mod 3 rural
TRANSCRIPT
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Introduction
A well-developed and tested model of buyer behaviour is known as the stimulus-response model, which issummarised in the diagram below:
In the above model, marketing and other stimuli enter the customers “black box” and produce certain responses.
Marketing management must try to work out what goes on the in the mind of the customer – the “black box”.
The Buyer’s characteristics influence how he or she perceives the stimuli; the decision-making process determineswhat buying behaviour is undertaken.
Characteristics that affect customer behaviour
The first stage of understanding buyer behaviour is to focus on the factors that determine he “buyer characteristics”
in the “black box”. These can be summarised as follows:
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Chapter 6 Class Notes
Contents of Chapter 6 Class Notes
What is Consumer Buying Behavior?
Stages of Consumer Buying Behavior?
Types of Consumer Buying Behavior. Categories That Effect Consumer Buying Behavior.
o Personal o Psychological o
Social
Please Email [email protected] any comments
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What is Consumer Buying Behavior?
Definition of Buying Behavior:Buying Behavior is the decision processes and acts of people involved in buying and using products.
Need to understand:
why consumers make the purchases that they make?
what factors influence consumer purchases?
the changing factors in our society.
Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A firm needs to analyze buying behavior for:
Buyers reactions to a firms marketing strategy has a great impact on the firms success.
The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies (gives utilityto) customers, therefore need to analyze the what, where, when and how consumers buy.
Marketers can better predict how consumers will respond to marketing strategies.
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Stages of the Consumer Buying Process
Six Stages to the Consumer Buying Decision Process (For complex decisions). Actual purchasing is only one stageof the process. Not all decision processes lead to a purchase. All consumer decisions do not always include all 6stages, determined by the degree of complexity...discussed next.
The 6 stages are:
1.
Problem Recognition(awareness of need)--difference between the desired state and the actual condition.Deficit in assortment of products. Hunger--Food. Hunger stimulates your need to eat.Can be stimulated by the marketer through product information--did not know you were deficient? I.E., seea commercial for a new pair of shoes, stimulates your recognition that you need a new pair of shoes.
2. Information search--o Internal search, memory.o External search if you need more information. Friends and relatives (word of mouth). Marketer
dominated sources; comparison shopping; public sources etc.
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A successful information search leaves a buyer with possible alternatives, the evoked set .
Hungry, want to go out and eat, evoked set is
o chinese foodo indian food
o
burger kingo klondike kates etc
3.
Evaluation of Alternatives--need to establish criteria for evaluation, features the buyer wants or does notwant. Rank/weight alternatives or resume search. May decide that you want to eat something spicy, indiangets highest rank etc.If not satisfied with your choice then return to the search phase. Can you think of another restaurant? Lookin the yellow pages etc. Information from different sources may be treated differently. Marketers try toinfluence by "framing" alternatives.
4. Purchase decision--Choose buying alternative, includes product, package, store, method of purchase etc.5. Purchase--May differ from decision, time lapse between 4 & 5, product availability.6. Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. Cognit ive Di ssonance , have you made
the right decision. This can be reduced by warranties, after sales communication etc.After eating an indian meal, may think that really you wanted a chinese meal instead.
Handout...Pillsbury 1-800#s
1-800 #s gives the consumer a way of communicating with the marketer after purchase. This helps reduce cognitivedissonance when a marketer can answer any concerns of a new consumer.Return to Contents List
Types of Consumer Buying Behavior
Types of consumer buying behavior are determined by:
Level of Involvement in purchase decision. Importance and intensity of interest in a product in a particularsituation.
Buyers level of involvement 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 therisk the higher the involvement. Types of risk:
Personal risk
Social risk
Economic risk
The four type of consumer buying behavior are:
Routine Response/Programmed Behavior--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 aboutunfamiliar brand in a familiar product category, perhaps. Requires a moderate amount of time forinformation gathering. Examples include Clothes--know product class but not the brand.
Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/or infrequently bought products. High degree of economic/performance/psychological risk. Examples include cars, homes,computers, education. Spend alot of time seeking information and deciding.
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Information from the companies MM; friends and relatives, store personnel etc. Go through all six stages ofthe buying process.
Impulse buying, no conscious planning.
The purchase of the same product does not always elicit the same Buying Behavior. Product can shift from onecategory 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 atall), 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.
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Categories that Effect the Consumer Buying Decision Process
A consumer, making a purchase decision will be affected by the following three factors:
1. Personal 2. Psychological 3.
Social
The marketer must be aware of these factors in order to develop an appropriate MM for its target market.Return to Contents List
Personal
Unique to a particular person. Demographic Factors. Sex, Race, Age etc.Who in the family is responsible for the decision making.Young people purchase things for different reasons than older people.
Handout...From choices to checkout...
Highlights the differences between male and female shoppers in the supermarket.
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Psychological factors
Psychological factors include:
Motives--
A motive is an internal energizing force that orients a person's activities toward satisfying a need or
achieving a goal.Actions are effected by a set of motives, not just one. If marketers can identify motives then they can betterdevelop a marketing mix.MASLOW hierarchy of needs!!
o
Physiologicalo
Safetyo Love and Belongingo Esteem
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o Self Actualization
Need to determine what level of the hierarchy the consumers are at to determine what motivates their purchases.
Handout...Nutrament Debunked...
Nutrament, a product marketed by Bristol-Myers Squibb originally was targeted at consumers that neededto receive additional energy from their drinks after exercise etc., a fitness drink. It was therefore targeted atconsumers whose needs were for either love and Belonging or esteem. The product was not selling well,and was almost terminated. Upon extensive research it was determined that the product did sell well ininner-city convenience stores. It was determined that the consumers for the product were actually drugaddicts who couldn't not digest a regular meal. They would purchase Nutrament as a substitute for a meal.Their motivation to purchase was completely different to the motivation that B-MS had originally thought.These consumers were at the Physiological level of the hierarchy. BM-S therefore had to redesign its MMto better meet the needs of this target market.Motives often operate at a subconscious level therefore are difficult to measure.
Perception--
What do you see?? Perception is the process of selecting, organizing and interpreting information inputs to produce meaning. IE we chose what info we pay attention to, organize it and interpret it.Information inputs are the sensations received through sight, taste, hearing, smell and touch.
Selective Exposure-select inputs to be exposed to our awareness. More likely if it is linked to an event,satisfies current needs, intensity of input changes (sharp price drop).
Selective Distortion-Changing/twisting current received information, inconsistent with beliefs.
Advertisers that use comparative advertisements (pitching one product against another), have to be very
careful that consumers do not distort the facts and perceive that the advertisement was for the competitor. Acurrent example...MCI and AT&T...do you ever get confused?
Selective Retention-Remember inputs that support beliefs, forgets those that don't.Average supermarket shopper is exposed to 17,000 products in a shopping visit lasting 30 minutes-60% of purchases are unplanned. Exposed to 1,500 advertisement per day. Can't be expected to be aware of allthese inputs, and certainly will not retain many.
Interpreting information is based on what is already familiar, on knowledge that is stored in the memory.
Handout...South Africa wine....
Problems marketing wine from South Africa. Consumers have strong perceptions of the country, and hence
its products.
Ability and Knowledge--
Need to understand individuals capacity to learn. Learning, changes in a person's behavior caused byinformation and experience. Therefore to change consumers' behavior about your product, need to givethem new information re: product...free sample etc.
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South Africa...open bottle of wine and pour it!! Also educate american consumers about changes in SA. Need to sell a whole new country.
When making buying decisions, buyers must process information. Knowledge is the familiarity with the product and expertise.
Inexperience buyers often use prices as an indicator of quality more than those who have knowledge of a product. Non-alcoholic Beer example: consumers chose the most expensive six-pack, because they assume that thegreater price indicates greater quality.
Learning is the process through which a relatively permanent change in behavior results from theconsequences of past behavior.
Attitudes--
Knowledge and positive and negative feelings about an object or activity-maybe tangible or intangible,living or non- living.....Drive perceptions
Individual learns attitudes through experience and interaction with other people.Consumer attitudes toward a firm and its products greatly influence the success or failure of the firm'smarketing strategy.
Handout...Oldsmobile.....
Oldsmobile vs. Lexus, due to consumers attitudes toward Oldsmobile (as discovered by class exercise)need to disassociate Aurora from the Oldsmobile name.
Exxon Valdez-nearly 20,000 credit cards were returned or cut-up after the tragic oil spill.
Honda "You meet the nicest people on a Honda", dispel the unsavory image of a motorbike rider, late1950s. Changing market of the 1990s, baby boomers aging, Hondas market returning to hard core. Tochange this they have a new slogan "Come ride with us".
Attitudes and attitude change are influenced by consumers personality and lifestyle.
Consumers screen information that conflicts with their attitudes. Distort information to make it consistentand selectively retain information that reinforces our attitudes. IE brand loyalty.
There is a difference between attitude and intention to buy (ability to buy).
Personality--
all the internal traits and behaviors that make a person unique, uniqueness arrives from a person's heredityand personal experience. Examples include:
o
Workaholismo
Compulsivenesso Self confidenceo Friendliness
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o Adaptabilityo Ambitiousnesso Dogmatismo Authoritarianismo Introversiono
Extroversiono
Aggressivenesso
Competitiveness.
Traits effect the way people behave. Marketers try to match the store image to the perceived image of theircustomers.
There is a weak association between personality and Buying Behavior, this may be due to unreliablemeasures. Nike ads. Consumers buy products that are consistent with their self concept.
Lifestyles--
Recent US trends in lifestyles are a shift towards personal independence and individualism and a preferencefor a healthy, natural lifestyle.
Lifestyles are the consistent patterns people follow in their lives.
EXAMPLE healthy foods for a healthy lifestyle. Sun tan not considered fashionable in US until 1920's. Now an assault by the American Academy of Dermatology.
Handout...Here Comes the Sun to Confound Health Savvy Lotion Makers..
Extra credit assignment from the news group, to access Value and Lifestyles (VALS) Program, complete the surveyand Email [email protected] the results. This is a survey tool that marketers can use to better understand their targetmarket(s).Return to Contents List
Social Factors
Consumer wants, learning, motives etc. are influenced by opinion leaders, person's family, reference groups, socialclass and culture.
Opinion leaders--
Spokespeople etc. Marketers try to attract opinion leaders...they actually use (pay) spokespeople to markettheir products. Michael Jordon (Nike, McDonalds, Gatorade etc.)
Can be risky...Michael Jackson...OJ Simpson...Chevy Chase
Roles and Family Influences--
Role...things you should do based on the expectations of you from your position within a group.People have many roles.Husband, father, employer/ee. Individuals role are continuing to change therefore marketers must continueto update information.
Family is the most basic group a person belongs to. Marketers must understand:
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o that many family decisions are made by the family unito consumer behavior starts in the family unito family roles and preferences are the model for children's future family (can reject/alter/etc)o family buying decisions are a mixture of family interactions and individual decision makingo family acts an interpreter of social and cultural values for the individual.
The Family life cycle: families go through stages, each stage creates different consumer demands:
o
bachelor stage...most of BUAD301o
newly married, young, no children...meo full nest I, youngest child under 6o full nest II, youngest child 6 or overo full nest III, older married couples with dependant childreno empty nest I, older married couples with no children living with them, head in labor forceo empty nest II, older married couples, no children living at home, head retiredo solitary survivor, in labor forceo solitary survivor, retiredo Modernized life cycle includes divorced and no children.
Handout...Two Income Marriages Are Now the Norm
Because 2 income families are becoming more common, the decision maker within the family unit ischanging...also, family has less time for children, and therefore tends to let them influence purchasedecisions in order to alleviate some of the guilt. (Children influence about $130 billion of goods in a year)Children also have more money to spend themselves.
Reference Groups--
Individual identifies with the group to the extent that he takes on many of the values, attitudes or behaviorsof the group members.
Families, friends, sororities, civic and professional organizations.Any group that has a positive or negative influence on a persons attitude and behavior. Membership groups (belong to)Affinity marketing is focused on the desires of consumers that belong to reference groups. Marketers getthe groups to approve the product and communicate that approval to its members. Credit Cards etc.!!
Aspiration groups (want to belong to) Disassociate groups (do not want to belong to)Honda, tries to disassociate from the "biker" group.
The degree to which a reference group will affect a purchase decision depends on an individualssusceptibility to reference group influence and the strength of his/her involvement with the group.
Social Class--
an open group of individuals who have similar social rank. US is not a classless society. US criteria;occupation, education, income, wealth, race, ethnic groups and possessions.
Social class influences many aspects of our lives. IE upper middle class Americans prefer luxury carsMercedes.
o
Upper Americans-upper-upper class, .3%, inherited wealth, aristocratic names.
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o Lower-upper class, 1.2%, newer social elite, from current professionals and corporate eliteo Upper-middle class, 12.5%, college graduates, managers and professionalso Middle Americans-middle class, 32%, average pay white collar workers and blue collar friendso Working class, 38%, average pay blue collar workerso Lower Americans-lower class, 9%, working, not on welfareo
Lower-lower class, 7%, on welfare
Social class determines to some extent, the types, quality, quantity of products that a person buys or uses.
Lower class people tend to stay close to home when shopping, do not engage in much prepurchaseinformation gathering.Stores project definite class images.
Family, reference groups and social classes are all social influences on consumer behavior. All operatewithin a larger culture.
Culture and Sub-culture--
Culture refers to the set of values, ideas, and attitudes that are accepted by a homogenous group of peopleand transmitted to the next generation.
Culture also determines what is acceptable with product advertising. Culture determines what people wear,eat, reside and travel. Cultural values in the US are good health, education, individualism and freedom. Inamerican culture time scarcity is a growing problem. IE change in meals. Big impact on internationalmarketing.
Handout...Will British warm up to iced tea?
No...but that is my opinion!!...Tea is a part of the British culture, hot with milk.
Different society, different levels of needs, different cultural values.
Culture can be divided into subcultures:
o geographic regionso human characteristics such as age and ethnic background.
IE West Coast, teenage and Asian American.
Culture effects what people buy, how they buy and when they buy.
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Executive SummaryThis study on rural consumer behaviour is aimed to get a better understanding of the Indianmarket place thusenabling companies to embark on selected strategies to effectively reach theIndia rural consumers.India is a hugecountry with 28 states, over one billion people and 120 dialects or languages.From the market perspective people ofIndia comprise different segments of consumers based onclass, status and income.An important and recentdevelopment is India¶s consumerism is the emergence of the ruralmarket for several basic consumer goods. Threefourth of India¶s population live in rural areaand contributes to one third of the national income.India is a lucrativemarket even though the per capita income in India is low and it remains ahuge market even for costly products.This project report focuses on understanding the rural consumer behaviour and psyche withoutwhich it will be virtuallyimpossible for companies to satisfy this segment. It is very essential for them to invest time and resources for thesame resulting in appropriate marketing strategies toincrease the market share and for avoiding any surprises in themarket place.Illustrations have been given to explain the difference in the behaviour of the rural consumer andhisurban counterpart.When we talk about rural markets and rural marketing, names of a few global players come toourmind. The top rank will definitely be taken by the pioneer in rural marketing ± HindustanUnilever Limited. Aneffort has been made to understand the successful marketing strategiesadopted by HUL to become a household namein rural India.
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CONSUMER BEHAVIOUR ± WHAT IS IT?The success or failure in any business depends upon the behaviour of the end-user or consumer who finally uses the product or any service. It enables the manufacturer to know which productshave been positively accepted in themarket and which ones need changes so as to suit theconsumers better. Not only is it critical to the manufacturer butalso to all the intermediariesinvolved in transferring the product to the ultimate user. Thus understanding theconsumer behaviour helps in identifying the weak points and also reflects the positive aspects of anybusiness.
So how can we define consumer behaviour? It refers to the acts of individuals directly involvedin obtaining goods
and services and includes decision process that involves a purchase.Sciffman and Karuk state that consumer behaviour is the behaviour that consumers display insearching for purchase, using and evaluating products, servicesand ideas which they expect willsatisfy their needs.It is the behaviour of the consumer which impacts their decisionto purchase or not purchase theproduct. Depending on their decision and their usage, an organization decides which products tomanufacture and to continue. The positioning of the product depends on the consumption of theproductand this behaviour of consumers may be related to any kind of products or services.THEORIES ON CONSUMER BEHAVIOURAs consumer behaviour is complex and dynamic to analyze many social scientists of differentdisciplines haveattempted to formulate various theories.A)
Decision making approach in understanding consumer behaviour provides that purchaseis an ultimate activity in acourse of action taken by a consumer. One of the theoriessuggests four different views related to consumer decisionmaking process and behaviour
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First is the µeconomic view¶ which states that consumers are primarily facing imperfectcompetition and they arealways expected to make rational decisions on the basis of assumptions that they are aware of all productalternatives, they rank benefits andlimitations of all alternatives and select one best alternative.
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Second µpassive view¶ is absolutely opposite to the above one and states that consumersare irrational, impulsiveand submissive to self centered interests of marketers. Theseconsumers are easily influenced by marketing tools.
Similarly third µemotional view¶ is related to perceive consumer¶s decision makingprocess based on theiremotional association or feelings about some products or services.For an instance, a person who has lost his red penwill neither make a rational decision byevaluating the alternatives (economic view) nor will he act in an impulsivemanner andget influenced by the marketers (passive view). Rather the person would choose any penthat closelyresembles his favourite possession.
Fourth and arguably the most acknowledged view is µcognitive view¶ which considersconsumers to be µthinking problem solvers¶ and who are receptive as well as activelysearching for products that can fulfill their needs.Consumer¶s behaviour under this goalis based on information seeking and processing attributes usually directed bya goal.An example would be that of a person buying a tooth paste from a certain shop with agoal of choosing a product that tastes good.Despite of critics for each viewpoint, it can be considered a valid argument that all fourtypes of decision making behaviour exist and provide the marketer guidelines to analyze the consumer accordingly.Based on general perception about acknowledged and common µcognitive view¶
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asserts broader stages of a consumer¶s decision making process that includes problemidentification, evaluation ofalternatives, outlet selection, purchase and post purchase selection.B)
We can also consider the study conducted by Engel which revealed certain basic facts onwhich he designed fourmodels to ascertain consumer behaviour.
It was found out in the study that the purchases made by consumers are mainly to satiatetheir demands and to solvethe underlying problem.
If a consumer purchases a product in order to fulfill his basic need, it can be said thepurchase was necessity-driven
and it can be analyzed from this aspect as to whatmotivates or drives a consumer to purchase a product.
If a consumer does an impulse purchase, he does it without any preconceived notion or well-thought over buying ofa product. The product in this case seems to be so attractiveor beneficial to a consumer that he immediately buys the product.So, this makes us understand that a product should have certain unique attributes to lure thecustomer. Insome of the product categories, there are a number of options to choose from and itbecomes difficult for thecustomer to reach a certain decision. Also it is difficult for the seller tosell his product as he needs to convince a lot by paying thrust on his product as against hiscompetitors
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IMPORTANCE OF CONSUMER BEHAVIOUR
Let us understand how the behaviour of the consumer affects a marketer.
It helps the marketer to take vital decisions with respect to designing of future marketingstrategies and help him tofind out what kind of promotional offers or marketingcampaigns need to be undertaken.
Whether the marketer should stick to the same product, extend the product portfolio, or probably launch a new product. If consumers prefer a particular brand and make thepurchase and the consumption of the same their regular
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habit, it is time that the marketer should think of improving upon a brand or come out with a different product. Manytimes,the need calls for a niche marketing
It also helps an organization to reinstate the corporate policies or take action to reframe thecorporate missionstatement.
The consumer behaviour also has effects on the entire social network which again helpsan organization to target aspecific audience or set of customers.
The behaviour of consumers gives the nation a different face, either good or bad.
Also helps in scheduling of events, for example, any product launch or any advertisingcampaign
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The consumer behaviour also is related to cultural attributes. If a product suits aparticular cross-section of culture,the marketer can think of extending his products tointernational arena and across different cultures.INDIAN CONSUMER ± DIFFERENT SEGMENTSSocialitesSocialites belong to the upper class. This affluent group forms a small part of the Indianpopulation with about 150million people. They prefer to shop in specialty stores, go to clubs onweekends and spend a lot on luxury goods.They are always looking for something different andprefer high value, exclusive products.Socialites are very brandconscious and would go for only for best known in the market.However this group does not form a demand baselarge enough for manufacturing marketingfirms to depend upon exclusively on them, except perhaps that those dealwith real luxury items.Conservatives
Conservatives belong to the middle class. The conservative segment is the reflection of the trueIndian culture. Theyare traditional in their outlook, cautious in their approach towards purchasesand spend more time with family than in partying and focus more on savings rather thanspending. Slow in decision making, seeking a lot of information before making any purchase.They look for durability and functionality but at the same time is also imageconscious.They prefer high value consumer products but often have to settle for the more affordable one.Thesehabits in turn affect their purchasing patterns.Rural consumerAbout 70% of India¶s population lives in rural India which is scattered in the 6,00,000 villages inthe country. For
several product categories, rural markets account for well over 60 per cent of the
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national demand. While the rural consumer is generally seen as less affluent than his urbancousin, things are
changing in rural India over the last ten years.While in 1998-99 over 83% of rural households fell in the lower andlower middle classes, thenumber has fallen to 70% in 2006-07; the comparative fall for urban India is from 53% to27%[NCAER data]. And if experts are to be believed, the number is set to fall at a rapid rate over thenext 20years.Over the years, as a result of the increasing literacy in the country, exposure to the west,satellitecommunication, foreign magazines and newspapers there is a significant increase in awarenessof ruralconsumers. Today more and more consumers are selective on the quality of products andservices.This awareness hasmade the Indian rural consumers seek more and more reliable sources for purchases such as organized retail storeswhich have a corporate background and where theaccountability is more pronounced. The consumer also seeks to purchase from a place where hisor her feedback is valued.Indian rural consumers are now more aware anddiscerning, knowledgeable about technology,products and the market and are beginning to demand benefits beyond
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just availability of a rangeof products that came from a trusted manufacturer. They prefer to buy value formoneyproducts.
RURAL CONSUMER BUYING BEHAVIOURRural buyer behaviour refers to the buying behaviour of final consumers ± individuals andhouseholds who buy
goods and services for personal consumption. All these final consumersmake up the consumer market.The ruralconsumer is likely to exhibit different purchase behaviour as compared to his urbancounterpart. This is basically dueto the unique characteristics of rural markets. The compositionof Indian rural market is probably the much morecomplex than the whole market in Europe interms of cultural, linguistic and other diversities.The social andreligious customs, climatic considerations, dual ownership due to prevalence of joint family system, mould the buying habits of rural consumers. The Chairman of HindustanUnilever Ltd also corroborates µour survey shows thatrural consumers tend to be more subject tolocal religious, cultural and social pressures and there are regionalvariations in tastes andhabits´.Thus it is important to study the thought process of the rural consumer purchasedecision so thatmarketers can successfully reach this huge untapped segment.Factors influencing buying behaviourTo understand rural buying behaviour a marketer must first understanda)
The factors that influence the buying behaviour andb)
The variations in that behaviour These help to generate information upon which a marketer can create bases forsegmentthe rural market taking the following factors into consideration:
Environment of the consumer± The surroundings within which consumer lives has avery strong influence on the buying behaviour.A villager¶sneeds are different from those
of his urban cousin. The environment has a critical influence in shaping the needs of therural consumer. Productsmade to urban specifications may be impractical in ruralsettings.An excellent example would be of electrical andelectronic goods. Virtually all radios,cassette players and television sets are made to urban supply specifications. Inmanyvillages, especially in power strapped villages, voltages fluctuate wildly making electricalgoods susceptible to
frequent breakdowns. In fact villagers don¶t mind paying more for these goods if they can sustain the frequent power cuts. Also water supply affects demandfor durables in many villages.
Geographic variations in market behaviour± The geographic location in which theconsumer is located also speaks about the thought process of theconsumer.Rural markets are not homogeneous. Variations in economic development and degree of acceptance ofinnovation are evident in such markets. Geographic variation to urbancentres and variations in development haveresulted in tremendous heterogeneity evenwithin a state for example western and eastern UP where there are majordifferences. For instance in western UP bullock carts are smaller vehicles with one buffalo while ineastern UP bullocks carts are larger pulled by two buffaloes. Also locals speak Hindustani in western UP while they speakBhojpuri in eastern UP.For instance villages in south accept technology quicker than in other parts of India.ThusHMT sells more winding watches in the north while they sell more quartz watchesdown south.These have
implications to product design and marketing strategies
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Influence of occupation and consumption patterns± The perception that the ruralconsumer is either a farmer or an agricultural labourer restricts marketingeffectiveness.In fact there are other groups of consumers with different needs and behaviour havingsignificant
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purchase volumes.The Indian Readership Survey of 1998 has chosen the occupation of chief wage earner asa basisto define the rural consumer. It tells us that the occupation profiles of owners of consumer durables of three popularconsumer durables indicate that non agriculturaloccupation group is one that constitutes the high consumptionsegment.Here the non agricultural occupation group includes shopkeepers, traders or those inemployment servicelike government administration jobs, banks, teachers and other professionals.Television owners in the service clanconstitute 43 percent which means one in twopersons own a television set. In the case of other non agriculturalgroup, the shopkeepersand traders, one in three persons owns a television.
Influence of consumer behaviour and its implication
Place of purchase± Not all the rural consumers buy from the same location. Also thesame consumer buys from different location
depending upon the product and need. Astudy on haats showed that about 58% of villagers visiting these haats preferred themover village shops due to better quality, prices and variety.Companies need to assess the influence onconsumers of both village shops and haats.Rural consumer do not depend on the haats and village shops alone assome purchasesare made from the urban areas also. For example, there are few product categories inwhich the ruraldistribution is still low and therefore consumer buys from towns. It wasobserved that for certain categories of products of FMCG, the rural consumers made ashigh as 50% of their purchases from urban markets.In case whererural dealer penetration is low, the purchase from urban centres is high. For example, shaving creams have lowdealer penetration and hence 37% of purchases aremade from urban area while there is a high dealer penetration fortea and hence 60%purchases are from rural markets and 25% from urban centres.% of products bought from the nearby town rather than within the village itself
Creative use of product± Marketers will find it useful to keep an eye on the differentways in which the rural consumers can use the given product. This is because product usecan differ and not be envisaged by the marketer. Even for the experienced
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of the participants with the interaction process and their outcomes and results thereof.A set of systematic activitiesusing the above framework can provide comprehensive insight intorural buyer behaviour. However there is no needto re invent the wheel. Disciplines likesociology/ rural sociology, anthropology, agricultural economies, psychology,social work,literature etc have developed considerable insight in the individual and group behaviour in therural andrurban context over a period of time.These disciplines may be tapped into, with the material carefully selected,interpreted andvalidated wherever required given the differences in the context. In fact one of the tragedies of
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the growth of marketing as a discipline has been its increasing isolation from the parent or sister disciplinesmentioned above without developing sufficient rigour of its own. Note± The word µparticipants¶ is deliberate here.It is possible and meaningful to segment the above categories in theexhibit but it is notattempted here.TYPES OF RURAL CONSUMER BUYING BEHAVIOURTypes of consumer buying behavior are determined by:y
Level of Involvement in purchase decision. Importance and intensity of interest in aproduct in a particular situation.
y
Buyer¶s level of involvementdetermines why he/she is motivated to seek informationabout a certain products and brands but virtually ignoresothers.High involvement purchases--Honda Motorbike, high priced goods, products visible toothers, and the higherthe risk the higher the involvement.Types of risk:y
Personal risky
Social risky
Economic risk The four type of consumer buying behavior are:y
Routine Response/Programmed Behavior--buying low involvement frequentlypurchased low cost items; need very little search and decision effort; purchasedalmostautomatically. Examples include soft drinks, snack foods, milk etc.y
Limited Decision Making--buying product occasionally. When you need to obtaininformation about unfamiliar brand in a familiar productcategory, perhaps. It requires a
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moderate amount of time for information gathering. Examples include Clothes--knowproduct class but not the brand.y
Extensive Decision Making/Complex high involvement- unfamiliar, expensive and/or infrequently bought products. High degree of economic/performance/psychologicalrisk.Examples include cars, homes, computers, education. Spend a lot of time seekinginformation and
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deciding.Information from the companies MM; friends and relatives, store personnel etc. Gothrough all six stages ofthe buying process.y
Impulse buying, no conscious planning.The purchase of the same product does not always elicit the same buying behavior. Product canshift from onecategory to the next.For exampleGoing out for dinner for one person may be extensive decision making (forsomeone that doesnot go out often at all), but limited decision making for someone else. The reason for thedinner,whether it is an anniversary celebration, or a meal with a couple of friends will also determinethe extent ofthe decision making.Role of people in buying decisionInitiator± The person who first suggests the idea of buying the product or service. For example,a in a family the youngestchild 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 relativewho lives in a nearby city. This relative suggests the farmer that aNokia or Dolphin cell phone would be good sincehe is well versed with the various models.Thus he has influenced his father
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Decider ±The person who decides on any component of the buying decision, whether to buy,what to buy, how to buy or whereto buy. The elder son of the farmer when asked, tells him thatNokia cell phone suggest that buying it would be a better option as it is more trusted. He hasdecided what cell phone to buy for the father.Buyer ±He is the person who makes the actual purchase. Here the father has made a decisionand buys a Nokia cell phonefrom a dealer known to him. The father has paid the money and heis the buyer.User± The person who consumes or uses the product or service. For example this new Nokiacell phone is actually used buy their sister who teaches in the school.
Buying behavior of Rural consumers
by V S Rama Rao on February 15, 2008
To understand the buying behavior of rural consumers, we must go to the factors that influence their buying behavior. The factors include:
1. Socio-economic environment of the consumer2. Cultural environment3. Geographic location4. Education/literacy level5. Occupation6. 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 products10. Involvement of others in the purchase.11. Marketers’ effort to reach out the rural markets
Some of these points are discussed in some detail below:
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Influence of culture: Culture and tradition influence perception and buying behavior. For example, the preference inrespect 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. Forexample, 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 ruralmarkets. To cite one more example of how geographic location affects buying behavior, we can point out the factthat 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 influencestheir buying. The example of lack of electricity affecting buying behavior illustrates this point as well. Lack ofelectricity automatically increases the purchase of batteries by rural consumers. Similarly, since rural consumerscannot use washing powders/detergent powders that much, as they wash their clothes in streams or ponds, they go inmore for washing bars and detergent cakes.
Places of purchase: Buying behavior of rural consumer also varies depending on the place of purchase. Differentsegments of rural buyers buy their requirements from different places/outlets. Some buy from the villageshopkeepers; some from village markets/fairs; others buy from the town that serves as the feeder to the rural area. Itis 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 productsand why?
Involvement of others in the purchase: Involvement of others in the purchase in the purchase decision is yet anotherrelevant factor in this regard. There has been a change here in recent years. In the past, the head of the family used tomake 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 toinformation has resulted in this development. The marketer has to reckon the role of the influencers while sizing upthe 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 broughtabout some change in the way buyers purchase different products. Developmental marketing has createddiscriminating 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 marketingmix variables, and the reference points they use for purchase decisions.
more at http://www.citeman.com/2777-buying-behavior-of-rural-consumers.html#ixzz1laZGM2qT
Factors Affecting Consumer BehaviorBy Asifo Shah
Consumer behavior refers to the selection, purchase and consumption of goods and services for the satisfaction oftheir wants. There are different processes involved in the consumer behavior. Initially the consumer tries to findwhat commodities he would like to consume, then he selects only those commodities that promise greater utility.After selecting the commodities, the consumer makes an estimate of the available money which he can spend.Lastly, the consumer analyzes the prevailing prices of commodities and takes the decision about the commodities heshould consume. Meanwhile, there are various other factors influencing the purchases of consumer such as social,cultural, personal and psychological. The explanation of these factors is given below.
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1. Cultural Factors
Consumer behavior is deeply influenced by cultural factors such as: buyer culture, subculture, and social class.
Culture
Basically, culture is the part of every society and is the important cause of person wants and behavior. The influenceof culture on buying behavior varies from country to country therefore marketers have to be very careful inanalyzing the culture of different groups, regions or even countries.
Subculture
Each culture contains different subcultures such as religions, nationalities, geographic regions, racial groups etc.Marketers can use these groups by segmenting the market into various small portions. For example marketers candesign products according to the needs of a particular geographic group.
Social Class
Every society possesses some form of social class which is important to the marketers because the buying behaviorof people in a given social class is similar. In this way marketing activities could be tailored according to differentsocial classes. Here we should note that social class is not only determined by income but there are various otherfactors as well such as: wealth, education, occupation etc.
2. Social Factors
Social factors also impact the buying behavior of consumers. The important social factors are: reference groups,family, role and status.
Reference Groups
Reference groups have potential in forming a person attitude or behavior. The impact of reference groups varies
across products and brands. For example if the product is visible such as dress, shoes, car etc then the influence ofreference groups will be high. Reference groups also include opinion leader (a person who influences other becauseof his special skill, knowledge or other characteristics).
Family
Buyer behavior is strongly influenced by the member of a family. Therefore marketers are trying to find the rolesand influence of the husband, wife and children. If the buying decision of a particular product is influenced by wifethen the marketers will try to target the women in their advertisement. Here we should note that buying roles changewith change in consumer lifestyles.
Roles and Status
Each person possesses different roles and status in the society depending upon the groups, clubs, family,organization etc. to which he belongs. For example a woman is working in an organization as finance manager. Nowshe is playing two roles, one of finance manager and other of mother. Therefore her buying decisions will beinfluenced by her role and status.
3. Personal Factors
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Personal factors can also affect the consumer behavior. Some of the important personal factors that influence the buying behavior are: lifestyle, economic situation, occupation, age, personality and self concept.
Age
Age and life-cycle have potential impact on the consumer buying behavior. It is obvious that the consumers change
the purchase of goods and services with the passage of time. Family life-cycle consists of different stages suchyoung singles, married couples, unmarried couples etc which help marketers to develop appropriate products foreach stage.
Occupation
The occupation of a person has significant impact on his buying behavior. For example a marketing manager of anorganization will try to purchase business suits, whereas a low level worker in the same organization will purchaserugged work clothes.
Economic Situation
Consumer economic situation has great influence on his buying behavior. If the income and savings of a customer ishigh then he will purchase more expensive products. On the other hand, a person with low income and savings will purchase inexpensive products.
Lifestyle
Lifestyle of customers is another import factor affecting the consumer buying behavior. Lifestyle refers to the way a person lives in a society and is expressed by the things in his/her surroundings. It is determined by customerinterests, opinions, activities etc and shapes his whole pattern of acting and interacting in the world.
Personality
Personality changes from person to person, time to time and place to place. Therefore it can greatly influence the
buying behavior of customers. Actually, Personality is not what one wears; rather it is the totality of behavior of aman in different circumstances. It has different characteristics such as: dominance, aggressiveness, self-confidenceetc which can be useful to determine the consumer behavior for particular product or service.
4. Psychological Factors
There are four important psychological factors affecting the consumer buying behavior. These are: perception,motivation, learning, beliefs and attitudes.
Motivation
The level of motivation also affects the buying behavior of customers. Every person has different needs such as
physiological needs, biological needs, social needs etc. The nature of the needs is that, some of them are most pressing while others are least pressing. Therefore a need becomes a motive when it is more pressing to direct the person to seek satisfaction.
Perception
Selecting, organizing and interpreting information in a way to produce a meaningful experience of the world iscalled perception. There are three different perceptual processes which are selective attention, selective distortionand selective retention. In case of selective attention, marketers try to attract the customer attention. Whereas, in
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case of selective distortion, customers try to interpret the information in a way that will support what the customersalready believe. Similarly, in case of selective retention, marketers try to retain information that supports their beliefs.
Beliefs and Attitudes
Customer possesses specific belief and attitude towards various products. Since such beliefs and attitudes make up brand image and affect consumer buying behavior therefore marketers are interested in them. Marketers can changethe beliefs and attitudes of customers by launching special campaigns in this regard.
To find a lot more on marketing, management, supply chain, finance and other core subjects of business
administration please visit the sites.
Factors influencing consumer behaviour
Consumer purchases are influenced strongly by or there are four factors.
01. Cultural Factor
02. Social Factor
03. Personal Factor
04. Psychological Factor.
01. Cultural Factor :-
Cultural factor divided into three sub factors (i) Culture (ii) Sub Culture (iii) Social Classo Culture:-
The set of basic values perceptions, wants, and behaviours learned by a member ofsociety from family and other important institutions. Culture is the most basic cause of a person’s wants and behaviour. Every group or society has a culture, and culturalinfluences on buying behaviour may vary greatly from country to country.
o Sub Culture :- A group of people with shared value systems based on common life experiences and
situations.
Each culture contains smaller sub cultures a group of people with shared value system based on common life experiences and situations. Sub culture includes nationalities,religions, racial group and geographic regions. Many sub culture make up importantmarket segments and marketers often design products.
o Social Class:-
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Almost every society has some form of social structure, social classes are society’s
relatively permanent and ordered divisions whose members share similar values, interestsand behaviour.
02. Social Factors :-
A consumer’s behaviour also is influenced by social factors, such as the (i) Groups (ii) Family (iii) Roles
and statuso Groups :-
Two or more people who interact to accomplish individual or mutual goals. A person’s behavious is influenced by many small groups. Groups that have a direct
influence and to which a person belongs are called membership groups. Some are primary groups includes family, friends, neighbours and coworkers. Some are
secondary groups, which are more formal and have less regular interaction. Theseincludes organizations like religious groups, professional association and trade unions.
o Family:- Family members can strongly influence buyer behaviour. The family is the most
important consumer buying organization society and it has been researchedextensively.Marketers are interested in the roles, and influence of the husband, wife and
children on the purchase of different products and services.o
Roles and Status :- A person belongs to many groups, family, clubs, organizations. The person’s position in each group can be defined in terms of both role and status. For example. M & “X” plays the role of father, in his family he plays the role of husband,
in his company, he plays the role of manager, etc. A Role consists of the activities peopleare expected to perform according to the persons around them.
03. Personal Factors :-
It includes
i) Age and life cycle stage (ii) Occupation (iii) Economic situation (iv) Life Style (v) Personality and self
concept.o Age and Life cycle Stage:-
People changes the goods and services they buy over their lifetimes. Tastes in food,clothes, furniture, and recreation are often age related. Buying is also shaped by the stageof the family life cycle.
o
Occupation :- A person’s occupation affects the goods and services bought. Blue collar workers tend to
buy more rugged work clothes, whereas white-collar workers buy more business suits. ACo. can even specialize in making products needed by a given occupational group. Thus,computer software companies will design different products for brand managers,accountants, engineers, lawyers, and doctors.
o Economic situation :- A person’s economic situation will affect product choice
o
Life Style :- Life Style is a person’s Pattern of living, understanding these forces involves measuring
consumer’s major AIO dimensions. i.e. activities (Work, hobbies, shopping, support etc) interest (Food, fashion, family
recreation) and opinions (about themselves, Business, Products)o
Personality and Self concept :- Each person’s distinct personality influence his or her buying behaviour. Personality
refers to the unique psychological characteristics that lead to relatively consistent andlasting responses to one’s own environment.
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-He understands symbols and colours better, and looks for endorsement by local leaders or icons.
-He doesn't like to pay extra for frills he cannot use.
-He has his daily routine, and there is no sense of urgency in his lifestyle.
-He has a very high involvement in any product purchased.
-Divisions based on caste, community and other hierarchical factors exist in rural areas.
-The rural market of India is a geographically scattered market.
-Rural consumers continue to be marked by low purchasing power.
-Rural market is culturally a diverse and Heterogeneous
-There is also a great deal of difference between different states in extent of development.
-The rural consumers are marked by a conservative and tradition-bound lifestyle.
-The lifestyle of a sizeable segment of rural is currently going through the process of change.
Characteristics of Rural Markets The households belonging to the middle-income and abovecategories that constitute the bulk of the consuming class had been increasingly steadily over theyears. The urban consumers have to incur a higher cost of living while the rural population hashigher levels of disposable income for the same levels of income. While incomes as well asexpenditure in rural areas have increased, their spending on non- food items has also increased.
However, the rural income is seasonal in nature and to a great extent influenced by non-controllable factors such as draughts and floods, crop failures due to pests, and similar factors.For the working class in rural areas, wages are distributed daily, weekly, or fortnightly and comein small installments.
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Social hierarchy, traditions, social norms and customs play significant roles in determiningindividual and collective behavior in rural India. The Caste system determines the social status of
the individuals and families, and this has important implications for individual and social behavior. However, within the caste system itself, there are sub-castes, religious groups and sub-groups, making the social hierarchy more complex. While in the urban areas, householdsettlements are often referred to as low-income group (LIG), middle-income group (MIG), orhigh-income groups (HIG), in many parts of rural India, geographic demarcation of householdsettlements is based on caste affiliations. In some rural areas, even the common facilities likewell water or grazing land is demarcated based on caste. People belonging to some castes are prohibited from accessing common facilities demarcated for other caste groups. Any violation ofthese norms can lead to social tensions. Unlike in urban areas, these behavioral norms are strictlyimplemented in rural areas.
Consumer Behavior in Rural Areas Purchase-decision processes and preferences also showcertain characteristics that implication for marketers. Exhibitions and road shows act as some ofthe key triggers for information-search behavior. Opinion leaders and people who are perceivedto be knowledgeable play an important role as information providers and advisors. Word ofmouth has more significance in purchase decisions of rural consumers. Family members,relatives, and friends are consulted before making purchase decisions of higher-value products.Compared to the urban counterparts, rural consumers have different interpretations of colors,symbols, and social activities. Rural consumers show a preference for bold, primary colors; redcolor connotes happiness and auspiciousness, and green color prosperity. Ownership of a largetractor, large house, telephone and other higher-value consumer durables, and education ofchildren in cities are considered as status symbols. However, as the exposure to mass media and
information technology is increasing, rural consumers are becoming more informed about products and services, and their dependence on traditional reference groups is gradually waning.Rural consumers also tend to be more loyal as brand switching has greater perceived risk.
Marketing Infrastructure in Rural Areas It is uneconomical to access a large number of smallvillages with a very low population density spread over a large geographic area. Factors such aslimited physical access, low density of shops, limited storage facilities, need for a large number
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of intermediaries in the distribution channel to reach the end customers, and low capacity ofintermediaries to invest in business make the tasks of reaching rural consumers very complex.
The importance of alternative means of reaching rural consumers through periodic villagemarkets (or haats), agricultural markets (mandis), and rural fairs (melas).Haats are a "public
gathering of buyers and sellers of commodities, meeting at an appointed or customary location atregular intervals. Most of these periodicmarkets are held once a week. Haats function as physicalmarkets for selling agricultural surplus as well as retail points for buying daily-use items andsupplies for farming activities. Mandis or agriculturalmarkets are set up by the state governmentsfor facilitating exchange of agricultural produce and for procurement of food grains by thegovernment agencies. Companies use mandis to promote their brands by setting up "stalls" forcarrying out sales promotion activities and for gatheringmarket-research information.
Melas or fairs are an integral part of human life. There are different types of fairs: commodityfairs, cattle fairs, and fairs in connection with religious festivals. Most of the fairs are held inconnection with religious festivals and, have limited marketing value. But the remaining fairs are
used by companies to promote their products and brands.
How to communicate with the rural?
The first step in the development of any communication package is the in-depth study of themindset of consumers of each region for each product category.
A rural consumer is not in a hurry and you can take your time to communicate a message.
- The importance of simple analogies that can help in understanding the brand promise better.
-The communication must address the specific problems, needs, aspirations and hopes of ruralfolks in each region.
- The total understanding of the main message was only 30-60 per cent among the ruralaudience.
- Rural folks do not understand clever, gimmicky, quick, suggestive and hi-tech films.
-Use of unrelated symbols, characters and icons confuse and distance them.