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Abstract

* The Indian rural market with its vast size offers a huge opportunity with 128 million households and

the rural population is nearly three times the urban. India today has about 6.4 lakh villages. All except

about 15,000, have a population below 5000. Looking at marketer defined classification, most

companies in the FMCG sector would define any area with primarily agriculture based occupation and

with a population of less than 20,000 as rural. Rural areas exhibit several distinctive characteristics that

are different from the urban areas. Literacy levels, family structure, occupational patterns, social

customs and norms, and several other features are unique to rural India. A complex set of factors

influence rural consumer's behavior. Social norms, traditions, castes, and social customs have greater

influence on the consumer behavior in rural areas than in urban areas. The seasonality of agricultural

production influences the seasonality of rural consumers' demand. Although rural areas offer attractive

opportunities to marketers at an aggregate level, about 68 percent of these markets remain untapped

mainly due to inaccessibility. It is uneconomical to access a large number of small villages with a very

low population density spread over a large geographic area. Factors such as limited physical access, low

density of shops, limited storage facilities, need for a large number of intermediaries in the distribution

channel to reach the end customers, and low capacity of intermediaries to invest in business

(investments for keeping stock, storage facilities, vehicles for distribution) make the tasks of reaching

rural consumers very complex. It is in this context we need to understand the importance of alternative

means of reaching rural consumers through periodic village markets (or haats), agricultural markets

(mandis), and rural fairs (melas). According to National Council for Applied Economic Research (NCAER)

survey the number of middle and high income households in rural India is expected to grow from 80

million to 111 million by 2007. In urban India, the same is expected to grow from 46 million to 59

million. Thus, the absolute size of rural India is expected to be double that of urban India.

* A survey by NCAER shows that the rural market is growing faster than the urban market in several

products. These include packaged tea, detergent powder, washing soap and detergent cake. Growth in

motor cycles too has been more in rural market than the urban market.

Introduction

Rural market is dynamic and has stood for centuries on its own. Nobody can ignore rural India which

comprises one tenth of the world population. A revolution is sweeping the Indian countryside which has

compelled companies to go rural. The rural consumer is discerning and rural markets are vibrant. The

Indian rural market with its vast size offers a huge opportunity with 128 million households and the rural

population is nearly three times the urban. Rural India has a large consuming class with 41 percent of


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India's middle-class and 58 percent of the total disposable income. According to a study by Chennai

based Francis Kanai Marketing Planning Services Pvt. Ltd. the rural market for FMCG is Rs 65000 crore,

for durable Rs 5000 crore, for tractors and agri-inputs Rs 45000 crore and two and four wheelers Rs

8000 crore. In total a hopping Rs. 123000 crore.

There is no official definition of what constitutes a rural area. However, an urban area is defined as per

the census of India as "all places with a municipality, corporation, cantonment or a notified town area"

and "all other places satisfying the following criteria:

a) Minimum population of 5000,

b) At least 75 percent of male working population in non-agricultural pursuit, and

c) Density of population of at least 400 persons per square kilometer. Therefore, an area that does not

satisfy the criteria specified above can be considered a rural area.

Taking on from the above, a habitation is defined as rural if

* It has a population density of less than 400 per sq. Km.

* At least 75 percent of male working population is engaged in agriculture related activities, and

* There is, in the location, no municipality or municipal board.

India today has about 6.4 lakh villages. All except about 15,000, have a population below 5000. Looking

at marketer defined classification, most companies in the FMCG sector would define any area with

primarily agriculture based occupation and with a population of less than 20,000 as rural. The constructcalled rurban is the overlap between rural and urban, with physical features closer to urban areas and

proximity to large urban centers, but with deep rural social moorings.

Characteristics of Rural Markets


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Rural areas exhibit several distinctive characteristics that are different from the urban areas. Literacy

levels, family structure, occupational patterns, social customs and norms, and several other features are

unique to rural India. Some of the features having important implications for marketers are:

Demographic Characteristics of Rural India

There are 6,39,000 villages in India with a total population of 743 million people, accounting for about

72 percent of India's population. This population, however, is distributed across a large number of

villages, where many are sparsely populated. In table 1 , is given the distribution of population in

villages.

Table 1 Distribution of Population in Villages in India

Population (Number)

No. of Villages

Proportion of Total Villages (%)

Less than 500 people

236,004

37.00

Between 500 and 999

158,124

25.00

Between 1000 and 4999


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221,040

35.00

Between 5000 and 9999

15,058

2.00

More than 10,000

3,976

1.00

Total

634,202

100.00

Source: Census of India

* About 62 percent of villages have a population below 1,000 and only 3 percent of the villages above

5000. Most villages with less than 500 people do not have any shops. These characteristics point toward

the complexities of distribution and logistics management.

Characteristics of the Rural Economy

Income levels in the rural areas have increased over the years. About 67 percent of the rural households

had an annual income of less than Rs. 35,000 in 1989-90 whereas by 1998-99, this proportion decreased

to about 48 percent. Proportion of households with an annual income of above Rs. 70,000 constituted


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about 9 percent in 1989-90 and by 1998-99, this proportion had increased to about 27 percent. Thus,

the households belonging to the middle-income and above categories that constitute the bulk of the

consuming class had been increasingly steadily over the years. The fact is that the urban consumers

have to incur a higher cost of living while the rural population has higher levels of disposable income for

the same levels of income. For marketers this is an encouraging fact.

The consumption patterns of the rural consumers are also undergoing a shift. In 1983, the per capita

consumption expenditure in rural areas was Rs. 112 per month whereas it was Rs. 166 in the urban

areas. In 2001, the per-capita monthly expenditure increased to Rs. 486 in rural areas and to Rs. 855 in

urban areas. Moreover, there is a shift in the expenditure pattern of rural consumers. In 1983, about 66

percent of the per capita consumption expenditure was on food and, by 2001, this proportion declined

to about 59 percent. This trend indicates that while incomes as well as expenditure in rural areas have

increased, their spending on nonfood items have also increased. The increasing demand for many

products can be accounted for this by changing pattern. However, the rural income is seasonal in nature

and to a great extent influenced by non-controllable factors such as draughts and floods, crop failures

due to pests, and similar factors. For the working class in rural areas, wages are distributed daily,

weekly, or fortnightly and come in small installments. Demand for many products in rural areas, thus, is

seasonal in nature.

Social and Cultural factors

Social hierarchy, traditions, social norms and customs play significant roles in determining individual and

collective behavior in rural India. One of the most important determinants of social hierarchy in the rural

areas is the caste system. The Caste system determines the social status of the individuals and families,

and this has important implications for individual and social behavior. However, within the caste system

itself, there are sub-castes, religious groups and sub-groups, making the social hierarchy more complex.

Manifestation of social hierarchy is exemplified by the pattern of household settlements. While in the

urban areas, household settlements are often referred to as low-income group (LIG), middle-income

group (MIG), or high-income groups (HIG), in many parts of rural India, geographic demarcation of

household settlements is based on caste affiliations. In some parts of India, these settlements are

known as harijan basti (harijan colony) or thakur gaon (village of the upper-caste Thakurs). Social

interactions and norms of behavior are governed by considerations in rural areas. In some rural areas,

even the common facilities like well water or grazing land is demarcated based on caste. People

belonging to some castes are prohibited from accessing common facilities demarcated for other caste

groups. Any violation of these norms can lead to social tensions. Unlike in urban areas, these behavioral

norms are strictly implemented in rural areas.


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Traditions are rigidly followed in rural areas. For example, in many rural areas (and even in some

sections of the urban society), women are expected to cover their head with the end portion of their sari

as a mark of pious behavior. Talking directly to men who do not belong to the immediate family is not

considered to be good behavior.

Consumer Behavior in Rural Areas

A complex set of factors influence rural consumer's behavior. Social norms, traditions, castes, and social

customs have greater influence on the consumer behavior in rural areas than in urban areas. The

seasonality of agricultural production influences the seasonality of rural consumers' demand. Given the

fact that the landless laborers and daily-wage earners get their income in installments, their purchasing

is restricted to small quantities of products at a time, mostly on a daily basis or once in two or three

days.

Purchase-decision processes and preferences also show certain characteristics that implication for

marketers. Exhibitions and road shows act as some of the key triggers for information-search behavior.

Opinion leaders and people who are perceived to be knowledgeable play an important role as

information providers and advisors. Word of mouth has more significance in purchase decisions of rural

consumers. Family members, relatives, and friends are consulted before making purchase decisions of

higher-value products. However, as the exposure to mass media and information technology is

increasing, rural consumers are becoming more informed about products and services, and their

dependence on traditional reference groups is gradually waning. As a result of the increasing role of self-

help groups and other government institutions involved in developmental activities, professionals

working for such agencies act as reference sources. They tend to exhibit greater trust in products and

services endorsed by the government and its agencies. Rural consumers also tend to be more loyal as

brand switching has greater perceived risk.

Compared to the urban counterparts, rural consumers have different interpretations of colors, symbols,

and social activities. Rural consumers show a preference for bold, primary colors; red color connotes

happiness and auspiciousness, and green color prosperity. Ownership of a large tractor, large house(pucca house), telephone and other higher-value consumer durables, and education of children in cities

are considered as status symbols.

Marketing Infrastructure in Rural Areas


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Although rural areas offer attractive opportunities to marketers at an aggregate level, about 68 percent

of these markets remain untapped mainly due to inaccessibility. It is uneconomical to access a large

number of small villages with a very low population density spread over a large geographic area. Factors

such as limited physical access, low density of shops, limited storage facilities, need for a large numberof intermediaries in the distribution channel to reach the end customers, and low capacity of

intermediaries to invest in business (investments for keeping stock, storage facilities, vehicles for

distribution) make the tasks of reaching rural consumers very complex. It is in this context we need to

understand the importance of alternative means of reaching rural consumers through periodic village

markets (or haats), agricultural markets (mandis), and rural fairs (melas).

Haats are a "public gathering of buyers and sellers of commodities, meeting at an appointed or

customary location at regular intervals. Most of these periodic markets are held once a week. Haats

function as physical markets for selling agricultural surplus as well as retail points for buying daily-use

items and supplies for farming activities. The number of haats in rural areas in India is about 42,000. On

an average, one haat covers 20 to 50 villages, has about 300 outlets, and is visited by more than 4,500

people.

Mandis or agricultural markets are set up by the state governments for facilitating exchange of

agricultural produce (providing information on prices and arrivals of produce, meeting of buyers and

sellers) and for procurement of food grains by the government agencies. There are about 6,800 mandis

in India, each catering to about 0.14 million people. Companies use mandis to promote their brands bysetting up "stalls" for carrying out sales promotion activities and for gathering market-research

information.

Melas or fairs are an integral part of human life. There are different types of fairs: commodity fairs,

cattle fairs, and fairs in connection with religious festivals. Although there are more than 25,000 fairs,

about 90 percent of them are held in connection with religious festivals and, hence, have limited

marketing value. But the remaining fairs are used by companies to promote their products and brands.

Characteristics of Rural Consumer Group

* A scattered market: The rural market of India is a geographically scattered market. Whereas the urban

population of India is concentrated in 3200 cities and towns, the rural population is scattered across


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570000 villages. And of them, only 6300 villages, or less than 1.1 per cent have a population of more

than 5000 each.

* Socio-economic position: By and large, rural consumers continue to be marked by low purchasing

power/low per capita income. Similarly, they continue to be tradition-bound community, with religion,

culture and tradition strongly influencing their consumption habits. A sizeable segment of rural

consumers defy this description. Nearly 60 per cent of rural income comes from agriculture. More than

half the households are in the income category of less than Rs 25000 per annum, but about 14 per cent

of the households have an annual income that exceeds Rs 50000 per annum.

* Culturally a diverse and Heterogeneous market: The diversity is manifest in a more intense manner

among the rural segments. It can be said that heterogeneity is the No 1 hallmark of the rural market-

5,70,000 villages, half a dozen religion, 33 languages, 1,650 dialects and diverse sub-culturescharacterize the market.

* State to state variation in extent of development: There is also a great deal of difference between

different states in extent of development. A recent study conducted by IMRB provides development

index points for each state, after collecting village-level data on various parameters, such as availability

of health and education facilities, availability of public transport, electricity, TV transmission, banks, post

offices, water supply and so on. According to the study, while the average village in India has 33

development index points, villages in Kerala had an average of 88 points while those in Bihar had just

22; M.P, Rajasthan and UP were close to Bihar; and states like Maharashtra, Haryana, Karnataka had

points ranging between 40 and 50.

* Literacy Level: It has been estimated that rural India has literacy rate of 28 percent for the whole

country. The rate is certainly on the low side. However, such statistics do not reveal the whole picture.

- Year-to-year too, there is a change. Every year about eight million people get added to rural India's

literate population.

- The adult literacy programmes launched in the rural areas are bound to enhance the rural literacy rate

in the years to come.


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- In absolute numbers, already there are more literate people in rural India (16.5) in urban India (16

crore).

* Lifestyle : By and large, the rural consumers are marked by a conservative and tradition-bound

lifestyle. But, what is striking today about this matter is not the basic conservative characteristic, but the

fact that the lifestyle is undergoing is significant change.

Lifestyle undergoes major change: The lifestyle of a sizeable segment of rural consumers has already

changed significantly in recent years, and that of a much larger segment is currently going through the

process of change. As such, the

earlier practice of bracketing all rural consumers as people with a tradition- bound lifestyle does not

hold goods in the new context.

The change can be attributed to several factors such as:

* Growth in income and change in income distribution

* Growth in education

* Enlarged media reach (particularly television)

* Growth interaction with urban communities

* Marketer's efforts to reach out the rural market

SWOT ANALYSIS OF RURAL MARKETING

* STRENGTHS

* According to National Council for Applied Economic Research (NCAER) survey the number of middle

and high income households in rural India is expected to grow from 80 million to 111 million by 2007. In


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urban India, the same is expected to grow from 46 million to 59 million. Thus, the absolute size of rural

India is expected to be double that of urban India.

* There has been a phenomenal improvement in rural incomes and rural spending power. Successive

good monsoon has led to dramatic boost in crop yields. Tax exemption on rural income too has been

responsible for this enhanced rural purchasing power.

* Rural consumers normally do not make brand discrimination but once induced to buy and use a

product, he becomes loyal to the brand provided he is satisfied about its functional utility, such a loyal

user may even make efforts to get the whole village use it.

* Few business houses like Hindustan Lever, Lipton, ITC, Tatas, Coca-cola, LG etc are capitalizing the

marketing opportunities in rural sector.

* A survey by NCAER shows that the rural market is growing faster than the urban market in several

products. These include packaged tea, detergent powder, washing soap and detergent cake. Growth in

motor cycles too has been more in rural market than the urban market.

* According to an NCAER survey, against seven consumer durables owned by urban households on anaverage, rural households own three. Rural India's market for consumer durables is estimated at Rs

4500 crore with an average annual growth rate of 8 per cent.

* According to IMRB survey the rural market share is above 50% in respect of washing cakes, bathing

soaps, batteries, razor blades, radios and bicycles. While for glucose powder, tea, torch lights, premium

soaps and washing powders its share is 25% to 50% and it is 10% to 25% in respect of milk powder,

antiseptic liquids, toothpaste, hair oils, tooth powder and talcum powder, etc.

* The literacy level in rural India according to the 1991 census was 41.2 per cent. It has gone up to 59.4

per cent in 2001.


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* WEAKNESSES

* About 62 percent of villages have a population below 1,000 and only 3 percent of the villages above

5000. Most villages with less than 500 people do not have any shops. These characteristics point toward

the complexities of distribution and logistics management.

* It is uneconomical to access a large number of small villages with a very low population density spread

over a large geographic area. Factors such as limited physical access, low density of shops, limited

storage facilities, need for a large number of intermediaries in the distribution channel to reach the end

customers, and low capacity of intermediaries to invest in business (investments for keeping stock,

storage facilities, vehicles for distribution) make the tasks of reaching rural consumers very complex.

* Usually rural consumers are price conscious and they purchase simple and low priced goods. Further,

the brand loyalty is very low in rural areas.

* Adequate roads have not been developed in rural areas. Even today about 36% of the villages in the

country do not have roads and over 65% of our villages are without an all-weather roads. Further, road

conditions in rural areas is worst during rainy season.

* In rural areas, banking and credit facilities are not extensive. It is estimated that for every 16 villages

there is one bank. Due to lack of credit facilities retailers in rural areas cannot carry adequate stocks and

which, will in turn, affect consumer credit.

* There are communication problems with regard to the marketing information to the rural consumers.

The level of literacy among rural people is low. Further, there are different languages in different areas.

The low literacy and different languages pose problems in promotion and advertising of goods in rural

areas.

* OPPORTUNITES


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* The Indian rural market with its vast size offers a huge opportunity with 128 million households and

the rural population is nearly three times the urban. Rural India has a large consuming class with 41

percent of India's middle-class and 58 percent of the total disposable income.

* The increased income/ purchasing power of the rural consumer and the improved income distribution

have enhanced rural demand for several products. Better access to many modern products/brands have

added to this growth.

* The heat of competition in the urban market actually serves as the strong driver behind the growing

interest of Corporates in the rural market. The fact that the rural market is still largely an untapped and

virgin market and the fact that the early entrants can tap it without having to face intense competition

as in the case of urban market, makes the rural market all the more attractive to them. For example,

penetration level for toothpaste in the urban market has now reached close to 80 per cent. In contrast,it is below 30 percent in the rural market. Obviously, any substantial further growth in the product can

come only from the rural market.

* In the FMCG category, half of the revenue of Hindustan Lever and Colgate comes from the rural

market. It can also be seen that about one-fifth of Pharma sales occur in rural India. In respect of high-

priced durables, about one fourth of the television sales happen in rural India; Kinetic sells about 30 per

cent of its scooters, Toyota nearly half of its vehicles and Hero Honda 40 per cent of its bikes.

* At the moment, radio transmission is available to almost 100 per cent villages while TV transmission

covers about 87 per cent territory of the country. According to the national readership survey 2002

about 28.5 rural households in the country own T.V sets, and 34 per cent of TV homes also have cable

connections.

* Contrary to the popular belief, the R-panel found that the rural demand is not overwhelmingly

unbranded. In categories such as shaving products, toothpastes, toilet soaps, biscuits, the share of

branded products is higher than the unbranded or local products.

* According to ORG-MARG data 90 per cent of all shampoo and about 65 per cent packaged tea sales in

rural areas comes sachets/small packs.


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* THREATS

* Rural demand is more seasonal compared to urban demand. The pre-dominance of agriculture in the

income pattern is one main reason for this. The relatively greater influence of marriages and festivals on

the purchase pattern is another.

* Besides being seasonal, rural demand is somewhat irregular as well. The pre-dominance of agriculture

in the income pattern is again the main reason for this.

* The share of unbranded products is higher in necessity items, mainly food products.

Buying Behavior

* Influence of Culture: Culture and tradition influences perception and buying behavior. For example,

the preference in respect of color, size and shape is often the result of cultural factors.

* Geographic Location: Rural consumer behavior is also influenced by the geographic location of the

consumers. For example, nearness to feeder towns and industrial projects influence the buying behavior

of consumers in the respective cluster of villages.

* Exposure to urban lifestyles: Extent of exposure of rural consumers to urban life styles also influence

their buying behavior.

* The way the consumer uses the product: The situation in which the consumer utilize the product also

influences their buying behavior. Since rural consumers cannot use washing powders/ detergentpowders that much, as they wash their clothes in streams or ponds, they go in more for washing bars

and detergent cakes.

* Place of Purchase: Buying behavior of rural consumer also varies depending on the place of purchase.

Different segments of rural buyers buy their requirements from different places/outlets. Some buy from


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the village shopkeepers; some from village markets/hats/melas; others buys from town that serves as

the feeder to the rural area.

* Involvement of others in the purchase: In the past, the head of the family used to make purchase

decision all by himself. In contrast, the involvement of the other members of the family in the purchase

decision has been growing in recent years. An increase in literacy coupled with greater access to

information has resulted in this development.

* Buying Behavior Undergoes Major Change: The buying behavior of rural consumers has been

undergoing a change. We need to exercise care even in contrasting the buying behavior of rural

consumers in a general manner from that of the urban consumers. In recent years, some convergence

in aspirations seems to be taking place between the urban and rural markets.

Conclusion

It is said India lives in villages. Rural market with 70% of the total population of country offers

opportunities and challenges for marketers. The opportunity is to tap vast rural market with right kind of

product, price, place and promotion. The challenge is that majority of villages are thinly populated

compelling marketers to think about innovative ways to reach rural consumers. Melas, Haats and self

help groups are one of the way to reach rural markets cost effectively.

References

(1) V S Ramaswamy and S Namakumari, Marketing Management, (Macmillan India Ltd. New Delhi 2006)

(2) P Kotler, et. al., Marketing Management, ( Pearson Prentice Hall, New Delhi 2007)

(3) J. S. Panwar, Beyond Consumer Marketing, (Response Books A division of Sage publications, New

Delhi 2004)


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(3) H.S.Grewal, S.N. Mahapatra and Sanjay Pandey, Role of Rural Melas and Haats in Modern Marketing,

Organizational Management, Vol. XXII. No.1. April-June 2006, pg.9

(4) R.G. Suri, A.S. Sudan, Rural Marketing-Some issues, Indian Journal of Marketing, Vol: XXXIII No.10

October 2003, Pg.23

(5) P. Indrasena Reddy, Rural Marketing in India Problems and Prospects, Indian Journal of Marketing,

Vol: XXV No.2-3 Feb, March 1996African Journal of Business Management Vol. 5(6), pp. 2276-2282, 18 March,2011Available online at http://www.academicjournals.org/AJBMISSN 1993-8233 2011 Academic Journals

Full Length Research Paper

Shopping behavior of rural consumer migratedto urbanarea in the Indian context - An emerging marketAnuradha Devadas1,2* and Hansa Lysander Manohar11Anna University, Chennai, Tamil Nadu, India.2Veltech High-tech Engineering College, Chennai, Tamil Nadu, India.Accepted 11 November, 2010

The urban- rural inequality in market, as well as customer characteristics bring a major differenceinshopping behavior and consumption pattern of the two communities. In India, a sizeable numberofpersons migrate from rural to urban in search of job opportunities, work, education, marriage and

personal reasons. From the marketing perspective, migration leads to new market opportunities.Andso, marketers have to come out with appropriate strategies to attract and retain migrants. In Indiaalimited research studies has been done in this regard. Convenient sampling technique is used inthisstudy. The survey was conducted among 74 students who have migrated from rural to urbanregion.They were selected from 3 different engineering colleges. The results reveal that the migratedconsumers consider the following dimensions when shopping in the urban environment: they areshopping conscious, enjoy urban shopping environment, price and quality conscious, andcomparedifferent shops when buying. They want shopping to be recreational, price worthy, perfect and

buyeroriented. They are unhappy with poor shopping environment, if any. These dimensions describethefactors to which the migrant rural consumers give importance in the urban shopping environment.Key words: Rural, urban, buying behavior, migration, migrants.INTRODUCTIONThe major portion of Indian population resides in ruralIndia. According to the Indian recent census report, thereare 638,365 villages in India and about 74% of Indianpopulation lives in these villages. The main occupation of


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the Indian rural population is agriculture and relatedoccupations. The scenario is changing, as the economicdevelopment in the urban area is much faster due toindustrialization such as IT, automobile, and the like. Therural-urban migration exists in India as the rural populationseeks to make use of the opportunities in the urbanenvironment for job, work, education, marriage andpersonal reasons. As per the census report, 39 millionpeople migrated in rural- urban patterns of which 54%were female. As a result of this migration the literacy rateamong rural India is 65% (Source: Indian Census Report)*Corresponding author. E-mail: [email protected].

Indian market is heterogeneous one. The urban marketcomprises of urban consumers and migrants (people whohave migrated from rural to urban). The rural customersare likely to differ in terms of their responsiveness towardsmarketing mix as well as retail shopping behavior.Researchers addressing emerging market issues haveoften targeted urban consumers in those countries(Maheswaran, 1984). Little attention has been paid to

rural consumers buying behavior (Home, 2002). Ruralconsumers probably represent the more enduring culturaltraditions of those emerging economies and may provideunexplored cultural perspectives on economic development(Maheswaran and Shavitt, 2000). An understandingof migrants behavior would enable the marketers to drawappropriate strategic marketing decisions to attract andretain migrated customers. India is fast emerging as oneof the biggest consumer markets. And so, various MNCsthat deal with consumer products are aiming to have amajor share in India. Hence this type of study assumesprominence.LITERATURE REVIEW

Intensive efforts has been made to find the relevantstudies in consumer behaviour of Rural urban migrants.Only a limited study is available in this field especially inIndia. A summary of literature reviewed is reported here.Lumpkin et al. (1986) have contributed a study onexamining the shopping orientation profiles of ruralconsumers. The purpose of the study is to determinewhether or not there exist segments of rural consumersthat have unique shopping orientations. The findingsindicate that there are three shopping-orientationsegments such as Inactive Inshoppers (High level ofloyalty towards local merchants), Active Outshoppers(favourable attitude towards large city shopping) and

Thrifty Innovators (Economic shoppers). These shoppingsegments are relatively unique with respect to attitudestoward various shopping-area attributes and patronagebehavior. Although each of the three shopping-orientationgroups of rural consumers represents a market segment,the Active Outshoppers and Thrifty Innovators seem tobe the more viable segments for urban retailersattempting to attract outshoppers from rural areas.Therefore for rural consumers, cleanliness is the mostimportant factor in deciding where to shop and the other


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factors are convenience-related attributes followed byattractive dcor and entertainment facilities.Rogers et al. (1988) have focused on the socioeconomicaspect of the urban and rural populations andthe expenditure pattern of the two populations. The incomeand expenditure pattern in terms of transportation,food, apparel, automobile and housing were comparedwith rural and urban population. The urban counterpartshad the higher level of expenditures on food, housing andapparel where as the rural population average incomewas spent on transportation, health care, tobacco andother personal insurance. Therefore there are differencesin the way that urban and rural consumers allocate theirexpenditures budgets as regard to socio-economicchanges.Schopphoven (1990) has identified the relationshipsbetween consumption patterns and values of differentsubcultures (a comparison between rural and urban consumersin western Germany). The ownership of selectedproducts, the intent of purchase and the importance of

these products for the individual consumer in rural andurban segment were explored in this study. The resultsreveal that there is not much of differences between theurban and the rural sub cultures, but some demographicssuch as marital status, professional status, the children inthe household tend to have discriminating power on thevalue variables.Sullivan and Savitt (1997) have conducted a study onstore patronage (grocery patterns) of rural shoppers. TheDevadas and Manohar 2277objective of the study was to determine the proportion ofoutshopping for groceries and to identify the storepatronage and psychographic factors associated with

rural grocery shoppers and to determine if such factorscorrespond with the proportion of grocery expendituresspent elsewhere. Nine store factors were identified suchas shopping environment (location, assortment, breadthand services), Price (advertising), leisure activities,convenience, shop around work, family shopping, goodshopping, credit and name brands. Results indicate thateach group has different store patronage practices,psychographic profiles, and income levels, suggestingthat grocery retailers should work with communities toorganize retail mix that appeal to different shoppinggroups. Results of this study also suggest that thecommunity and individual retailers in partnership can

provide rural customers with an optimal merchandise mixand shopping experience.Miller (2001) has conducted a study on examining thedeterminants of rural consumers inshopping behaviourfor the product categories of apparel and home furnishings.The study was carried out among the con-sumersliving in two rural Iowa communities. It examines whetherreciprocal actions exist between community members asconsumers and retailers and if these actions arepersuasive in predicting the economic activity regarded


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as consumer inshopping. The results support the socialcapital theory evidence that consumers level of satisfactionwith reciprocity was a significant determinant of ruralconsumer level of shopping with local retailers. Overallthe study revealed that community attachment has asignificant indirect effect on inshopping behavior.Home (2002) has observed the rural consumerspatronage behaviour in Finland, which is done by findingout the relations between consumers and grocery storesin the countryside. The study identifies the most relevantstore choice factors of an ideal grocery store and themost important features which best describe the ruralstore. The objective of the study was to find newconsumer buying behaviour information that can help toimprove the competitive capabilities of rural grocerystores. The study identifies the most relevant store choicefactors of an ideal grocery store such as friendliness ofsales people, findings of goods easily, cleanliness andneatness of the store and reliable shop keeper and themost important features which best describe the rural

store. This study also identified the factors that have animpact on the store choice of rural consumers and toidentify the three different homogeneous buyer groups:supermarket customers, rural store loyalists and priceconscious consumers on the basis of consumersshopping orientation. The consumers in each group havedifferent criteria to evaluate grocery stores.Broadbridge and Calderwood (2002) have uncoveredthe factors and attitudes that influence the customersstore choice decision and their attitudes towards theirlocal shops. The study has explored grocery shopping2278 Afr. J. Bus. Manage.behavior of rural inhabitants in Scotland. The survey

reveals that the trading future for small rural shops isdifficult with the majority of the consumers using themonly for supplementary shopping. Also that the studyconcluded, if local shops provide a differentiating andunique offer than supermarkets then it may increase thecustomers visit to local shops. Local shops need to havecommitment and willingness to cater for the localcommunity wants and needs. The relative proximity ofalternative shopping facilities and the quality of localshopping provision combine to influence the degree offood outshopping from a community.Sun et al. (2004) have identified the impacts ofeconomic development on consumer lifestyles. The

objective of this study is to understand the Chinese ruraland urban consumers who are in the two levels of livingstandards (poor and rich) are different in terms of theirattitudes toward the whole marketing mix. The resultssuggest that there still exists a big difference in terms ofideal material possessions between urban and ruralconsumers. Rural consumers were more price-conscious,less product-innovative, and suspicious about massadvertisingand not brand conscious when compared withurban consumers. Due to the disparate attitudes of the


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rural and urban consumer they were found to usedifferent products to reflect the improvement of their livingstandards. The lifestyle differences between rural andurban consumers might suggest the impact of economicdevelopment on consumer behaviour. On the whole thestudy reveals that there is huge marketing potential inchinas rural markets for MNCs and other investors.Tuli et al. (2004) have explored the Indian ruralconsumers patronage aspects of shopping behaviourregarding two major retail formats i.e. village shops andperiodic market in the rural market. The study also coversthe factors which influence the decision of ruralconsumers in the selection of a particular retail format,from which a large part of their goods are purchased. Thestudy concluded that rural consumers prefer andpatronize village shops to meet their day-to-day needsand for their credit-based impulsive or unplanned requirements.At the same time they prefer periodic markets forbulk purchases, to avail bargain, and promotionalincentives such as low cost, discounts, variety etc., which

in turn motivate rural consumers .In case of village shopsconsumers look for low transactional cost on account ofshopping activity cost and the credit facility provided tomeet day-to-day needs.Shukla (2004) has addressed on understanding theeffect of product usage, satisfaction and involvementlevel on the brand switching behaviour in severalcategories of products associated with different productusage, performance and satisfaction levels. Five categoriesof products were considered in this study they are:vehicles, television, soap, hair oil and ice cream. Theresults reveal that product usage and related satisfactionhas very moderate impact on brand switching behavior.

Also that there does not exist a simple relationshipbetween product satisfaction, involvement and brandswitch; rather, different facets of the customersinvolvement have different influences on brand switch.Hence the marketers will have to understand the productusage pattern and the satisfaction derived and also howcustomers involve themselves with the product should bestudied to lessen the brand switching behavior.Johnson et al. (2006) have conducted a study on identifyingwhether any changes had occurred between 2000and 2003 in the use of retail channel among the ruralconsumers for searching the product information and forpurchasing food and fiber products and to investigate

whether differences existed between channel use groups(that is, store only shoppers, store and catalog shoppers,and multi-channel shoppers). The results reveal that therural consumers are shifting from use of store and acatalog for product information has decreased while theusage of internet for purchasing food and fiber productshas increased. Especially to search for information onapparel, food, or home furnishing products, internet useincreased slightly as did use of the internet to purchaseapparel and home furnishings. The multi channel


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shoppers usage of new channels, being they are timepressed,dissatisfied with the local offerings, unattachedto their community and unconcerned with financialsecurity while shopping.Multichannel retailing strategy is the dominant formatfor the apparel retailing industry. Lee and Kim (2007)have investigated the effect of consumers shopping orientations as a consumer characteristic on theirsatisfaction level with the product search in a multichannelenvironment. The authors had also investigatedthe influence of multi-channel shoppers shopping orientationson their satisfaction level with the apparel productpurchase made in a multi-channel shopping environment.The consumers were overall satisfied with the multichannelsfor information search about price, promotion,style/ trends and merchandise availability of apparelproducts. The findings suggest that consumers adopt andutilize various channels for searching different types ofproduct information and in turn they purchase apparelproducts via the channel of their choice.

The factors contributing rural consumers inshoppingbehavior and its effects on institutional environment andsocial capital (Kim and Stoel, 2010). The objectives ofthis research are to investigate rural customers inshopping behavior by looking at both social environmentalfactors and retailers social activities. The resultsrevealed that location and proximity of the store did nothave any significant influence on the rural consumersinshopping behavior. This study also found that when aretailer gains legitimacy, the retailer can justify itsexistence to community. The consumers decision about whether or not to support the local retailer depends ontheir first evaluation about the institutional actions of the

retailer, and if the retailer is a legitimate entity for thecommunity. This study reveals that when a high level ofsocial capital exists, local retailers can focus on theirinstitutional activities and gain legitimacy from localshoppersThe above review gives an understanding that onlylimited systematic attempt has been made across theworld on the select dimensions of the shopping behaviorof migrants. This is so in India, where no study thatfocused directly on the issue, rural migrants shoppingbehavior.Research problem identifiedAs reported already, in India a sizeable number of rural

populations is moving towards urban area. And theretailing has undergone a revolutionary change in majorcities in India like Delhi, Mumbai, Bengaluru, Kolkata,Hyderabad, Cochin, Chennai and the like are floodedwith retail shopping malls of global standards. Manymultinational players such as subway, KFC, Adidas,Puma, Nike, Couton, etc. have started operating in abigger way. The urban consumers are exposed tomultiple media of communication like press, television,radio, web marketing and different state-of-the-art sales


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promotion techniques. And this retail environment istotally new to the migrants. The study is on finding whetherthe new retail atmospherics change the shoppingbehavior of the migrants, if so, what are the key driversassociated with the change. And this has been identifiedas the problem for the study.Objectives of the studyThe study has the following objectives:1. To study the profile of the migrants.2. To find out if the migrants have a brand switchingbehavior, if so, the nature and key drivers influencing thebrand switching behavior.3. To understand the satisfaction with the present brandof products.4. To know the factors influencing migrant consumersshopping behavior in urban retail shopping environment.METHODOLOGYThe migrants refer to college students who have migrated from ruralarea to urban area within the period of three years. The city werethe study was conducted is Chennai. The product considered forthe study is personal care products such as: Detergent hair oil,perfume, shampoo, talcum powder, toilet soap, tooth paste.A specially designed interview schedule consists of questionsrelating to objectives of the study was used. The questionnaire wasdistributed among 135 students; out of this 74 completed questionnaireshave been received. As such, the total sample size is 74.The collected data has been processed using percentage,

Devadas and Manohar 2279cluster and factor analysis. Likerts scaling technique was usedwherever necessary (a copy of the interview schedule is enclosed).The institutions from were the survey was conducted wasconveniently selected in such a way that they were geographicallyclose to the researcher and represented rural migrants population.

RESULTS AND ANALYSESProfile of studentsThe profile of the sample respondents is summarized inTable 1.Brand switchover behaviorTo understand the brand switchover behavior themigrants were asked to mark their current brand and theprevious brand of personal care products. This was doneto analyze whether there is any change in the usage ofpersonal care products. The findings are presented inTable 2.The reasons for brand switch over behavior is also dueto the reasons that there are certain brands of personalcare products marketed only in rural area, that may beone of the reason for the change in usage of brand afterthe migration. The key drivers influencing the change in

the previous brand of products are listed in the orderranked by the migrants, they are: Self image, Outdoordisplay, Attractive Package, influence of sales people,Features of the product, New habit, Awareness about theproduct, Brand image, perceived quality, Advertisement,Friends influence, Availability of the product, price of theproduct, Health related reasons, dissatisfied with theprevious brand.Satisfaction with the present brand of products


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Migrants satisfaction with the present brand of personalcare products is indicated. Satisfaction with respect toToothpaste (58%), Talcum powder (47%), Perfume(45%), Toilet soap (41%), Shampoo (38%), Hair Oil(31%), Detergent (29%). Further it was also probed to themigrants whether they will stick to the present brand ofpersonal care products after they get back to their native.The results revealed that 61% of the respondents will usethe same brand, based on the availability of the brand intheir native.Urban retail shopping environmentFactor analysis was used to find out the dimensionsaccording to which the rural consumers evaluate theurban retail shopping environment and homogeneouscustomer groups with different shopping orientationswere formed using cluster analysis. It is presented in2280 Afr. J. Bus. Manage.Table 1. Profile of student.Demographic Number %Age (years)

17-20 27 3721-24 34 45>25 13 18GenderMale 49 66Female 25 34Number of years in Chennai0-1 19 261-2 22 302-3 33 44Stay in ChennaiCollege Hostel 34 46Individual accommodation 8 11Staying with Friends 29 39Staying with family 3 04

Table 2. Brand switchover behavior.Item Change in brand preference (% )Detergent 47Hair oil 50Perfume 61Shampoo 55Talcum powder 64Toilet soap 58Tooth paste 65

Table 3.The dimensions according to which the migrant ruralconsumers evaluate the urban shopping environmentare: they are shopping conscious, enjoy urban shoppingenvironment, price and quality conscious, and compare

different shops when buying. They want shopping to berecreational, price worthy, perfect and buyer oriented.They are unhappy with poor shopping environment, ifany. These dimensions describe the factors to which themigrant rural consumers give importance in the urbanshopping environment.CONCLUSION AND DIRECTIONS FOR FUTURESTUDYThe study enables to conclude that there appears tobechange in the shopping behavior of migrants from


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rural-to-urban. Thus the finding is in supportive of similarstudies across the world. Most of previous studiesfocused on urban consumers in metropolitan areas thisstudy enables to understand the shopping behavior ofrural consumers in the urban area. The study has identifiedseven factors such as: Recreational and ShoppingConscious, Favourable attitude towards urban shoppingenvironment, Enjoy Shopping, Price Conscious, Comparisonshopping/ Complainer, Perfectionist, High qualityconscious. Marketing strategists has to concentrate onthe seven factors so as to attract the migrant population.At all India level migrants account for 24.68% of thepopulation. In case of rural population the share ofmigrants is 22.74% where as the corresponding share inurban population is 30.65% (NSSO Report). The studyrevealed that brand switchover behavior was higher intooth paste followed by Talcum powder, perfume, Toiletsoap, Shampoo, Hair Oil and detergent. The brand switchover was high in case of Tooth paste and very less withDetergent.

Devadas and Manohar 2281Table 3. Factors influencing migrant consumers shopping behavior in urban retail shoppingenvironment: Seven factor model.Factor and Item LoadingRecreation and Shopping consciousThe store I buy is colorful 0.78The store makes me buy more 0.84Favorable attitude towards urban shopping environmentThe shopping environment ambience is good 0.61I visit the store frequently 0.91The shopping environment is a meet point 0.80Enjoy shoppingI find lot of choices in the stores 0.65The shopping place is entertaining 0.75Visiting the stores is informative 0.84It is worth experience 0.68Price consciousIt adds to my self-image 0.81I think the price is too high 0.84Comparison shopping / ComplainerIt is difficult to reach 0.92Perfectionist, high quality conscious customerIt is prestigious to visit 0.62I feel it is time consuming 0.86I doubt the quality of service 0.81

The study has the following limitations in terms of onelocation considered for the study that too with a limitedsample size. Therefore generalization of the findingsrequires enough caution. The researcher recommends

that the study may be extended in the following lines: byincluding large number of samples; covering all the majorcities in India; the sample may also include migrants on

job/ business related reasons, marital reasons andothers. Attempts can be made to analyze the relationshipbetween demographic, psychographic profile and brandswitching behavior in a cross-cultural environment.REFERENCES

Andrews FM, Withey SB (1974). Developing measures of perceived life quality: results from several national surveys. Soc. Indicat. Res., 1:


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1-26.Atkinson T (1982). The stability and validity of quality of life measures. Soc. Indicat. Res., 10: 113-32.

Anderson ER (1973). Consumer dissatisfaction: the effect ofdisconfirmed expectancy on perceived product performance. J.Mark. Res., 10: 38-44.Broadbridge A, Eric C (2002). Rural grocery shoppers: do theirattitudes reflect their actions. Int. J. Retail Distrib. Manag., 30(8):

394-406.Dholakia RR (1999). Going shopping: key determinants of shoppingbehaviors and motivations. Int. J. Retail Distrib. Manag., 27(4): 154-165Hafstrom JL, Chae JS, Chung YS (1992), Consumer decision-makingstyles: comparison between United States and Korean youngconsumer . J. Consum. Aff., 26(1): 114-122.Hui CH Tiandis HC (1985), Measurement in cross-cultural psychology:

A review and comparison of strategies. J. Cross -Cultural Psychol.,16: 131-152.Home N (2002). Rural consumers patronage behaviour in Finland, Int. Rev. Retail, Distrib. Consum. Res., 149164.Houlton D, Brian S (1995). Sylvanian Families: the Production andConsumption of a Rural Community. J. Rural Stud., 11(4): 367-385.Irvine SH, Carroll WK (1980). Testing and assessment across cultures:Issues in methodology and theory, in Triandis HC, Berry JW (Eds),Allyn and Bacon, Boston MA. Handbook Cross-Cultural Psychol.,

127-180.Israelsen CL (1990). Family resource management research: 1930 1990. Finan. Counsel. Plan., 1: 3- 39Jacoby J, Chestnut R (1978). Brand loyalty: Measurement andmanagement, John Wiley and Sons, New York, NY.Johnson KP, Kim JY, Jongeun R, Sharron L, Cynthia J, Mary LD(2006). Multi-channel shopping: channel use among rural shoppers,Int. J. Retail Distrib. Manag., 34(6): 453-466Kim J, Stoel L (2010). Factors contributing to rural consumersinshopping behavior. Mark. Intel. Plan., 28(1): 70-87.Lastovicka J (1982). On the validation of lifestyle traits: A review andillustration. J. Mark. Res., 19: 126-138Lee C, Green RT (1991). Cross-cultural examination of the Fishbein

2282 Afr. J. Bus. Manage.behavioural intentions model. J. Int. Bus. Stud., 22: 289-305.Lee H, Jihyun K (2008). The effects of shopping orientations on

consumers satisfaction with product search and purchases in a multichannelenvironment . J. Fash. Mark. Manag., 12(2): 193-216Maynes ES (1976). Decision-making for consumers: An introduction toconsumer economics, Macmillan, New York, NYMoschis GP (1976). Shopping orientations and consumer uses ofinformation. J. Retail., 52: 61-70, 93Nunnally J (1978). Psychometric theory, McGraw-Hill, New York, NYParameswaran R, Yaprak A (1987). A cross-national comparison ofconsumer research measures. J. Int. Bus. Stud., 18: 35-49Rogers MJ (1988). Expenditures of rural and urban consumers,Monthly Labor Rev., 41.Sproles EK, Sproles GB (1990), Consumer decision-making styles as afunction of individual learning styles. J. Consum. Aff., 24: 134-147.Sproles GB (1985). From perfectionism to faddism : Measuringconsumers decision-making styles, in Schnittgrund KP (Ed.),Proceedings American Council on Consumer Interests, ACCI,Columbia, MO. 79-85.

Sproles GB, Kendall EL (1986). A methodology for profiling consumerdecision-making styles. J. Consum. Aff., 20: 267-279.Survey of world advertising expenditures (1989). Starch INRA Hooper,New York, NY.Sullivan P, Ronald S (1997). Store patronage and lifestyle factors:implications for rural grocery retailers. Int. J. Retail Distrib. Manag.,25(11): 351364Smith FM (1999). Urban versus suburban consumers: a contrast inholiday shopping purchase intentions and outshopping behavior. J.Consum. Mark., 16(1): 58-73.Sun T, Guohua Wu (2004). Consumption patterns of Chinese urbanand rural consumers. J. Consum. Mark., 21(4): 245-253.


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Thorelli HB, Becker H, Engeldow J (1975). The information seekers: Aninternational study of consumer information and advertising image,Ballinger Cambridge, ILWells WD (1975). Life Style and Psychographics, American marketingassociation, (Ed.) Chicago, ILWestbrook RA, Black WC (1985). A motivation-based shopper

typology. J. Retail., 61: 78-103., Pg.23

Buying behavior of Rural consumers

by V S Rama Rao on February 15, 2008

To understand the buying behavior of rural consumers, we must go to the factors that influence their

buying behavior. The factors include:

1. Socio-economic environment of the consumer

2. Cultural environment

3. Geographic location

4. Education/literacy level

5. Occupation

6. Exposure to urban lifestyles

7. Exposure to media and enlarged media reach.

8. The points of purchase of products.

9. The way the consumer uses the products

10. Involvement of others in the purchase.

11. Marketers effort to reach out the rural markets

Some of these points are discussed in some detail below:


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Influence of culture: Culture and tradition influence perception and buying behavior. For example, the

preference in respect of color, size and shape is often the result of cultural factors. Rural consumers

perception of products is strongly influenced by cultural factors.

Geographic locations: Rural consumer behavior is also influenced by the geographic location of the

consumers. For example, nearness to feeder towns and industrial projects influence the buying behavior

of consumers in the respective clusters of villages. We are discussing this aspect in detail in the section

on market segmentation in rural markets. To cite one more example of how geographic location affects

buying behavior, we can point out the fact that the lack of electricity in many rural households acts as a

barrier to the purchase of certain consumer durables.

Exposure to urban lifestyles: Extent of exposure of rural consumers to urban lifestyles also influences

their buying behavior. An increased exposure and interaction with urban communities has been the

trend in recent years.

The way the consumer uses the products: The situation in which the consumers utilize the product also

influences their buying. The example of lack of electricity affecting buying behavior illustrates this point

as well. Lack of electricity automatically increases the purchase of batteries by rural consumers.

Similarly, since rural consumers cannot use washing powders/detergent powders that much, as they

wash their clothes in streams or ponds, they go in more for washing bars and detergent cakes.

Places of purchase: Buying behavior of rural consumer also varies depending on the place of purchase.

Different segments of rural buyers buy their requirements from different places/outlets. Some buy from

the village shopkeepers; some from village markets/fairs; others buy from the town that serves as the

feeder to the rural area. It is also seen that the same buyer buys different requirements from different

laces. For understanding the buying behavior of the rural consumer correctly, the marketer must ask the

question: Where from do they buy the products and why?

Involvement of others in the purchase: Involvement of others in the purchase in the purchase decision is

yet another relevant factor in this regard. There has been a change here in recent years. In the past, the

head of the family used to make the purchase decision all by himself. In contrast, the involvement of the

other members of the family in the purchase decision has been growing in recent years. An increase in


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literacy coupled with greater access to information has resulted in this development. The marketer has

to reckon the role of the influencers while sizing up the buying behavior of rural consumers.

Marketers efforts to reach out the rural market: In recent years, many corporate companies have

been trying hard to develop a market for their products in the rural areas, investing substantially in

these areas. This has brought about some change in the way buyers purchase different products.

Developmental marketing has created discriminating buyers and hitherto unknown demand in the rural

market.

All the above factors influence the buying behavior of rural consumer and hence their responses to the

marketing mix variables, and the reference points they use for purchase decisions.

very important for rit

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