Presentation talks about the consumer of rural India, facts and figure of rural India, their buying behavior, and also factors affecting decision making process and many more.

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.
oEvaluates relative importance of each.
oArrives at overall brand impression for further comparison.
-Lexicographic Model
oAttributes arranged in order of priority.
oSelection made if first attribute is satisfactory.
oIf not, second attribute forms the basis for evaluation.

8. -Conjunctive Model
oConsumer selects product that satisfies the integral attributes.
-Disjunctive Model
oA brand 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.