Introduction

A well-developed and tested model of buyer behaviour is known as the stimulus-response model, which is
summarised 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 Buyers characteristics influence how he or she perceives the stimuli; the decision-making process determines
what 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:

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 alex@udel.edu any comments
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What is Consumer Buying Behavior?

Definition
of
Buying
Buying Behavior is the decision processes and acts of people involved in buying and using products.

Behavior:

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 utility
to) 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 stage
of the process. Not all decision processes lead to a purchase. All consumer decisions do not always include all 6
stages, determined by the degree of complexity...discussed next.
The 6 stages are:
1.

2.

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., see
a commercial for a new pair of shoes, stimulates your recognition that you need a new pair of shoes.
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.

A successful information search leaves a buyer with possible alternatives, the evoked set.
Hungry, want to go out and eat, evoked set is

3.

4.
5.
6.

o chinese food
o indian food
o burger king
o klondike kates etc
Evaluation of Alternatives--need to establish criteria for evaluation, features the buyer wants or does not
want. Rank/weight alternatives or resume search. May decide that you want to eat something spicy, indian
gets
highest
rank
etc.
If not satisfied with your choice then return to the search phase. Can you think of another restaurant? Look
in the yellow pages etc. Information from different sources may be treated differently. Marketers try to
influence by "framing" alternatives.
Purchase decision--Choose buying alternative, includes product, package, store, method of purchase etc.
Purchase--May differ from decision, time lapse between 4 & 5, product availability.
Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. Cognitive Dissonance, 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 cognitive
dissonance
when
a
marketer
can
answer
any
concerns
of
a
new
consumer.
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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 particular
situation.
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 the
risk 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 about
unfamiliar brand in a familiar product category, perhaps. Requires a moderate amount of time for
information 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.

Information from the companies MM; friends and relatives, store personnel etc. Go through all six stages of
the 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 one
category
to
the
next.
For
example:
Going out for dinner for one person may be extensive decision making (for someone that does not go out often at
all), but limited decision making for someone else. The reason for the dinner, whether it is an anniversary
celebration, 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.
2.
3.

Personal
Psychological
Social

The marketer must be aware of these factors in order to develop an appropriate MM for its target market.
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Personal
Unique
to
a
particular
person.
Demographic
Factors.
Who
in
the
family
is
responsible
for
Young people purchase things for different reasons than older people.

Sex,
the

Race,
decision

Age

etc.
making.

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 better
develop
a
marketing
mix.
MASLOW hierarchy of needs!!
o
o
o
o

Physiological
Safety
Love and Belonging
Esteem

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 needed
to receive additional energy from their drinks after exercise etc., a fitness drink. It was therefore targeted at
consumers 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 in
inner-city convenience stores. It was determined that the consumers for the product were actually drug
addicts 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 MM
to
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. A
current 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 all
these 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 by
information and experience. Therefore to change consumers' behavior about your product, need to give
them new information re: product...free sample etc.

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
Knowledge is the familiarity with the product and expertise.

must

process

information.

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 the
greater price indicates greater quality.
Learning is the process through which a relatively permanent change in behavior results from the
consequences 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's
marketing 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, late
1950s. Changing market of the 1990s, baby boomers aging, Hondas market returning to hard core. To
change 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 consistent
and 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 heredity
and personal experience. Examples include:
o
o
o
o

Workaholism
Compulsiveness
Self confidence
Friendliness

o
o
o
o
o
o
o
o

Adaptability
Ambitiousness
Dogmatism
Authoritarianism
Introversion
Extroversion
Aggressiveness
Competitiveness.

Traits effect the way people behave. Marketers try to match the store image to the perceived image of their
customers.
There is a weak association between personality and Buying Behavior, this may be due to unreliable
measures. 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 preference
for 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 survey
and Email alex@udel.edu the results. This is a survey tool that marketers can use to better understand their target
market(s).
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Social Factors
Consumer wants, learning, motives etc. are influenced by opinion leaders, person's family, reference groups, social
class and culture.

Opinion leaders-Spokespeople etc. Marketers try to attract opinion leaders...they actually use (pay) spokespeople to market
their 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 continue
to update information.
Family is the most basic group a person belongs to. Marketers must understand:

o
o
o
o
o

that many family decisions are made by the family unit

consumer behavior starts in the family unit
family roles and preferences are the model for children's future family (can reject/alter/etc)
family buying decisions are a mixture of family interactions and individual decision making
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
o
o
o
o
o
o
o
o
o

bachelor stage...most of BUAD301

newly married, young, no children...me
full nest I, youngest child under 6
full nest II, youngest child 6 or over
full nest III, older married couples with dependant children
empty nest I, older married couples with no children living with them, head in labor force
empty nest II, older married couples, no children living at home, head retired
solitary survivor, in labor force
solitary survivor, retired
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 is
changing...also, family has less time for children, and therefore tends to let them influence purchase
decisions 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 behaviors
of 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 get
the groups to approve the product and communicate that approval to its members. Credit Cards etc.!!
Aspiration
groups
(want
Disassociate
groups
(do
not
Honda, tries to disassociate from the "biker" group.

to
want

to

belong
belong

to)
to)

The degree to which a reference group will affect a purchase decision depends on an individuals
susceptibility 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 cars
Mercedes.
o

Upper Americans-upper-upper class, .3%, inherited wealth, aristocratic names.

o
o
o
o
o
o

Lower-upper class, 1.2%, newer social elite, from current professionals and corporate elite
Upper-middle class, 12.5%, college graduates, managers and professionals
Middle Americans-middle class, 32%, average pay white collar workers and blue collar friends
Working class, 38%, average pay blue collar workers
Lower Americans-lower class, 9%, working, not on welfare
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 prepurchase
information
gathering.
Stores project definite class images.
Family, reference groups and social classes are all social influences on consumer behavior. All operate
within 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 people
and 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. In
american culture time scarcity is a growing problem. IE change in meals. Big impact on international
marketing.
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
o

geographic regions
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.

1
Executive Summary
This study on rural consumer behaviour is aimed to get a better understanding of the Indianmarket place thus
enabling companies to embark on selected strategies to effectively reach theIndia rural consumers.India is a huge
country with 28 states, over one billion people and 120 dialects or languages.From the market perspective people of
India comprise different segments of consumers based onclass, status and income.An important and recent
development is Indias consumerism is the emergence of the ruralmarket for several basic consumer goods. Three
fourth of Indias population live in rural areaand contributes to one third of the national income.India is a lucrative
market 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 virtually
impossible for companies to satisfy this segment. It is very essential for them to invest time and resources for the
same resulting in appropriate marketing strategies toincrease the market share and for avoiding any surprises in the
market place.Illustrations have been given to explain the difference in the behaviour of the rural consumer andhis
urban counterpart.When we talk about rural markets and rural marketing, names of a few global players come toour
mind. The top rank will definitely be taken by the pioneer in rural marketing HindustanUnilever Limited. An
effort has been made to understand the successful marketing strategiesadopted by HUL to become a household name
in rural India.
2
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 the
market and which ones need changes so as to suit theconsumers better. Not only is it critical to the manufacturer but
also to all the intermediariesinvolved in transferring the product to the ultimate user. Thus understanding the
consumer 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, services
and ideas which they expect willsatisfy their needs.It is the behaviour of the consumer which impacts their decision
to 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 theproduct
and this behaviour of consumers may be related to any kind of products or services.
THEORIES ON CONSUMER BEHAVIOUR
As consumer behaviour is complex and dynamic to analyze many social scientists of differentdisciplines have
attempted to formulate various theories.A)
Decision making approach in understanding consumer behaviour provides that purchaseis an ultimate activity in a
course of action taken by a consumer. One of the theoriessuggests four different views related to consumer decision
making process and behaviour
3

First is the economic view which states that consumers are primarily facing imperfectcompetition and they are
always expected to make rational decisions on the basis of assumptions that they are aware of all product
alternatives, they rank benefits andlimitations of all alternatives and select one best alternative.

Second passive view is absolutely opposite to the above one and states that consumersare irrational, impulsive
and submissive to self centered interests of marketers. Theseconsumers are easily influenced by marketing tools.

Similarly third emotional view is related to perceive consumers decision makingprocess based on their
emotional association or feelings about some products or services.For an instance, a person who has lost his red pen
will neither make a rational decision byevaluating the alternatives (economic view) nor will he act in an impulsive
manner andget influenced by the marketers (passive view). Rather the person would choose any penthat closely
resembles his favourite possession.

Fourth and arguably the most acknowledged view is cognitive view which considersconsumers to be thinking
problem solvers and who are receptive as well as activelysearching for products that can fulfill their needs.
Consumers behaviour under this goalis based on information seeking and processing attributes usually directed by
a 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 four
types of decision making behaviour exist and provide the marketer guidelines to analyze the consumer accordingly.
Based on general perception about acknowledged and common cognitive view
4
asserts broader stages of a consumers decision making process that includes problemidentification, evaluation of
alternatives, 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 four
models to ascertain consumer behaviour.

It was found out in the study that the purchases made by consumers are mainly to satiatetheir demands and to solve
the 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 of
a 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. In
some of the product categories, there are a number of options to choose from and itbecomes difficult for the
customer 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
5
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 to
find 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

habit, it is time that the marketer should think of improving upon a brand or come out with a different product. Many
times,the need calls for a niche marketing

It also helps an organization to reinstate the corporate policies or take action to reframe thecorporate mission
statement.

The consumer behaviour also has effects on the entire social network which again helpsan organization to target a
specific 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

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 SEGMENTS
Socialites
Socialites belong to the upper class. This affluent group forms a small part of the Indianpopulation with about 150
million 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 brand
conscious and would go for only for best known in the market.However this group does not form a demand base
large enough for manufacturing marketingfirms to depend upon exclusively on them, except perhaps that those deal
with real luxury items.
Conservatives
Conservatives belong to the middle class. The conservative segment is the reflection of the trueIndian culture. They
are 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 image
conscious.They prefer high value consumer products but often have to settle for the more affordable one.These
habits in turn affect their purchasing patterns.
Rural consumer
About 70% of Indias 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
7
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 and
lower middle classes, thenumber has fallen to 70% in 2006-07; the comparative fall for urban India is from 53% to
27%[NCAER data]. And if experts are to be believed, the number is set to fall at a rapid rate over thenext 20
years.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 rural
consumers. Today more and more consumers are selective on the quality of products andservices.This awareness has
made the Indian rural consumers seek more and more reliable sources for purchases such as organized retail stores
which 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 and
discerning, knowledgeable about technology,products and the market and are beginning to demand benefits beyond

just availability of a rangeof products that came from a trusted manufacturer. They prefer to buy value for
moneyproducts.

RURAL CONSUMER BUYING BEHAVIOUR

Rural 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 rural
consumer is likely to exhibit different purchase behaviour as compared to his urbancounterpart. This is basically due
to the unique characteristics of rural markets. The compositionof Indian rural market is probably the much more
complex than the whole market in Europe interms of cultural, linguistic and other diversities.The social and
religious 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 our survey shows that
rural consumers tend to be more subject tolocal religious, cultural and social pressures and there are regional
variations in tastes andhabits.Thus it is important to study the thought process of the rural consumer purchase
decision so thatmarketers can successfully reach this huge untapped segment.
Factors influencing buying behaviour
To 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 for
segmentthe 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 villagers
needs are different from those

of his urban cousin. The environment has a critical influence in shaping the needs of therural consumer. Products
made to urban specifications may be impractical in ruralsettings.An excellent example would be of electrical and
electronic goods. Virtually all radios,cassette players and television sets are made to urban supply specifications. In
manyvillages, especially in power strapped villages, voltages fluctuate wildly making electricalgoods susceptible to
frequent breakdowns. In fact villagers dont 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 the
consumer.Rural markets are not homogeneous. Variations in economic development and degree of acceptance of
innovation are evident in such markets. Geographic variation to urbancentres and variations in development have
resulted in tremendous heterogeneity evenwithin a state for example western and eastern UP where there are major
differences. 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 speak
Bhojpuri in eastern UP.For instance villages in south accept technology quicker than in other parts of India.Thus
HMT sells more winding watches in the north while they sell more quartz watchesdown south.These have
implications to product design and marketing strategies
1
9

Influence of occupation and consumption patterns

The perception that the ruralconsumer is either a farmer or an agricultural labourer restricts marketing
effectiveness.In fact there are other groups of consumers with different needs and behaviour havingsignificant

purchase volumes.The Indian Readership Survey of 1998 has chosen the occupation of chief wage earner asa basis
to define the rural consumer. It tells us that the occupation profiles of owners of consumer durables of three popular
consumer durables indicate that non agriculturaloccupation group is one that constitutes the high consumption
segment.Here the non agricultural occupation group includes shopkeepers, traders or those inemployment service
like government administration jobs, banks, teachers and other professionals.Television owners in the service clan
constitute 43 percent which means one in twopersons own a television set. In the case of other non agricultural
group, 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 on
consumers of both village shops and haats.Rural consumer do not depend on the haats and village shops alone as
some purchasesare made from the urban areas also. For example, there are few product categories inwhich the rural
distribution 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 where
rural dealer penetration is low, the purchase from urban centres is high. For example, shaving creams have low
dealer penetration and hence 37% of purchases aremade from urban area while there is a high dealer penetration for
tea 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

marketersthere could be surprises. Market development is achieved by being alert to the new andcreative uses of
products
2
1
Godrej hair dye being used to colour the horns of oxen,washing machine being used for churning lassi. The study of
product end provides indicators on the need for educationand also new product ideas.
Developing a framework for understanding rural buyer behaviour

Framework developed by Mr. Mithileshwar Jha, Professor in Marketing, IIM Lucknow

Consumers in India can be divided into three broad categories Urban, Rural and Rurban in termsof geography and
sociological characteristics. This supports the notion of a continuum from ruralto urban, rurban being the overlap
between the two, with pretensions to being closer to urban inphysical features and proximity to large urban centres
but with deep sociological moorings.It is desirable to consider behaviours in specific interaction contexts of these
three markets thatis participants from each market buying from or selling to or facilitating participants from thesame
or other markets for a better understanding of specific behaviour patterns.When the above two (grouping in terms of
geography, sociological characteristics and asparticipants of three markets) are put together we establish a domain
for exploring and
22
understanding rural buyer behaviour. It includes eight of the nine blocks (except the crossedone).Any marketing
interaction normally involves six broad categories of participants from themarketers perspective. These are the end
customers, suppliers and distributors, facilitators whoare both direct and indirect like bankers, transporters,
warehousing agents, advertisers, researchutilities and regulators.It makes more intuitive and practical sense to map
out both individual behaviour and interactionbehaviour (influence on each other) to develop a better insight on their
past behaviour and futurepossibilities.Apart from traditional buying phases and buying roles the factors that need to
be studied are asbelow

Modalities
(activities providing time, space, form, ownership, assortment etc., utilitiesand their perceived importance by the
participants)

Norms (
formal and informal rules guiding the interactions among participants)

Satisfaction/ Dissatisfaction

of the participants with the interaction process and their outcomes and results thereof.A set of systematic activities
using the above framework can provide comprehensive insight intorural buyer behaviour. However there is no need
to 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 and
rurban 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
23
the growth of marketing as a discipline has been its increasing isolation from the parent or sister disciplines
mentioned above without developing sufficient rigour of its own.
Note
The word participants is deliberate here.It is possible and meaningful to segment the above categories in the
exhibit but it is notattempted here.
TYPES OF RURAL CONSUMER BUYING BEHAVIOUR
Types 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
Buyers level of involvement
determines why he/she is motivated to seek informationabout a certain products and brands but virtually ignores
others.High involvement purchases--Honda Motorbike, high priced goods, products visible toothers, and the higher
the risk the higher the involvement.Types of risk:
y
Personal risk
y
Social risk
y
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; purchased
almostautomatically. 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 product
category, perhaps. It requires a
24
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/psychological
risk.Examples include cars, homes, computers, education. Spend a lot of time seekinginformation and

deciding.Information from the companies MM; friends and relatives, store personnel etc. Gothrough all six stages of
the 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 one
category to the next.For exampleGoing out for dinner for one person may be extensive decision making (for
someone that doesnot go out often at all), but limited decision making for someone else. The reason for the
dinner,whether it is an anniversary celebration, or a meal with a couple of friends will also determinethe extent of
the 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 youngest
child who goes to school suggests the buying of a cell phone.
Influencer
The people whose views or advise influence the decision. For instance the father of the child talks to his relative
who lives in a nearby city. This relative suggests the farmer that aNokia or Dolphin cell phone would be good since
he is well versed with the various models.Thus he has influenced his father
25
Decider
The person who decides on any component of the buying decision, whether to buy,what to buy, how to buy or where
to buy. The elder son of the farmer when asked, tells him 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 phone
from 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 consumer
2. Cultural environment
3. Geographic location
4. Education/literacy level
5. Occupation
6. Exposure to urban lifestyles
7. Exposure to media and enlarged media reach.
8. The points of purchase of products.
9. The way the consumer uses the products
10. Involvement of others in the purchase.
11. Marketers effort to reach out the rural markets
Some of these points are discussed in some detail below:

Influence of culture: Culture and tradition influence perception and buying behavior. For example, the preference in
respect of color, size and shape is often the result of cultural factors. Rural consumers perception of products is
strongly influenced by cultural factors.
Geographic locations: Rural consumer behavior is also influenced by the geographic location of the consumers. For
example, nearness to feeder towns and industrial projects influence the buying behavior of consumers in the
respective clusters of villages. We are discussing this aspect in detail in the section on market segmentation in rural
markets. To cite one more example of how geographic location affects buying behavior, we can point out the fact
that the lack of electricity in many rural households acts as a barrier to the purchase of certain consumer durables.
Exposure to urban lifestyles: Extent of exposure of rural consumers to urban lifestyles also influences their buying
behavior. An increased exposure and interaction with urban communities has been the trend in recent years.
The way the consumer uses the products: The situation in which the consumers utilize the product also influences
their buying. The example of lack of electricity affecting buying behavior illustrates this point as well. Lack of
electricity automatically increases the purchase of batteries by rural consumers. Similarly, since rural consumers
cannot use washing powders/detergent powders that much, as they wash their clothes in streams or ponds, they go in
more for washing bars and detergent cakes.
Places of purchase: Buying behavior of rural consumer also varies depending on the place of purchase. Different
segments of rural buyers buy their requirements from different places/outlets. Some buy from the village
shopkeepers; some from village markets/fairs; others buy from the town that serves as the feeder to the rural area. It
is also seen that the same buyer buys different requirements from different laces. For understanding the buying
behavior of the rural consumer correctly, the marketer must ask the question: Where from do they buy the products
and why?
Involvement of others in the purchase: Involvement of others in the purchase in the purchase decision is yet another
relevant factor in this regard. There has been a change here in recent years. In the past, the head of the family used to
make the purchase decision all by himself. In contrast, the involvement of the other members of the family in the
purchase decision has been growing in recent years. An increase in literacy coupled with greater access to
information has resulted in this development. The marketer has to reckon the role of the influencers while sizing up
the buying behavior of rural consumers.
Marketers efforts to reach out the rural market: In recent years, many corporate companies have been trying
hard to develop a market for their products in the rural areas, investing substantially in these areas. This has brought
about some change in the way buyers purchase different products. Developmental marketing has created
discriminating buyers and hitherto unknown demand in the rural market.
All the above factors influence the buying behavior of rural consumer and hence their responses to the marketing
mix variables, and the reference points they use for purchase decisions.

more at http://www.citeman.com/2777-buying-behavior-of-rural-consumers.html#ixzz1laZGM2qT
Factors Affecting Consumer Behavior
By Asifo Shah
Consumer behavior refers to the selection, purchase and consumption of goods and services for the satisfaction of
their wants. There are different processes involved in the consumer behavior. Initially the consumer tries to find
what 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 he
should 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.

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 influence
of culture on buying behavior varies from country to country therefore marketers have to be very careful in
analyzing 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 can
design 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 behavior
of people in a given social class is similar. In this way marketing activities could be tailored according to different
social classes. Here we should note that social class is not only determined by income but there are various other
factors 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 of
reference groups will be high. Reference groups also include opinion leader (a person who influences other because
of 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 roles
and influence of the husband, wife and children. If the buying decision of a particular product is influenced by wife
then the marketers will try to target the women in their advertisement. Here we should note that buying roles change
with 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. Now
she is playing two roles, one of finance manager and other of mother. Therefore her buying decisions will be
influenced by her role and status.
3. Personal Factors

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 such
young singles, married couples, unmarried couples etc which help marketers to develop appropriate products for
each stage.
Occupation
The occupation of a person has significant impact on his buying behavior. For example a marketing manager of an
organization will try to purchase business suits, whereas a low level worker in the same organization will purchase
rugged work clothes.
Economic Situation
Consumer economic situation has great influence on his buying behavior. If the income and savings of a customer is
high 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 customer
interests, 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 a
man in different circumstances. It has different characteristics such as: dominance, aggressiveness, self-confidence
etc 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 is
called perception. There are three different perceptual processes which are selective attention, selective distortion
and selective retention. In case of selective attention, marketers try to attract the customer attention. Whereas, in

case of selective distortion, customers try to interpret the information in a way that will support what the customers
already 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 change
the 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 Class
o Culture: The set of basic values perceptions, wants, and behaviours learned by a member of
society from family and other important institutions. Culture is the most basic cause of a
persons wants and behaviour. Every group or society has a culture, and cultural
influences 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 important
market segments and marketers often design products.

Social Class:-

Almost every society has some form of social structure, social classes are societys
relatively permanent and ordered divisions whose members share similar values, interests
and behaviour.

02. Social Factors :

A consumers behaviour also is influenced by social factors, such as the (i) Groups (ii) Family (iii) Roles
and status
o Groups : Two or more people who interact to accomplish individual or mutual goals.
A persons 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. These
includes 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 researched
extensively.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 persons 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 people
are 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 stage
of the family life cycle.
o Occupation : A persons 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. A
Co. 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 persons economic situation will affect product choice
o Life Style : Life Style is a persons Pattern of living, understanding these forces involves measuring
consumers 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 persons distinct personality influence his or her buying behaviour. Personality
refers to the unique psychological characteristics that lead to relatively consistent and
lasting responses to ones own environment.

04. Psychological Factors :

It includes these Factors.

i) Motivation (ii) Perception (iii) Learning (iv) Beliefs and attitudes
Motivation :o Motive (drive) a need that is sufficiently pressing to direct the person to seek satisfaction of the
need
Perception :o The process by which people select, Organize, and interpret information to form a meaningful
picture of the world.
Learning:o Changes in an individuals behaviour arising from experience.
Beliefs and attitudes :o Belief is a descriptive thought that a person holds about something
o Attitude, a Persons consistently favourable or unfavourable evaluations, feelings, and tendencies
towards an object or idea

Understanding The Rural Consumer

Posted: Mar 01, 2010 |Comments: 0 | Views: 1,126 |
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It is uneconomical to access a large number of small villages with a very low population density
spread over a large geographic area. Social norms, traditions, castes, and social customs have
greater influence on the consumer behavior in rural areas than in urban areas. Factors such as
limited physical access, low density of shops, limited storage facilities, need for a large number
of intermediaries in the distribution channel to reach the end customers, and low capacity of
intermediaries to invest in business make the tasks of reaching rural consumers very complex
Characteristics of the rural consumer
-Rural areas generally have less pollution, less crime, and less stress than urban areas.
-People in rural areas have poor job opportunities than urban.
- Rural life is generally less exciting than urban life.
-The rural consumer is very conscious about getting value for money.

-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 above
categories that constitute the bulk of the consuming class had been increasingly steadily over the
years. The urban consumers have to incur a higher cost of living while the rural population has
higher levels of disposable income for the same levels of income. While incomes as well as
expenditure 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 noncontrollable 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 come
in small installments.
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Social hierarchy, traditions, social norms and customs play significant roles in determining
individual 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 subgroups, making the social hierarchy more complex. While in the urban areas, household
settlements are often referred to as low-income group (LIG), middle-income group (MIG), or
high-income groups (HIG), in many parts of rural India, geographic demarcation of household
settlements is based on caste affiliations. In some rural areas, even the common facilities like
well 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 of
these norms can lead to social tensions. Unlike in urban areas, these behavioral norms are strictly
implemented in rural areas.
Consumer Behavior in Rural Areas Purchase-decision processes and preferences also show
certain characteristics that implication for marketers. Exhibitions and road shows act as some of
the key triggers for information-search behavior. Opinion leaders and people who are perceived
to be knowledgeable play an important role as information providers and advisors. Word of
mouth 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; red
color connotes happiness and auspiciousness, and green color prosperity. Ownership of a large
tractor, large house, telephone and other higher-value consumer durables, and education of
children 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 small
villages with a very low population density spread over a large geographic area. Factors such as
limited physical access, low density of shops, limited storage facilities, need for a large number

of intermediaries in the distribution channel to reach the end customers, and low capacity of
intermediaries to invest in business make the tasks of reaching rural consumers very complex.
The importance of alternative means of reaching rural consumers through periodic village
markets (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 at
regular intervals. Most of these periodicmarkets are held once a week. Haats function as physical
markets for selling agricultural surplus as well as retail points for buying daily-use items and
supplies for farming activities. Mandis or agriculturalmarkets are set up by the state governments
for facilitating exchange of agricultural produce and for procurement of food grains by the
government agencies. Companies use mandis to promote their brands by setting up "stalls" for
carrying 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: commodity
fairs, cattle fairs, and fairs in connection with religious festivals. Most of the fairs are held in
connection 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 the
mindset 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 rural
folks in each region.
- The total understanding of the main message was only 30-60 per cent among the rural
audience.
- Rural folks do not understand clever, gimmicky, quick, suggestive and hi-tech films.
-Use of unrelated symbols, characters and icons confuse and distance them.