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Presenter: Ganesh Swamy

Background-Rural Consumers
Size of Rural Consumer
Rural Population about 73% of total population According to 2001 census population is about 74 corer 12 crore of the households Location Pattern: A scattered market Urban Population in 3,200 cities Rural Population in 5,70,000 villages

Socio-economic Position
Low purchasing power/ per capita income Bounded by tradition, culture, religion and

community 60% rural income from agriculture Less 50 % have income less than Rs. 25,000 In recent year, 70% rural households have started saving their income ( service class, non farmers like shop keeper)

Literacy level
Rural India has literacy rate of 28% compared to the

whole country Every year numbers of people getting added to the rural Indias population is increasing Adult literacy programmes have been launched -TCS ALP - software to promote literacy among the adults

Conservative and tradition bound But it has changed to a good extend due to:

- Increase in income - Growth in education -Enlarged media reach -Growing interaction with urban area - Marketers effort to reach rural area

Rural Demand
Pressure cooker
Medicines Cell Phone TV Cycles, Bikes, Scooters Bathing soaps, washing powder, washing cakes Tea

What is Consumer behavior?

Those activities directly involved in obtaining , consuming and disposing of products and services, including the decision processes that precede and decision actions follow these actions

Factors Impacting Consumer Behavior

Environment of the consumer

The environment or the surroundings, within which the consumer lives, has a very strong influence on the buyer behavior Example: Electrification, water supply affects demand for durables Geographic Influences 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 cluster of villages.


Family size & the roles played by family members exercise considerable influence on the purchase decisions. Example Industry observers are increasingly realizing that at times, purchase of durable has less to do with income, but has more to do with the size of the family & thats where rural India with joint family structures, becomes an attractive proposition Economic factor The quantum of income & the earning stream are one of the major deciding factors, which determine to a great extent, what the customer will be able to buy. Example Many people in the rural market are below poverty line & for large number of people, agriculture is the primary occupation

Place 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. Example Some buy from the village shopkeepers; some from village markets/hats/melas; others buys from town that serves as the feeder to the rural area

Creative use of product

The study of product end provides indicators to the company on the need for education. Example Godrej hair dye being used as a paint to colour horns of oxen, Washing machine being used for churning lassi

The way the consumer uses the product
The situation in which the consumer utilize the product also influences their buying behavior. Example 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

Involvement of others in the purchase

Example Head of family make purchase decision all by himself

Cultural factors impacting consumer behavior

Product (colour, size, design, and shape): There are many

examples that support this point. a. For Example, the Tata Sumo, which was launched in rural India in a white colour, was not well accepted. But however, when the same Sumo was re launched as Spacio (a different name) and in a bright yellow colour, with a larger seating capacity and ability to transport good, the acceptance was higher. b. Another good Example would be Philips audio systems. Urban India looks at technology with the viewpoint of the smaller the better. However, in rural India, the viewpoint is totally opposite. That is the main reason for the large acceptance of big audio systems. Thus Philips makes audio systems, which are big in size and get accepted in rural India by their sheer size.

Social Practices
There are so many different cultures, and each culture exhibits different social practices. For Example, in a few villages they have common bath areas. Villagers used to buy one Lifebuoy cake and cut it into smaller bars. This helped lifebuoy to introduce smaller 75gram soap bars, which could be used individually

Changes in saving and investment pattern

From gold, land, to tractors, LCVs

Thank you