Consumer Bahaviour Consist of Human Behaviour That Go to Make Purchase Decisions

7/29/2019 Consumer Bahaviour Consist of Human Behaviour That Go to Make Purchase Decisions

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CONSUMER BEHAVIOUR IN RURAL MARKET

MEANING & INTRODUCTION OF CONSUMER BEHAVIOUR :-

Consumer behaviour consists of human behaviour that goes to make purchase decisions.

Consumer behaviour is reactions of individuals in obtaining and using goods and services of a

particular type. An understanding of consumer behaviour is essential in formulating the

marketing strategies. However, information about rural consumers is limited and hazy due to

lack of right competence, partial approach and limited knowledge and bias of the corporate

managers.

Consumer behaviour deals with the psychological process of decision making by consumers

whether rural or urban in a social context which also exerts group pressures on them. This

process, the consumer deliberates within himself before he makes any purchase decisions. The

buying behaviour involves several psychological factors like: individual thinking process like

motivation, personality, perception and attitude, decision making process in marketing,

interaction of the consumer with several groups like friends, family and colleagues group

oriented concepts and selection of the brand and outlet depending on price and features and

emotional appeal marketing mix elements in a given environment. Consumer behaviour may

be influenced by both internal and external influences. Internal influences are: demographics,

psychographics like lifestyle, personality, motivation, knowledge, attitudes, beliefs, and feelings.

Again external Study of consumer behaviour is the study of how individual makes their

purchase decision with respect to their available resources, for example: - money. In this

project we are going to discuss the buying behaviour of rural consumers, a short survey from

rural retailers regarding consumer behaviour.


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DEFINITIONS OF CONSUMER BEHAVIOUR:-

According to Professors C.G. Walter and G.W. Paul: -

Consumer behaviour is the process whereby individuals decide whether, what, when, where,

how and from whom to purchase goods and services.

According to SARA KIRCHHEIMER: -

Through the application of sociology, psychology and demographics, marketers can begin to

understand why consumers form attitudes and make decisions to purchase. Consumer-

behaviour studies inform marketers, advertisers and public agencies how product and service

selection is influenced by personality, perception, values and beliefs. For marketing, these

influences are studied in the context of demographics, which includes ethnicity, age, marital

status, size of family, income, education and employment.

CONSUMER BEHAVIOURDefinition: -

Actions (that is, behaviour) undertaken by people (that is, consumers) that involve the

satisfaction of wants and needs. Such actions often, but not always, involve the acquisition (that

is, purchase) of goods and services through markets. The study of consumer behaviour is

fundamental to the understanding of the demand-side of the market. From a marketing

perspective, the patterns, actions or steps in the process of decision making by consumers. The

decision making process is influenced by various attitudes, motives, and social influences on

the purchaser. Buyers tend to behave in certain ways including habits, brand loyalty, and postpurchase behaviour.


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FACTORS INFLUENCING CONSUMER BUYING BEHAVIOUR IN

RURAL MARKET:-

Rural consumer

About 70% of Indias population lives in rural

areas of India which is scattered in more then 6,

00,000 villages in the country. For several

product categories, rural markets account for

well over 60% of the national demand. While the

rural consumer is generally seen as less affluent

than his urban cousin, things are changing in

rural India over the last ten years. While in 1998-

99 over 83% of rural households fell in the lower and lower middle classes, the number has

fallen to 70% in 2006-07; the comparative fall for urban India is from 53% to 27%. And if

experts are to be believed, the number is set to fall at a rapid rate over the next 20 years. Over

the years, as a result of the increasing literacy in the country, exposure to the west, satellite

communication, foreign magazines and newspapers there is a significant increase in awareness

of rural consumers. Today more and more consumers are selective on the quality of products

and services. This awareness has made the Indian rural consumers seek more and more reliablesources for purchases such as organized retail stores which have a corporate background and

where the accountability is more pronounced. The consumer also seeks to purchase from a

place where his or her feedback is valued. Indian rural consumers are now more aware and

discerning, knowledgeable about technology, products and the market then before and are

beginning to demand benefits beyond just availability of a range of products that came from a

trusted manufacturer. They prefer to buy value for money products but still not compared to

urban buyers.

Need Recognition

It is the difference between the desired state and the actual state. A rural consumer first

recognizes his needs and accordingly thinks of purchasing the product. This is the first step in

the simple decision making model. For instance, a farmer in a rural area wants to purchase a

colour television.


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Pre-Purchase Search

After the need has been identified, the next step is to do a pre purchase search. Pre purchase

search is of two types namely internal search using ones memory and external search which

involves getting more information from friends or relatives (word of mouth).Marketer dominated sources, comparison shopping, public malls etc. A successful information

search leaves a buyer with possible alternatives, the evoked set. Here the farmer may go to a

nearby city and visit a showroom that has multiple products.

Evaluation of Alternatives

This third step is to basically pick the best alternative from the available. In this step the rural

buyer needs to establish criteria for evaluation. He makes a decision about what features he

wants or does not want in the product. Accordingly ranks are given to the alternatives. Therural consumer/farmer may look for products of Akai, Videocon, Onida and LG that

are available with the dealers and finally select one of them. If he is not satisfied with the

choice made the buyer can return to the search phase. Also marketers try to influence the

buyer by framing alternatives.

Purchase Decision

This is action that results in the purchase of the product from among available alternatives. The

rural customer may plan to purchase a specific product that suits his needs and is within his

budget etc. This includes product, package, store, method of purchase among other things.

For example the farmer may plan togo for LGs Sampoorna Colour Television as it has

a vernacular onscreen display, better sound and superior picture quality. Besides it is priced at

only Rs 8,500.

Purchase

This involves the actual purchase of the product. However it may differ from the decision due

to time lapse between the purchase decision and the actual purchase or may also depend uponthe availability of the product.

Post Purchase Behaviour

This is another step of consumer behaviour. The buyers relationship with the seller does not

come to an end with the purchase especially in the case of consumer durables. This is not an


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important factor for FMCG. The farmer may see whether LG has a service centre nearby in case

the product needs servicing.

It is found that the main elements studied for analyzing rural consumer decision making

process are media exposure, purchase aspects, behaviour of the consumer towards price,

quality relations, credit and influence of the retailer.

Place of Purchase

Not all the rural consumers buy from the same location. Also the same consumer buys from

different location depending upon the product and need. A study on haats showed that about

58% of villagers visiting these haats preferred the mover village shops due to better quality,prices and variety. Companies need to assess the influence on consumers of both village shops

and haats. Rural consumer does not depend on the haats and village shops alone as some

purchases are made from the urban areas also. For example, there are few product categories

in which the rural distribution is still low and therefore consumer buys from towns. It was

observed that for certain categories of products of FMCG, the rural consumers made as high as

50% of their purchases from urban markets. In case where rural dealer penetration is low, the

purchase from urban centers is high. For example, shaving creams have low dealer penetration

and hence 37% of purchases are made from urban area while there is a high dealer

penetration for tea and hence 60% purchases are from rural markets and 25% from urban

centers. Further details are shown in table given below:-

Category % Share from UrbanPurchase

Shaving preparations 36.6

Bulbs & Balms 32.0

Toilet soaps 24.0

Washing powders/liquids 23.4

Iodized salt 14.4


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Creative Use of Product

Marketers will find it useful to keep an eye on the

different ways in which the rural consumers

can use the given product. This is because

product use can differ and not be envisaged by

the marketer. Even for the experienced marketers

there could be surprises. Market development is

achieved by being alert to the new and creative

uses of products.

Godrej hair dye being used to colour the horns of oxen. The study of product

end provides indicators on the need for education and also new product ideas.

Framework developed by Mr. Mithileshwar Jha, Professor in Marketing, IIM LucknowConsumers in India can be divided into three broad categories Urban, Rural and Rurban in

terms of geography and sociological characteristics. This supports the notion of a continuum

from rural to urban, rurban being the overlap between the two, with pretensions to being

closer to urban in physical features and proximity to large urban centers but with deep

sociological moorings. It is desirable to consider behaviours in specific interaction contexts ofthese three markets that is participants from each market buying from or selling to

or facilitating participants from the same or other markets for a better understanding of

specific behaviour patterns. When the above two grouping in terms of geography, sociological

characteristics and as participants of three markets are put together we establish a domain for

exploring and understanding rural buyer behaviour. It includes eight of the nine blocks

(except the crossed one). Any marketing interaction normally involves six broad categories of

participants from the marketers perspective. These are the end customers, suppliers and

distributors, facilitators who are both direct and indirect like bankers, transporters,

warehousing agents, advertisers, research utilities and regulators .It makes more intuitive and

practical sense to map out both individual behaviour and interaction behaviour (influence on

each other) to develop a better insight on their past behaviour and future possibilities. Apart

from traditional buying phases and buying roles the factors that need to be studied are as

below:-


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Brand Domain for Studying Rural Buyer Behaviour

to

From

Modalities

Activities providing time, space, form, ownership, assortment etc., utilities and their perceived

importance by the participants.

Norms

Formal and informal rules guiding the interactions among participants.

Satisfaction/ Dissatisfaction

Of the participants with the interaction process and their outcomes and results thereof .A set of

systematic activities using the above framework can provide comprehensive insight into rural

buyer behaviour. However there is no need to re invent the wheel. Disciplines like sociology/

rural sociology, anthropology, agricultural economies, psychology, social work, literature etc

have developed considerable insight in the individual and group behaviour in the rural and

rurban context over a period of time. These disciplines may be tapped into, with the material

carefully selected, interpreted and validated wherever required given the differences in the

context. In fact one of the tragedies of the growth of marketing as a discipline has been its

increasing isolation from the parent or sister disciplines mentioned above without developing

sufficient rig our of its own.

Urban Rural Rurban

Rural

Rurban

Urban


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TYPES OF RURAL CONSUMER BUYING BEHAVIOUR: -

Types of consumer buying behaviour are determined by:

Level of Involvement in purchase decisionImportance and intensity of interest in a product in a particular situation.

Buyers Level of Involvement

It determines why he/she is motivated to seek information about a certain products and brands

but virtually ignores others. High involvement purchases--Honda Motorbike, high priced

goods, products visible to others, and the higher the risk the higher the involvement.

Types of Risk: -

Personal risk.

Social risk.

Economic risk.

The Followings Are The Types Of ConsumerBuying Behaviour: -

Routine Response/Programmed Behaviour

Buying low involvement frequently purchased low cost items; need very

little search and decision effort; purchased almost automatically. Examples include soft drinks,

snack foods, milk etc.

Limited Decision Making

Buying product occasionally. When you need to obtain information about unfamiliar brand in

a familiar product category, perhaps. It requires a moderate amount of time for information

gathering. Examples include Clothesknow product class but not the brand.

Extensive Decision Making/Complex high involvement

Unfamiliar, expensive and/or infrequently bought products. High degree ofeconomic/performance/psychological risk. Examples include cars, homes, computers,

education. Spend a lot of time seeking information and deciding. Information from the

companies MM; friends and relatives, store personnel etc. Go through all six stages of the

buying process.


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Impulse Buying, No Conscious Planning.

The purchase of the same product does not always elicit the same buying behaviour. Product

can shift from one category to the next .For example, going out for dinner for one person may

be extensive decision making (for someone that does not go out often at all), but limited

decision making for someone else. The reason for the dinner, whether it is an anniversarycelebration, or a meal with a couple of friends will also determine the extent of the decision

making.

Role of People In Buying Decision Initiator

The person who first suggests the idea of buying the product or service. For example, a in a

family the youngest child who goes to school suggests the buying of a cell phone.

Influencer

The people whose views or advise influence the decision. For instance the father of the child

talks to his relative who lives in a nearby city. This relative suggests the farmer that a Nokia or

Dolphin cell phone would be good since he is well versed with the various models. Thus he has

influenced his father.

Decider

The person who decides on any component of the buying decision, whether to buy, what to

buy, how to buy or where to buy. The elder son of the farmer when asked, tells him that Nokia

cell phone suggest that buying it would be a better option as it is more trusted. He has decided

what cell phone to buy for the father.

Buyer

He is the person who makes the actual purchase. Here the father has made a decision and buys

a Nokia cell phone from a dealer known to him. The father has paid the money and he is the

buyer.

UserThe person who consumes or uses the product or service. For example this new Nokia cell

phone is actually used buy their sister who teaches in the school.


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Experiential sources - Individuals own experience, prior handling of a

particular product (Tim would definitely purchase a Dell laptop again if he

had already used one)

3. Step 3 - The next step is to evaluate the various alternatives available in the market. Anindividual after gathering relevant information tries to choose the best option available

as per his need, taste and pocket.

4. Step 4 - After going through all the above stages, customer finally purchases theproduct.

5. Step 5 - The purchase of the product is followed by post purchase evaluation. Postpurchase evaluation refers to a customers analysis whether the product was useful to

him or not, whether the product fulfilled his need.


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4 Ps of MARKETING MIX

The 4Ps are:

Product (or Service)

Place Price

Promotion

A good way to understand the 4 Ps is by the questions that you need to ask to define you

marketing mix. Here are some questions that will help you understand and define each of the

four elements:

Product/Service

What does the customer want from the product/service? What needs does it satisfy?

What features does it have to meet these needs?

Are you including costly features that the customer won't actually use?

How and where will the customer use it?

What does it look like? How will customers experience it?

What size(s), color(s), and so on, should it be?

What is it to be called?

How is it branded? How is it differentiated versus your competitors?

What is the most it can cost to provide, and still be sold sufficiently profitably? (See

also Price, below).

Place

Where do buyers look for your product or service?

If they look in a store, what kind? A specialist boutique or in a supermarket, or both?

Or online? Or direct, via a catalogue?

How can you access the right distribution channels?

Do you need to use a sales force? Or attend trade fairs? Or make online submissions?

Or send samples to catalogue companies?

What do you competitors do, and how can you learn from that and/or differentiate?

Price


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What is the value of the product or service to the buyer?

Are there established price points for products or services in this area?

Is the customer price sensitive? Will a small decrease in price gain you extra market

share? Or will a small increase be indiscernible, and so gain you extra profit margin?

What discounts should be offered to trade customers, or to other specific segments of

your market?

How will your price compare with your competitors?

Promotion

Where and when can you get across your marketing messages to your target market?

Will you reach your audience by advertising in the press, or on TV, or radio, or on

billboards? By using direct marketing mail shot? Through PR? On the Internet?

When is the best time to promote? Is there seasonality in the market? Are there anywider environmental issues that suggest or dictate the timing of your market launch,

or the timing of subsequent promotions?

How do your competitors do their promotions? And how does that influence your

choice of promotional activity?

The 4Ps model is just one of many marketing mix lists that have been developed over the years.

And, whilst the questions we have listed above are key, they are just a subset of the detailed

probing that may be required to optimize your marketing mix.

Amongst the other marketing mix models have been developed over the years is Boom andBitner's 7Ps, sometimes called the extended marketing mix, which include the first 4 Ps, plus

people, processes and physical layout decisions.

Another marketing mix approach is Lauterborn's 4Cs, which presents the elements of the

marketing mix from the buyer's, rather than the seller's, perspective. It is made up of Customer

needs and wants (the equivalent of product), Cost (price), Convenience (place) and

Communication (promotion). In this article, we focus on the 4Ps model as it is the most well-

recognized, and contains the core elements of a good marketing mix.


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4 As MARKETING MIX

4 As approach of Indian Rural Market give opportunity to the Indian rural market with its

vast size and demand base offers a huge opportunity that MNCs cannot afford to ignore. With

128 million households, the rural population is nearly three times the urban. As a result of thegrowing affluence, fuelled by good monsoons and the increase in agricultural output to 200

million tonnes from 176 million tonnes in 1991, rural India has a large consuming class with

41 per cent of India's middle-class and 58per cent of the total disposable income. The

importance of the rural market for some FMCG and durable marketers is underlined by the

fact that the rural market accounts for close to 70 per cent of toilet-soap users and 38 per cent of all

two-wheeler purchased. The rural market accounts for half the total market for TV sets, fans, pressure

cookers, bicycles, washing soap, blades, tea, salt and tooth powder, What is more, the rural

market for FMCG products is growing much faster than the urban counterpart. The 4Aapproach The rural market may be appealing but it is not without its problems: Low per capita

disposable incomes that is half the urban disposable income; large number of daily wage

earners, acute dependence on the vagaries of the monsoon; seasonal consumption linked to

harvests and festivals and special occasions; poor roads; power problems; and inaccessibility to

conventional advertising media. However, the rural consumer is not unlike his urban

counterpart in many ways. The more daring MNCs are meeting the consequent challenges

of availability, affordability, acceptability and awareness availability.

The first challenge is to ensure availability of the product or service. India's 627,000 villages

are spread over 3.2 million sq km; 700 million Indians may live in rural areas, finding them is

not easy. However, given the poor state of roads, it is an even greater challenge to

regularly reach products to the far-flung villages. Any serious marketer must strive to reach at

least 13,113 villages with a population of more than 5,000. Marketers must trade off the

distribution cost with incremental market saturation. Over the years, India's largest MNC,

Hindustan Lever, a subsidiary of Unilever, has built a strong distribution system which helps its

brands reach the interiors of the rural market.

To service remote village, stockiest use auto rickshaws, bullock-carts and even boats in the

backwaters of Kerala. Coca-Cola, which considers rural India as a future growth driver, has

evolved a hub and spoke distribution model to reach the villages. To ensure full loads, the

company depot supplies, twice a week, large distributors which who act as hubs. These


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distributors appoint and supply, once a week, smaller distributors in adjoining areas. LG

Electronics defines all cities and towns other than the seven metros cities as rural and semi-

urban market. To tap these unexplored country markets, LG has set up 45 area offices and

59rural/remote area offices.

Affordability the second challenge is to ensure affordability of the product or service. With low

disposable incomes, products need to be affordable to the rural consumer, most of who are on

daily wages. Some companies have addressed the affordability problem by introducing

small unit packs. Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in

50-gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh

the so-called `Bimaru' States. Hindustan Lever, among the first MNCs to realize

the potential of India's rural market, has launched a variant of its largest selling soap brand,

Lifebuoy at Rs 2 for 50 gm. The move is mainly targeted at the rural market. Coca-Cola hasaddressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs

5.The initiative has paid off: Eighty per cent of new drinkers now come from the rural markets.

Coca-Cola has also introduced Sun fill, a powdered soft-drink concentrate. The instant and

ready-to-mix Sun fill is available in a single-serve sachet of 25 gm priced at Rs 2 and

mutiserve sachet of 200 gm priced at Rs 15.

Acceptability the third challenge is to gain acceptability for the product or service. Therefore,

there is a need to offer products that suit the rural market. One company which has reaped

rich dividends by doing so is LG Electronics. In 1998, it developed customized TV for the rural

market and christened it Sampoorna. It was a runway hit selling 100,000 sets in the very first

year. Because of the lack of electricity and refrigerators in the rural areas, Coca-Cola provides

low-cost ice boxes a tin box for new outlets and thermocol box for seasonal outlets. The

insurance companies that have tailor-made products for the rural market have performed

well. HDFC Standard LIFE topped private insurers by selling policies worth Rs 3.5 crores in total

premium. The company tied up with non-governmental organizations and offered reasonably-

priced policies in the nature of group insurance covers. With large parts of rural India

inaccessible to conventional advertising media only 41 per cent rural households haveaccess to TV building awareness is another challenge. Fortunately, however, the rural

consumer has the same likes as the urban consumer movies and musicand for both the

urban and rural consumer, the family is the key unit of identity. However, the rural consumer

expressions differ from his urban counterpart. Outing for the former is confined to local fairs


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and festivals and TV viewing is confined to the state-owned Doordarshan. Consumption of

branded products is treated as a special treat or luxury.

Awareness Hindustan Lever relies heavily on its own company-organized media. These are

promotional events organized by stockiest. Godrej Consumer Products, which is trying to pushits soap brands into the interior areas, uses radio to reach the local people in their language.

Coca-Cola uses a combination of TV, cinema and radio to reach 53.6 per cent of rural

households. It doubled its spend on advertising on Doordarshan, which alone reached 41 per

cent of rural households. It has also used banners, posters and tapped all the local forms of

entertainment. Since price is a key issue in the rural areas, Coca-Cola advertising stressed its

`magical' price point of Rs 5 per bottle in all media. LG Electronics uses vans and road shows to

reach rural customers. The company uses local language advertising.


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CONCLUSION: -

In consumer behavior, consumer decide from what, where and from whom and how to

purchase good and services.

Age and life-cycle stage, occupation and lifestyle have their effect in purchasing process. Different consumer having their different perception, thinking, attitude about products

and services.

Proprietors conduct different strategies with different type of consumers.

Proprietor sales every product with profit.

In case of perishable goods, proprietor purchase limited quantity of goods for sales.

Customers also bargains for products like cloth, utensils with proprietors.

In rural market also some customers like to purchase only branded products for beingreputed in society and having faith in company.

Technology have an impact on the occupations and life style of the rural people.

Some government policies also helps to rural markets for its development, customers and

proprietor take benefit of these policies

In rural areas also consumer find information about product and to take decision of

purchasing a product.

Some rural people only purchase high price product because they believes that high price

means high quality and vice versa.


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Questionnaire:

General Store

1. How you treat customer?

We are treating them with politeness and with good behavior.

2. Do you allow credit to customers who

are not in condition to pay on spot?

Yes, we allow regular and trusted

customers to purchase on credit.

3. How customers demand for a

product?

Some of educated customers prepare list of commodities and give that to us and

whereas some customers orally demand for a product.

4. Whether customers are checking or making enquiry from you about the

manufacturing date of product, its expiry date and maximum retail price?

Very few customers check that.

5. Are you able to fulfill the demands of consumers or not?

Yes, we are trying our best and till now not received any complaints.

6. What are the basic Requirements like which product they purchase from you on daily

basis?

The products such as milk, sugar, spices, oil, etc. In short they purchase such

products on daily basis which they cannot buy in bulk Quantities.


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7. In what quantity usually the consumers purchase the grocery items from you?

The people usually buy in small quantity as they earn on daily basis. So they

purchase as per their daily requirements.

Shop-2 Vegetable store:-

8. Do customer bargains with you for a particular vegetable

Yes, mostly all of them bargains

with us for a particular vegetable.

9. Do they purchase everyday

vegetables from you?

No,mostly they purchase from

Sunday-Thursday and on Friday

and Saturday we give order to our

supplier for less vegetables stock as compared to other days because that two days

we are having less customers and we also close our shop soon on that two days.

10.In case, if a customer buy vegetables which are faulty and came back to you for

exchange purpose. So will you replace them?

Yes, We will exchange that but only if that customer is remember by us (means fe

actually purchased vegetable from us) and only in short period of time.

Consumer Bahaviour Consist of Human Behaviour That Go to Make Purchase Decisions

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