S.R.O. (Sex Role Orientation)-Husband
predominated in all family affairs.
3. Nuclear and extended families are coming in picture.
4. Older and educated children are influencing their parents
brand choices by virtue of their exposure.

22. IMPLICATION FOR MARKETER
• Need to recognize various family sizes
• Structure of influence in decision making
• Target promotional communication to the right members

23. Sociability
1. Interaction is the most common and prominent
phenomenon
2. People like to share as much with as many as possible.
3. Interaction is frequent with same people richness of
interaction is limited
4. villages now have access to television internet and
newspapers which has impacted sociability of people.
5. various organization's, Political, NGO'S, Anganwadi
Workers, N.S.S. (national social service) has improved
community relations.

24. IMPLICATION FOR MARKETER’S
1. Various Programmes for low sociability villages & High Sociability
villages(corridor and accessible villages)
2. Companies like HUL and Colgate have rural educational
programmes.
3. Extended reach to the remote villages through local bodies.
4. Example: Shaktivani Programme (educates rural communities about
basic health practices)

25. TECHNOLOGICAL FACTORS
• Biotechnology Development’s: BT Crops have increased per
hectare and reduced the cost of seeds.
Monsanto India is providing G.M. seeds and various other
services to farmers.
• Digital and satellite technologies: Increased penetration of FM
Radio, TV’s, Video Cameras, Cameras are slowly becoming part
of rural world
• Information and communication technology Revolution:
Today more then 15 million villagers know about internet. People
Seek various information from internet like Govt. Schemes, Job
Opportunities, Career Counselling, Land Records Etc.

26. TECHNOLOGICAL CHANGES OVER TIME
Aspect Traditional Modern
Agriculture Bullock cart,
Low-Yeild
Seeds,
Conventional
Manure
Tractors,
Harvesters,
G.M. Seeds,
Pesticides,
Fertilizers,
Pump Sets,
Motors,
Generators
Lifestyle Neem Sticks,
Bicycle, Post
Cards
Tooth Paste,
Two-Wheelers,
Mobile Phones

27. ECONOMIC FACTORS
• The entire economic environment shows a much
improved prosperity due to new and improved techniques,
higher quality of inputs and increasing awareness and
education on agriculture.
• Banking is reaching out to the door steps of more and
more farmers. Finance is now more readily available and
so is credit.

28. Impact of
globalization
Influence of
competition
Influence of
recession
Impact of
inflation
Availability
of micro
credit.

29. Political Factors
The fortunes of rural people are greatly influenced by the
decisions of ruling party. Schemes launched by
government has led to the development of rural areas. The
government of india is empowering the panchayti raj and
other village institutions by making available developmental
funds. This has resulted in major purchases of equipment
and materials needed for infrastructure development.
30% compulsory representation of women in local bodies is
leading to the empowerment, encourage in rural india to
explore income generation and entrepreneurial activities.

30. Buyer characteristics
The characteristics of the buyer that affect the buying
process include
• Age and lifecycle stage
• Occupation
• Economic situation
• Lifestyle
• Personality and self concept
• Psychological factors

31. Age and lifecycle stage
Consumption by age and lifecycle stage
Age Lifecycle stage products
Up to 12 Child Baby foods, diapers, shampoos, toothpaste, toys,
slate ,books , pencil ,noodles, etc.
13 to19 Teenage Two- wheelers, cycle, gym and yoga services
20 to 40 Young Readymade garments ,cellphone ,motorbikes
,computers ,TV , services for communication skills
and for appearing in competitive examinations
40 to 60 Middle – aged Credit cards, bank accounts, etc
Above 60 Old Books, medicines, old-age homes, TV , etc

32. Cont’d
• Children - favored consumer
India has the largest kid segment in world
Children as a decision maker
• Youth – liberated consumer
• Key characteristics of the youth are:-
• They have urban exposure and brand
knowledge
• Users of internet
• Consumption oriented
• Ambitious

33. Occupation
Goods and services bought by a person are influenced by
the occupation of the individual.

34. Economic situation
Rural economy is basically savings oriented due to
• Uncertainty
• Long gap in realizing agriculture income
Implications for marketers
• Offer low priced pack sizes
• Pricing the goods moderately
• Offering installment purchase scheme
• Giving heavy discounts or incentive goods with purchase

35. Lifestyle
Lifestyle is a person’s pattern of living and it is determined
by :-
• Activities
• Interests
• Opinions
• Expressions like “quality of life” and “lifestyle” becoming
popular.

36. Personality and self concept
Two aspects to be considered to relate personality to the
products people purchase are –
• Situation
• Person

37. Psychological factors
The three psychological factors that help describe what
goes on in the mind of consumer:-
• Perception
• Cognition
• Motivation

38. Perception
• It is the process by which people select, organize and
interpret information to form meaningful pictures of the
object.
Implications for marketers
• Try to create positive impressions
• Consumer centric

39. Cognition
Process of information gathering and processing and results in
learning and creation of knowledge and attitudes.
Knowledge helps make decisions
• Learning is slow and step by step
• Non verbal communication
• Subject is simple and not abstract
• Learning is by experince
Beliefs and attitude
Beliefs - based on knowledge, opinion ,faith or emotion
Attitude -
• Functionality is more important than style and frills
• Multiple uses of a product
• Any product is ok

40. Motivation
• Maslow (theory of motivation)
Self actualization- krishi pandit award
Esteem needs- refrigerators,
coolers, jeeps
Social needs- entertainment
equipment's, kitchen appliances
Productivity needs- tractors, cycle,
insurance, two wheelers
Basic needs – houses, seeds,
agriculture implements, bullock carts

41. Differences
• Value for money
• Don’t trust outsiders easily
• More brand loyal- the literacy level is low they recognize
the brand more through colour, symbol and logo.
• Traditional values, customs and perceptions have a
stronger hold on the rural customers than urban
customers

42. Buying behavior pattern
Buying behavior can be
explained on 2 factors
1) Degree of involvement
2) Time spent

43. 1. Degree of involvement
DIFFERENCE AMONG
BRANDS
INVOLVEMENT LEVEL
HIGH LOW
SIGNIFICANT COMPLEX
VARIETY
SEEKING
FEW
DISSONANCE
REDUCING
HABITUAL

44. Complex buying behavior
• Seen in case of products such as computer, refrigerators
and automobiles.
• Help consumer learn about the product.
• Comparative analysis of features and benefits in print
media
• Train and motivate sales personnel.
• Generate word of mouth advertising
• Influence word of mouth.

45. Dissonance reducing behavior
• Products like carpet and furniture are expensive and also
they have few difference.
• Reflect their social status and lifestyle
• Appearance and performance is what matters
• Marketers should give them right amount of logical
information.
• Ads should be frequently released.

46. Habitual buying behavior
• Products like salt, wheat, cigarette and pan
masala where is involvement is very low and
low cost.
• Customer is not bothered about brand
• Do not postpone the purchase
How to market them?
• Rationale: raising the consciousness level in
individuals, relate to the benefit of the product.
E.g.- Medimix
• Emotional: associate with it emotions like love
fear, jealousy. E.g.:- Wills- made for each
other.

47. Variety seeking behavior
• When purchasing is less expensive and frequent.
Products have significant difference.
• A consumer prefers to buy a different items of same brand
or different brands to experience a different sound, smell,
touch and taste.
• Brand switching occurs because of dissatisfaction arising.
marketers
availability
attraction
variety

48. II. Amount of time spent
Planned Buying
Emergency Buying
Impulse Buying

49. Brand loyalty
• First impression- pioneer creates a lasting impression
• Lack of alternatives- the entry of new brands in the
rural market is a difficult proposition.
• Perceived risk- does not easily switch brand due to
fear associated with trying a new brand
• Collective decision- belonging to relative closed
societies, rural consumers are slower to adopt new
brands,.

50. Innovation Adoption
• Buyer show different degrees of readiness to adopt them.
Time Lag in
Adoption
Groups Probable consumer
No Innovator A farmer better educated and more
efficient
Very less Early adopter Efficiency conscious farmer with
adequate resources
Less Early majority A hesitant but adaptive farmer with
moderate resources
Large Late majority Less efficient farmer with moderate
resource
Very large Laggards Less efficient farmer with meagre
resources.