In this article we will discuss about the values that form the basis of social thinking of rural consumer and behavioral aspects displayed by them.
Social Thinking of Rural Consumer:
Traditions and cultural values explain how people behave and interact with products and brands. Social values and norms explain attitudes towards consumption. Values are the underlying beliefs of people.
We discuss the values that form the basis of social thinking on several variables:
1. Modernity through Conformity:
Indians are gradually becoming modern as result of media exposure. The trend is seen in cities, but rural areas are also tending towards modernism. Villages close to cities are more exposed to modern lifestyles. Yet, despite winds of change, Indians seek conformity. Social hierarchies are very strong and people conform to traditions and customs, even though they adopt Western clothes and language.
For instance, despite increasing modernization, India registered an almost 800 percent rise in the number of killings in the name of ‘honour’ reported in 2015, with 251 cases of honour killings registered by the police, according to figures presented in parliament. However, the desire to appear modern in rural areas opens up a ready market for counterfeit products: local manufacturers provide cheap goods which openly display labels of the world’s best brands in clothing and consumer products.
2. Success and Growth:
Banerjee (2008) writes that in Indian society, recognition, or social acceptability is valued more than individual achievement. This is more evident in rural areas. Success is enjoyed from the perspectives of a group than an individual. Rural folk look down upon city life, which encourages individual growth and success. This prevents them from accepting ads based on urban values and products that overtly promote individualism.
3. Age and Youthfulness:
India has the world’s largest youth population—356 million 10-24-year-olds according to the United Nations Population Fund’s (UNFPA) State of the World’s Population. However, millions in this group remain locked in a struggle with poverty as the country has failed to create formal jobs for them. Only 22 million belong to the urban middle class. The rest find low paying jobs such as security guards; millions of young people living in rural India have few opportunities for jobs and remain underemployed. With little purchasing power, they are unlikely to buy branded products.
4. Happiness and Adaptability:
Indian culture stresses upon spiritual growth and materialistic gain is not considered the prime route to ensuring happiness. Though this is changing fast, such thinking is still evident in villages, where religion and rituals are followed more than in urban areas. Many people follow religious sects and godmen. However, rural society is slowly acquiring materialistic tastes and new products like cars, mobile phones, white goods and consumer goods are being bought in large numbers.
With government initiatives like MGNREGA, there has been increase of incomes in rural areas which is helping rural consumption. The Emerging Consumer Survey 2014 conducted by Credit Suisse notes that the increase in rural investments “underlines a significant uplift in consumer markets geared to the lower income consumer”.
5. Religion and Spirituality:
The many religions of India add their traditions and festivities to the country. Dedicated television channels transmit religious messages round the clock. They also sell ‘blessed products’ to help ward off the evil eye and other ailments. Camps and ashrams are hugely popular, with holy products to match. The second is to use culture by selling medicines and nature cure products. Anything with the word ‘ayurveda’ and ‘yoga’ attached to it conjures up images of Indian culture and people are quick to adapt to them.
The success of Patanjali, which sells a wide variety of products from medicines to FMCG goods, can be attributed to this factor. Yoga, too, has become a big business in India, with several resorts offering ‘yoga vacations’ to Indians and foreigners. Rural tourism is a big opportunity. Also, companies can devise marketing strategies based on religious festivals when the rural consumer is most open to buying goods.
6. Rituals and Customs:
Religions also give different sets of rituals to their followers. The challenge before companies is to understand and use the rituals practised in villages to sell products. There are, in fact, many things that are common between religion and marketing. Brands that have rituals and superstitions associated with them are much ‘stickier’ than those that do not.
7. Traditions:
Companies also use traditions to position their products. The Indian tradition of offering sweets to celebrate occasions or festivals, for example, was used effectively by Cadbury Dairy Milk. The company came up with advertisements with the tagline Kuch meetha ho jaye (Let’s have something sweet). The tradition of using herbal remedies has resulted in many companies offering soaps, cosmetics and medicines made with traditional Indian herbs. The Indian habit of hoarding gold was used effectively by Tanishq, which showed heavily decked up ladies in its advertisements with the tagline, Parampara ki nayi kahani (A new story of tradition).
8. Languages:
Mobile phone makers use local languages to expand their markets. They introduced the Hindi SMS facility because they realized that a large section of the population was not familiar with English. MNCs frequently use Indian names to connect with Indian consumers, more so when they venture into rural markets, such as LG, which introduced its Sampoorna line of products.
Companies also learn to use languages creatively. Advertising often combines local languages with English words to appeal to the masses. National Geographic launched a series of programmes called Mission Udaan. Godrej introduced a small refrigerator named ‘ChotuKool’, not only combining two languages and but also using a popular word as well for better acceptability. In rural areas, there is a greater appeal for brands using local languages. Names like Agni Tea, Mahindra’s Bhoomiputra and Sarpanch series of tractors have worked well in these markets. Hollywood movies dubbed in languages have been huge hits in India.
9. Symbols:
Marketing is done through symbols in rural marketing. Coca-Cola realized that in rural markets, brand names are not very relevant as people associate a brand more with visuals and symbols. This also helps get over the literacy hurdle. Well-known brands are recognized through elementary symbols. Coca-Cola resorted to visual branding to encourage brand recognition, connecting its brands with symbols.
The thanda matlab Coca-Cola campaign launched in 2002 used the word that describes cold drinks, thanda, to appeal to the rural consumer. It featured Aamir Khan in six characters, using rural settings. Political advertising and campaigns, too, largely rely on symbols such as bicycle, elephant, scales and so for better recall.
The cultural elements, their importance and the implication for rural brand architecture is summed up in Table 3.4.
Behavioural Aspects Displayed by Rural Consumers:
Though film stars and sportspersons are used as opinion leaders in both urban and rural markets, rural markets are different. Rural market opinion is likely to be influenced by local leaders and shopkeepers, educated people, religious leaders and people with regular jobs.
Ratna and Mehra’s study (2015) of demographic characteristics opinion leaders for non-life insurance products in India shows that opinion leaders in rural areas are more likely to be:
1. Older in age and were mostly in the age group of 40-50 years,
2. Mostly men,
3. Highly educated,
4. Belonging to larger families of four or more members,
5. Coming from a mix of rural and urban backgrounds,
6. Mostly in private employment, and
7. Coming from the same social class as the others.
These characteristics match the cultural beliefs of the target audience and can well be extended to other product categories. Though opinion leaders will be different in categories like, for example, cosmetics, the psychological set-up of people in rural India suggests that older, educated men will have a greater impact on local opinion.
Opinion leaders help in rural consumers opening up to brands. Slowly consumers are realizing that it is important to buy a branded product for its quality. But local brands and products still pose a formidable challenge to brands and are able to compete on price. Thus, companies must also recognize changes and learn to make tailored products and strategies that appeal to rural consumers.
Opening Up to Brands:
Changes are happening slowly in Indian villages. Despite the huge differences in rural consumers, companies are failing to respond to the changing needs and behaviours despite the huge growth potential. A one-size-fits-all strategy does not work for all villages. Further, companies also must keep into account the changing socio-economic dynamics influencing the spending decisions of rural customers.
This is a critical change unfolding in India’s hinterlands, writes Rajan (2005). He says that huge changes are taking place that impact buying and consumption across villages, but the consumer cannot be taken for granted. An advertisement by Idea reflects this—it says that rural people cannot be taken for a ride, thanks to easy availability of the Internet (No ullu banaying). However, a radical change is required.
Usually the following assumptions are made about the rural consumer:
i. He is conscious about getting value for money.
ii. He is impressed by endorsements by local leaders or icons.
iii. He is a value buyer and does not like to pay extra for bells and whistles.
iv. He understands symbols and colours better.
v. He has no sense of urgency in his lifestyle.
vi. He has high involvement in any product purchased, especially in high-end products.
vii. Divisions based on caste, community and other hierarchical factors continue to exist in rural areas.
viii. Perceptions, traditions and values vary from state to state and, in some cases, from region to region within a state.
Many of the aforementioned assumptions about the rural consumers are being challenged because of large changes that are taking place, albeit slowly, across the countryside. An Accenture survey (2013) finds that the conventional wisdom that rural consumers care most about price and settle for substandard offerings is quite wrong. It says that rural consumers have aspiration and they strive to purchase branded, high quality products – around 71 percent of respondents had purchased branded products and 59 percent consider them as trustworthy.
Companies make the mistake of working on assumptions of the past, but the expectations of rural Indian consumers differ markedly from those of previous generations. Rural consumers are moving away from value driven by low prices but seek quality products that reflect their aspirations, according to Sanjay Dawar, MD for Accenture’s Strategy practice in India. The report points to lack of importance of ads—only 7 percent of the respondents said that advertisements influence their final buying decisions.
The change in rural consumers in some areas is happening because of the following reasons:
1. Increase in Incomes:
Incomes in rural areas have risen, leading to greater purchasing power. Investments in rural infrastructure by the government are beginning to yield results.
2. Mindset:
Rural consumers are upgrading from locally available products to branded products. This shows that rural populations are slowly moving towards better awareness and lifestyles.
3. Awareness:
Several modes of communication, both conventional and unconventional, have made their way to the hinterlands of India. Rural consumers are today exposed to a variety of entertainment sources and other stimuli because of increasing media reach. Around 35 percent of rural India watches television, which influences consumer patterns.
4. Consuming Potential:
According to the Central Statistical Organization, India is a consumption-led economy because of its high private final consumption expenditure, that is, monthly per capita expenditure (MPCE) levels of 60 percent of its GDP.
5. Mobile Phones:
Deep penetration of mobile phones has resulted in better connectivity and awareness of rural consumers. As smartphones and e-payment systems are becoming popular, further changes in consumption behaviour are expected to happen.
Credit Suisse’s Emerging Consumer Survey 2014 notes that investment in rural infrastructure appears to be paying off and raising income expectations at a faster pace than their urban counterparts. A rural middle class is emerging. The survey found that confidence among rural people about the future was much higher than their urban counterparts. Rural areas are witnessing a much bigger improvement than urban areas in most categories.
The survey shows there has been a sharp fall in consumers wishing to buy unbranded items. Consumption of items such as beer, spirits, meat and cigarettes as well as access to the Internet has been rising and there is scope for further improvement. However, rural consumers’ confidence depends on several factors and varies with erratic monsoons and economic conditions.
In terms of spending categories, there has been growth in discretionary categories such as smartphones and cars in 2013. This trend is expected to continue to products such as watches and branded goods. There was a sharp fall in consumers wishing to buy unbranded items, as consumers are becoming more brand conscious.
A study conducted by Tripathi (2014) showed that rural consumers like to buy branded products and associate the use of branded FMCG goods as a status symbol. Among the products that had high brand recall were – Babool toothpaste, Breeze soap, Godrej No.1 soap, Hamam soap, Ghadi detergent, and Nirma. The most popular biscuits brand was ‘Parle-G’.
Parle Kismi bar and toffees are popular among rural consumers instead of chocolates and eclairs. Another finding was that rural consumers are brand loyal – once they like a product, they keep on consuming the same product for years. They neither switch their brand nor do they try new products every now and then. The study also examined their perception regarding the quality of branded products in comparison to non-branded products. Rural consumers perceive the quality of branded products as better than non-branded products.
Yet, the findings need to be taken with a pinch of salt and cannot be taken as common for all villages. Rural buying behaviour differs on the basis of region, purchasing power and individuals. Further, the aspiration-based consumer buying is not static: a bad monsoon changes rural consumers’ confidence quickly. Brand loyalty also depends on availability— since rural shops stock limited number of brands, the consumer really has no option but to buy whatever is available. Companies that use general figures of growth and duplicate urban strategies in rural areas tend to make mistakes.