Rural marketing

1. RURAL MARKETING

2. PGDM (IIM Raipur)
Bakhresa FMCG (South Africa)
Relationship Manager (HDFC Bank)
MD- Shyam Hospital
Faculty(MBA)- GLA University, Mathura
Swarit Yadav

3.  The consumer buying behavior model
 What influences consumer behavior?
 Cultural Factors
 Culture
 Most fundamental determinant
 Person grows up with values, perception and preferences
 Changes in culture should be analyzed
 Change towards education and joint family system

4.  Social customs
 Socially accepted norms in practice
 Tends to follow age old customs
 Touching other body with feet
 Traditions
 Long standing beliefs that are accepted true
 Effects the way humans behave
 ‘Atithi devo bhava’- Guests equivalent to gods
 Subculture
 Caste
 Homes/fields and drinking water will be different
 Harijan basti/dom para

5.  Social class
 On the basis of education and occupation(Urban)
 Difficult in calculating annual income in rural areas
 Rural do not file income tax
 Apart from agriculture, people take up different jobs
elsewhere

6.  SEC
 Created by (market research society of India) MRSI
 Depends on education of chief wage earner
 Depends on the type of house he lives
 Scaled as R1, R2, R3 and R4
 R1 and R1 is 19% of rural population(Major Consuming class)
 R2 and R3 is 81% of rural population
 Urban classification is education and occupation(Sec A,B,C)
 Income and occupation is not included
 R1 shops from nearby town
 R2 and R3 prefers shopping from weekly haats/bargaining power
 Use this classification for
 Target right segment for product category/launching the product
 Use in market research for a product category
 Different marketing strategies for different consumer segments
 Due to pucca makaan emergence, importance of house in segmentation is
reducing
 MREC(Media research users council) came up with new system.

7. SEC Grid in Rural

8. SEC breakup in rural

9. New MRUC SEC system
 Check document
 Divided on the basis of education and the assets
 12 SEC groups
 A1/A2/A3
 B1/B2
 C1/C2
 D1/D2
 E1/E2/E3
 Applicable on both urban and rural

10.  Social Factors
 Close net affinity is present
 Formal and informal groups are easy to make
 Reference groups
 Informational
 Trial of products used by other in the village
 Normative
 The need to belong
 New form of influencer as professionals
 Anganwadi workers
 Nurses and ASHA members
 SHGs
 Agri-cooperative society
 Funds from NABARD

11.  Opinion leaders
 Whose words formally or informally influences the action and
attitude of the consumer
 Usually informal
 Comes from social status/power/success in public life
 Gram pradhan/sarpanch is still a greatest influencer
 After independence teacher became influencer
 Now with increasing education, teacher as a influencer is
limited
 Rural educated youth is now the opinion leader
 Influencer for TV/refrigerator/motorcycle etc.
 Male family head is still a decision maker with high involvement
products
 At age 20-22 the rural youth is additional bread earner
 His/her opinion now matters
 Youth is driving the change in rural behavior and practices

12.  Sociability
 Spend more time with family and friends
 Village choupal and community meetings
 Women meet fetching water, visiting temples or washing
clothes at the pond
 Neighbors are the extension of the family/some times active
participant in family decisions
 Each product is discussed/deliberated/evaluated with
neighbor to increase acceptability
 Example of declining soft drink consumption in rural youths

13.  Family
 Joint family is disintegrating
 Reasons are education and profession
 They live in same compound but with separate kitchens
 Individualized joint family
 National census records each chulha separately
 Take separate decisions for FMCG and durables
 Lives under the parent family with same values system
 Choice sets for brands will be different in a family
 Comes together on social events and festivals

14.  Roles and status
 Caste defines social status
 Sarpanch/caste leaders/medical practitioner/retired
military personnel/priest enjoys high status
 These constitute upper level society in village regardless of
economic status
 Their purchase decision do influence
 A progressive farmer is respected for being knowlegable

15.  The role of rural women
 Used to remain in pardah and ghungat
 Always accompanied by male members
 Mobility was restricted
 Didn’t play significant role in purchase decisions
 Status is changing now
 Now educated and aware about education and health of
family
 Education/health services/social services/functions and
festivals
 Women are empowered today
 Involvement in decision making is increasing

16.  Personal factors
 Age and stages of lifecycle
 Occupation and income
 Economic situation
 Lifestyle
 Products and status symbol
 Personality and self concept
 Motivation
 Perception
 Learning
 Beliefs and attitudes

17. Age and stages of the lifecycle

18. Age and stages of the lifecycle

19.  Personal factors
 Age and stages of lifecycle
 Occupation and income
 Different occupations have different product needs
 Farmers/potters/teacher/retailers
 Rural has more than one income source
 Rural behavior should not be on the basis of income alone
 Head of the household occupation is important
 Economic situation
 Depends on disposable income/savings and debts/credit
worthiness/attitude towards spending and savings
 Farmers dependent on monsoons
 Reluctant to go for credit due to the risk of status dilution and
reputation

20.  Lifestyle
 Activities
 Interests
 Opinions
 Demographics
 Changed lifestyle due to change in literacy level and
exposure to TV
 Stylish bikes and trendy mobile phones came in rural

21. Lifestyle in Rural India

22.  Products and status symbol
 For tv rural consumer prefers ease of operation rather than
fancy features
 Jhon Deere Example

23. Status Symbols in Rural India

24. Maslow’s Model of motivation

25.  Personality and self concept
 Personality is unique individual characteristics that determine
or reflect how a person responds to the environment
 Self Image is the way we perceive our self in social framework
 Products that fit our image and personality
 2 aspects to consider
 Situation
 Person
 Rural youth purchases pan masala, namkeen and tea with
friends
 While travelling | Packs food from home
 Rural marketer wants distinct personality and image for
products
 Using different brand ambassador for targeting segments

26. Rural Brand Ambassadors

27.  Psychological Factors
 Motivation
 Less adventurous
 Averse to risk taking
 Prefers tried and tested
 Lot of persuasion is required by influencer to try new
 Opinion leaders play important role
 Rural consumers stay in the lower 2 in Maslow's pyramid

28. Maslow’s Pyramid

29.  Perception
 Retailer play important role in FMCG selection
 Connect with small town rural audience with new upcoming
player from rural towns | Example airtel
 Learnings
 Beliefs and attitudes

30. The buyer Decision Process

31.  The buyer decision process
 Need recognition
 Information search
 Personal sources
 Depends less on Commercial sources
 Depends on experiential sources | Touch and feel |
Demonstration
 Marketer should reduce search time | Introduce product
trials
 BTL activities are effective

32.  The evaluation of alternatives
 High involvement product- takes time
 Low involvement product- impulse buying
 The purchase decision
 Perceived risk and influencer is important
 Need to address perceived risk by showcasing previous
customer experiences
 Post-purchase behavior
 Positive v/s negative word of mouth
 Dissatisfied customer will never report to the company
about it

33.  The product adoption process
 Product awareness
 Product interests
 Product evaluation
 Product trial
 Product adoption
 Winning over key opinion leaders is critical for rural
penetration
 Bright smile bright future of Colgate targeting teachers
 Higher brand loyality is obtained in rural
 But slower pace for adoption

34. Diffusion of Innovation