CONSUMER BUYING BEHAVIOUR TOWARDS F.M.C.G.

PRODUCTS

Consumer buying behaviour is the sum total of a consumer's attitudes, preferences, intentions, and decisions
regarding the consumer's behaviour in the marketplace when purchasing a product or service.
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Study Of The Consumer Behaviour Towards FMCG Products In Rural Areas Of

Ramnagar, Nainital

Kshitiz Yadav Prof. Rajkumar Ghosh Dr. S.H. Kulkarni

Student, MBA 1st Year Professor Associate Professor

ASM’s Institute of Business ASM’s Institute of Business ASM’s Institute of Business

Management & Research Management & Research Management & Research

Abstract:

The Rural population is nearly three times the urban, so that Rural consumers have become
the prime target market for consumer durable and non-durable products, food, construction,
electrical, electronics, automobiles, banks, insurance companies and other sectors besides
hundred per cent of agri-input products such as seeds, fertilizers, pesticides and farm
machinery. The Indian rural market today accounts for only about Rs. 8 billion of the total ad
pie of Rs 120 billion, thus claiming 6.6 per cent of the total share. So clearly, there seems to
be a long way ahead. Although a lot is spoken about the immense potential of the
unexplored rural market, advertisers and companies find it easier to vie for a share of the
already divided urban pie. The success of a brand in the Indian rural market is as unpredictable
as rain. It has always been difficult to gauge the rural market. Many brands, which should
have been successful, have failed miserably. A radical change in attitudes of marketers
towards the vibrant and burgeoning rural markets is called for, so they can successfully
impress on the 230 million rural consumers spread over approximately six hundred thousand
villages in rural India. The Indian established Industries have the advantages, which MNC do
not enjoy in this regard. The strong Indian brands have strong brand equity, consumer
demand-pull and efficient and dedicated dealer network which have been created over a
period of time. The brand has to be made relevant by understanding local needs. Even
offering the same product in different regions with different brand names could be adopted
as a strategy. The rural market has a grip of strong country shops, which affect the sale of
various products in rural market. The companies are trying to trigger growth in rural areas.
They are identifying the fact that rural people are now in the better position with disposable
income. Marketer should understand the price sensitivity of a consumer in a rural area.
This paper is therefore an attempt to promote the brand image in the rural market.

Keywords: Rural Markets, Consumer Behaviour, Brand, Brand Loyalty, Rural Customers,
Local Brand
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Introduction

The logic for companies going rural has been impeccable. As many as 742 million Indians live
in rural areas. The rural market was tempting since it comprised 74 per cent of the country's
population, 41 per cent of its middle class, 58 per cent of its disposable income and a large
consuming class rural incomes have been increasing thanks to increasing agricultural
productivity and a growing non-farm sector which now constitutes more than half of the rural
economy.

Things are changing fast now. The increasing literacy level and media explosion, people are
becoming conscious about their lifestyles and about their rights to live a better life. Brand
consciousness is on the rise. This, clubbed with increasing disposable income of rural
households, has made the rural consumer more demanding and choosier in his purchase
behaviour than ever before. And the dusky village damsel has now learned to pine for a
satin rose.

The rural India offers a tremendous market potential. A mere one percent increase in India’s
rural income translates to a mind-boggling Rs 10,000 crore of buying power. Nearly two-
thirds of all middle-income households in the country are in rural India. And close to half of
India’s buying potential lies in its villages. Thus for the country’s marketers, small and big,
rural reach is on the rise and is fast becoming their most important route to growth.
Realizing this Corporate India is now investing a sizeable chunk of its marketing budget to
target the rural consumers.

Types of rural market

HAATS /MANDIES (mostly for weekly market for all commodities)

MANDIS
COMMODITY SPECILISED MARKETS

Characteristics of Rural markets

There are certain characteristics of rural market, which every prospective marketer needs to
be aware of before unleashing his product:

• Low income influenced by seasonal fluctuations

• Low literacy

• Diverse customs, languages and social structures

• Resistant to change
• Price sensitive

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• High brand loyalty

• Influenced by traditions

• Moderate inspirational levels

• Quality Conscious

• Low to moderate risk taking ability

These typical characteristics of the rural market make it evident that there are huge
challenges, which a marketer will face. These challenges need to be tackled using
appropriate strategies and proper planning. The major obstacles can be classified as follows:

• Poor infrastructure facilities, which hamper the effective distribution of products and
make the task of reaching the target consumer difficult.

• Traditional media is ineffective due to illiteracy and non availability.

• There is insufficient past research to provide some insight about consumer behavior.

• Disposable income is highly dependent on good monsoons and a rich harvest.

• Varying linguistic and socio-cultural norms compel the marketer to vary his marketing
message for different parts of the same country.

• Role of women in buying process is still not independent of family constraints.

• Inadequate credit availability hampers the ability of rural retailers to carry stocks.

Understanding the psyche of the rural consumer and gauging the complexity of the rural
market has to be given utmost priority by marketer. Creative marketing solutions need to be
devised to combat these barriers.

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Category Brand with highest

Category
penetration penetration
Toilet soap 91% Lifebuoy
Washing cake 88% Wheel
Edible oil 84% Double iron mustard
Tea 77% Lipton Taaza
Washing powder 70% Nirma
Salt 64% Tata salt
Biscuit 61% Parle-G

Source: http://www.etstrategicmarketing.com/smJune-July2/art6_1.htm

Research objectives
To study the consumer behaviour of rural consumer for FMCG products.
To identify their level of satisfaction in purchase of various FMCG products.
To find out the brand preference of FMCG consumers.
To determine the various factors influencing the behaviour of FMCG consumer

Research Methodology

The study conducted followed a descriptive research design. The design produces the
picture of the phenomenon in which the decision maker is interested..

Since only small amount of secondary data was available on the subject, the research focused
on collection and analysis of primary data. Survey method was adopted to collect the primary
data.
A structured, non-disguised questionnaire acted as the research instrument. It was pre-tested
on 5 respondents for the purpose of examining the relevance and ambiguity of the questions.
Necessary additions, corrections and deletions were incorporated accordingly. Most of the
questions were closed ended types with a few open ended questions also included. Further, in
closed ended questions, dichotomous questions, multiple choice, importance scale and rating
were incorporated.
The Sample Universe was the rural people in the outskirts of Nainital city. Respondents were
individuals who are using FMCG product. This, being a pilot study, the sample size was kept
at 50 from different locations. The sampling plan used is Simple random Sampling.
For the purpose of Data Analysis, the responses to each question was calculated and shown
in the form of tables and bar graphs or pie charts and from these results had been carried out.

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Analysis & Interpretation

Table & Chart 1: Showing no. of People using FMCG products

Responses No of respondents
Yes 50
No 0

Table 4.1 & chart 4.1 depicts that the respondents which were selected for the survey or study
were FMCG product users.

4.2: Table 2 & chart 2: Showing Occupation of respondents

Table 4.2

Agriculture 28
Employee 15
Labor 3
Businessman 4

Figure 4.2

Occupation

28
No of respondents

30
25 Agriculture
20 15 Emplooyee
15
10 Labor
3 4
5 Businessman
0

Responses

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Table 4.2 & chart 4.2 depicts the occupation of the respondents. Out of which 56% of the
respondents are farmers, 30% of them are employees, 6% are laborers and remaining 8% own
a business.

4.3: Table 3 & graph 3: Showing from where they buy FMCG products

Table 4.3

local retailer 36
local mandi 8
local wholesaler 9
Haat 1
Any other place 0

Figure 4.3

Purchasing place
No of respondents

40 36
35
30
25
20
15 8 9
10 Local Retailer
5 1 0
0 Local Mandi
Local Wholesaler
haat
Any other

Responses

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Table 4.3 &chart 4.3 shows the place from where the respondents like to buy there FMCG
products which they use, where most of the respondents like to buy FMCG products from the
local retailer. Local wholesaler is the second most preferred place among the respondents.

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4.4: Table 4 & chart 4: Showing brand consciousness for FMCG products

Table 4.4

Yes 48

No 2

Figure 4.4

Brand consciousness

60

50
No of respondents

40
Yes
30
No
20

10

0
Yes No
Re sponse s

Table 4.4 & chart 4.4 depicts that 96% of the respondents out of total respondents are brand
conscious with regard to FMCG products. And only 4% of respondents are not brand conscious with
regard to FMCG products.

4.5: Table 5 & graph 5: Showing which of the following FMCG products do they use
Table 4.5

Toothpaste 48

Toilet soap 37

Detergent powder 38

Shampoo 32

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Talcum powder 14

Any other 0

Figure 4.5

Different FMCG products usage

No of respondents

60 48
50 37 38
40 32
30 Toothpaste Toilet
20 14
10 0 soap detergent
0
powder Shampoo
Talcum powder
Any other

Re sponse s

Table 4.5 & Chart 4.5 depicts that what all kind of FMCG products do respondents use. More
than 70% of respondents use all the FMCG products which were stated in the structured
questionnaire, instead of Talcum powder. Only 28% of respondents use talcum powder.

4.6: Table 6 & chart 6: Showing which toothpaste do people use

Table 4.6

Colgate 33

Promise 10

Babool 3

Pepsodent 10

Any other 1

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Figure 4.6

Toothpastes being used

33
35
No of respondents

30 Colgate
25 Promise
20
Babool
15 10 10
10 Pepsodent
3
5 1 Any other
0

Re sponse s

Table 4.6 & chart 4.6 depicts which brand respondents do use as toothpaste. Most of the
respondents use Colgate. Promise and Pepsodent share the second place. Babool is the 3rd
preferred brand.

4.7: Table 7& chart 7: Showing which detergent powder do people use

Table 4.7

Rin 21

Wheel 19

Nirma 5

Surf 6

Any other 1

1
0
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Figure 4.7

Detergent powder
25
21
19
No of respondents

20 Rin

15 Wheel
Nirma
10 Surf
5 6
5 Any other
1
0

Rin Wheel Nirma Surf Any other

Responses

Table 4.7 & chart 4.7 depicts which brand respondents do use as detergent powder. Rin is the
most preferred brand among the respondents. Where wheel is the 2nd most preferred brand
and surf is on the 3rd number.

4.8: Table 8 chart 8: Showing which toilet soap do people use

Table 4.8

Lux 37

Lifebuoy 9

Nirma 3

Santoor 3

Any other 0

10
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Figure 4.8

Toilet soap
40 37
35
No of respondents

30 Lux
25 Lifebouy
20 Nirma
15 Santoor
9
10 Any other
5 3 3
0
0

Lux Lifebouy Nirma Santoor Any other

Re sponse s

Table 4.8 & chart 4.8 depicts which brand respondents do use as toilet soap. Here Lux
dominates all over. 74% of respondents use Lux. It has the major chunk of the market
followed by Lifebuoy which is the 2nd most preferred brand with 18% of respondents.

4.9: Table 9 &chart 9: Showing factors influence the purchase

Table 4.9

Availability of commodity 10
Affordable price 21
Brand 29
Quality 25
Promotional Schemes 20
Advertisement 16

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Figure 4.9

Factors influencing buying behaviour

No of respondents

35 29
30 25
25 21 20
20 16
15 10 Availability
10
5 Affordable
0
Brand
Availability

Affordable

Advertisments
Promotional
Quality
Brand

schemes
Quality
Promotional schemes
Advertisments

Responses

Table 4.9 & chart 4.9 depicts the various factors which influence the buying behavior of the
respondents. Most of the respondents are attracted by the Brand of the product followed by
quality of the product. Promotional schemes also attract the respondents, whereas availability
of commodity influences the least.

Brand got the 1st rank followed by quality as 2nd rank, promotional schemes on 3rd.

4.10: Table 10 &chart 10: Showing from where they came to know about the FMCG
products

Table 4.10

TV 28
Newspaper 21
Radio 5
Hoardings 5
Friends 30

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Figure 4.10

Source of information
35 30
28
No of respondents

30 Tv
25 21
News paper
20
radio
15
10 Hoardings
5 5
5 friends
0
Tv News radio Hoardings friends
paper
Responses

Table 4.10 & chart 4.10 depicts the source of information from where the respondents come to
know about the FMCG products they are using. Word of mouth or from friends was the most
common response of the respondents. After that, most of the respondents responded that they
come to know through TV. Newspaper also plays an important role here. Radio and hoardings
are at least rank.

4.11: Table 11 & chart 11: Showing For how long stick to a particular brand

Table 4.11

More than a 12 months 6

About 6 months 39
Less than 6 months 5

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Figure 4.11

T ime period
50
No of respondents

39
40
Long period Average
30
Average
20
Less
10 6 5

0
Long period Average Less
Average
Re sponses

Table 4.11 & chart 4.11 depicts that 78% of the respondents stick to a particular for an
average time, whereas only 12% of the respondents stick to a brand for a longtime. 10% of
the respondents often change their brand.

4.12: Table 12 & chart 12: Depicting satisfaction with all brands
Table 4.12

Yes 47
No 3
Figure 4.12

satisfied or not

50 47
No of respondents

40

30 Yes
20 No

10 3
0
Yes No
Responses

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Table 4.12 & chart 4.12 depicts the 94% of the respondents are satisfied with the brands
which they are using with regard to FMCG products, whereas on 6% of the respondents are
not satisfied with the brands they are using.

Suggestions & Conclusion

As is evident from the data, the following suggestions are recommended for FMCG
companies pertaining to rural markets:

1) Without a doubt, FMCG companies must focus product availability in rural points.
2) POS (both in primary & secondary) must be added prolifuratiously to foster visibility
as there is a ready market for branded products.
3) Organisations must focus on TV ads keeping the rural markets in mind, since a big
chunk of audience is influenced by the same.
4) Organisations can no more be complacent about their rural positions and must work
on brand retention, since maximum people have an “average life” in the same.

Conclusion

People are becoming more and more aware about different brands available. They want to try
new products. They are becoming brand conscious. Rural India has a potential of $500-bn.
Companies should try to explore rural market. There is a huge growth opportunity out there.

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