Rural Market environment

Consumer decision and action can only be properly comprehended when the environment in which are operating is properly understood. The study of Environmental factors is important for marketers to realize the developmental and trends rather than know the static picture of the environment in which they live. Influence of larger Environment on rural consumer
Geographical variation in Market behavior.

1. Lecture-3 Prof. S. S. Budhwar SriSIIM, New Delhi 1 RURAL MARKETING ENVIRONMENT

2. Contents 6 Non- Profit Sector 5 Service Market 4 Institutional market 3 Size, Structure,Constitution 2 Environment 1 Introduction

3. Rural Market Environment Introduction: Consumer decisions and actions can be properly comprehend only when the Environment in which they are operating is understood. Study of environmental factors is important for marketers to realize the developments and trends rather than know the static picture of the environment. Today’s decisions are not for short term performance, but also for evaluating future opportunities, performance and results.

4. Influence of the Larger Environment on Rural Consumer A villager’s needs are different from those of an urban consumer. The environment is a critical influence in shaping the needs of rural consumers. Products made to urban specifications may be impractical in rural settings. Geographical Variations in Market Behavior The rural market is not a homogeneous one. Variations in eco-nomic development and in consumer willingness to accept innovations are evident in rural markets..

5. Geographical variations in exposure to urban centers and variations in development have resulted in tremendous heterogeneity even within a state.

6. Social & Cultural Economic Social Culture Income Saving Class Level Pattern Caste Consumption Differences Expenditure Product Marketing Price Organization Demographic Promotion Physical Political Fig. 2. Structure of rural marketing environment

7. Variations in consumer behaviour due to geographical locations are also reflected in the variations in their innovativeness. LML found that the south was more receptive to its scooters than the north. In the words of their Marketing Manager, Rakesh Jayal , ‘People in the south are more willing to accept a high-tech product than in the north. They are more brand conscious, more educated’ (Das Gupta and Menon, 1990). A variation in the behaviour of buyers of watches between rural areas of the north and of the south is also evident.

8. Defining Environment for a Market. An environment is that which surrounds a business. Environment is sum total of external factors and prepared of tangible and intangible factors, both controllable and uncontrollable. Rural marketing is essentially a focused marketing activity of an organization. The environment outlines opportunities and threats of the market. The rural marketing environment is complex and is changing constantly . When marketing enters into rural people or marketing activities are done in the rural areas, it is necessary to know the conditions of the rural markets.

9. Occupation and Consumption Pattern   The perception that the rural consumer is either a farmer or an agricultural labourer restricts marketing effectiveness. In fact there are other groups of consumers with different needs and behaviour and having significant purchase volumes . The non-agricultural occupation groups of shopkeepers or traders and those employed in service (government administration jobs, banks, teachers, other professionals, etc.) are the high consumption segment. Television owners in the service class constitute 43%. In the case of the other non-agricultural group, the shopkeepers and traders, 33%.

10. Place of Purchase Variations   Not all rural consumers buy from the same location. It is also true that the same consumer could buy from different locations depending on the product and the need. A study on haat s indicates that, despite the same product being available in the village shop, 58% of the rural consumers visiting the haat s preferred to buy these from a haat because of better prices, quality and variety. Rural consumers do not rely on the local outlets and haat s alone, as some of the purchases are made in the urban areas (see Table 1.0). TABLE 1.0 % of Products Bought from Nearby Towns Rather than within the Village itself Category % Share from Urban Purchase Shaving preparations 36.6 Bulbs & Balms 32.0 Toilet soaps 24.0 Washing powders/liquids 23.4 Iodized salt 14.4 Source: Business world.

11. The above discussion on the different geographic and demographic influences on behaviour is captured in Figure 3.1. Influences on Consumer Behavior and its Implications   External (voltage fluctuations)   Geographical   Occupation (farmer/service/ trader)   Product type, design & features sought . Product sought, features &sophistication accepted. Place of Purchase Consumption Level & Purchase of Durable Villager

12. Social Environment –Population and households, education and literacy levels, social groups, festivals and melas, entertainment and arts. Technological Environment –Power and energy sources, postal services, telecommunications, information and communication technology, appropriate technology and innovations. Economic environment –Occupations, land distribution, land use pattern, irrigation, asset holding, income, consumption, savings, disposable incomes, rural lifestyles and sales potential, rural credit institutions, rural retail outlets, micro financing and rural industry.  

13. Social   Cultural   Perception Attitudes Product design preferred (usage due to culture influences design). Information source (use of personal sources). Meaning to signs, symbols & colour Language Place of purchase ( haat s for novel items and for variety) Value purchase (brand preference, occasional splurge on high price item) Loyalty (strong brand and limited variety increase loyalty). Villager Behaviour

14. Political Environment : Development initiative and administrative bodies. Marketing Decision and Environment Demand Estimation –Demographics Segmentation and Target Marketing: Production Decision: Income, quality consciousness, brand awareness, preference of consumers and competition Price Decision. Place Decision. Promotion Decision.

15. Rural Income Rs7006 Billion Agricultural 53% Non-Agricultural 47% Self Employed 43% Formal 36% Wage Earner 10% Informal 10%

16. Population. Occupation Pattern. Income Generation. Location of Rural Population. Expenditure Pattern. Literacy Level and Rural Demand. Land Distribution.