CONSUMER BEHAVIOUR IN RURAL AREAS: A MICRO- LEVEL STUDY OF BUYING BEHAVIOUR OF RURAL CONSUMERS IN THRISSUR DISTRICT

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1 GJBM Consumer Behaviour in Rural Areas: A Micro-Level Study... ISSN: Vol. 4 No. 1, June CONSUMER BEHAVIOUR IN RURAL AREAS: A MICRO- LEVEL STUDY OF BUYING BEHAVIOUR OF RURAL CONSUMERS IN THRISSUR DISTRICT Dean Martin, C.* ABSTRACT In recent days, consumer India is at the point where there is a multiplicative effect of income growth, aspiration to consume and a changed consumption, friendly ideology/ social discourse across the income board, especially in rural India. Hence, the buying behaviour of rural consumers has become a hot topic for discussion because rural India, in recent days, is enthusiastically consuming every thing from shampoo to motor cycles and this rural predilection is being considered as one of the significant topics of market analysis. Besides, we know well that purchase decisions in Indian homes have become a collective process with women and teenage children playing a major role on product and brand choices. Decision making has become a joint process in the family, women is the initiator and/or product evaluator, man the financier and child, an influencer. Hence the market analysts are adopting both the product window approach and consumer or people window approach for getting an insight into the structure and drivers of consumer demand, particularly in rural India. The first approach deals with the perspective of how much of what is being bought and the latter deals with how many of what kind of people are buying. The thrust is on not just what is being bought but also who is buying and the analysis has to be made considering both product segments and consumer segments. Key Words: Consumer behaviour, Gender attention, Product window, Rural consumers, Suggestive advertisement The rural India s market for consumer durables is growing with an average annual growth rate of around 10%. It is growing and it is bigger than the urban market. The market analysts feel that rural markets are vital for the growth of most companies like Hindustan Lever, the largest FMCG company in the country. More than half its annual turnover comes from the rural market. Marketing is all about knowing the consumer/customer. Rural consumers are fundamentally different from their urban counterparts; and since different rural geographies display considerable * Chazheer Thatta Parambil House, P.O. Arimpur , Thirssur, Kerala-9 deanmartin@msn.com Global Journal of Business Management

2 64 Dean Martin, C. heterogeneity it requires rural-specific and region-specific analysis of consumer behaviour to know the extent the consumer welfare is being enjoyed by them. A rural consumer may be illiterate but he is not unintelligent. He is conscious of value for money and for every rupee he spends, he expects good value. After getting a 120% satisfaction only, he pays for the product. His decision to purchase a product is influenced by lot of consultations with family members, co-consumers and this approach is indicative of his high involvement to purchase a product. Tricky, clever, gimmicky or even suggestive advertisement does not work with him. Rural consumer is said to be the pivot around which all the retail business practices and activities revolve. Hence, satisfaction of the consumers becomes the most important goal of retail business. Being influenced by all the above factors, consumer shopping behaviour, which is a part of consumer behaviour, assumes much importance in the present consumer-oriented marketing system in rural areas, with particular reference to gender attention. Objectives The study was conducted to investigate and analyze the impact of socio-economic influences on rural consumer behaviour in terms of their buying practices and to throw light on the pattern of decision-making agents with specific attention to the social status and level of income. Specifically this study aims at: 1. To know the mode of purchase in the process of buying the products. 2. To estimate the level of bargaining in the buying process. 3. To analyze the influence of family members in to decision-making purchase products. 4. To find out the importance of certain influential factors which have a bearing on consumer behaviour. 5. To study the impact of consumer influence with reference to level of income. 6. To suggest measures for the betterment of retailer-consumer relationships. METHODOLOGY The knowledge and understanding of rural consumer behaviour leads to consumer protection and welfare which is synonymous with the concept of economic welfare. Hence, keeping in view the vital goal of consumer welfare, a micro-level survey has been initiated to observe, understand and analyze the buying behaviour of rural consumers with particular reference to weaker section. Area of the Study Six retail shops in Arimpur, Edathirinji and Chittatukkara of Thrissur district of Kerala State to which the nearby rural consumers are habituated to visit and purchase the consumer goods were selected for interviewing the sample buyers. Two shops which are near to Arimpur High School (Arimpur center), two shops near to Edathirinji Post Office (Edathirinji Bus stop) and two shops near to St.Sebastian Church Chittatukkara (Representing Thrissur, Mukunthapuram and Chavakad Taluk respectively). Vol. 4, No. 1, June, 2010

3 Consumer Behaviour in Rural Areas: A Micro-Level Study Sample Size The size of the sample is 150 rural consumers, who are the residents of three taluks of Thrissur districts. Among these 150 sample customers 30 (20%) belong to big farmers and salaried employees is also 30 (20%). 90(60%) of sample consumers represent weaker sections comprising small and marginal farmers (30), landless agricultural labourers (30) and rural artisans (30). Purposive random sampling technique was used for selecting the consumers with a view to have different categories of buyers with specific attention to income groups and social status. 100 (66.67%) sample buyers belong to SCs, STs and OBCs and 50 (33.33) belong to other categories of social status. Among these 150 sample buyers, 101 (67.33%) belong to the income group of than 10,000; 42 (28%) belong to the income group of Rs 10,001-40,000; and 7 (4.67%) belong to Rs 40,001 plus income group representing lower middle and higher income groups. Period of Study This study was carried out during the second and third week of December 2009 at the selected shops in Arimpur Edathirinji and Chittatukkara of Thrissur district. Data Collection The study is based on the primary data collected by interviewing the sample buyers personally. A detailed questionnaire embracing the objectives laid down was designed and canvassed to the sample buyers. Information on their behavioural aspects and influentials was recorded at the selected shops after their purchase of consumer goods from those shops. The interviewed rural buyers were found purchasing eight types of consumer goods and grouped under eight categories viz., electrical goods, medicines, groceries, toiletries, cosmetics, footwear, tobacco and utensils of both steel and aluminum. ANALYSIS OF RESULTS The analysis is based on the primary information collected from 150 samples rural buyers. Among these buyers, 66.67% belong to the social category of SCs, STs and OBCs and the remaining (33.33%) represent the other categories of social status. The percent (122) of these selected consumers are literates and 18.67% are illiterates. The 67.33%, 28%, 4.67% of these sample buyers belong to the income groups of less than Rs 10,000, Rs 10,001a-40,000 and Rs 40,001 and above respectively. It was observed in the field survey that the frequency of buying the products differed consumer to consumer and between the consumers of different income groups. To the greatest extent, the frequency of buying was related to the type of product and its use in the households. The survey on this aspect reveals that products like groceries (including vegetables) tobacco and medicines were purchased on daily or weekly basis by the lower income groups. It was found during the field study that a great majority of labourers and artisans purchased their groceries on a daily basis in morning and evenings. Salaried consumers Global Journal of Business Management

4 66 Dean Martin, C. and big farmers were found purchasing groceries, toiletries, and medicines on monthly basis particularly as these sample consumers belong to the middle and higher income groups. Goods like electricals and footwear were purchased by these consumers once in three months or six months and also on special occasions like festivals and marriages by the sample consumers belonging to low income groups. Table 1 & 2: Social Status and literacy Status SI Status of the Sample Social status No Households SCs,STs, OBCs Others Literates Illiterates 1 Small and marginal farmers Big Farmers Agricultural labourers Artisans Employed & Salaried All Occupations (66.67) (33.33) (81.33) (18.67) Source: Field data., Note: Figures in the brackets denotes percentages to total Table 3: Income level SI Status of the Sample Monthly House Monthly House Hold Monthly House No Households Hold income less income Rs 10,000 Hold income Rs than Rs 10,000-40,000 40,000 & above 1 Small and marginal farmers Big Farmers Agricultural labourers Artisans Employed & Salaried All Occupations 100 (67.33%) 42 (28%) 7(4.67%) Source: Field data., Note: Figures in the brackets denotes percentages to total Mode of Purchase The rural consumers are different compared to the urban consumers. They attach some personal preferences and goodwill to the shop owners. Particularly they visit the same shops and are habituated to purchase the goods. They even introduce their children and suggest them to buy from those shops only. This preference and intimacy often makes the shop owners also to extent goods on credit basis and the shop owners continue to lend the consumer goods on credit basis for years together. These tendencies were also found in the field survey. Vol. 4, No. 1, June, 2010

5 Consumer Behaviour in Rural Areas: A Micro-Level Study The sample consumers have purchased goods on payment of cash as well as on credit. Electricals, medicals, cosmetics, footwear, tobacco and utensils were purchased by paying cash by the majority of the consumers ranging from 53.33% to 98.67%. A proportion ranging from 1.33% to 59.33% of the sample buyers have purchased against credit i.e., groceries, toiletries (59.33% each). Others are electricals (9.33%), medicals (1.33%), cosmetics (20%), footwear (3.33%), tobacco (46.67%) and utensils (20%). Table 4: Product-wise Mode of Purchase SI Mode of purchase No Products Cash Credit Barter All Modes No % No % No % No % 1 Electricals Medicals Groceries Toiletries Cosmetics Footwear Tobacco Utensils Source: Field Data. Note: % to total sample consumers. Bargaining Marketing strategies feel those rural consumers are more rational as a buyer and exhibits a higher level of rationality compared to the urban consumer. Whenever a consumer is familiar and aware of information about prices of the products and marketing conditions, certainly tries to get good value for his each and every rupee spent on purchase of goods. This rationality often leads to bargaining; and bargaining is an attempt of the consumers to keep the selling cost of a product lower or equal to the utility or satisfaction that he or she derives from that particular product. This tendency of bargaining is generally found in the consumers who belong to the lower income groups and bargaining springs from the economic situation wherein the means to purchase are insufficient to purchase the quantity of products required. The level of bargaining decreases or does not exist even whenever the means to purchase (income) are excessively available with consumers. The observations in the field survey corroborate this general tendency of consumer behaviour. The classification of lend of bargaining based on income level has reveled that of the total 150 consumers, 100 consumers (66.67%) were found bargaining- always (55 consumer) and usually (45 consumers). The 51.33% of these consumers belong to the low income group of less than Rs 10,000 (77 customers). This proportion is only 15.33% in the middle income group. A negligible proportion (6.67%) of the consumers with more income of Rs 40,000 and above reported that they usually bargain with shop owners and did not bargain always. Of the Global Journal of Business Management

6 68 Dean Martin, C. total 15 consumers belonging to this income group, 09 consumers (60%) expressed that they never bargain in the shops while purchasing the goods. The 6.67% (10 consumers) of the total consumers are never bargained at the purchase of goods. Hence, it could be inferred that there exists a negative correlation between the level of income and the level of bargaining. Vol. 4, No. 1, June, 2010 Table: 5 Level of Bargaining in the purchase of products Level of All groups(total) Family income groups (in Rs) Bargaining No % Rs 0-10,000 Rs 10,001-40,000 Rs 40,000 & above No % No % No % Always Usually Sometimes Never Total Source: Field data Note: Family Income: Income earned by the family members from all sources. Involvement of Family Members Family is the institution which primarily and significantly influences the purchase of goods. The members of the family involve in the process of purchasing and the level of involvement depends upon the nature, importance and preferences. The magnitude of involvement of family members according to the status is presented in Table 6. The tabulated information on involvement shows that the products which have kitchen importance were purchased by the housewives and particularly this involvement is clearly visible in the purchase of groceries and utensils. Among the different products purchased, groceries and utensils were the dominant goods purchased by housewives as 45.33% and 58.67% of the wives in the families were observed purchasing these items. Dominance of fathers/ heads of the households was observed in the purchase of tobacco (65.33%) and medicals (52%). The sons and daughters, who represent the younger generation were found interested in purchasing cosmetics (58.67%), toiletries (45.33%), footwear (40%), groceries (24%) and medicines (25.33%). However, a good level of involvement of sons-in-laws and daughter-in-laws was observed in the purchase of goods particularly like toiletries (45.3%), electricals (36%) and cosmetics (32%). Importance Given to Factors An attempt is made in this study to know the factors which were given importance in the process of buying factors like quality, price, easy availability, advertising, use by the neighbour consumers and experience of the own family members were treated as important factors and the sample consumers were asked to express their opinion about to what extent these factors

7 Consumer Behaviour in Rural Areas: A Micro-Level Study are influencing their behaviour while purchasing the goods. The analysis is presented in Table 7. The data presented by the table 7 reveals that experience of the family members (69.33%) and easy availability of products (65.33%) were considered most important while purchasing goods % and 56% of the sample consumers reported that quality and price of the product respective were the important factors which had influence their buying behaviour to the maximum extent. Table 6: Involvement of family members in buying the products SI Status of the family members No Mother Father Sons & Sisters & Total sample daughters Daughter in Respondents Laws No % No % No % No % No % 1 Electricals Medicals Groceries Toiletries Cosmetics Footwear Tobacco Utensils Surprisingly, majority of the consumers (68%) did not attach much importance to advertising and 14.67% of them opined that it is neither important nor unimportant. It is also surprising to observe that the experience of neighbours in the use of products was considered to be the most important factor by 69.33% of the consumers. The 17.33% of the consumers felt that price was an unimportant factor for purchasing the products. These observations facilitate to infer that consumers attach much importance to the quality (73.33%) {16+94/150} price (82.66%) {84+40/150} easy availability (86.67%) {98+32/150} and experience of their own family members (69.33%) were the dominant factors in the purchase of products. Advertising and experience of the neighbors were found to be less important factors. Influence on Income The factors which influence the purchasing behaviour are also influenced by the level of income, the source of purchasing power, to the significant extent. An attempt is made to analyze the impact of income on these factors observed and the results are presented in Table 8. The sample consumers with a low income of less than Rs attached much importance to price of the products (97.78% of this group) followed by quality of products (94.44%). The 89% and 86.67% of the consumers of this group gave importance to the easy availability and experience of the family members. Global Journal of Business Management

8 70 Dean Martin, C. Table 7: Factor wise contribution in purchasing the products Level of importance of the factors considered Factors Most Important Most Unimportant Neither Total important unimportant Important / Unimportant sample Quality 16 (10.67) 94 (62.67) 40 (26.67) (100) Price 40 (26.67) 84 (56) - 26 (17.33) - 150(100) Easy availability 98(65.33) 32 (21.33) - 16 (10.67) 04 (2.67) 150(100) Advertisements - 26 (17.33) (68) 22 (14.67) 150(100) Use by neighbors - 34 (22.67) 98 (65.33) 18(12) - 150(100) Experience of the family members 104 (69.33) (24) 10 (6.67) 150(100) Source: Field data; Note: Figures in the brackets denote percentages to total. The consumers with an income of Rs also attached much importance to 93% easy availability followed by quality of products and using information by neighbors (89% each). It was observed that the factors like advertisement found to be exerting lesser impact on this group of consumers (only 33.33%). At the same time, this group gives importance to the price of the products and experience of the family members (84.44% each). It is also observed that though highest importance was attached to the factor QUALITY by the higher income group (100% of this group), they have given less importance to the price of the goods (33.33%). At the same time low income group and middle income group have good importance to the price of the goods (97.78% and 84.44% respectively). The analysis indicates that advertisement is exerting a negligible impact on the buying behaviour of sample consumers. Quality and easy availability of the products are dominantly influencing the buying behaviour in rural areas according to the views of the sample buyers. Table 8: Impact of income group influencing factors considered Family income groups (in Rs) All groups Factors considered Rs 0-10,000 Rs10,001-40,000 Rs 40,000 & above Imp Unimp Imp Unimp Imp Unimp Imp Unimp Quality of products Price of the products Easy availability Advertisement Use by neighbors Experience by the family members Source: Field data. Note: Imp Important, Unimp Unimportant Vol. 4, No. 1, June, 2010

9 Consumer Behaviour in Rural Areas: A Micro-Level Study Behavioural Influentials Generally marketing experts design, prepare and implement many things, running programmes and entertainments to influence the consumer to buy a particular product. These things acts as a means to add information and knowledge on various matters and lures the consumer to buy that particular product. In rural areas, cinema dialogues, pictures and names of the famous actors and actorsses, flowers, symbols, quickies, short theatre commercials, TV spots, cricket themes, road shows, vow programmes etc. are used extensively to influence the consumer behaviour.focus group approach, SLICE OF LIFE approach, face-to-face approach, bottom line touch etc. are some of the approaches designed and implemented to motivate influence and make the consumers to purchase the goods. In the present survey an attempt is made to find out the important influentials product wise so as to assess their impact on purchasing the products. The results are presented in Table 9. The data presented in Table 9 reveals that four types of influentials viz.; experience of family members, suggestions of intimate shop owners, use by neighbour consumers and advertisement and mass media are influencing the buying behaviour of the sample consumers. The experience of the family members is the chief propelling influential in the purchase of groceries (38.67%) and utensils (53.33%). The consumers who consume tobacco are very much motivated and purchased due to the suggestions put forth by the shop owners of the shops to which they visit regularly (58.67%). The influence is only 12.67% effect in the case of purchase of medicines. The experience of neighbor consumers is the important influential in the purchase of medicals (42.67%), foot wear (38.67%) and cosmetics (35.33%). Table 9: Product-wise consumer influentials Type of consumer influentials Products Experience of Known shop Use by Advertisement Total own people owners consumer and Mass media Sample Neighbours No % No % No % No % No % Electricals Medicals Groceries Toiletries Cosmetics Foot wear Tobacco Utensils Source: Field data: Note: % represents percentages to total. In the case of groceries and toiletries the influential percentage are 28% each. It is quite interesting to note that advertisements particularly quickies (short TV commercials) and commercials ads through mass media are the prominent propelling factors in the purchase of Global Journal of Business Management

10 72 Dean Martin, C. electricals (64%), cosmetics (32.67%), toiletries(45.33%) and foot wear (32%). These influentials are exerting a negligible impact on the purchase of tobacco (2.67%), medicals (10.67%) and groceries (18.67%). This observation leads to infer that the younger generation is very much influenced by the infotainment and the older generation by personal experience while purchasing the products. CONCLUSION Rural consumers is totally a different consumer in the rural market scenario, being influenced by the rationality, personal experience, the level of utility that is derived from the consumption which are being influenced by the changing tastes and preferences of younger generation. The clever and gimmicky advertisements do not work out well with rural consumers. Their buying behaviours is very much influenced by experience of their own and of neighbor consumers and his own family and involvement of his own members are exerting maximum influence on his purchases. Above all, quality of the product and its easy availability are the primary and vital determinants of his buying behaviour. The technique of bombarding with message has a limited influence. He is very much attached to and influenced by touch and feel aspect of any promotional activity. It is imperative that the marketing experts should understand the mindset of the rural consumers for every product in a particular region. Hence it is necessary that more rural research studies of quality should be undertaken to understand the rural consumers better and generate more reliable data with particular attention to product-specific, region-specific, group-specific and occasion-specific studies. It is also very important that language and regional behavioural variation should be given due attention while developing the rural communication strategy. Feel the local touch and sell the goods much should be the aim of producers and marketing agencies. If the increased participation of rural consumers and purchase is the objective of the rural marketing, emergency of a radical shift is the need of the hour in management thinking. Then only the producers are able to taste the success and rural distribution of the products and their sales would not be considered as a nightmare, which automatically passes the way for the next big market revolution in rural areas. REFERENCES Bijapurkar, Rama (2006). The Marketing in India. The economic times, 6. Joseph, R.L. (2009). Rural Consumer behaviour. The Business Line, 6. Kashyap, Pradeep (2007). Managing Rural markets. The Business line, 6. Murthy, Ravi (2007). Rural market for Consumer Durables. The economic Times, 6. Pani, Narendar (2006). The Mirage of Rural Marketing The Business Line, 8. Rajan, R.V. (2008). Enabling Rural Reach. The frontline, 24. Sankar, R. (2009). Rural Marketing and its enormity in India, The Business line, 08. Saraf, Vikas (2008). Branding: the hub of corporate wheel, Indian Journal of Marketing, 3-5. Trchan, Ruchi and Singh Harmandeep (2008). A comparative study on Urban and Rural behaviours. Indian Journal of Marketing, 4-7. Ushadevi, K.N. (2009). The Dynamics of Rural consumers, The Research Thesis, 156. Vol. 4, No. 1, June, 2010