Unit 2

Rural Marketing Mix

Marketing mix comprises of various controllable elements like product, price, promotion and
place. Success of any business enterprise depends on marketing mix and these four elements
are like powerful weapons in the hand marketers.

Since behavioral factors of rural consumers are different and almost unpredictable in nature,
the marketers have a challenging task to design marketing mix strategies for the rural sectors.
Due to considerable level of heterogeneity, marketers need to design specific programs to
cater needs and wants of specific groups.
Product Mix
Product is a powerful tool of an organization’s success. The products must be acceptable to
rural consumers in all significant aspects. The firm must produce products according to the
needs and future demands of rural buyers. The product features like size, shape, color,
weight, qualities, brand name, packaging, labeling, services, and other relevant aspect must
be fit with needs, demands and capacity of buyers.
Product must undergo necessary changes and improvements to sustain its suitability over
time. The effectiveness of other decisions like pricing, promotion and place also depends on
the product.
Price Mix
Price is the central element of marketing mix, particularly, for rural markets. Rural consumers
are most price sensitive and price plays more decisive role in buying decisions.
Pricing policies and its strategies must be formulated with care and caution. Price level,
discounts and rebates, then credit and installment faculties are important considerations while
setting prices for rural specific products.
Normally, the low-priced products always attract the rural buyers, but rarely some rural
customers are quality and status conscious.
Promotion Mix
Rural markets are delicately powerful to cater to the rural masses. The promotion strategies
and distribution strategies and Ad makers have learned to leverage the benefits of improved
infrastructure and media reach.
Most of the companies advertise their products and services on television and they are sure it
reaches the target audience, because a large section of the rural India is now glued to TV sets.
Marketers have to decide on promotional tools such as advertisement, sales promotion,
personal selling and publicity and public relations.
The method of promotion needs to meet the expectations of the market. Vehicle campaigns,
edutainment films, generating word of mouth publicity through opinion leaders, colorful wall
posters, etc. — all these techniques have proved effective in reaching out to the rural masses.
Village fairs and festivals are ideal venues for projecting these programs. In certain cases,
public meetings with Sarpanch and Mukhiya too are used for rural promotion. Music
cassettes are another effective medium for rural communication and a comparatively less
expensive medium.
Different language groups can be a low budget technique and they can be played in cinema
houses or in places where rural people assemble. It is also important that in all type of rural
communication, the rural peoples must also be in the loop. The theme, the message, the copy,
the language and the communication delivery must match the rural context.
Eventually, the rural communication needs creativity and innovation. In rural marketing, a
greater time lag is involved between the introduction of a product and its economic size sale,
because the rural buyer’s adoption process is more time consuming.
Nowadays, educated youth of rural area can also influence decision-making of the rural
consumers. Rural consumers are also influenced by the western lifestyle they watch on
television. The less exposure to outside world makes them innocent and the reach of mass
media, especially, television has influenced the buying behavior greatly.
Place Mix
Rural market faces critical issues of distribution. A marketer has to strengthen the distribution
strategies. Distributing small and medium sized packets through poor roads, over long
distances, into the remote areas of rural market and getting the stockiest to do it accordingly.
Both physical distribution and distribution channel should be decided carefully to ensure easy
accessibility of products for rural consumers. Choosing the right mode of transportation,
locating warehouses at strategic points, maintaining adequate inventory, sufficient number of
retail outlets at different regions, and deploying specially trained sales force are some of the
critical decisions in rural distribution.
Normally, indirect channels are more suitable to serve scattered rural customers. Usually,
wholesalers are located at urban and semi urban to serve rural retailers. Not only in backward
states, but also in progressive states, local rural producers distribute directly to consumers.
For service marketing, employees of rural branches can do better jobs. Various sectors like
banking, insurance, investment, satellite and cable connection, cell phone, auto sales and
services etc. — the market for these sectors is booming in villages of some states in a rapid
speed. Service industries are trying to penetrate into rural areas by deploying specially trained
employees and local rural area agents.
Nowadays, online marketing is also making its place gradually in rural areas of the
progressive states. Marketers must design and modify their distribution strategies time to time
taking into consideration the nature and characteristics prevailing in rural areas, may be quite
differently than that of urban markets.
Product/Service Classification in Rural Marketing

1. FMCG –Major players are HUL, Dabur, Marico, Colgate Palmolive, Nirma,

CavinKare and Godrej
2. Consumer Durables –Usha, Bajaj, Philips, Titan, Godrej, Videocon, Onida,
Salora, Hero Cycles, Hero Honda, Mahindra & Mahindra and Tata. New entrants –
LG, Samsung and Maruti.
3. Agricultural Products – Agricultural inputs such as seeds, fertilizers,
pesticides, insecticides and implements (tractors, tillers and threshers) Livestock,
poultry and fishery. Major players are Rallis India, Monsanto, DCM Shriram,
Chambal Fertilisers, IFFCO, Mahindra & Mahindra, Eicher and Escorts.
4. Services –Telecommunications (BSNL), transport, health care, banking (SBI),
insurance (LIC) and education.
Five levels of Products
Five levels of the product offering: Core benefit, basic product, expected product, augmented
product, potential product.
The core benefit (mobility, entertainment) and the basic product (eg. Motorcycle, television)
remain the same both in rural and urban. At the third level, the marketer prepares an expected
product and defines a set of attributes and conditions that a buyer normally expects when he
purchases a product. A rural television buyer expects good picture quality, clear sound and an
easy to operate set, whereas an urban consumer looks for digital sound, flat screen, and
features such as child lock and picture in picture. A motorcycle buyer in rural expects good
shock absorbers, fuel efficiency and low maintenance cost, whereas an urban buyer expects
good appearance, power and style.
 
At the fourth level, rural consumers expect a Television set that can run on batteries
and provides better picture quality in weak signal conditions and on-screen display in local
Languages for easy operation. For urban consumer, could be an in-built DVD player with a
television and a set top box to watch his or her favourite. Fifth level, by offering TV sets that
can sustain high voltage fluctuations or TV that can run on alternate sources of power.

Classification of rural markets

 This can be classified as follows:
 a) CONSUMER MARKET:
Constituents: Individuals and Households.
Products : Consumables, Food- Products, Toiletries, Cosmetics, Textiles and Garments,
Footwear etc.
Durables : Watches, Bicycles, Radio, T.V, Kitchen Appliances Furniture, Sewing Machines,
Two Wheeler etc.
b) INDUSTRIAL MARKET:
Constituents : Agricultural and allied activities, poultry farming, fishing, Animalhusbandry,
Cottage Industries, Health center, School, Co-operatives, Panchayat office etc. 
Products : Consumables, seeds, Fertilizers, Pesticides, Animal feed, Fishnets, VMedicines,
Petrol diesel etc.
Durables : Tillers, Tractors, Pump sets, Generators, Harvesters, Boat etc.
 c) SERVICES MARKET
 Constituents : Individuals, Households, offices and Production firms.
 Services : Repairs, Transport, Banking credit, Insurance, Healthcare, Education,
communications, Power etc.
Rural Vs urban markets
It is important to understand why rural marketing is different from urban marketing. Due to
significant differences in almost all the major marketing variables, it becomes very difficult
to optimally tap the rural market potential with an urban mindset. In most cases, it requires a
modified approach, philosophy and marketing mix.
 
Therefore the domain of rural marketing is significantly different from the way marketing is
planned and implemented in urban areas. The positive results achieved by HLL‘s Project
Shakti, Colgate‘s Project Jagaruti, etc., because they had structured their rural marketing in
terms  of planning, effort, operations, distinctively from their urban marketing. This proves
the  justification for treating and approaching rural marketing distinctively from urban
marketing.
Segmentation, Targeting and Positioning of Rural Market
Rural Market Segmentation
Rural market segmentation is the process of dividing a potential rural market into distinct sub
markets of consumers with common needs and characteristics.
Rural market segmentation is the starting step in applying the rural marketing strategy.
The basic problem in segmenting the rural market is the heterogeneous nature of the market.
Definition
Rural market segmentation is the process of dividing a potential rural market into distinct sub
markets of consumers with common needs and characteristics. Rural market segmentation is
the starting step in applying the rural marketing strategy. Once, segmentation takes place, the
marketer targets the identified customer groups with proper marketing mix, so as to position
the product/brand of company as perceived by the target segments.
Market segmentation is a method for achieving maximum market response from limited
marketing resources by recognizing differences in the response characteristics of various
parts of the market. It is one of the most interesting and an effective tool in the hands of
marketer. Marketer segmentation is the sub-division of a market into homogeneous subset of
customers where any subset may conceivably be selected as a target market to be reached
with a distinct market mix.
Market segmentation is based on the fact that markets are heterogeneous and not
homogeneous. Homogenous market means a market where the prospective buyers of any
product are found to be uniform in their needs, habits, choice, nature etc. Heterogeneous
market refers to a market where the prospective buyers of any product are not found similar
or homogeneous in their needs, habits, choice, nature etc.
The basic problem in segmenting the rural market is the heterogeneous nature of the market.
In spite of there being heterogeneous market, the buyer of any product can be divided into
homogeneous groups of segments on the basis of their common needs, habits, preferences
etc.
There are various definitions of market segmentation.
Some of the definitions of market segmentation given by different experts are as follows:
According to American Marketing Association, “Market segmentation refers to dividing the
heterogeneous markets into smaller customer groups having certain homogeneous
characteristics that can be satisfied by the firm.”
According to Philip Kotler, “Market segmentation is the sub dividing of a market into
homogeneous subsets of consumers, where any subset may conceivably be selected as a
market target to be reached with a distinct marketing mix.”
According to William J. Stanton, “Market segmentation consists of taking the total
heterogeneous market for a product and dividing it into several sub markets or segments each
of which tends to be homogeneous in all significant aspects.”
According to Schiffman and Kanuk, “Market segmentation can be defined as the process of
dividing a market into distinct subsets of consumers with common needs or characteristics
and selecting one or more segments to target with a distinct marketing mix.”
In short we can say that market segmentation is a marketing concept which divides the
complete market set up into smaller subsets comprising of consumers with a similar taste,
demand and preference. It allows the firm to better satisfy the needs of its potential
customers.

Characteristics of Rural Market Segmentation 

It is difficult to effectively catch everybody in the market place, so business will aim their
producers and services at specific parts of the market. After selecting a segment of the
market, marketer should evaluates their choice carefully and ensure that they have made the
right decision. If a business begins with promoting products of market segments without a
full evaluation, it is risky, wasting time and money. A successful market segment will usually
meet the various criteria.
To be useful, segmentation of market must exhibit some characteristics that are as follows:
1. Measurable:
The market segment must be measurable in order to calculate the market potential. The
segment variables must be distinct, clear and measurable. The size, profit and other relevant
characteristics of the segment must be measurable and obtainable in terms of data. If the
information is not obtainable, no segmentation can be carried out.
Companies are unable to reach rural markets effectively due to lack of comprehensive data
related to markets and consumers. In the absence of information related to size, purchasing
power and profiles of rural consumers, these were considered similar to urban cities. Today
rural markets are being studied by various companies to obtain valuable data that can be used
for segmentation.
2. Accessible:
The segment should be accessible through existing network of people at a cost that is
affordable. Reach is important to serve the segment. Now, while segmenting rural markets, it
is important to ensure that the segmented market is conveniently reachable to the marketer to
deliver products.
Till recently, marketers preferred urban markets to rural one because of the inaccessibility of
the rural markets. But due to improvement in infrastructure and in connectivity of villages
and other new channels of distribution, rural markets are becoming increasingly accessible.
Rural consumers can be reached through vans and through village retailers visiting nearby
town distributors and retail outlets.
Segments must be accessible in two senses. Firstly, marketers must be able to make them
aware of products and services. Secondly, they must get these products to them through
distribution system at a reasonable price. For example targeting rural population could be
through television, radio and by opening outlets locally.
3. Differentiable:
The market segments have to be diverse that they show different reactions to different
marketing maps, if not then there would have been no use to break them up in segments.
Segments attract the consideration of marketers only when they have distinguishing features.
Rural consumers are identified as different segments as their responses may be different from
urban consumers at least for some products.
For Example – While buying a motorbike, rural consumers give more importance to
sturdiness, mileage and carrying capacity of bike, whereas urban consumers look for style,
power and aesthetics.
4. Substantial:
The segment should be large enough to be profitable. The segment should comprise either a
large number of light users or a small number of heavy users so that marketing becomes
beneficial to the company. It should consist of people, who are similar in perceptions,
learning, attitude, preferences and actions. As such, covering them will be easy.
Rural areas are not homogenous. Region-wise differences are found in language, mind set
and behaviour. So, it is difficult to design separate promotional programmes as the size of
consumers is not large enough to make the effort viable.
5. Actionable or Feasible:
It has to be possible to approach each segment with a particular marketing programme and to
draw advantages from that. The segments that a company wishes to peruse must be
actionable in the sense that there should be sufficient finance, personnel and capability to take
them. Hence, depending upon the reach of the company, the segments should be selected.
6. General Considerations:
Apart from the above requisites, the segment must have growth potential, be profitable,
carries no unusual risk and has competitors, who do not fight directly with the product or
brand. The firm must possess enough resources for market segmentation. The segment
criteria should follow the instructions and guidelines issued by the government regarding
distribution of a particular product.
The segment should be relatively stable over a period of time. The segment that emerge
rapidly and disappear just as quickly will not be a good segment. So segment must be
suitable, practicable and attractive to the firm.

Approaches to Rural Market Segmentation 

Broadly speaking, we have two main approaches to identify market segments as given below:
A. People-Oriented Approach (Customer Personal Characteristics):
We can classify the customers by customer dimensions such as geographic location,
demography, socio-economic characteristics and psychographic characteristics. These are
variables and they are independent of any product or service and the particular situation
encountered by the buyer in making buying decisions.
Following are the types of customer who will buy our products:
1. Geographic Location:
Geographic Location is the usual and popular basis for market segmentation. The market
could be divided into urban and rural markets. While urban population is highly concentrated,
rural population is scattered over a wide geographical area. Since 1980s, many companies are
targeting rural consumers due to growing purchasing power. About 50 per cent of the rural
population lives in about one lakh villages having a population of over 2,000 each and
companies like HUL have been able to cover this segment by establishing retail network in
these villages.
We have four regions, i.e., South, West, East and North. It has been observed that consumers
in South, by and large, are conscious about cleanliness, health, education and culture. Due to
hot weather conditions, there is increased use of talcum powder in South and Ponds has a
high market share in this region. The demand for woollen dress materials is high in North
during winter season compared to other regions in the country.
2. Demographic Segmentation:
In rural areas, the husband provides economic security to the members of the family and he
makes purchase decisions. Nowadays, school-going children have high awareness about new
products and they are influencing buying decisions in the family. Therefore, the marketers are
targeting the younger lot for products like biscuits, chocolates, shampoos and soft drinks.
3. Socio-Economic Segmentation:
Major income still comes from agriculture though the share of non-farm income has gone up
in recent years. Based on occupation, there are four important groups, who form the target
population for consumer durables like colour TV, refrigerator and two-wheelers.
i. Farmers:
(a) The landlords which include Zamindars/Mitadars/Thakurs, traders and local
moneylenders. They possess large acres of land and have spacious houses in the village. They
have high disposable income. Their lifestyle can be compared to that of upper income group
of urban areas. They have relatives staying in cities and in many cases abroad also. Their
children go to urban schools.
(b) Affluent farmers who live in villages and follow modern methods of cultivation. They
occupy a high position in the society that is above the normal population with respect to
social and economic status in the village. They are hardworking and aspire for better living
conditions. They have high disposable income and try to maintain their status in the village.
The owner farmers who constitute 34 per cent of households, own about 30 per cent of
durables.
The small and marginal farmers occupy low rank in the rural social hierarchy and their needs
are basic, i.e., food, clothing and shelter.
ii. Traders:
The traders constitute about 8 per cent of the rural households and own between 15-20 per
cent of the durables.
iii. Service Class:
The service class who includes teachers, clerks, mechanics, electricians in the villages and
office and factory workers, who work outside the village, constitute about 13 per cent of rural
households and own 30-40 per cent of durables.
Rural income is highly seasonal as it is dependent on agricultural activities. Therefore, most
of the purchases of durables, jewellery and clothes takes place during post-harvest season and
during festivals like Onam, Pongal, Diwali, Idd, Gudipadwa and Baisakhi.
Family life cycle exercises definite influence on consumer behaviour with regard to purchase
of consumer goods.
Example – In rural areas, the users of shampoo are the young daughter or the daughter- in-
law and the elderly women continue to use natural products like shikakai powder.
iv. Rural Youth:
The rural youth in the age group of 20-25 years, play a major role in the purchase decisions
of the family. They view television and cinema and enjoy seeing cricket matches and action
movies. They are the target group for products like toothpaste, shampoo, soft drink,
deodorant, television model, audio system, mobile phone, etc. They are moving from bicycles
to motor cycles. Even branded clothes and shoes have entered rural homes, though the sales
volumes are low at present. Marketing researchers can meet them at telephone booth,
playground, retailer shop and village square. However all decisions regarding agriculture and
inputs are taken by the head of the family in most of the cases.
4. Psychographic Segmentation:
Personality traits such as dominance, aggressiveness, achievement orientation, motivation,
etc., may influence buyer behaviour. Lifestyle can be measured by the products the person
uses and the person’s activities, interests, opinions and values.
In a rural society, there are grades of people based on income, occupation and wealth. The
educated youth, innovative farmers, village president are the important opinion leaders and
marketers are targeting this group for promoting products and services.
B. Product-Oriented Approach (Customer Response Behaviour):
The customer response or buyer behaviour may be considered in relation to product benefits,
product usage, store patronage and brand loyalty. We want to know why consumer buys a
certain product. Example- Bullet Motor Cycle is considered as a sturdy vehicle (product
benefits) and creates a ‘Macho Image’.
1. Use Pattern:
A buyer may be classified as heavy, medium, light user and non-user. The use of consumer
products such as shampoo, hair oil, toothpaste, talcum powder is low in rural areas due to
poor affordability and many marketers have introduced small unit packs of these products to
meet the requirements of lower and middle class rural consumers. In agriculture, cotton
farmers are heavy users of pesticides and the marketers have come out with large packs
(20/25 liters) of the products to meet their special requirements.
2. Benefits Pattern:
Consumers buy products primarily to secure expected benefits. Rural buyers look for value
for money while purchasing products. They look for quality but cannot afford high prices.
They are concerned with utility of the products rather than mere good looks and frills. The
rural consumers particularly the lower/middle income group are budget- conscious unlike,
urban consumers who are comparatively more status-seeking.
Examples-
1. Bullet motor cycle is popular in villages due to its ruggedness.
2. HMT watches are seen on many a wrists for its utility value.
3. Rural consumers prefer strong tea (Kadak Chai).
4. Titan has introduced Sonata brand watches; priced between Rs.350 and Rs.800 to meet the
requirements of price-sensitive rural and semi-urban consumers.
3. Brand Loyalty:
A rural consumer is price sensitive due to low purchasing power and lack of awareness about
the quality of products available in the market. However, they will continue to patronise a
brand once they are satisfied with the product.
Example – A few of the popular brands are Lifebuoy, Parle, Ponds, Nirma, Tata Salt,
Colgate, Philips, etc.
4. Store Patronage:
It has been observed that rural consumer buys from the same shop. The retailer extends credit
to the consumers and many have running credit account with the same retailer. He influences
buying decisions of the consumers. Therefore, the marketers have to identify key retailers in
rural markets and ensure product availability for success of business.
5. Predispositions towards Products and Brands:
The attitudes, perceptions, values, beliefs, intentions and preferences are the constituents of
predisposition, indicating the consumers’ state of mind, predisposing the consumer to behave
in a particular way towards a product, brand, dealer and the company. Segmentation studies
based on buying motives, attitudes, perceptions and preferences give much better results
regarding buyer behaviour than those obtained by demographic, socio-economic variables or
determinants. While age, gender, usage, income can be measured objectively, personality
traits, lifestyles, motives, attitudes, values and beliefs have to be inferred as they are
subjective phenomena and cannot be objectively measured.

Types of Rural Consumer’s Segmentation

The step towards developing a segmentation strategy is to locate basis for segmenting the
market. There are different variables which are used for this purpose. The variables relate to
consumer demographics, psychographics, geographical and behaviour. The variables used for
urban segmentation may not necessarily fit into the scheme of rural consumer segmentation.
But it is necessary to segment rural consumers in order to target them effectively.
There are four major segmentation variables used for rural consumer’s segmentation which is
explained below:
Variable # 1. Geographical Segmentation:
The region, city size, its density whether urban, semi urban or rural and the climate matters a
lot in segmenting the market on the basis of geographical segmentation. The main advantages
of this segmentation base are that it reflect the physical location of the market and it’s
climatic conditions.
Rural consumers can be segmented according to geographical factors like:
i. Region,
ii. State,
iii. District,
iv. Village and
v. Climate
i. Regions:
The region is divided into four zones – North, South, East and West. Regional diversity
within rural India dictates that the real challenge lies in understanding the fragmented rural
consumers if marketers want to succeed in convincing them to consume. There are variations
in the cultural and behavioral traits of consumers across the four regions of the country.
Marketers need to evolve effective strategies around products that fulfill functional needs and
the need gaps of different regions.
ii. Village Population and Density:
The census of India has categorized villages into different strata on the basis of their
population. The rural life style changes with size of village due to a variation in the level of
infrastructural and economic development. So far, most companies have targeted villages
with a population of more than 2000, which have better infrastructural facilities and high
purchasing power. What marketers need to do is to segment the village markets on the basis
of development indicators relevant to the product category and target accordingly.
iii. Climate:
Climate conditions also play a significant role in the consumption of specific products. Agro
based technology companies segment India into eight geo-climate regions based on the
conditions of soil and the climate. The climate conditions have great impact over the
purchase decision. For example coolers and Ac are not normally sold in hilly areas.
Variable # 2. Demographic Segmentation:
Demographic is also an important, most purposeful and commonly used basis. Demographic
basis has various advantages. These are easy to recognize and easy to measure. Demographic
data can be easily made available. Rural consumers can be segmented on the basis of
demographic factors like age, income, family structure, landownership etc.
Some of the demographic variables are explained below:
i. Age and Life Cycle:
With the changing life cycle stage, consumer’s need for products and brand preferences also
changes. This phenomenon is true for both rural and urban consumer. For example, in rural
India, young adults make preference for mobile handsets with latest features and technology
whereas elders are satisfied with second hand mobiles with simple and basic features.
ii. Family Structure:
In rural areas, family structure is an important factor for purchasing a product. As the family
size increases, so does the consumption of products. In such a case, the family pack or the
economy refill pack works very well. Similarly large families have more bread winners,
which translate into higher family income and thus a greater consumption of products. This
often leads to multi-brand consumption of a product category among different family
members.
In past, there were mostly joint family system in rural areas but gradually rural India is
moving from large joint family system to individualized joint family system (families staying
together but with separate kitchen) and nuclear family system. This result into greater
demands especially for consumer durables, because every new family unit living separately
needs a T.V., Refrigerator, LPG connection, Pressure cooker etc.
iii. Occupation:
It is an important base to segment the market. The major occupation in rural India is self-
employment in agriculture, labourer, and self-employment in non-agriculture and regular
salary/wages. The variation in the major occupation groups necessitates the segmentation of
rural markets on a different basis. Both product categories and consumption pattern change
among different occupation groups. Therefore, marketers should consider occupation patterns
while segmenting the rural market for their product category.
iv. Income:
In rural India, the flow of income is mostly seasonal (post-harvest for farmers or weekly/
daily for wage earners). The salaried class with a regular monthly income constitutes a very
small segment of rural consumers. Many urbanities pay income tax, whereas agricultural
income is not taxable. Also due to irregular income pattern and multiple source of income, an
assessment of rural income is difficult.
So, urban income based segmentation strategy is not entirely appropriate in case of rural
consumers.
v. Education:
Education provides knowledge and skill. Rural folks are mostly illiterate. But due to
government launched literacy programmes, there is a considerable raise in the literacy level.
Despite that, their thinking capabilities, in terms of divergence and association with images
may be different to the urban.
vi. Religion and Caste:
Religion provides a “code of life” and links the visible real word with invisible world after
death. Religion and caste play an important role in influencing the social economic, political
and cultural behavior of certain community particularly in rural areas. The influence of
religion on the consumer purchase behaviour is an important consideration for marketers.
The settlement of villages has historically taken place on the basis of caste and religion,
villages often having a predominance of people belonging to one particulars caste or religion.
Their differences are clearly visible in villages, where hamlets of the upper and lower casus
are kept separate. Village shops are also decorated along similar lines in many cases.
This particular feature of caste dynamics cannot be ignored while segmenting the rural
markets. However, when it comes to trade and commerce, caste does not play a significant
role.
vii. Landownership:
Rural livelihoods, security, property sometimes are intrinsically linked to land. Urbanites tend
to regard land as just another asset and they face to appreciate the emotional bond that
farmers have with their land. Segmentation on the basis of land should include five factors,
size of land holding, quality of land and area under cultivation, irrigation method, agricultural
productivity and crop mix etc. Therefore, rural markets can also be segmented on the basis of
land holding size into the following categories ‘large farmers, medium farmers, small
farmers, marginal farmers.
Variable # 3. Psychographic Segmentation:
The psychographic segmentation is at the mind level. It is a recent approach to market
segmentation which has emerged as a major alternative to the traditional approach. It segment
the market on the basis that how people act.
Psychographics include factors such as:
i. Personality traits,
ii. Lifestyle and value system,
iii. Social class,
iv. Culture.
i. Life Style:
Life style is defined by the activities, interests and opinions of the persons. Lifestyle reflects
the overall manner in which persons live and spend time and money. People with the same
demographic group or social class can exhibit very different lifestyles and hence different
psychographic profile.
With the advent of satellite Television and Cable networks all across the country, the rural
people have been exposed to the rich life style of the urban households. Landlord, farmers
and educated are exposed to an urban environment aspires to match with urban lifestyle.
Whereas, average landholding farmer manages small saving and opt for time tested
technology and fall in category of followers.
ii. Culture:
The culture of a region provides a window into the attitudes of the people who live there,
their relationships and power structure. Cultural identities have diluted to some extent in
urban areas due to the influence of western culture, but it is largely intact in rural areas.
iii. Personality:
Personality refers to the set of psychological and physical characteristics of an individual that
determine human behaviour. These characteristics are unique, making individuals different
from one another. Marketers by experience found that consumers buy those products or
brands which match or fit with their self-perceived personality. Personality affects the
consumption of many goods especially those which are consumed publicly. Personality can
be designed with the help of characteristic like self-confidence, sociability, authority,
creativity etc.
For example, a person with social nature and creative zeal is likely to prefer picnics, parties,
photography. Marketers may offer restaurants with good feed and ambience, picnic spots,
cameras etc., to satisfy his requirements.
iv. Social Class:
Society consists of a structure, which represents a hierarchy of classes or grades of people.
The social class may be categorized as upper class, lower class, middle class etc. Upper class
demands expensive and superior products like as a mobile phones, luxuries items etc. Middle
class demands comforts products like cooler, scooter, furniture, crockery etc.
Lower class demands necessity products. The buying behavior of these classes differs
significantly. This can also be used as base for segmenting the markets.
Variable # 4. Behaviourial Segmentation:
Behavior of consumers is a better guide to segment the markets. Behavioral segmentation
involves various parameters like occasions, benefits sought, user status, loyalty status etc.
Behavioural segmentation is based on the consumer response to his requirements.
i. Occasions:
Buyers can be segmented on the basis of the occasions on which they purchase a product. In
rural areas, most durables are purchased after the harvest season because this is a time when
farmers have cash after selling their agricultural produce. Like the Baisakhi season in Punjab,
Onam and Ugadi in South India and Diwali and Dussehra in most parts of the country, are
important festival occasions when villages prefer to buy new items.
Rural people prefer buying, when melas and haats are organized. Also weekly haats and
shandis are the times to purchase daily use products, vegetables and spices.
ii. Benefits Sought:
Benefit segmentation emerges from the understanding the needs of consumers. Customer
satisfaction depends upon product benefit such as economy, performance, durability, status,
task etc. Many marketers do the segmentation on the basis of the benefits sought by the
consumers to position their products in rural areas.
The benefits sought from a product vary from consumer to consumer. Rural consumer may
buy a motor bike seeking one or more benefits like economy in purchasing, status symbol,
convenience of transport. Rural consumers are more concerned with the utility of products
than its appearance and sophistication.
iii. User Status:
On the basis of usage of a product, consumers may be categorized into first time user, regular
user, potential user and non-user. In rural markets, the majority of consumers fall within the
categories of potential users or first time user for most product categories. Therefore, a focus
on product trials and demos is very crucial in rural areas, unlike urban consumers who are
already expose to multiple brands and products through a number of channels.
iv. Usage Rate:
On the basis of usage rate, consumers may be categorized into light, medium and heavy
users. Taking this into account, marketers have introduced different pack size to meet the
requirements of different users. Now days, most of consumers goods are available in sachet
packs for rural consumers and family packs for joint and large families. Though the heavy
users are small in number but they show a high percentage to total consumption. Normally,
heavy users consume four to ten times more than the light users. Therefore marketer likes to
attract the heavy users.
v. Loyalty Status:
A marketer can be segmented on the basis of consumer’s loyalty for specific brands. The
peculiar phenomenon of brand stickiness works in rural areas, which helps marketers to retain
customers for longer periods with minimal efforts.
Rural buyers take a long time to decide on a particular brand, but once they are convinced,
they are generally more brand loyal than the urban customers. Segmentation based on loyalty
help the marketers to tailor the communication and product appeal to retain the loyal
consumers or to attract new consumers from rival brands or converts non loyal buyers into
loyal buyers.
vi. Place of Purchase:
Rural consumers buy different product and services from different markets place. In rural
areas, place of purchase changes with change in product categories. This is unlike the
situation in urban markets, where customers make most of their purchases from one place or
even from one super market.
Taking advantage of this specific rural purchasing behaviour, marketers can promote their
products by developing an understanding of the place where potential buyers congregate most
often and from where, they prefer to buy specific products.
Degrees of Rural Market Segmentation
The marketer adopts several approaches to segmenting a rural market.
These approaches are also known as degrees of rural market segmentation which are as
follows:
1. Mass Marketing:
Mass marketing is a philosophy which offers the same product and applies the same
marketing mix to all consumers assuming that there is no significant difference among
consumers in terms of needs and wants. Initially, a majority of companies that entered the
rural market, related it an extension of the urban market.
They followed the trickly down theory and tried to sell urban products in rural markets. They
have used the mass marketing approach in rural markets, not attempting any segmentation of
consumers and treating all consumers as the same. This is the first step of marketing where
marketers do not have much knowledge of the market.
For Example – Colgate, Palmolive successfully marketed the same Colgate toothpaste to all
consumers in urban and rural markets till recently. However, the rural markets started to
evolve and consumers become more demanding, Colgate introduced Cibaca.
In this approach company feels that no segmentation is necessary. This is undifferentiated
marketing strategy.
2. Segment Marketing:
Segment marketing is still in its early stages in rural markets. It is only in recent years that
marketers have realized the potential of different consumers segments that are substantial
enough to target and have designed and launched low priced, innovative products for rural
markets.
Hindustan Unilever uses two different approaches to market its two different brands –
Hamam and Lifebuoy. On the one hand it tries to reach the whole market in one go by using
the mass marketing approach for its brand Hamam. On the other, it has introduced four
variants of its brand Lifebuoy – Active Red, Active Orange, Plus and Gold – to reach four
different segments of the Indian market.
3. Niche Marketing:
A Niche is a very small group with a distinctive set of traits who seek a special combination
of benefits. Niche is a narrowly defined group of customers that have a distinct and complex
set of needs. In cycle industry, there might be segments like cycle for regular users, sports,
racing, kids, girls etc.
Niche is created when cycle is required for physique club, physically handicapped with left
and right hand working etc. In the niches, there are few or no competitors and the product
might command a premium price. Niche marketing identified special sub groups within
larger segments and offer different products and services.
4. Micro Marketing:
Micro marketing refers to the tailoring of products and programmes to satisfy a particular
taste or need. Micro marketing occurs when target market is further bifurcated and the needs
of the smaller customer groups are addressed on a local basis. Some specific models/styles,
features products are made available at selected places on a local basis. One of the examples
of micro marketing is Dabur’s Anmol Hair Oil, a mustard amla bases oil launched for
northern Indian markets at INR 10 for a 50-ml pack, targeted at rural consumers using loose
mustard oil. It includes local marketing and individual marketing.
(a) Local Marketing:
Local marketing involves designing brands and promotions to suit the needs and wants of
local customer group on a geographical basis. As rural people do not have much exposure,
local marketing has relevance in many cases. It helps in effective marketing in the face of
differences in demographics and the lifestyles of communities in different regions. Regional
and local brands are very good at local marketing since they operate in a limited geography,
which helps them to develop a good understanding of local consumers and their specific
needs.
(b) Individual Marketing:
Individual marketing is customized marketing or one to one marketing. The focus of rural
marketer is further shifting from local basis to Individual customer basis. With the
advancement in manufacturing because of breakthrough in information technology for
example, use of computer-aided design and computer aided manufacturing, it has now
become possible to manufacture a product as per the individual customer needs or of a
buying organization.
Tailoring, forging and carpentry are the examples of individual marketing in rural set-up. In
this approach an individual can get a product according to his specific needs. To address great
diversity of rural markets different segmentation approaches have been attempted by
marketer to reach rural consumers effectively.
5. Target Marketing:
The modern marketing concept starts with the definition of target markets. The target
marketing has its roots in the marketing age. Target marketing helps the marketer to correctly
identify the markets-the group of customers for whom the product is designed. There are two
approaches that can be followed despite the fact that different customers have different needs.
First is to treat the target market as a single unit-one aggregate market and draft one
marketing mix for them. This is known as shortgun approach.
Second, total market is viewed as consisting of small segments and the consumer differenced
necessitates different marketing mixes for each of them. Based on the capabilities of a
company, the selection of each segment take place. This is known as Riffle approach. Thus,
there might be no market segmentation or complete market segmentation depending upon
shortgun approach or riffle approach.

Approaches to Rural Segmentation

 
First level segmentation could be done on the basis of occupation, i.e. farm and nonfarm
activities. The compilation of an index could then be attempted with farmers categorized into
five prosperity levels, ranging from very poor to very prosperous.
 
Geographic Segment
1. Regions : East, West, North and South
2. Village size : <500, 501-1000, 1001-2000, 2001-5000, >5000 . Rural lifestyle changes
with village size due to variation in the level of infrastructural and economic
development.
3. Density : Low, moderate, high (Villages with high population density have better
infrastructural facilities and higher purchasing power.
4. Climate  :  Summer,  Rainy,  Winter  (Talcum  Powder  is  used  more  in  hot  and 
humid regions)
5. Culture (culture affects language, dress, food habit and location)
 
Demographic Segmentation
1. Age and life cycle : Children, teenagers, young adults, elders, seniors (Confectionary
and toys are more desirable in childhood, whereas young adults seek motorcycles, soft
drinks,  trendy clothes and music systems)
2. Family structure : Nuclear, joint (Family pack or economy refill packs work very well
with joint families, Joint family translates to greater consumption of products) Gender
: Male, female
3. Income : Due to irregular income patterns and multiple sources of income, assessment
of rural income is difficult.
4. Landownership : Land owners, rich farmers, small or marginal farmers, agricultural
labourers. Segmentation on the basis of : size of landholding, area of land under
cultivation, irrigation method, crop mix and rate of money realisation. Education &
House type
5. Occupation : Cultivators, shopkeepers, poultry, artisans
6. Religion & Caste : Settlement of villages on the basis of religion and caste. Eg. Rajput
village.
 
Psychographic Segmentation
 
1. Social class –Social class is determined by a combination of factors like education,
occupation, income, wealth and others. Classified rural consumers into five classes:
 2. Affluent, The Well off, The Climbers, The Aspirants and the Destitutes on the basis
of three variables : Education of the chief wage earner, Ownership of durables, and
Type of house.
3. Lifestyle –Overall manner in which a person lives and spends time and money.
Personality
 
Behaviour Segmentation
1. Occasions : Festival, mela, jatra, weekly haat. In rural areas, most durables are
purchased during or after the harvest season because this is when farmers have cash in
hand after  selling their agricultural produce. Melas offer products at attractive prices
and weekly haat days are the time to purchase daily-use products, vegetables and
spices.
2. Benefits sought : Quality, convenience, value for money, service. Rural consumers
are more concerned with the utility of the product than its appearance and
sophistication.
3. User status –Rural consumers fall into the category of first-time users for most
product categories. Therefore, the focus on product trials and demonstrations is very
crucial in rural market. Tag line for Ghariwas Detergentkarein‘ induce customers to
try out the product.
4. Usage rate –Usage for most FMCG products is relatively low among rural consumers
due to poor affordability. Marketers have launched sachet packs for rural consumers
and  family packs for joint families.
5. Loyalty status –Rural buyers take a long time to decide on a particular brand, but once
they are convinced, they are more brand loyal than their urban counterparts.
6. Place of purchase –Village shops (Tea, kerosene), Haats (Food grain, pulses,
vegetables), Nearest town (Fertilisers, seeds), Melas (Clothes, cheap jewelry)
 
Multi-attribute Segmentation
 
Thomson rural market index –Overall indicator of rural market potential and considers 10
variables : Agricultural labourers, Gross cropped area, Gross irrigated area, Area under non-
food crops, Pump sets, Fertilizer consumption, Tractors, Rural credit, Rural deposit, Villages
electrified.
MICA Rural Market Ratings: Used to segment rural markets. For each district the socio-
economic indicators are classified as: Demographics, Major occupations, Communication
methods, Educational profiles, Shops and other establishments, Commercial banks,
Agricultural data, Medical facilities, Major crops.

Benefits of Rural Market Segmentation 

Market segmentation can be very effective strategy to tap a market that is heterogeneous with
respect to its response to a product category. Therefore, rural market being heterogeneous in
nature is advisable to be segmented. Market segmentation ensures higher customer
satisfaction and improve effectiveness of the marketing programme. It helps the marketers to
match their products with the real needs the consumer groups. It is benefitted to both
marketers and customers.
The benefits of rural market segmentation are:
1. Customer – Oriented Philosophy:
Market segmentation improves a company’s understanding of why customers do or do not
buy certain product or services. It also provides an understanding that how a company can
make adjustment to meet the changing market demands. Market segmentation results in many
wars with in the segment such as Coke vs. Pepsi, Tata Salt vs. Captain Cook etc.
Each time a war goes on, customer is the winner. Consumer gains in terms of added quantity
and variety. As the marketing mix will be determined on the basis of the homogeneous
market segments, it helps in serving the needs of customers in an optimum manner.
2. Enables Development of Strong Position of Brand:
By segmentation in an effective manner, a marketer can increase the company’s sales
volume. Each segment has different demand pattern and when the manufacturers satisfy the
demand of different segments by changing their products, the total sales of the company
increases. As the organization is serving the consumer needs in a highly customer oriented
manner, it establishes a strong image of the organization in the target market.
3. Enable Tailoring of Marketing Programme:
When customer needs are fully understood, marketer is able to formulate and implement
different marketing programmes which suits to the markets. In the absence of segmentation, a
strong marketing programme will not be framed and which will not be effective for all
consumer groups. Marketer can make better adjustments of his products and marketing
appeals by segmenting the markets.
As the marketer is aware of the consumer needs, he can develop a customized and tailored
marketing programme that can delight the consumer with benefits and the experience.
4. Help in Cutting of Wasteful Expenditure on Unwanted Consumers:
Rural market segmentation helps in cutting the wasteful expenditure on unwanted consumers.
A marketer can focus and make expenditure on a particular customer segment which will be
profitable for them.
Under market segmentation, marketers are in a better position to locate the target customers
and compare marketing opportunities. In the market area where response of the customers
seems to be poor, the strategy of company can be readjusted so that the sales can be pushed
up.
5. Matches Needs and Wants of Specific Groups of Buyers to Firm’s Setting:
Market segmentation help the marketer to match the needs and wants of specific group of
buyers with firm’s setting. All marketing activities are directed towards the satisfaction of
consumers and with the help of segmentation it become easy to measure the level of
segmentation in each segments and also to make improvements in the segmentation level.
The company can fulfill the specific customer group’s needs by considering their resources
and overall objectives.
6. Stimulates Demands through Multi-Product for Multi-Segments:
Rural marketing segmentation also helps in stimulating demand through multi products for
multi-segments. In practical life, the marketer does not use single variable for market
segmentation, rather it uses multi attribute segmentation.
7. Helps in Knowing Company Capability and Assessment of the Competitors
By looking at a particular segment company can carry SWOT analysis. SWOT analysis
details out the strength and weakness within the company and opportunities and threat
outside the company. Thus it keeps the marketer to adopt different strategies for different
markets, especially in rural markets. It helps to know the level of competition in each
segment. By knowing the strength and opportunities and controlling weakness and threat a
company can enhance its capabilities for marketing its products in a particular segment in
rural areas.
8. Provides Opportunities to Expand Market and Hence Enhances Marketing Efficiency:
By segmenting the market, a marketer is able to create new markets for their products It
enhances marketing efficiency by offering specific pricing, sales promotion and distribution
channel as per the requirement of different segments. Marketers get benefits in focusing the
relevant segment more closely and look for changes in the market requirements. This all
increases the marketing efficiency of the firm.
Disadvantages of Segmentation
1. It may create logistical problems as companies try to meet the varied
2. requirements of different regions.
3. It may reduce economies of scale.
4. It may affect the overall image of a brand as promotion programs vary from place to
place

Targeting
As a next step, targeting involves evaluating the varioussegments and
selecting the ones to target.
There are three aspects of Targeting which are following

1. Evaluation and Selection of Segments

Overall Attractiveness –One should not be impressed by size alone. This is because in rural,
the size of the market may be big but the purchasing power of rural consumers is limited.
Population engaged in non-farming activities offers higher per capita prosperity. Also, this
segment is more exposed to products and accepts newer products and services more readily.
 
Company Objectives and Resource Competencies –If a company‘s objective achieve long-
term sustainable sales volume by expanding its consumer base, then it has to go rural instead
of expecting consumers to come to urban markets to purchase products and services. This is
demonstrated by companies like HUL, and Colgate Palmolive, which are reaching rural
homes with their products. Smart marketers in rural like HUL initiated Project Shakti pilots
have been transformed into mega rural marketing models.
 
2. Coverage of Segments
 
a. Undifferentiated Marketing –Mass distribution and mass advertising. eg. Many toilet
soap users prefer medicinal value, cosmetic strength, economy and the feeling of
Freshness in their toilet soap. Medimix offers all these features and also claims that it
is a beauty care Ayurvedic family soap. Coca Cola targets both urban and rural
market with the same drink.
b. Differentiated Marketing –Investigates and identifies differences between segments
and tries to match the market offer to the desires and expectations of each segment.
Eg. Companies developed 25-30 HP tractors for small or marginal farmers and 50 HP
tractors for large farmers.
c. Single segment concentration –Due to the small number of consumers in each
segment, targeting only one segment would spread marketing efforts thinly over a
vast area. With Brands  like  Lifebuoy  Active,  Lifebuoy  Gold,  Lux,  Breeze  and 
Liril,  HUL  targets different consumers segments in the rural market. Choosing a
coverage strategy
 

Positioning
Act of designing the company‘s offering and image so that it occupies a distinctive place in
the mind of the target segment.
 
Positioning involves :
 
1.    Identifying the unique features of the product as well as the differences of the offer
vis-à-vis the competitor‘s offer.
2. Selecting the differences that have greater competitive advantage and
3.  Communicating such advantages to the target audience.
 
Eg. Himami positions Sona Chandi Chyavanprash on the two platforms of a health body and
a sharp mind.
 
Ghari detergent –low price high quality..
 
Lifebuoy Active –from male soap to a family soap.
 Identifying the Positioning Concept
 
Product Differentiation –Can be differentiated on the basis of form, features, durability and
quality. Coke introduced Chota Coke at Rs 5 for rural. Hero Honda came out with the lower
priced Dawn model of motorcycle for the rural buyer. Meswak, Neem and Babool toothpaste
are herbal versions of the soap.
 
 
Service Differentiation –Service may be differentiated in respect of delivery, installation and
maintenance. Reliance, a private LPG company, when pitted against the three well
entrenched public sector undertakings created service differentiation on the basis of their
distribution network and better refilling facility.
 
 
People –People who are widely respected and admired by consumers. Endorsement of Coca
Cola by Aamir Khan (dressed as a villager) or of Sona Chandi Chyavanprash by
 
Sunny Deol. Courteous staff of HDFC Bank.
 
Image –Foreign brands image. Image is built by advertisements, symbols, logos,
signs, colors and general reputation of the company.
 
 
Selecting the Positioning Concept
 Critical factors that should be considered while positioning a brand are:
1. Attractiveness –Does it provide value to the customer?

2. Distinctiveness - Is it different from that of its competitors?

3. Pre-emptive - Is it very difficult for the competitors to copy it?

4. Affordability - Can buyers pay for it?

5. Communicability –Can the product difference be clearly expressed?

 
Developing the concept
 
Deciding which positioning to promote : Lay stress on the generic benefit of the
product. Eg. Sprite bujhaye only pyaas, baaki sab bakwaas.
 
Thanda matlab Coca Cola.
 
Deciding how many ideas/differences to promote –Positioning of two or three ideas
would be a better proposition as rural consumers would think that they are getting more
value for their money.
 Decision Actions
1. Identification of various bases for segmenting
Segmentation market
2. Developing profiles of the market segments
3. Evaluating the market segments for their
Targeting attractiveness
4. Deciding the market coverage strategy
5. Communicating the chosen competitive
advantage to the customers
Positioning 6. Identifying a set of possible competitive
advantages of the brand
7. Selecting the right competitive advantage

Rural Consumer Behaviour

Rural Consumer

Definition: A Rural Consumer is an end-user of the products offered in rural markets.

More precisely, a rural consumer is the one who buys goods & services for self-consumption,
reselling or reproduction in the rural areas.

The rural consumer has less disposable income. So, they prefer to buy less expensive
products. They differ from the urban consumers in respect of lifestyles and thinking.

There is a significant change in the rural consumers due to the growth in:-

 Disposable Income
 Education Facilities
 Media Reach
 Urban Interactions
 Reach of the marketers

Rural markets came out as potential markets over the years. With the markets, there is a
growth in consumer base having varied characteristics.

Therefore, rural marketers analyze the consumption pattern and lifestyle of the consumer. To
remain competitive, the marketers develop rural and region-
specific marketing strategies.
Hence, the marketers must explore and understand rural consumers’ buying habits and
preferences. This is helpful in meeting the organizational marketing objectives and earning
profits.

Characteristics

The user’s needs and wants of the rural market are different. Thus, the rural consumer
possesses distinctive characteristics.

Education

Consumers are less literate due to fewer educational facilities.

The marketers need such strategies which generate product awareness considering this
characteristic. They can incorporate an audio-visual medium of communication in their
marketing campaign.

Low-Income Levels

The income of the rural consumer has grown over the years. But still, their disposable income
is spent on basic necessities. They prefer affordable products and purchase only the required
quantity of goods.
The marketers must launch their products in small packaging and at lower rates.

Occupation

The consumption pattern of rural consumers largely depends upon their income and
occupation. It is observed that the occupation of a rural consumer is framing in general.

There exist other professions as well, like service providers, technical workers, etc.
The companies must launch such products in markets that satisfy all consumer groups.

Impact of Reference Groups

In rural areas, the consumer is often influenced by a few people. Consequently, there is a
significant change in their buying behaviour.

The rural marketers must plan their strategies that positively impact these influencers.

The people who may influence rural consumers may include:

1. Local Vendors
2. Teachers
3. Bank ManagersLocal Leaders
4. Health Workers, etc
5. Media Habits

People residing in rural areas are less literate, as discussed above. Thus, print media does not
have much impact on rural consumers.
The companies must use those communication channels that reach consumers quickly.

Brand Loyalty

Rural consumers tend to be loyal to brands. With the development, rural consumers are well
aware of the available brands.

Some brands have successfully created a strong consumer base in the rural markets.

Value for Money

It is the main characteristic of rural consumers. Consumers look for quality products at
justified prices.
Rural marketers should try to create a sense of trust in the mind of the consumers. And offer
products that deliver maximum benefits as per their value.

Types of Consumers

We can categorize users of rural areas into three categories mentioned below:
  Households: The customers who purchase products for self-consumption. The
goods purchased are consumed and not used for further production. They buy
products for:-

o Family Needs
o Personal Use
 Rural Industrial: This type of consumer buy products for reproduction. The
industries buy raw materials from the market, reproduce them into a new
product.
 Rural Resellers: They are the retailers of the rural areas. The rural resellers
don’t consume the products. However, they buy the products to resell them in
the local markets.

Myths about Consumer in Rural Areas

There are some myths about the Rural Consumer. Rural marketers need to know the real
picture to develop an effective strategy.

Following are several myths related to the rural consumer:

1. Buy only low priced products

The rural consumer seeks value for money. That doesn’t mean they only buy
low priced goods. They make purchase decisions based on quality,
functionality, and product availability.
2. Homogeneous consumer base
Marketers have a misconception that all rural consumers are homogeneous. But
research reveals that in rural areas consumer base is diversified. Their taste and
preferences differ from one another.
3. Buy whatever the companies offer to them
Consumers brand loyalty make marketers think that consumers will buy
anything they offer. But, companies must make continuous initiatives to attract
and retain their consumers.
4. No brand awareness
With the increase in literacy rate and widespread use of the Internet and
Broadcast media, consumers are aware of the products. Consequently, they can
differentiate among various brands and products available in the market.
 5. Many uses of products
It is perceived that rural consumers use a product in multiple ways. This may be
an outcome of the incomplete information provided to the user about the
products.
The marketer must convey the correct usage and directions for the use of the
products.

The exploitation of Rural Consumers

 Wrong measurement of the goods.

 Undue high prices of the products are charged.
 The sale of fake and duplicate products in the rural markets.
 Misguiding consumers by giving wrong product information.
 The sale of expired medicines in the market.
 The dominance of the suppliers, producers and officials by creating groups.

What is Rural Consumer Behaviour

In rural areas, consumers get highly influenced by internal and external forces. The rural
marketing strategy widely depends upon the consumer’s behaviour.

The marketers try to achieve a high level of consumer acceptance. So, they explore and
understand the preferences of the consumer. And critically examine rural consumers
behaviour.

The rural consumers include:-

1. Individuals
2. Groups
3. Organizations, etc

We can classify buyer behaviour according to:-

 Degree of involvement while making the purchase. Also, the risk and

investment associated with the product.
 The time of purchase, i.e., planned, emergency or impulse.

Factors Affecting Rural Consumer Behaviour

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:

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 Asian Journal
of Technology & Management Research [ISSN: 2249 –0892] Vol. 01 – Issue: 01 (Jan -
Jun 2011) 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 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.

Example:

• ITC international business division has conceptualized the e – chaupal as a chain of

internet kiosk connected through VSAT to facilitate procurement of specific
commodities. Each kiosk is a part of hub-and –spoke model. This echaupal which offers
 the farmers all the information, product and services they need to enhance farm
productivity.

STAGES IN THE BUYING PROCESS

Consumers pass through five stages while making a purchases decision. In low
involvement rural and urban consumers may skip some of these stages. A woman buying
her regular brands of daily use, groceries will identify the need and purchases from the
shop, skipping two stages. It is in the purchase of high-involvement products that a rural
consumer display different motives relating to the problem recognition, source of
information, Evaluation procedures, collective decision and different post purchase
behaviour. This creates need to treat each stage of the marketing process differently for
rural and urban consumers.

Stages in the buying process

Stage 1: Problem Recognition

Stage 2: Information search

Stage 3: Evaluation of alternatives

Stage 4: Purchase decision

Stage 5: Post-purchase behaviour

1.Problem Recognition

Put simply, before a purchase can ever take place, the customer must have a reason to believe
that what they want, where they want to be or how they perceive themselves or a situation is
different from where they actually are. The desire is different from the reality – this presents
a problem for the customer.
However, for the marketer, this creates an opportunity. By taking the time to “create a
problem” for the customer, whether they recognize that it exists already or not, you’re
starting the buying process. To do this, start with content marketing. Share facts and
testimonials of what your product or service can provide. Ask questions to pull the potential
customer into the buying process. Doing this helps a potential customer realize that they have
a need that should be solved.

2. Information Search

Once a problem is recognized, the customer search process begins. They know there is an
issue and they’re looking for a solution. If it’s a new makeup foundation, they look for
foundation; if it’s a new refrigerator with all the newest technology thrown in, they start
looking at refrigerators – it’s fairly straight forward.
As a marketer, the best way to market to this need is to establish your brand or the brand of
your clients as an industry leader or expert in a specific field. Methods to consider include
becoming a Google Trusted Store or by advertising partnerships and sponsors prominently on
all web materials and collaterals.
Becoming a Google Trusted Store, like CJ Pony Parts – a leading dealer of Ford Mustang
parts – allows you to increase search rankings and to provide a sense of customer security by
displaying your status on your website.
Increasing your credibility markets to the information search process by keeps you in front of
the customer and ahead of the competition.

3. Evaluation of Alternatives

Just because you stand out among the competition doesn’t mean a customer will absolutely
purchase your product or service. In fact, now more than ever, customers want to be sure
they’ve done thorough research prior to making a purchase. Because of this, even though they
may be sure of what they want, they’ll still want to compare other options to ensure their
decision is the right one.
Marketing to this couldn’t be easier. Keep them on your site for the evaluation of alternatives
stage. Leading insurance provider Geico allows customers to compare rates with other
insurance providers all under their own website – even if the competition can offer a cheaper
price. This not only simplifies the process, it establishes a trusting customer relationship,
especially during the evaluation of alternatives stage.

4. Purchase Decision

Somewhat surprisingly, the purchase decision falls near the middle of the six stages of the
consumer buying process. At this point, the customer has explored multiple options, they
understand pricing and payment options and they are deciding whether to move forward with
the purchase or not. That’s right, at this point they could still decide to walk away.
This means it’s time to step up the game in the marketing process by providing a sense of
security while reminding customers of why they wanted to make the purchase in the first
time. At this stage, giving as much information relating to the need that was created in step
one along with why your brand, is the best provider to fulfill this need is essential.
If a customer walks away from the purchase, this is the time to bring them back. Retargeting
or simple email reminders that speak to the need for the product in question can enforce the
purchase decision, even if the opportunity seems lost. Step four is by far the most important
one in the consumer buying process. This is where profits are either made or lost.

5. Purchase

A need has been created, research has been completed and the customer has decided to make
a purchase. All the stages that lead to a conversion have been finished. However, this doesn’t
mean it’s a sure thing. A consumer could still be lost. Marketing is just as important during
this stage as during the previous.
Marketing to this stage is straightforward: keep it simple. Test your brand’s purchase process
online. Is it complicated? Are there too many steps? Is the load time too slow? Can a
purchase be completed just as simply on a mobile device as on a desktop computer? Ask
these critical questions and make adjustments. If the purchase process is too difficult,
customers, and therefore revenue, can be easily lost.

6. Post-Purchase Evaluation

Just because a purchase has been made, the process has not ended. In fact, revenues and
customer loyalty can be easily lost. After a purchase is made, it’s inevitable that the customer
must decide whether they are satisfied with the decision that was made or not. They evaluate.
If a customer feels as though an incorrect decision was made, a return could take place. This
can be mitigated by identifying the source of dissonance, and offering an exchange that is
simple and straightforward. However, even if the customer is satisfied with his or her
decision to make the purchase, whether a future purchase is made from your brand is still in
question. Because of this, sending follow-up surveys and emails that thank the customer for
making a purchase are critical.
Take the time to understand the six stages of the consumer buying process. Doing this
ensures that your marketing strategy addresses each stage and leads to higher conversions and
long-term customer loyalty.

Advantage of study of consumer behaviour is as under-

• Saves from disaster.

• Helps in formulating right marketing strategy.

• Helps in sales promotion.

• Helps in development of new products.

• Helps in product orientation.

• Helps consumer to study their behaviour.