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What do you think affects the decision making of Indian Rural Population for buying mobile phones?

What do you think is the % of Rural population who use Mobile phones, 30%? You are in for a surprise.

Introduction Rural India is known for its vivid diversity. With 6, 38,000 villages; India houses worlds largest rural population. India has 711.6 million rural population and 132.4 million rural households which comprise of 70% of total Indian population. The peculiar thing about this population is that their consumption pattern is evolving day by day. Many of the urban products are making their ways to rural market. Mobile phone is one such product. As urban market is getting saturated, marketers are looking at rural market as an option to grow their market share. Literature review According to study done by researchers in this area so far, rural consumers emphasise on price and the features available in the mobile while making a choice for mobile phone. Despite of low income and lack of knowledge of technology, they are fascinated by the advanced features of mobile phones. They look for optimum utilization of money. There is a shift in the consumption pattern during the mid-1980s in both the rural and the urban sectors. For the lowest expenditure class in the rural sector, the shift is away from food items. Nowadays, rural youth are expending on lifestyle products. The expenditure on entertainment has increased considerably. Researches show that consumption pattern of a household, in general, is affected by several factors, which may be of economic and non-economic in nature. Economical factors like income and occupation and non economical factors like gender age; determine the consumption pattern of an individual. Research methodology Based on the findings from existing literature, the impact of demographic variables, say age, personal income, family income, family size and occupation; on the consumer behaviour for mobile phones was studied. Apart from this, effect of price of the mobile phone and its features on the purchase decision taken by the consumers was studied as well. The research is of descriptive type. The data for study have been collected through personal interview from Mahuli village in Patna Rural Block in Patna district of Bihar. Judgmental sampling method has been used. The data for study has been collected through semi structured personal interview. The data has been collected primarily from males because males were found to be the prime purchaser and influencer for mobile handset. Sample size is hundred. The sample contains respondents of 14 to 56 years of age (Fig.1).

Village demography Village demography Mahuli is one of the villages in Patna Rural Block in Patna district of Bihar. The total population of the village is 5,063(Census 2001). The total number of households in Mahuli is 682. The literacy rate is 42.44%. The female literacy rate is 25.13%. The male literacy rate is 56.59%. Female to male ratio of Mahuli is 83.77% as compared to female to male ratio of Bihar as 91.93%. The literacy rate of the village is 42.44% compared to the literacy rate of state 47 (Census 2001). All this data has improved till date with the ongoing development of Bihar. Consumer Behavior The usage of mobile handset has increased drastically in past few years. Before 5 years, only 24% of the respondents had mobile phones. The number increased to 48% in following two years. Two year before, 72% of the respondents were using mobile handsets. We can see the high growth rate in the number of consumers. Multimedia mobile handsets are popular in the village. Table 2 shows the use of different mobile handsets by the respondents. It was found that usage of Chinese and Micromax mobile handsets are more (Fig.2). This is so because they are cheap and they offer multimedia features. People appreciate these mobile handsets for its long battery back-up as well. 69% of the respondents use mobile handsets with multimedia features. Black and white mobile phones are used by 11% of the respondents that too mainly by people of more than 40 years of age (Fig.3). 40% of the total respondents use mobile handsets for call purpose only (Fig.4). Rest 60% use other features as well. 9% of the multimedia handset owners were not using the multimedia features of their mobile handset but it was being used by the young members in their family. A peculiar thing was found that youth use mobile handsets not only to watch movies. They get movie loaded in the mobile phones in Rs.5 from market and watch it in mobile.

Quantitative Analysis The affect of age, personal income, and price of mobile handset, family income, occupation and family size was studied on the number of mobile handsets owned by an individual.

KMO and Bartlett's Test Output Rotated Component Matrix Component 1 Age Price Income Family Size .403 -.701 -.208 .732 2 .732 -.105 .553 .216

Occupation code Annual_family_income Fig. 6- Output table of SPSS Factor Analysis


Factor Analysis

.126 .718

.708 -.157

Factor Analysis

The SPSS output of factor analysis has been shown in figure 6. The above mentioned 6 variables were loaded on two factors. One factor comprises of variables like price of mobile handset and family size and annual family income .Another factor comprises of age, income of an individual and occupation. The first factor has been named as economic factor. Second factor has been named as income factor.

Correlation Analysis The correlation output shows that there is significant relationship between the number of mobile owned by an individual with age, price of handset, annual family income and family size. Changes in these variables significantly change the number of mobile owned by an individual. Regression Analysis The selected six variables determine 83.4% of variation in the number of mobile handset owned by an individual (dependent variable).The regression equation is as follows:Number of mobile owned by an individual =1.29 0.93*Age-0.65*Price+0.53*Income+.913* Family Size -.100*Occupation code + 0.17*Annual family income This shows that youth are fond of keeping more number of handsets. Low priced mobile phones are owned more. Students own more mobile phones as compares to farmers and business personnel in rural India. Market for mobile handsets It was found that the number of mobile phone users is increasing day by day. The average family size of the village is 7 and average number of mobile handsets per household lies between 2 to 3. Families having more youth were having more mobile handsets. In India, about 11,600 villages are of same population (Census 2001). Therefore, there seems a huge market for companies to penetrate. Implications of the study for marketer The study shows the consumer behaviour and the factors determining the usage of mobile handsets in rural India. Based on it, marketers could follow the following marketing strategy for penetrating into the rural market which is yet flooded with Chinese mobile handsets:Product

The mobile handset should be of two types. One handset should be non multimedia set for those who use mobile phones primarily to make calls and another should contain advanced features like music, video and camera. The functionality of these handsets should be simple and battery backup should be more because electricity facility is still inadequate in many of the Indian villages. Price The handset should be of three ranges; that is 1100, 1500 and 2000 depending upon the features it has; to make it affordable for rural consumers. Place The mobile handsets should be distributed through the local mobile stores. It should be made available nearby those villages which have a population of 5000 or more than this. Promotion To promote the handset, advertisement should be flown on television at about 8 P.M. programmes which is the time when the target consumers watch television. Ads could be shown on Star Plus, Zee TV and Doordarshan. Retailers should be given incentives on the sale of mobile handsets. They should be given incentives on meeting a given sales target. To attract the customers, a free sim card with some balance should be given. This could be done in collaboration with some telecom service provider. References Das, V. M. Consumer issues in development: A perspective in studying Indian rural consumers, 1987 Jain A., Hundal B. S.; 2007; Asia-Pacific Journal of Rural Development; Vol. 17 Issue 1, p17 28 Viswanathan B.; 2001; Applied Economics;Vol. 33 Issue 9, p1187-1200 Sarangi P., Panda, B. K.; 2011; Journal of Management Research; Vol. 10 Issue 2, p53-72 Pal S., Kynch J.; 2000; Applied Economics;, Vol. 32 Issue 12, p1559 -1573

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