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The Rural consumers can be classified under the following categories based on their
economic status:-
The Poor
This constitutes a huge segment. Their Purchasing power is less, but
strength is more. They receive the grants in various ways from government
and reap the benefits of many such schemes and may move towards the
middle class. The farmers of Bihar and Orissa fall under this category.
1.Age and Stages of the Life Cycle The purchase of products and services and their forms
and nature is influenced by age and life-cycle stages of the consumer. This gives direction to
the estimation of demand, segmentation, targeting of markets and product mix decisions .
2.Occupation and Income:- In the rural sector, a range of goods and services beyond the
very basic ones are bought by a consumer, influenced by the occupation and income of the
individual. Fishermen buy a boat and large nets, whereas a farmer opts first for a tractor and
pump set. The same buying behaviour and choice of products cannot be expected from a
cultivator, salary earner (teacher) and petty shopkeeper, all of whom may have identical
incomes. A farmer has to allow for variations in income during pre-harvest and post-harvest
periods. The shopkeeper (baniya) behaves differently as he is in a position to adjust his income
according to demand in village by adjusting inventory and credit, without this affecting the
purchase of goods. On the other hand, a salary earner has a fixed and assured income.
4.Lifestyle Lifestyle deals with everyday behaviorally oriented facets of consumers, as well as
their values, feelings, attitudes, interests and opinions. It embodies the patterns that develop
and emerge from the dynamics of living in a society. There is a vast difference in the lifestyles of
rural and urban consumers, because of the differences in the social and cultural environment,
values and daily mode of living. Extensions of urban positioning therefore can become totally
irrelevant. The typical lifestyle dimensions are:
A. Activities: Allocation of time by the consumer/family (work, hobbies, social events, entertainment)
C. Opinions: Consumer attitudes to events / issues (politics, education, social issues, future, culture)
.5.Personality and Self-Concept :- Personality is the sum total of the unique individual
characteristics that determine and reflect how a person responds to his/her environment. It
provides a framework within which consistent and long-lasting behavior can be developed. Self-
concept or self-image is the way we perceive ourselves in a social framework. There is a natural
tendency to buy those products and services that we think fit or match with our personality. In
order to relate personality to the products people purchase, there are two aspects to be
considered : situation and person. When in social gatherings, rural youth prefer to buy pan
masala, tea, and namkeen, whereas urban youth enjoy popcorn and coffee/cold drinks.
6.Personality and Psychological Factors The rural consumer, unlike his urban
counterpart, is quite content to satisfy his basic needs relevant to his environment. He is less
adventurous, averse to taking risk and prefers to stay with the tried and tested. A lot of
persuasion by an influencer, whose achievements he respects is required to convince him to try
new products. For products which are higher on the involvement scale (not necessarily more
expensive), opinion leaders to play a significant role.
Stages in Buying Process Consumers pass through five stages while making a purchase decision. In
low-involvement purchases, rural and urban consumers may skip some of these stages. A woman
buying her regular brands of daily-use groceries will identify the need and purchase from the shop,
skipping two stages. It is in the purchase of high-involvement products that a rural consumer
displays different motives relating to problem recognition, sources of information, evaluation
procedures, collective decision, and different post purchase behaviour. This creates the need to
treat each stage of the marketing process differently for rural and urban consumers.
Problem recognition
Information search
Evaluation of alternatives
Purchase decision
Post-purchase behavior
3. BUYING BEHAVIOUR AND PATTERENS OF THE RURAL CONSUMERS ARE
INFLUENCED BY THE FOLLOWING FACTORS.
Exposure of a message
Trial or demonstration
Final sale
Personal Selling
It is a process of face to face interaction between the salesperson and the
prospective customer. Through a proper training and guide, a salesman can
be a valuable medium between the marketer and the prospective customer.
A good salesperson is the one who has thorough knowledge about the
product he is about to sell and tries to strike a common point of link between
the product and the customer needs.
Though still not a prevalent practice adopted by the national level marketers,
personal selling is widely done by the local manufacturers of utensils,
garments, edible good etc.
Sales Promotion
It is a short term tool adopted by the marketer to increase the sales of the
particular product / service in a particular area for a particular period of
time.
With-pack Premiums
Here, a free product is given either inside the pack or outside the pack. This
attracts the rural customers to purchase the product. This is successful only
when the free product is either complementary or useful to the consumers.
For example, a free toothbrush that comes complementary with toothpaste.
Price-off Premiums
This refers to the cut-price technique for a product. This is useful not only in
case of FMCGs but also in case of consumer durables if the discount is
appropriate.
Main features of rural logistics Market Compared with urban logistics market, urban logistics
market has the following outstanding features: 1) urban logistics market demand has regional feature.
Rural residents live dispersedly. The distance between the operation and consumption units and
peasant households is remote, while villages are disperse. This is a distinct difference between rural
market and urban market. Thus, rural logistics market has dispersity, wide coverage and small scale. 2)
Rural logistics market has the feature of demand subjectivity. Rural producers and consumers have
basically fused together. Some agricultural products are directly provided to vast producers. The
production behavior and consumption behavior will to some extent coincide. Peasant households are
not just the producers of agricultural products, but also the consumers. Large quantities of logistics are
completed in rural.
Market Segmentation
Rural India accounts for a total of 55% of the manufacturing GDP. They
were host to nearly 75% of the new factories built in the last decade. Rural
consumption per person has increased by 19% yearly between 2009 and
2014.
Mass Marketing − In this, all the consumers are being treated the
same. It allows the company to target the maximum number of
consumers. For example, HUL has offered only one detergent that is
“Surf” to all consumers but Norma entered the market and grabbed a
sizeable market share because of which HUL woke up and introduced
wheel.
A prime need for any firm to emerge as a strong player in the rural market
is by carefully identifying gaps in the rural market and crafting the right
product offering for consumers. Chalking out a product strategy for rural
market differs in many aspects when compared to urban counter parts.
Needs and demand of rural consumer might be contrasting to that of urban
consumer and therefore its necessary to hit the right chord when entering
the rural market. The prime objective is to design products to suit rural
requirements.
Conventional wisdom on rural marketing states that the needs of the rural
consumers are similar to those of the urban consumers. Hence, the products
made to urban specifications should suit the requirements of the rural
consumers. However, this is not true in many cases, as there is a market
difference between rural and urban environments. For instance, Kerosene or
LPG gas stoves, where the flame can be controlled, are used for cooking in
urban areas, while an open fire or ‘Chulha’ is used in rural areas. Pressure
cookers with handles on one side suit the urban consumers, but not the
rural consumers for use on an open fire or a ‘chulha’. Perhaps, a wide-
bodied cooker within handles on opposite sides may suit rural requirements.
Therefore, while designing and developing products, the requirements of the
rural consumers are to be considered and rural-specific products developed.
3. PACKAGING OF PRODUCTS.
During the late eighties, shampoo sales boomed when it was introduced
in sachet pack, because it suited the consumers in low income groups.
Hindustan Motors (HM) launched a utility vehicle the RTV (rural transport
vehicle), aimed at rural market. Hence, product development for rural
consumers is necessary.
Small unit packing: This method has been tested by products life
shampoos, pickles, biscuits, Vicks cough drops in single tablets, tooth
paste, etc. Small packings stand a good chance of acceptance in rural
markets. The advantage is that the price is low and the rural consumer
can easily afford it.
Another example is the Red Label tea Rs. 3.00 pack which has more sales
as compared to the large pack. This is because it is very affordable for
the lower income group with the deepest market reach making easy
access to the end user satisfying him.
The small unit packings will definitely attract a large number of rural
consumers.
4. PRODUCT DESIGNS.
New product designs: Keeping in view the rural life style the
manufacturer and the marketing men can think in terms of new product
designs.
For e.g. PVC shoes and chappals can be considered sited ideally for rural
consumers due to the adverse working conditions. The price of P.V.C
items is also low and affordable.
5. BRANDING OF PRODUCTS.
Brand name: For identification, the rural consumers do give their own
brand name on the name of an item. The fertilizers companies normally
use a logo on the fertilizer bags though fertilizers have to be sold only on
generic names. A brand name or a logo is very important for a rural
consumer for it can be easily remembered.
Many times rural consumers ask for ‘peeli tikki’ (Yellow Bar) in case of
conventional and detergent washing soap. Nirma made a ‘peeli tikki’
(Yellow Bar) specially for those peeli tikki users who might have
experienced better cleanliness with the yellow colored bar as compared to
the blue one although the actual difference is only of the color.
Branding too needs skilful handling in the rural markets. The rural
consumers have already graduated from generic products to branded
products. Today, the brand name is the surest means of conveying to rural
consumers. To them, buying an established and well spoken of brand is the
sure way of reducing risk. In other words, brand is the key to confidence
building among the rural consumers. Besides quality it conveys that the
manufacturer is going to show sustained interest in those products and
markets. Whether same brand should be used in both urban and rural
markets and appropriate variants of the brand must be adopted for the
rural market is a matter of conscious decision by individual firms depending
on the context. In quite a few cases the same brand is proving right and
cost-effective.
While specific research studies may provide useful insights on the rural
markets, no one can make any sweeping generalizations.
Physical Distribution:
Let us first see the special problems, which marketers have to face in
physical distribution in the rural context.
7. PRICING DECISIONS OF RURAL MARKETS.
Low prices of products and services are just inducements to get over this
reluctance and inertia of rural consumers. Marketers have to do much
more than offer products and services at lower prices to keep rural
consumers in the marketplace.
Most rural consumers do not have a steady and regular source of income.
They get their income when they sell their crops after the harvest.
Therefore most rural consumers receive money in lump sum a few a times
a year depending upon the number of crops they are able to grow.
(i) MSP and Procurement Prices: The price support policy was
initiated by the Government to provide protection to agricultural
producers against any sharp drop in farm prices. If there is a good
harvest and market prices tend to dip, the government guarantees
an MSP or floor price to farmers, which covers not only the cost of
production, but also ensures a reasonable profit margin for the
producers. MSP is announced each year and is fixed after taking into
account the recommendations of the CACP (Commission for
Agricultural Costs and Prices). CACP is an agency which advises the
Government on a continuing basis about the level of MSP.
Procurement prices are the prices of Kharif and Rabi cereals at
which the grain is to be domestically procured by public agencies
(for example, FCI [Food Corporation of India]) for release through
public distribution services (PDS).
(ii) Buffer stocks and Public Distribution System: Buffer stock
operations are an integral component of agriculture price in India. It
is used as an instrument to minimize the fluctuations in the prices of
agriculture products. Buffer stocks have a price stabilizing impact on
the economy. Under the buffer stock policy, government builds up
stock of agricultural commodities either through purchases from
domestic market or through imports and release these stocks in the
domestic market when the prices are rising. The government supply
thus moderates the sharp increase in the price of agricultural
products. In the event of bumper crop, the market price is
substantially reduced. In this situation government make
procurements at MSP or procurement price and prevent fall in price.
This helps to prevent distress sales among farmers.
(i) The price policy has to evolve a qualitatively superior crops mix i.e. to
provide incentive for growth of crops which are nutritionally superior or
the crops where the country has comparative advantage. In India this
aspect of agricultural price policy has remained largely neglected.
(ii) During the last few years, lack of prudence in fixing the level of support
prices of rice and wheat led to not only accumulation of excessive stocks
but also raising the public cost of food grain policy. During these years,
the government fixed MSPs of rice and wheat at much higher levels than
that recommended by CACP. Currently however the stocks are below or
almost close to the minimum prescribed levels.
(iii) The farmers in the new emerging states could not get the minimum
support prices for their produce. This happened mainly because the
nodal agency (FCI) and state agencies in the new emerging surplus
states are not geared to undertake price support operations. The FCI
remains occupied with large volumes of purchases traditional surplus
producing states (like Punjab, Haryana, and western U.P)
3. Co-operative Marketing.
Cooperative Marketing
The basic aims of cooperative marketing are to arrange for the marketing of
agricultural produce of the agricultural members at a reasonable and
remunerative price, to distribute farm inputs to the agriculturists, to advance
loans on the pledge of agricultural produce, to undertake processing of the
agricultural commodities and to help in better recovery of loans through
linking of credit with marketing.
2. Sale in Markets:
The second method of disposing surplus of the Indian farmers is to
sell their produce in the weekly village markets popularly known as
‘hat’ or in annual fairs.
3. Sale in Mandis:
The third form of agricultural marketing in India is to sell the surplus
produce though mandis located in various small and large towns.
There are nearly 1700 mandis which are spread all over the country.
As these mandis are located in a distant place, thus the farmers will
have to carry their produce to the mandi and sell those produce to the
wholesalers with the help of brokers or ‘dalals’.
2. Distress Sale:
Most of the Indian farmers are very poor and thus have no capacity to
wait for better price of his produce in the absence of proper credit
facilities. Farmers often have to go for even distress sale of their
output to the village moneylenders-cum-traders at a very poor price.
3. Lack of Transportation:
In the absence of proper road transportation facilities in the rural
areas, Indian farmers cannot reach nearby mandis to sell their
produce at a fair price. Thus, they prefer to sell their produce at the
village markets itself.
4. Unfavourable Mandis:
The condition of the mandis are also not at all favourable to the
farmers. In the mandis, the farmers have to wait for disposing their
produce for which there is no storage facilities. Thus, the farmers will
have to lake help of the middleman or dalal who lake away a major
share of the profit, and finalizes the deal either in his favour or in
favour of arhatiya or wholesalers. A study made by D.S. Sidhu
revealed that the share of middlemen in case of rice was 31 per cent,
in case of vegetable was 29.5 per cent and in case of fruits was 46.5
per cent.
5. Intermediaries:
A large number of intermediaries exist between the cultivator and the
consumer. All these middlemen and dalals claim a good amount of
margin and thus reduce the returns of the cultivators.
6. Unregulated Market’s:
There are huge number of unregulated markets which adopt various
malpractices. Prevalence of false weights and measures and lack of
grading and standardization of products in village markets in India are
always going against the interest of ignorant, small and poor farmers.
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