UNIT 3 RURAL MARKETING PREPARED BY SARANYA A

RURAL MARKETING

1. UNIT III RURAL MARKET RESEARCH NEW RESEARCH TOOLS RURAL CONSUMER BEHAVIOR FACTORS INFLUENCING RURAL CONSUMER BEHAVIOR RURAL MARKET PROFILE CONSUMERS CHARACTERISTICS OPINION LEADERSHIP PROCESS

2. RURAL MARKET RESEARCH Rural marketing research is the  careful and objective study of product design, markets and transfer activities such as physical distribution and warehousing, advertising and sales management in rural areas . It helps to know the demographics, psychographic and behavioral characteristics of the target market in rural areas. Rural marketing research helps to know the demographics, psychographic and behavioural characteristics of the target market in rural areas.

3. Rural Marketing Research – Scope Rural marketing research include following areas: 1. Product Research 2. Customer Research 3. Sales Research 4. Promotional Research

4. 1. Product Research: Product research is associated with the conversion of rural customer needs into tangible product offer. This includes development and testing of new products, improving the existing products and a tab on the changing customer preferences, habits, tastes etc. Product research also includes product packaging, branding and labeling decisions. Under product research following activities are included: i . Determining customer acceptance of proposed new products. ii. Evaluating new products concepts. iii. Determining current and new uses of existing products. iv. Market testing of proposed new products or services. v. Simplifying product lines. vi. Making packaging and design studies. vii. Brand preference etc.

5. 2. Customer Research: This research includes investigation of rural customer buying behaviour . Rural marketing research also study the economic, social, cultural, personal and psychological influences on rural consumer buying behaviour . Following are the activities that are included in customer research: To know the demographic, psychological and behavioural aspect of rural consumers. ii. To study the preferences and taste of the customers. iii. Estimating demand for the product. iv. Determining sources of customer dissatisfaction with products.

6. 3. Sales Research: Sales research involves decision regarding selection of store location, channels, territories, sales force motivation, compensation etc. The purpose is to reach the target customer more effectively, efficiently and timely. Following areas are covered under sales research: Establishing sales territories. ii. Evaluating present and proposed sales methods. iii. Analysing salesman’s effectiveness. iv. Setting sales quotas and developing salesman’s standards. v. Establishing salesman’s compensation plans.

7. 4. Promotional Research Promotional research includes all efforts by the marketers to communicate the company’s offer to the rural customers. This includes advertising, public relations, publicity, sales promotion. Following areas or activities are included in promotional research: i . Evaluating advertising effectiveness. ii. Analysis competitive advertising and selling practices. iii. Selecting advertising media. iv. Motivational studies like motion study etc.

8. Rural Marketing Research – Objectives Rural marketing research is conducted to achieve the following objectives: 1. To Know the Demographics and Psychographics of Rural Customers – Rural marketing research tries to reveal the number of facts who buy why they buy, when they buy, the frequency to their buying and the sources of their buying. Rural marketing research helps to find out the social status and the regional location of the rural customers. 2. To find out the impact of Promotional Efforts – Rural marketing research helps in finding out the effectiveness of advertising, pricing policies and other promotional tools on the rural customers. It facilitates appraising and improving the methods of sales promotion. 3. To Forecast Sales -Rural marketing research helps in sales forecasting and market planning in rural India. The researchers make sale forecast on the basis of the response from the rural customers and the distribution media. 4. To Know Rural Customer Response to a New Product – Rural marketing research is frequently used to know the opinion of the rural customers about the satisfaction given by a new product. This helps in knowing the desired improvements in quality, size, design, pricing, distribution method etc. This is also known as product testing. 5. To Anticipate Competition Moves – Rural marketing research helps the marketers to continuously monitor the competitor and judge about the right actions that might be acquired. 6. To Probe ‘What Went Wrong’ – This happens when the product is having some special problems. Marketing research help in knowing what problems the product of company is facing by conducting survey and hence, company can take immediate action against that problem. For example, Johnson & Johnson probed into the poisoning of their capsules and found that the customers felt very bad about the company. The company launched advertising campaign whereby it offered to replace all the capsules, it owed its responsibility for any injury caused to the customers and that poisoning happened outside their factors. The company regained its image and the market share. This was possible because marketing research found the right media and message which could change customer attitude in favour of Johnson & Johnson.

9. Rural Marketing Research – Steps involved in the Process Rural marketing research is carried out in a systematic and scientific manner to make it more effective and useful for marketers. The need for any marketing research areas on account of gaps in the existing information, based on which the problem is designed. The research leads to insight and a solution for that problem. There are sequential steps that apply to any research – Industrial, Commercial, Public utilities etc.

10. Step # 1. Defining a Research Problem and Objectives: The starting point for rural marketing research is the recognition of a management problem and defining business and research objectives. The foremost task in the problem discovery stage is to transform the management problem into a marketing research problem by looking at the context of the problem, the observation of the management and the exploration of the problem by putting a ‘Why to the original problem’. Problem can also be studied in terms of business objectives and research objectives. i . Business Objectives: Business objectives state the purpose for which the marketer is conducting the research. Normally it is stated in terms of a tangible benefit. For Example – “To design a new product catering to rural consumers.” To design a new distribution channel for a specific product for rural markets of India. ii. Research Objectives: Research objectives state the expected research output, which help in taking decisions to achieve business objectives. Framing the research objectives calls for a clear understanding of the kind of information required to facilitate the decision making process. For example – To map the buying behaviour of rural consumers for sub-35hp tractors”, “To identify and profile the segments existing among rural consumer mass.

11. Step # 2. Determining the Research Budget: Most marketing research project involves a certain amount of cost incurred for collecting information and analysis data. Budget decisions depend on the research approach to be used for a particular study. Taking a budget decisions involves two major steps: i . Specifying the approximate value of the information to be collected. ii. Determining the maximum amount that can be spent on the study. Once the budget is finalized, the research is designed accordingly.

12. Step # 3. Designing the Marketing Research Design: The third stage of marketing research involves developing an effective design for gathering the required information which includes a decision on the research approach. The problem discovery and the consequent marketing problem definition is an incomplete process if it is done without looking at the broad dimensions of the marketing research design. Using these three criteria, research can be classified as: i . Purpose – Exploratory, descriptive and casual. ii. Nature of data – Quantitative and qualitative. iii. Sources of data – Primary and secondary. For instance, if a company is interested in marketing its products in the rural market for the first time and the marketing manager is interested in knowing whether rural markets are attractive, they prefer a small scale survey – a sort of pilot study to assess the attractiveness of the rural market. If the results are positive, they will go for descriptive research – a large scale survey to assess the market potential and identify strategic options. In the final stage, they may undertake experimental research to test – market the product in a few select villages to predict its success. If the result is positive, they will implement this marketing plan for the entire rural market. Exploring Research: When a manager is unaware of a phenomenon, they may initiate an exploratory research to gain a basic understanding of it. Descriptive Research: Marketers may take up descriptive research to obtain through and analytical view of it. They may opt for examination before making huge investments on it. Quantitative Research: Quantitative research is number driven and involves the use of structured interview questionnaires or other tools for data collection. The data thus gathered in the form of numbers. It is analyzed through various statistical techniques such as frequency and cross tabulation. Qualitative Research: The research does not involves any fixed format or set of questions to be answered by the respondent, instead of, the emphasis is on a free flowing interview or discussion to aid an in- depth exploration of various issues or problems. The questions asked are open-ended and unstructured. For example, “What problems do you face in the paddy cropping, describe”, “To whom do you consult when taking decisions on which type of seeds to purchase and why?”

13. Step # 4. Selection of Research Methods: Next step in conducting marketing research is to decide the research methods; the marketer is to decide from where to collect data, either from primary sources or from secondary sources. i . Primary Source of Data (Primary Research): Primary source of data refer to the first hand original data collected by the investigators through observation, experimentation and field survey. It is not a published source of data, but has to be collected by the researcher. This data can be collected at a huge cost, but it is useful as it is collected for a specific objectives. The information may be collected directly from the customers, dealers and salesman. ii. Secondary Source of Data (Secondary Research): Primary data are in the shape of raw materials to which statistical methods are applied for the purpose of analysis and interpretation. But secondary data are usually in the shape of finished products as it has already been treated statistically. The significance of secondary data lies in the fact that it is available at a very low cost. It can be collected within a short period of time. The secondary data include facts and figures which are already collected by other individuals and institutions. The sources of secondary data include publications of Government, private institutions like Trade Association and Chambers of commerce, International institutions like IMF, World Bank and data collected by other research agencies etc.

14. Step # 5. Selection of Sample Design: It is a rare phenomenon that total population is taken for the purposes of analysts. The use of sample (a sub set of population) is commonly occurrence. In selection of sample design, two important decisions are taken. One is to choose the sampling method and second is to decide the sample size. Step # 6. Designing the Research Instrument: The research instrument can be of two types – discussion guide in the case of qualitative research and questionnaire in the case of quantitative research. A discussion guide is an unstructured measurement from that permits a range of possible responses. It includes an open-ended questions with a lot of prints for probing a particular area. On the other hand, a questionnaire is a more structured research instrument. It involves close-ended questions and seeks definitive responses in a particular format. For example, how satisfied are you with the usage of the new tractor? Please rate your satisfaction on the following scale – completely satisfied, somewhat satisfied, neither satisfied nor dissatisfied etc.

15. Step # 7. Organising the Field and Collecting the Data: Once the research instrument is decided, data must be collected from the respondent member of the sample. In qualitative research, the researcher uses discussions guides to conduct focus groups in-depth interviews. Interviews in qualitative research in rural areas are always held within the natural setting of the villages, rather than at a location that is central for the researcher and the respondent. Interactions with respondents are mostly audio recorded for the purpose of analysis. Focus groups are conducted at caste-neutral and common village points. As far as possible, in depth interviews are conducted at the respondent’s house or at an isolated place as villagers tend to crowd around stranger. In rural quantitative research, data is collected using a structured questionnaire. Quality control measures are important in quantitative research since it is normally conducted by the field investigators from field research agencies, who may not have clear understanding about the product category or the brand. In such a case, it is necessary to ensure that investigators involved in the field work have prior experience of conducting the research in rural areas.

16. Step # 8. Data Analysis: In the case of qualitative research, the data collected in the form of notes, audio recordings is transcribed and collected in a set format. Further, content analysis is done using filters and specific colour codes to find similarities and variations in the data. In quantitative research, data input frames are prepared in excel or SPSS software where the data captured in the questionnaires is transferred for analysis. Broadly, three types of quantitative analysis can be done on the number of variables involved: (1) Uni-Variate Analysis – This analysis is done using one variable at a time. For example, frequency calculation for nominal variable in terms of percentage. (2) Bi- Variate Analysis – This analysis is done using two variables at a time. For example, cross-tabulation as well as bivariate regression can be done between two variables to ascertain the association. (3)   Multi- Variate Analysis – When three or more variables are studied at a time, we have to adopt a multi variate technique. For example, factor analysis and cluster analysis can be done with multiple variables for measuring the inter-dependence level.

17. Step # 9. Interpretation of Findings: The selection of an appropriate statistical tool helps in carrying out interpretation of findings. Interpretation provides specific meaning to the data and helps convert into information. The information so generated is used to relate the findings with the work/studies that already exist. The interpretation should take place in the light of research objectives, limitations of the samples etc. Step # 10. Reporting the Findings: As the last step in the marketing research process, the researcher presents the findings relevant to the marketing decision to the rural marketer.

18. Research Tools for Rural Market • Semiotic Analysis -appropriate colors, signs and symbols to avoid inappropriate ones. Helps advertising agencies in promotion mix • Customer I.Q -quality, satisfaction and loyalty which provides information about brand equity • Advanced Tracking Program (ATP) -tracking brand health and brand equity to analyze different brands performance

19. Primary Data • PRA technique – Is a set of approaches and methods to enable rural people to share, enhance and analyze their knowledge of life and conditions, to plan and to act. PRA Tools – Social mapping : capture house location/ caste distribution Resource mapping : availability of resources Seasonality diagram : information on the basis of seasons Venn diagrams : to identify various issues with relative importance Advantages of PRA & FGD PRA(Participative Rural Appraisal) FGD( Focused Group Discussion) Large and Heterogeneous Small and Homogeneous All people participate in Verbal & Non Verbal ways Spokespersons Dominant the discussion in Verbal form. Attitude and Behavioral oriented. Action oriented Spot analysis by Participant Analysis done by Moderato

20. Rural Marketing Research – 7 Main Benefits Help in Implementation of Marketing Concept in Rural Areas Help in Assessing Product Acceptance Help in Understanding New Markets Help in Forecasting Demand Help in Rightful Promotion Help in Determining Suitability of Channels and Assessment of Middleman To Reduce Uncertainty by Providing Information that Facilitates Decision Making by Marketers

21. Rural Marketing Research – Limitations Nature of Rural Market Low Literacy Levels Paucity of Rural Marketing Research Budget Local Language Communication There are 22 official languages in India Lack of Uniformity in Secondary Data Lack of Facilities in Rural Areas Difficulty in Interacting with Woman Respondents Interview Timing Comprehension of Research Tools Rule out Revalidation of Data . Sensitivity of Rural People . Inaccessible Roads

22. Rural Consumer Definition :  A Rural Consumer is an end-user of the products offered in rural markets . More precisely, a rural consumer is one who buys goods & services for self-consumption, reselling or reproduction in rural areas. The rural consumer has  less disposable income . Therefore, they prefer to buy  less expensive products . They differ from urban consumers in respect of lifestyles and thinking.

23. Consumer behavior Consumer behavior is the thought processes, conditioning, behavioral inclinations, decisions, and actions of focus groups or target audiences that influence or compel them to make a purchase

24. Types of Consumers Households : The customers who purchase products for self-consumption. The goods purchased are consumed and not used for further production. They buy products for:- Family Needs Personal Use Rural Industrial : This type of consumer buy products for reproduction. The industries procure raw materials from the market and reproduce them into a new product. Rural Resellers : They are the retailers of rural areas. The rural resellers don’t consume the products themselves. However, they buy the products to resell them in the local markets.

25. Classification of Rural Consumers based on their Behaviour Habitual Group Such customers consistently buy specific products because they are completely satisfied with them. Cognitive Group People belonging to this group have some selective perception, and their buying behaviour gets influenced by it. Emotional Group Customers in this class are influenced by their emotional intellect. They are more focused towards the product’s image and features. Impulsive Group This group make purchase considering the physical attributes of the product. Thus, there is no brand query from the customer’s end. New Group With the growth and development of a new group has emerged over the years.

26. Factors influencing rural consumer behavior include Increase in literacy levels Migration to urban sectors Growth in media and telecommunication Availability of bank credit schemes Globalization of market Low price technology products Government-sponsored employment generation Tax concessions and loan waivers

27. Factors Affecting Rural Consumer Behaviour Socio-cultural factors Group Family Role and Status Sociability Economic Factors Political Factors

28. Rural consumer behavior is characterized by the following factors Cultural and traditional values : These influence purchasing decisions. Value-consciousness : Rural consumers prefer affordable, high-quality products. Lifestyle : Rural lifestyle, often centered around agriculture and community activities, impacts consumer needs and preferences.

29. Opinion Leadership Opinion leadership in consumer behaviour refers to the extent to which an individual can informally influence the attitudes or overt behaviour of others in a desired way with relative frequency.  Opinion leadership is defined as the process in which one person influences the attitudes or actions of other person informally, who may be identified as opinion leader. They offer informal advice about the product or service. Opinion leaders are part of the social groups. They have social communication network. The communication is informal and interpersonal in nature which happens between those who are not associated with the commercial selling source directly.

30. EXAMPLES OF OPINION LEADERSHIP The role of opinion leadership could be seen in the following examples. 1. During casual talk, a friend talks about the car he recently bought. He recommends buying it. 2. A person shows a friend photographs of his recent tour abroad. He suggests that by using a particular make of camera, better pictures could be shot. 3. A family wants to have a swimming pool in their spacious house. The family head asks neighbors which pool construction company they should call. 4. A parent wants admission for his child in a particular school. He contacts other parents sending their children to the same school.

31. CHARACTERISTICS OF OPINION LEADERS 1. CREDIBLE SOURCE 2. PROVISION OF BOTH POSITIVE AND NEGATIVE PRODUCT INFORMATION 3. SOURCES OF INFORMATION AND ADVICE 4. TWO-WAY STREET

32. Opinion Leadership Process In simple words, the opinion leadership process can be considered as a two-stage communication flow, where ideas move from media to opinion leaders and further to society . 1) Two-stage Communication Flow 2) Multi-stage Communication Flow Theory

33. 1) Two-stage Communication Flow Commercial influencers like advertisers and publicists affect the general public through opinion leaders. As shown in the figure, the model of two-stage communication flow illustrates opinion leaders as the direct receivers of data obtained from the advertisement. It further explains that opinion leaders correctly interpret the received data and adopt a word of mouth strategy to spread it further to other people. This theory assumes that the flow of mass media content is mediated through opinion leaders, which rarely happens.

34. 2) Multi-stage Communication Flow Theory The multi-stage flow of communication theory was developed when it was identified that every person is prone to mass media and is getting affected by it. This theory explains that the flow of information is direct to different consumers including opinion seekers, gatekeepers, and opinion leaders. Since the gatekeepers are the one who neither affects nor are affected by others, it is they who decide whether the members of the group should obtain the required data or not ..

35. The Dynamics of Opinion Leadership The opinion leadership process involves several key dynamics that shed light on how influence spreads: 1. Identification and Recognition The opinion leadership process begins with the identification and recognition of individuals as opinion leaders within their respective domains. Others perceive these individuals as knowledgeable, trustworthy, and credible sources of information and guidance. 2. Information Gathering and Evaluation Opinion leaders actively gather and evaluate information within their areas of expertise. They stay up-to-date with the latest developments and trends, positioning themselves as reliable sources of information. 3. Sharing and Communication Opinion leaders actively share their insights, opinions, and recommendations with their networks. They use various channels, including in-person interactions, social media, blogs, and reviews, to disseminate information. 4. Trust and Influence The trustworthiness and credibility of opinion leaders are central to their influence. Their recommendations and endorsements carry significant weight due to the trust they have built within their communities. 5. Amplification Opinion leaders have the ability to amplify messages and trends within their networks. When they endorse a product, idea, or belief, it gains momentum and reaches a wider audience.

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