UNIT 2

Rural Consumer Behavior

CONSUMER BUYING DECISION PROCESS IN THE RURAL MARKET

1. Problem Recognition: The buying process starts when the consumer recognizes the need
for some product or service. This stage is initiated by some stimulus, which could be both
internal, and external. Physiological needs like hunger, thirst, pain, etc. are internal,
whereas, heat, cold, advertisement, others’ lifestyle, etc. are some of the external stimuli.
In rural areas, majority of people are guided more by their needs, than pleasure and
luxury. When it comes to biological needs like hunger and thirst, no external motivation
is required.
2. Information Search: Rural consumers mainly acquire information from personal
sources like family, friends, relatives, and knowledgeable persons within the village. In
addition, he also consults pradhan mukhiya, the owner of such products in their village
and their friends and relatives who live in urban areas before buying a new product or
brand. Due to limited exposure, rural consumers depend less on commercial sources of
information like communicating with salespersons, dealers, packaging, displays,
advertising media etc. The potential customers also look for recalling public sources
(T.V, internet, radio, print media, etc.) for information search.
3. Evaluation of Alternatives: The rural market has a limited product range for customers
compared to the urban market. Moreover, it is observed that rural customers are loyal to
brands because of past usage and familiarity with those brands. Consumers’ evaluation
process depends on the kind of product, the type of buyer and buying situation. Rural
buyers, during evaluation, consider multiple attributes like price, quality, usage method,
etc. and compare the brands, each of which is weighted differently.
4. Purchase Decision: After evaluating the alternatives in the prior stage, all selected
alternatives are taken into consideration. However, the following will influence the final
choice:
 Perceived risk associated with the product
 Attitude of others
  Unanticipated situational factors
 Key influencers (opinion leaders, family, and relatives) play an important role in
the final purchase.
5. Post Purchase Behaviour: After the purchase and consumption of the product, the
customer develops favourable or unfavourable attitude towards the product. If the product
matches the customer’s expectations, the customer is satisfied. This leads to positive
word-of-mouth referencing of the product. If the product does not meet customer
expectations, this leads to dissatisfaction or complaint behaviour. The customer may
decide to return or exchange the product if this option is available and will not re-buy the
product.
FACTORS INFLUENCING BUYING BEHAVIOUR

1. Social factors
The people around a consumer, such as family, friends, and neighbors, can impact their
purchasing decisions.
 Reference group
 Family
 Roles and Status

2. Psychological factors
How a consumer's mind works, including their motivation, learning, attitudes, and
beliefs.
3. Economic factors
The strength of a nation's economy, which can impact consumer confidence and
purchasing power.
4. Literacy
How literate a consumer is can affect how they process information and make decisions.
5. Demographic factors
Characteristics of a population, such as age, gender, income, occupation, and education.
6. Product factors
The product itself, including its price, quality, and availability.
7. Cultural factors
The cultural norms and beliefs of a community can influence a consumer's buying
behavior.
 Sub-culture
 Social Class
BUYING BEHAVIOUR PATTERNS OF CUSTOMERS

A consumer is the ultimate user/beneficiary of the product/service whereas a customer is the one
who purchases the product or a service.

Analyzing and Identifying the Actual Customer

It is difficult to identify the actual customer or the real decision maker who will be going ahead
with the purchase of a product/service.

 Analysis of the customer composition: This includes analysis of the demographic

factors like gender, age group, occupation, religion, economic & social status and
nationality.
 Understanding the Origin of the Customers: This involves an analysis of the place or
location from where the customer reaches the retail store, travel time spent by the
customer for reaching the retail store and the type of area in which the customer lives.
 Assessment of the Customer Objective: An analysis of the objective of the customer is
very crucial whether a customer is actually in the mood for buying a product or simply is
engaged in a shopping endeavor.

Customer Buying Behaviour Patterns

A customer’s buying behaviour is largely governed by the needs, preferences, and tastes of the
consumers for whom the product/service is ultimately purchased. Numerous patterns influence
the buying behaviour of the customers:

1. Place or the Location of Purchase: Lot of customers prefer to purchase their preferred
products by visiting various stores in different locations for comparing the prices and the
offers. Hence, a customer does not remain loyal to a single store for a very long period. A
retail store should pay a lot of importance to the store location, identifying a distributor in
the closer vicinity and also the nature of merchandise and the ready availability of stocks.
2. Type of Products to be Purchased and Quantity of Purchase: This essentially implies
an analysis of the type of product which a customer will want to purchase and in how
much quantity. This will depend on the following factors like:
 a. Buying capacity of the customer
b. Product Perishability or durability
c. Availability of the product choices
d. Customer requirement of the product
e. Whether the product is available in abundance or there is a shortage of the product
f. Product storage

Frequency of Purchase and the Time During When a Product is Purchased

Retailers should adjust their work hours as per the peak time availability of the customers, which
includes giving adequate consideration to various factors such as weather, seasonal variations,
and the customer location. The product purchase frequency will largely depend upon the
following factors:

 The product type

 Customer Lifestyle
 How essential or necessary the product is
 Festivals, Rituals, and Customs
 The extent of influence of the individual who accompanies the ultimate buyer of the
product.

For example, an average middle-income group Indian customer may have the capacity of going
ahead with the decision of purchasing a car for not more than three times across his/her lifetime,
whereas an average middle-class customer of USA will buy cars and replace it more frequently.

Purchase Methods

This involves an analysis of the following factors such as:

 Whether the customer is buying the product alone or is accompanied by someone else.
 Whether a customer makes the payment by cash or by way of debit/credit cards, net
banking or on a credit basis.
Customers Response towards the Sales Promotional Techniques

Various sales promotion methods increase the impulsive buying behaviour of a customer as and
when a customer enters the shop. The retailers depend upon the following sales promotion
techniques for influencing the buying behaviour of their customers:

 Product Displays: Product display create an aesthetic appeal and hence influence the
buying behaviour of the customer.
 Demonstration: Product demonstrations help a lot in motivating the customer for buying
the product by making them aware of the usage of the products and or by distributing a
product sample.
 Special Schemes and Pricing: Various product schemes, offers, special prices during
festive seasons or off season, coupons, special offers, contests, etc. play a crucial role in
moulding the customer buying behaviour.
 Sales talks delivered verbally by the sales reps at the store or printed advertisements
also influence the buying behaviour of the customers.
STEPS IN BUYING EVALUATION PROCESS

 Need recognition

The first step in the process, where consumers identify a need or want they want to fulfill.

 Information search

Consumers look for information about products or services that can meet their needs. This
can include reading reviews, visiting stores, or asking friends and family.

 Evaluation of alternatives

Consumers compare products or services based on factors like price, quality, features, and
brand reputation.

 Purchase decision

Consumers decide to buy a product or service based on their evaluation of options.

 Post-purchase evaluation
Consumers evaluate their satisfaction with the purchase and consider whether they would
make the same decision again.
BRAND LOYALTY IN RURAL MARKETING

When consumers in rural areas repeatedly buy a product or service from the same brand. Brand
loyalty can be demonstrated by positive behaviors like word-of-mouth advocacy.

Why is brand loyalty important?

 Increases customer retention

Loyal customers continue to buy from the same brand, even when competitors offer similar
products.

 Increases sales

Repeat purchases and higher transaction values lead to increased sales revenue.

 Influences consumer behavior

Loyal customers are less sensitive to price and more likely to buy from their preferred
brand.

How can businesses build brand loyalty?

 Create a brand identity: Branding helps differentiate a product from competitors and adds
value to the product.

 Use loyalty segmentation: Divide customers into groups based on their loyalty and
engagement levels.

 Encourage word-of-mouth advocacy: Loyal customers may spread positive word-of-

mouth about the brand.
INNOVATION IN RURAL MARKETING

It involves adapting products, services, and marketing strategies to meet the needs of rural
consumers. It can also include building infrastructure to support rural markets.

Innovative technologies

 AI and machine learning: Can analyze consumer data to predict purchasing patterns and
recommend products

 Geo-targeting: Can deliver ads to consumers in specific regions or villages

 Local influencers: Can endorse products more effectively than traditional celebrity
endorsements

Innovative product development

 Small unit size and low price: Can be priced to suit the economic status of rural consumers

 Sturdy products: Can be designed to suit the needs of rural consumers

 Functionality: Should be understood deeply, not just form

Innovative marketing strategies

 Hyper local marketing: Tailors marketing efforts to the specific needs of a particular
locality

 Client and location specific promotion: Involves a strategy designed to be suitable to the
location and the client

 Bundling of inputs: Involves selling several related items to the target client

 Developmental marketing: Involves taking up marketing programs keeping the

development objective in mind