CHAPTER 4 & 5

• Consumer Behaviour

• Rural market Research

CONSUMER BEHAVIOUR

Introduction

• Factors affecting consumer behaviour

• Consumer buying process

• Opinion leadership process

• Diffusion of innovation

• Brand loyalty

Factors affecting CB

• Culture

• Subculture

• Social factors

• Technological factors

• Economic factors

• Political factors

Culture

• Collective social sanction:

• Societies are bound by definitive norms being followed by set of the people . This norms dictate the ways and means of behaving ,working addressing and conducting ourselves in society.

• In rural India these norms are strong and rigorously followed too.

• Violation of these norms can even lead to cast out of the society.

Influence of social customs

• Social custom• Customs are socially accepted norms that have been in practice

over a long time .In urban India due to due to course of time customs are fading away . Eg; touching feet of elders

• Traditions• Traditions are the 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.

• Rural people are staunch believers in traditions.• Eg; washing hair and leaving open calls evil spirits.

Influence of caste

• Cast play a key role in behaviors of community . In rural India ,the upper caste and lower cast differences still continue and are considered an important facet of everyday life.

• There is a clear demarcation in the villages for house making, two areas , including natural resources such as drinking water and grazing land for cattle.

• In urban limited physical space and pressure on limited available natural resources , interaction based on economic status and vocations rather than on basis of caste leads to an absence of such division.

Funeral in rural India

SOCIAL CLASS

Socio Economic Classification (Urban)•Unskilled/Skilled workers•Shop owners/Industrialists•Self-employed professionals•Clerical/salesman•Supervisory level•Junior level Officers/Executives•Senior level Officers/Executives

Socio Economic Classification (Rural)• Landlord farmers, educated, exposed to urban

environment, aspiring to match urban lifestyle, technology adapters, owns tractors, two wheelers, music system.

• Rich farmers with about 5 acres of land, may not be educated, with friends and relatives in urban and consult them for technology adaptation, status conscious, owns tractors, two wheelers, TV.

• 2-5 acres land, manage small savings, opt for time tested technology, owns TV, tractors.

• Little or no land, agricultural labour, living below poverty line .

CHANGING BEHAVIOUR• Return of people from urban• Information technology• Communication• Explosion of Media

FAMILY• Individualized Joint Family

ROLES and STATUS• Urban- Social standing or Material wealth• Rural- Occupation, Caste

PRODUCTS AND STATUS SYMBOL

• Urban- Features

• Rural- Ease of operation

SOCIABILITY

TECHNOLOGICAL FACTORS

ECONOMIC FACTOR

Characteristics ofRural Consumer

Characteristics of rural consumer

• Consumer behaviour is a complex phenomenon that is influenced by various factors such as income, occupation, education, lifestyle and geographical location.

• Using a single factor would be misleading.

Characteristics of Rural Consumer

Perception&

Brand belief

Age & Stages of Lifestyle

Economic Circumstances

Personality&

Self-concept

Occupation &

Income

Lifestyle

Personality & Psychological

Factors

AGELIFE-CYCLE STAGE

RURAL URBAN

Below 12 Child Toys, ice candy, daliya

Video games, chocolates, beverages/health drinks

13-19 TeenageBicycle, television, cinema

Cell phones, motorcycle, internet

20-40 Young

Motorcycle, telephone, LPG,Tailored/unbranded clothes, local liquor, haat

Car, PC, branded clothing, alcohol, stores/malls

40-60 Middle AgedTractor, kisan-credit card, postal savings, mela

Luxury car, credit cards, house, health insurance, holiday trips

Above 60 OldChaupal, playing cards, pilgrimage

Clubs, theatre, parks

CONSUMPTION BY AGE & STAGES OF LIFE CYCLE

BELOW 12 YRS URBANRURAL

13-19 Yrs URBANRURAL

20-40 Yrs URBANRURAL

40-60 Yrs URBANRURAL

Personality

• Sum total of unique individual characteristics that determine

how a person responds to the environment.

• Tendency to buy the products which suit our personality.

• Self image is the way we perceive ourselves in a society.

• In the rural market, purchase depends on situation and

person.eg. Pan Masala in rural, Popcorn in urban

• The rural customer is content to satisfy basic

needs.

• Persuasion necessary to convince a customer.

• Peer pressure not very relevant

• High esteem but content with everyday life.

Perception and Brands

• Perception plays a major role in purchase

behavior for the rural consumer.

• Quality and price influence the perception of the

consumer.

• Barrier to level of trial and acceptance of products

• Rural customer trusts government services

Information Search and Pre Purchase Evaluation

• Prefers getting information from opinion

leaders rather than media.

• For high involvement products, information

may be obtained by visits to company outlets

• Touch and Feel experience is very important

in the current scenario

Rise of Consumerism

• Rural people working in urban India increasing

• Gifts from urban people

• Migrated village folk – New Class of Opinion Leaders

• Rural Consumer – Ready to buy products that are not basic necessities

Consumer Buying Process

• Level of involvement depends on factors like– Price– Availability– Variety– Knowledge– Purpose

Eg. Wristwatch, Cereals and Pulses, Medical Services

Stages in Buying Process

• Problem Recognition – NA for rural consumers

• Information Search – NA for rural consumers

• Evaluation of Alternatives

• Purchase Decision

• Post Purchase Behaviour

Buying Roles

URBAN RURALYoung Man INITIATOR SonColleagues INFLUENCER Urban

RelativesThe Young Man DECIDER FatherThe Young Man BUYER Relatives,

FriendsThe Young Man USER Father,Son

OPINION LEADER PROCESS• Power to influence other

• Can be non verbal

• Urban OL having specialized knowledge

• Gram Pradhan or Sarpanch, Ex. Alwar (John Dheere)

• School teacher restricted among school going student

• Influenced college going student by urban life style

• Increasing exposer to education, the media, awareness of technology has given new power to youth.

• Mainly in rural area OL influence about product which have direct impact their occupations and sources of livelihood

Rural Opinion Leader

• Sarpanch/Gram Pradhan-Village

administration, resolving social & family conflicts, introducing

new idea of farming, purchase of new products on farming.

• College educated youth/villagers working in urban centers-

Influence in family and neighborhood, on purchase of durables

like refrigerators, TVs, motorcycles

Understanding rural youth

• Literacy level rising

• Education not considered to be a learning process but a

gateway to a job or livelihood

• Government job is a dream

• Job security, power, less work responsibility, higher social

status & post retirement benefits

• Migrated person from his own community and made it big is a

role model for rural youth

• Younger generation prefer trouser, shirts & t-shirts instead of traditional Dhotti & Kurta

• Youth prefer simple sober colours, branded clothes now taking place

• Action movies, cricket match, serials & music programme are most watched

• During playing cricket consumption of cold drinks & bubble gum is more

• Cold drinks is taking place instead of Nimbu Pani & Lassi

• Easily recall action involve & personality driven commercials

• Home made wafers & sevaiah are preffered as snakes

• High awareness of FMCG product, like toothpaste, (Colgate,

pepsodent) soaps (Lux, Lifebuoy)

• In vehicle category motorcycle commonly used because of

macho style

Diffusion of innovation

• Due to a long chain rural consumer are less exposed to product

& services evolving regularly in the market

• Due to low level literacy consumer is also limited in his or

desire to adopt innovations

• The concept of adoption of innovation is same in urban &

rural, but the role played by different consumers in different

stages varies

Urban profile Type of consumer Rural profile

Young, public-school educated, in business, fun loving, credit card holder

Innovator Young progressive farmers, urban exposure, additional income (part time service, agent

Young, educated, employed in MNC, exposure to media

Early adopter Rich farmer, high disposable income, urban exposure, high social status

Young, married, disposable income, self employment/in service

Early majority Mediocre farmer, member of cooperative society, willing to adopt technology products

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

Late majority Hesitates to take agri-loan, member of cooperative society, adopt only time tested technology

Middle aged, in service, shops in neighborhood

Laggard Marginal farmer using traditional forms of cultivation

Brand loyalty (Stickiness)

• Due availability of more choice now evaluation parameters increasing for making choice

• 80% of FMCG sold in rural markets are branded either national or regional (less than 50% availability)

• Ex. Ghari, Parle-G, Lux, Fair & Lovely, Colgate

• Ghari gives customer satisfaction and solve primary objective of the consumer

• Mahindra village, Escort village

• Relation building concept lacking in rural market

• Brands like “Kala Ghora” in Rajasthan & “Lamsa” in

Maharashtra convince their regional customer

• Ex. Veldanda village in Andra Pradesh

• Customer relationship maintained by social interaction &

extension of credit

• Ex. In small town shopkeepers gives “freebies”

CHAPTER 5

CHAPTER 5

Rural Market ResearchRural Market Research

Planning Research

• Research objectives includes the perfect roadmap to entry in rural markets

• Investigative and exploratory in nature• Requires a small sample size• Types of rural studies includes 4 As U&A or KAP Feasibility Promotion distribution channel

Primary data collection

• Mostly secondary data are available

• Data collection method includes focused group discussion and in depth interviews

• PRA (participatory rural appraisal) is the best method by which people share enhance and analyze their knowledge of life and conditions to plan and to act

PRA

FGD

Large and heterogeneous

Small and homogeneous

Expression is verbal and nonverbal

Only verbal expression

Information flow is more natural

Moderators role is high

Attitude and behavioral change oriented

Action oriented

On the spot analysis Analysis by moderators

PRA Tools

• Social mapping used to capture house location and caste distribution

• Resource mapping used to capture availability of resources

• Seasonality diagram is used to get infotmation on basis of seasons

• Venn diagram deals with various issues with their importance

Measurement and scaling methods

• Faces for rating includes various faces and respondents give their opinion about the product by indicating the face

• The rating is from 5 to 1

• Most effective tool

Wheel with different colours

• The colours are selected on the basis of their association with certain values among rural people

• Dark green represents HARYALI with a rating of 5

• Extreme black represents death or doom which is considered to be worst

• The remaining colors are orange yellow and red

Ladder

• A small bamboo ladder with a number of rungs corresponding to number of items to be compared is constructed

• A high rung implies a higher rank

• But it is not a good rating tool

Questionnaire design

• GIGO principle is applied

• Questions should be simple and direct

• Should be self explanatory

• Should not be ambiguous

• Should have a logical flow

• Should be in local language

Sampling

• Population spread• Scattered and remote village• Heterogeneity• Sampling process is complicated• Includes village sampling that covers population

occupation religion tribal population• Respondent sampling • Sample size determination

Field Procedures & Rural Market Realities

Do’s & don'ts in rural market research

• Wear simple clothes

• Should either be familiar with local dialect or ask an educated resident to accompany you

• Invest time in establishing rapport with interviewee

• Conversation should be gradually build up

• Make purpose of study clear and gain their trust and cooperation

• Make respondent a part of research project and tell him that his responses are really important

• Give importance to interviewee by actively listening to his concerns

• Rural people can handle only limited information at time

• Make him feel that he is leading the interview

• Interviewer should talk a good deal about general topics

• Interviewers should avoid being overfriendly

• Issues sensitive to respondents should be carefully handled

Attributes of Rural researchers

• Mindset

• Effective Communication

• Discerning abilities

• Patience

Location for conducting research

• Caste neutral

• Easy to locate

• Easy to find people

Location for conducting research

Retail shop/ STD boothTea stallPlay groundChaupalHaat

Interviewee & Interviewer

Who is to be interviewed?

When?

By whom?Urban researchers sensitized to rural realitiesNGOsResearchers should not be Government officials

Limitations of Rural Research

• Low literacy level

• Poor media exposure, low product and brand awareness

• Local language communication

• Scattered and remote village, inaccessible road

• Social taboos; difficulty in interacting with women

• Interview timing

• Revalidation of data

Major Research Organizations

• National Council for Applied Economic Research (NCAER)

• Social and Rural Research Institute

• AC Nielsen ORG-MARG

• MART

Thank You