RURAL CONSUMER BEHAVIOR

Factors Influencing Consumer Behavior

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Why to study consumer behavior.?

It is relatively easy to measure -what rural consumers buy, -where they buy from, -how much they buy

Understanding why they buy is the most difficult in rural India and this has to be the focal point of any marketers efforts
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What influences consumer behavior.?

Influencing factors can be classified as 1. Cultural factors 2. Social factors 3. Personal factors 4. Psychological factors

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Cultural factors
Culture

Culture is the most fundamental determinant of the persons behavior. Rural India lives in a society bound by culture. The time tested true behavior exhibited by a collective group is therefore determined by culture.

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Cultural factors
Influence of social customs

Customs are socially acceptable norms that have been in practice over along period of time. Rural India still tends to follow the customs.

For instance: Touching ones feet.

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Cultural factors
Traditions

Traditions are long-standing beliefs that are believed to be true in nature and often practiced in a ritualistic manner, without knowing the origin, or questioning the need to do so. Traditions influence the human behave and could therefore lead to acceptance or rejection of product.
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Cultural factors

Subculture

Subcultures are groups of people within a culture who have shared value systems based on common life experiences and situations. For e.g. Caste: -plays a key role in the behavior of the community. 4/11/12

Cultural factors

Social class

-- Are defined on the basis of occupation and education in the urban area -- In rural India , it is difficult due to the multiple and changing occupations in different seasons For e.g.: in Orissa farmers collect sal 4/11/12

Cultural factors

Socio-economic classification (SEC) SEC is most widely preferred & accepted consumer classification in India. Created by MRSI (Market Research Society of India in the early 1980s SEC is based on : --the education of chief wage earner

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Socio-economic classification
Education PUCCA
Illiterate Below SSC SSC/HSC Some college not graduate UG/PG (general) UG/PG 4/11/12 (professional)

SEMIPUCCA
R4A

KUCHHA
R4B R4A

R4A R3A R2 R1 R1 R1

R3A R2 R2 R2

R3B R3B R3A R3A

Socio-economic classification
SEC Behavior, Aspirations and Lifestyle

R1

Landlord farmers, educated, exposed to urban environment ,children in schools/colleges in nearby towns ,aspiring to match urban lifestyle ,technology adopters , experiment with modern farming methods ,eager for additional sources of income, owns durables like tractor,2 wheeler, TV, music system, steel almirah, LPG , refrigerator, mixer grinder.

R2

Rich farmers with about 5 acres of land, not be educated but wants children get educated, with friends and relatives in urban, consults them for technology, low risk taker, owns durables like TV, tractor(self ,rental )

R3

Avg. land holding 2-5 acres, manages small savings, children sent to village school, opts for time tested technology, low risk taker, owns durables like TV, 4/11/12 tractor(self and rental)

SEC break-up in rural

source: Indian Readership Survey 2010

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Marketers can use the SEC to:

Target the right segments for a product category, especially while launching the product; Conduct market research activities with the most appropriate respondent segment for a given product category; and Design different marketing strategies for different consumer segments
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Social factors
A consumer is also influenced by newly emerging social factors in the environment he lives and works in. These supplement the traditional reference groups, the role played by family and friends and opinion leaders .
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Social factors: Reference Groups

Emergence of new institutions in rural India has brought forward new reference points and influencers in the form of professional workers such as

Anganwadi workers Auxiliary Nurse Midwife(MNF) Self-Help Groups

Members of Primary Agriculture Co4/11/12 operative Society

Social factors : opinion leaders

A person whose words and actions informally influence the action or attitude of others is an opinion leader. This leadership comes from social status , power , or success in public life

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Social factors : opinion leaders

An opinion leader in a village can be the sarpanch ,
q q q q q q

teacher, bank manager , village development officer , doctor , youth extension officer or

social worker 4/11/12

Social factors : Family

Individualized Joint Families

They take the decisions on purchase of FMCG and durables independently. For important decisions involving heavy investment, choice of marriage, partner for their children they seek the advice of the family.

Therefore the nuclear family continues to stay with the same values systems 4/11/12

Roles and status

In rural area , caste plays a very important role in defining social status, whereas in urban status is linked to the occupation and profession. Individuals like Sarpanchs, caste leaders, medical practitioners retired military personnel and priests enjoy a higher status irrespective of their economic status. 4/11/12

Products as Status Symbol

RURAL Social/Political Status Tractor Large Pucca house Land Telephone Pilgrimage URBAN Educational degree Car House locality Airconditioning Club Membership Holiday Abroad

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Role of a women

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Sociability

It is level of interaction between one another in the human context. Urban Scenario Rural Scenario
Place of meeting Choupal

Frequency of meeting

Almost daily

Meeting new people Very rare Keeping in touch

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Personal Interaction

Personal factors: age & stages of the lifecycle

The purchase of products and services and their forms and nature are influenced by age & lifecycle stages of the consumers. India is a nation of the young , with 65 per cent of its population below the age of 35 years. One fourth of Indias consumption base made by young adults
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This gives direction to the estimation

Personal factors: age & stages of the lifecycle

Consumption by Age and Life-Cycle Stages: Rural Vs Urban Products and Services Age Below12 Life-Cycle Stages Child Urban Rural Video games, chocolates Toys, ice-candy, local kulfi , ,beverages / health drinks kurkure Cell phones , motor cylces, internet Bicycle . television, Cinema , mobile

13-19 20-40

Teenage Young

Car, PC, branded clothing, Motorcycle, telephone, alcohol , malls LPG, tailored clothes, local liquor , jeep Luxury car, credit cards,house,health insurance,holiday trips Clubs, theatre, parks Tractor, Kissan Credit Card, postal savings, mela , playing cards Chaupal, hukka ,pilgrimage , social and political function.

41-60

Middle aged

Above 60

Old

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Personal factors: occupation and income

Goods and products beyond basic ones are bought by a consumers, influenced by the occupation and income

For e.g.: fishermen buy a boat & large net whereas a farmer opts first for a tractor and pump set.

Rural consumer has more than one source of income Consumer behavior is also guided by

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Personal factors: occupation and income Rural Occupation and Consumption Pattern
Occupation Rural HH(%) TV Ownership (%) 33 14 31 6 9 6 2 2-wheler Ownership Contribution to refrigerators( %) 31 20 40 2 5 2 1

Owner farmer Shopkeeper/trader Salary earner Agri-worker Unskilled non-agri worker Artisan Rest(leased farmers,livestock, poultry,fishery)

34 8 13 20 17 6 2

33 16 39 3 4 4 1

The purchases of durables are dominated by salary earners, businessman and cultivators ,whereas 4/11/12 consumption of FMCG is almost in uniform

Personal factors: economic situation

Purchasing power plays a significant role in the choice of products Peoples economic circumstances are dictated by their disposable income, savings and debts, credit worthiness and attitude towards spending and savings. Pattern of income of farmers dependent on
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-- the harvest & stability of income

Personal factors: economic situation

Agriculture being the main activity, the purchasing power is highly unpredictable, which may lead to high variations in the demand pattern of products Saving habits are more inclined towards fixed deposits and small savings in banks and post offices They are reluctant to go in for credit 4/11/12 purchases.

Personal factors: Lifestyles

Lifestyle is a persons pattern of living, which deals with everyday behaviorally oriented facets of consumers and their values, feelings, attitudes, interests and opinions.

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Lifestyle in rural Comparison of Rural &Urban lifestyles India

Dimensions Urban Rural Govt school, self employed, large family, ordinary spacious house Agriculture, shop/trade, physical sports, gossip, playing cards, cinema, religious congregation Desi food, milk, bright colored clothes, jewellery, visiting towns, mela Demographic Convent educated, salary s (Age, earner, small nuclear education, family, apartments income,) Activities Office jobs, internet (Allocation of surfing, health club, time) shopping, clubs and party.

Interests Chinese, continental (preferences foods, designer clothes, and prioritiesholiday trips 4/11/12 )

Product & status symbol

Status of a consumer plays an important role in the choice of product. Sometimes to boost the status in the society they purchase products.

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Status symbols in rural India

class Product owned

Affluent

Well-offs

Climbers

Source: NCAER Indian Market 4/11/12 Demographics report

Aspirants Destitute

Social & political status , 4-wheeler, gold ornaments, DTH, pilgrimage Bike, fridge, color t.v., land, readymade clothing Moped, audio system, t.v., mixer, pucca house, LPG Bicycle, fan, iron Wrist watch, pressure cooker, radio

Personality and Self Concept

Personality is sum total of the unique individual characteristics that determine how a person responds to his/her environment. It provides a framework within which consistent & long-lasting behavior can be developed.

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Personality and Self Concept

Self-concept or Self image is the way we perceive ourselves in a social framework. There is a natural tendency to buy those products and services that we think fit or match our personality. Marketers are becoming increasingly concerned about giving a distinct image or personality to that adheres 4/11/12closely as possible to that of the as

Personality and Self Concept

A few brand ambassadors are considered idealistic role models, and are perceived to have qualities considered most admirable by the rural audience in the relevant marketing territories.

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Rural brand ambassadors

Brand name Pulse polio, navratan oil Rural brand ambassadors Amitabh Bachchan Brand personality Rugged, conventional, self-confident Smart, simple Jovial, youthful, cool Smart, colorful, modern Beautiful ,

Coca-cola, Tata Aamir Khan sky Aircel, TVS Mahinder sigh Dhoni Idea (what an Abhishek idea sirji!) Bachchan Kurkure 4/11/12 Juhi chawla

Psychological factors

Motivation Perception Learning Beliefs & Attitudes

Comprise the psychological factors affecting consumer behavior

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Psychological factors: motivation

The rural consumer is quite content to satisfy his basic needs, relevant to his environment. He is less adventurous, risk averse and prefers to stay with tried and tested. A lot of persuasion from the influencers and opinion leaders is required to convince him to try the 4/11/12 new products.

Perception and Brand Belief

Perception acts more as an barrier to trial and acceptance for the product. Familiar and known sources , such as retailer acts as a strong spokesperson for low involvement FMCGs. Rural consumers have inherent trust in the products and services provided by the Government.
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Brand

belief

is

reinforced

by

The buyer decision process

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Need recognition

In this stage, consumers recognize a need or respond to marketing stimuli. Marketers can stimulate need recognition through a variety of proactive marketing tactics.

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Information search

Rural consumer primarily seeks and gets his information from personal sources (family, relatives outside the village, knowledgeable persons within the village) In addition, village retailers is also an important and credible source of information. They also depends on experiential 4/11/12 sources (touch and feel,

Information search

Haats, mandis, melas facilitate informal consumer interactions

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Evaluation of alternatives

rural buyers evaluate multiple attributes-price, quality etc. In case of consumer durables evaluation is done more carefully and logically For convenience goods-grocery items, etc.-evaluation process is very short For high involvement products such 4/11/12 as tractors, 2 wheelers, new category

The purchase decision

After arriving at the choice set in the evaluation stage, all the selected brands are acceptable to the consumer. In this situation final decision is guided by the perceived risk associated with product, as well as by the key influencers (opinion leaders, family, friends) For household products, female

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Post purchase behavior

It involves the buyers activities, reactions, evaluation after the purchase of the product. Buyers expectations and products performance are interrelated. This leads to satisfaction or dissatisfaction

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Urban

Buying Process

Rural High- involvement product(tractor)- productivity drives consumers recognition for need First-hand info from a fellow owner and nearby dealer at district town. (Exposure to electronic media is low) Lower education/ awareness more importance to fellow owner and illustration of dealer. Consults Opinion ;leader like progressive farmer, after getting first-hand info. Process repeated several times, back and forth Collective decision by buyer, adukt son, mechanic and progressive village farmer at dealer point. Drive tractor home. No say of women in the process. Higher satisfaction lower dissonance .Because of lowerrisk factor and expectation is low. Low risk taking ability because: life

High- involvement Need Recognition product(car)- comfort, status, drive, First-hand info from TV, Information Search internet, Newspaper Ads/consultants a fellow owner before visit. Educated/aware understands, Evaluation of analyses technical Alternatives specifications.(Features like MPFI)12-valves are signs of superiority. At most looks for test drive Normally buyer makes final Purchase Decision decision. Family influences colour and looks. Drives new car home, with family Higher satisfaction or Post-Purchase dissonance because of greater Behaviour risk factor. 4/11/12 Higher risk taker, bcos

The product adoption process

There are several products available in the market with similar features. Consumer select a particular product to fulfill their needs. The consumer carries out several observations, exercises and trials before selecting a new product. This process is known as the product adoption process.
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Stages in product adoption process

1.

Product awareness: consumer become aware of product, but lack information Product interest: interest generated so information can be gathered on a new product

2.

3.

Product evaluation: the information gathered is evaluated on various parameters(quality, features, price , 4/11/12 etc.)

Stages in product adoption process

4. product trial: the consumer tries the product to gain first-hand experience 5. product adoption : the customer adopts the product and decides to use it regularly.

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Helps to turn a prospective buyer into a regular user of the product It is therefore important for marketers to understand rural hierarchies and tap into local opinion leaders to help brand adoption & diffusion within a rural community

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Urban Profile

Diffusion of Technology
Type of consumer Rural Profile Innovator Young progressive farmer, urban exposure, kissan credit card, additional income Rich famer, high disposable income, urban exposure, high social status conscious evaluator, kissan credit card, Mediocre farmer, member of cooperative society, ready for kissan credit card, Member of co-operative society, hesitates to take agri loan, adopts only time tested technology/product after approval from opinion leader Marginal farmers using traditional forms of cultivation.

Young, public school educated, affluent , in business, fun loving, creditcard holder

Young educated affluent, Early employed in MNC, with Adopter exposure to media, credit-card holder Young educated, married, disposable income, self employed/ in service Early Majority

Middle aged, in service/self Late employed, opts for consumer Majority schemes

Middle aged, in seervice, 4/11/12 shops in neighborhood

Laggard