The document discusses factors that influence consumer behavior in rural markets. It outlines cultural, social, personal and psychological factors. Key points include that culture and social norms strongly impact rural consumers. Family and social groups are very influential. Rural consumers tend to be less adventurous and rely more on personal sources for information than commercial sources. Market segmentation models like SEC are used to classify and target different rural consumer groups. Opinion leaders play an important role in rural areas for product adoption.

1. RURAL MARKETING

2. PGDM (IIM Raipur)
Bakhresa FMCG (South Africa)
Relationship Manager (HDFC Bank)
MD- Shyam Hospital
Faculty(MBA)- GLA University, Mathura
Swarit Yadav

3.  The consumer buying behavior model
 What influences consumer behavior?
 Cultural Factors
 Culture
 Most fundamental determinant
 Person grows up with values, perception and preferences
 Changes in culture should be analyzed
 Change towards education and joint family system

4.  Social customs
 Socially accepted norms in practice
 Tends to follow age old customs
 Touching other body with feet
 Traditions
 Long standing beliefs that are accepted true
 Effects the way humans behave
 ‘Atithi devo bhava’- Guests equivalent to gods
 Subculture
 Caste
 Homes/fields and drinking water will be different
 Harijan basti/dom para

5.  Social class
 On the basis of education and occupation(Urban)
 Difficult in calculating annual income in rural areas
 Rural do not file income tax
 Apart from agriculture, people take up different jobs
elsewhere

6.  SEC
 Created by (market research society of India) MRSI
 Depends on education of chief wage earner
 Depends on the type of house he lives
 Scaled as R1, R2, R3 and R4
 R1 and R1 is 19% of rural population(Major Consuming class)
 R2 and R3 is 81% of rural population
 Urban classification is education and occupation(Sec A,B,C)
 Income and occupation is not included
 R1 shops from nearby town
 R2 and R3 prefers shopping from weekly haats/bargaining power
 Use this classification for
 Target right segment for product category/launching the product
 Use in market research for a product category
 Different marketing strategies for different consumer segments
 Due to pucca makaan emergence, importance of house in segmentation is
reducing
 MREC(Media research users council) came up with new system.

7. SEC Grid in Rural

8. SEC breakup in rural

9. New MRUC SEC system
 Check document
 Divided on the basis of education and the assets
 12 SEC groups
 A1/A2/A3
 B1/B2
 C1/C2
 D1/D2
 E1/E2/E3
 Applicable on both urban and rural

10.  Social Factors
 Close net affinity is present
 Formal and informal groups are easy to make
 Reference groups
 Informational
 Trial of products used by other in the village
 Normative
 The need to belong
 New form of influencer as professionals
 Anganwadi workers
 Nurses and ASHA members
 SHGs
 Agri-cooperative society
 Funds from NABARD

11.  Opinion leaders
 Whose words formally or informally influences the action and
attitude of the consumer
 Usually informal
 Comes from social status/power/success in public life
 Gram pradhan/sarpanch is still a greatest influencer
 After independence teacher became influencer
 Now with increasing education, teacher as a influencer is
limited
 Rural educated youth is now the opinion leader
 Influencer for TV/refrigerator/motorcycle etc.
 Male family head is still a decision maker with high involvement
products
 At age 20-22 the rural youth is additional bread earner
 His/her opinion now matters
 Youth is driving the change in rural behavior and practices

12.  Sociability
 Spend more time with family and friends
 Village choupal and community meetings
 Women meet fetching water, visiting temples or washing
clothes at the pond
 Neighbors are the extension of the family/some times active
participant in family decisions
 Each product is discussed/deliberated/evaluated with
neighbor to increase acceptability
 Example of declining soft drink consumption in rural youths

13.  Family
 Joint family is disintegrating
 Reasons are education and profession
 They live in same compound but with separate kitchens
 Individualized joint family
 National census records each chulha separately
 Take separate decisions for FMCG and durables
 Lives under the parent family with same values system
 Choice sets for brands will be different in a family
 Comes together on social events and festivals

14.  Roles and status
 Caste defines social status
 Sarpanch/caste leaders/medical practitioner/retired
military personnel/priest enjoys high status
 These constitute upper level society in village regardless of
economic status
 Their purchase decision do influence
 A progressive farmer is respected for being knowlegable

15.  The role of rural women
 Used to remain in pardah and ghungat
 Always accompanied by male members
 Mobility was restricted
 Didn’t play significant role in purchase decisions
 Status is changing now
 Now educated and aware about education and health of
family
 Education/health services/social services/functions and
festivals
 Women are empowered today
 Involvement in decision making is increasing

16.  Personal factors
 Age and stages of lifecycle
 Occupation and income
 Economic situation
 Lifestyle
 Products and status symbol
 Personality and self concept
 Motivation
 Perception
 Learning
 Beliefs and attitudes

17. Age and stages of the lifecycle

18. Age and stages of the lifecycle

19.  Personal factors
 Age and stages of lifecycle
 Occupation and income
 Different occupations have different product needs
 Farmers/potters/teacher/retailers
 Rural has more than one income source
 Rural behavior should not be on the basis of income alone
 Head of the household occupation is important
 Economic situation
 Depends on disposable income/savings and debts/credit
worthiness/attitude towards spending and savings
 Farmers dependent on monsoons
 Reluctant to go for credit due to the risk of status dilution and
reputation

20.  Lifestyle
 Activities
 Interests
 Opinions
 Demographics
 Changed lifestyle due to change in literacy level and
exposure to TV
 Stylish bikes and trendy mobile phones came in rural

21. Lifestyle in Rural India

22.  Products and status symbol
 For tv rural consumer prefers ease of operation rather than
fancy features
 Jhon Deere Example

23. Status Symbols in Rural India

24. Maslow’s Model of motivation

25.  Personality and self concept
 Personality is unique individual characteristics that determine
or reflect how a person responds to the environment
 Self Image is the way we perceive our self in social framework
 Products that fit our image and personality
 2 aspects to consider
 Situation
 Person
 Rural youth purchases pan masala, namkeen and tea with
friends
 While travelling | Packs food from home
 Rural marketer wants distinct personality and image for
products
 Using different brand ambassador for targeting segments

26. Rural Brand Ambassadors

27.  Psychological Factors
 Motivation
 Less adventurous
 Averse to risk taking
 Prefers tried and tested
 Lot of persuasion is required by influencer to try new
 Opinion leaders play important role
 Rural consumers stay in the lower 2 in Maslow's pyramid

28. Maslow’s Pyramid

29.  Perception
 Retailer play important role in FMCG selection
 Connect with small town rural audience with new upcoming
player from rural towns | Example airtel
 Learnings
 Beliefs and attitudes

30. The buyer Decision Process

31.  The buyer decision process
 Need recognition
 Information search
 Personal sources
 Depends less on Commercial sources
 Depends on experiential sources | Touch and feel |
Demonstration
 Marketer should reduce search time | Introduce product
trials
 BTL activities are effective

32.  The evaluation of alternatives
 High involvement product- takes time
 Low involvement product- impulse buying
 The purchase decision
 Perceived risk and influencer is important
 Need to address perceived risk by showcasing previous
customer experiences
 Post-purchase behavior
 Positive v/s negative word of mouth
 Dissatisfied customer will never report to the company
about it

33.  The product adoption process
 Product awareness
 Product interests
 Product evaluation
 Product trial
 Product adoption
 Winning over key opinion leaders is critical for rural
penetration
 Bright smile bright future of Colgate targeting teachers
 Higher brand loyality is obtained in rural
 But slower pace for adoption

34. Diffusion of Innovation