The Affluent Group
They are mostly cash rich farmers and are very few in number. They have affordable but do not form a demand base large enough for marketing firms to depend on wheat farmers of Punjab and rice merchants of Andhra Pradesh fall in this group.
The Middle Class
This is one of the largest segments for manufactured goods and is fast expanding farmers cultivating sugar cane in UP and Karnataka fall in this category.
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.
The social status of the rural regions is precarious (uncertain) as the income level and literacy is extremely low along with the range of traditional values and superstitious beliefs that have always been a major impediment (obstacle) in the progression of this sector.
Consumption patterns differ according to income levels. Typically, in a rural area the principal occupation is farming, trading, crafts, plumbing, electric works, primary health workers and teachers.
Agriculture and related activities continue to be the main occupation for majority of the rural population. Land is the major source of income for about 77% of the population.
The rural market in India is vast and scattered, and offers a plethora of opportunities in comparison to the urban sector. It covers the maximum population and regions, and thereby, the maximum number of consumers. Rural market is account for about 74% of total Indian population.
Response to Price:
Price-related features of rural segments include:
- Rural customers are price-sensitive and highly influenced by level of pricing. Price is the strongest factor that affects their buying decision.
- They buy those products which are low in price and medium in quality.
- They are easily attracted by price discounts and rebates.
- They prefer credit facility. They normally have strong desire to postpone payment for certain period.
- Some middle-class rural customers are attracted by installment and loan facility.
Rural people are fond of music and folklore. In rural areas a popular form of entertainment is the ‘Tamasha’ and ‘Nautanki’. And then there are television, radio and video films.
Response to Products:
- Rural markets (buyers) believe in product utility rather than status and prestige. However, they like novel products with distinctive features.
- Most village customers consider tastes rather than usefulness in long run.
- They like simple and long-life products. They are interested in immediate results. Products must offer immediate benefits.
- They respond to those products that suit their religious faith, and social norms and customs.
- They ask for such products which can assists in their traditional occupations and life style.
- They have minimum urge for individuality. They prefer family-used products than personal- used products.
- They strongly prefer such products that can change and improve their life-style.
- They are less concerned with product services associated with products like after-sales services, guarantee and warrantee, home delivery, and other similar services. Branding, packaging, and labeling have less influence compared to urban segments.
Typically, in a rural area the reference groups are primary health workers, doctors, teachers and panchayat members, the village trader or the grocer, commonly called ‘Baniya’ or ‘Mahajan’ are an important influencer in the decision making of rural customer. A marketer needs to be aware of these influences that can effect changes in the rural customer’s consumption patterns.