03-01-2013, 03:24 PM
Consumption patterns of Urban and Rural consumers of emerging Indian Markets
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ABSTRACT
This paper empirically presents the impact of economic development on the consumers living habits or
lifestyles. As an exploratory study on rural and urban consumers in emerging market like India this
paper found that consumers are statistically different in terms of their attitude towards products, price,
promotion and distribution.
As most of the MNC’s and foreign investor today wants to invest in emerging markets like India
because of the huge untapped market and India not being a homogeneous consumer segment is divided
into two broad consumer categories i.e. rural and urban, therefore it becomes important from the
viewpoint of a marketer to understand the lifestyle patterns of these two groups to make the best use of
the marketing opportunities present in these markets. Possibly as a result of this disparate attitude the
study found that rural and urban consumers use different products to reflect the improvement of their
standard of living also the difference is indicated by the words they chose to describe their ideal future
image.
In the area of consumer behaviour not much has been done to relate the effect of economic development
with consumer behaviour. The purpose of this paper specifically served by the comparison of rich and
poor on the basis of the change in lifestyle due to economic development of the country.
INTRODUCTION
In this paper the level of economic development tends to be defined along the urban rural line. There is
not much research done to explore the influence of economic development on consumer behaviour
(Maheswaran and Shavitt, 2000). A comparison between urban and rural consumers of an emerging
market like India will offer a much needed insight into the effects of economic development on
consumer lifestyle (Dhumal and Mander, 2008). Researchers addressing emerging markets issues have
often targeted urban population. Little attention has been paid to rural consumer behaviour
(Home,2002). It is also suggested that the level of economic development affects the aspirations and
goals of consumers (Sinha,1994). This study carry a significant marketing implication as India’s rural
market is developing at a fast pace and MNC’s expand from urban areas into rural regions. It is also
found that different marketing strategies must be developed as strategies adopted in developed markets
are not adopted in rural market conditions and this must be based on a thorough understanding of
consumers (Craig and Douglas, 2011).
METHODOLOGY
Based on a stratified random sampling technique the study was done among total 200 consumers out of
which 200 were from the rural region and 200 were from urban regions. They were between 18 to 65
years of the age. The survey was conducted in metropolitan city Delhi and three small villages of UP.
The regional variables were recorded in these areas. The survey covered such areas as consumer
attitudes and behaviors, Product indicator of improved standard of living, Ideal future image, Price
consciousness, Attitude towards ads and innovativeness in product.
Data on “ Product indicator of improved standard of living”& “ Ideal future image ” was collected on
an ordinal scale in which the respondents were asked to rate items from one to five as per their
preference. The responses than collected were measured through Chi – Square test of independence.
Conclusions were drawn by analyzing the data statistically using SPSS version 17.
Other questions (excluding demographics) were measured on the nominal scale (yes or no) and
descriptive analyses were performed on these questions.
RESULTS AND ANALYSIS
Products as indicator of improved standard of living
For both urban and rural consumers five products were introduced as the products reflecting improved
standard of living. Out of five random products urban consumers were asked to select rate them in the
order of preference as reflecting highest standard of living, similarly the same set of products were
shown to rural consumers for rating in the order starting from the one reflects the highest improved
standard of living. For urban consumers the top one was House (71%), Car(10.5%), Laptop/PC(10%),
Washing Machine(4.5%), and TV(4%). On the other side for rural consumers products indicating
improved standard of living were House (69.5%), Car (12%), TV (10%), Washing Machine (5.5%),
Laptop/PC (3%)Table I,II.
Ideal future Image
Out of the five given adjectives in one question respondents (Urban & Rural) were asked to choose one
to describe best their ideal future image or projections about the future. The percentage of both urban &
rural consumer’s selected adjectives is as following. Urban- healthy (32%), stress-free life (18%), well
off(24%), established(16%), spirituallyrewarding (10%). Rural – Well off (42%), healthy (26%),
spiritually rewarding (14%), stress-free life (11%), established(7%).
If we try and understand the mental psychology of the two set of consumers by using the Maslow’s
hierarchy of needs, than we could categorize “Healthy” & “Well off” under the physiological need – the
most basic needs , vital for survival. “Stress free life” under the need for safety and security and finally
“Established” & “Spiritually rewarding” under the self-actualizing need.
It seems that both rural and urban consumers consider the physiological need which are healthy and well
off as their most important ideal self-concept because these adjectives made the top entry in table III &
IV. What made the difference in the two lists is that urban consumers are more risk aversive than the
rural consumers as the need for safety which is reflected by the stress-free life made a top entry in urban
and bottom in rural. Self-actualizing need for personal growth indicated by established and spiritually
rewarding is more a concern for urban consumers than the rural as 16% urban consumers chose it
against only 7% rural consumers.
Product Innovativeness
Responses for product innovativeness from urban and rural consumers were collected and it was found
that rural consumers are less product innovative in comparison with the urban consumers as they were
loaded lower on statements like –
A. It’s cool to own something not yet own by others.
B. I always buy latest and trendy products.
C. I do not prefer using the product already used by someone else.
D. I like exploring and buying new products in the store.
E. I want to be the first one to experience the new product arrival in the market.
Attitude towards ads
Both urban and rural consumers were administered open ended questions regarding their attitude
towards the ads and also about the impact and influence a particular promotional campaign has on their
decision of buying a product. The questions asked, were – 1.What type of ads influence you most. 2.
How many times your decision of buying a product is influenced by its advertisement. 3. What all type
of mass media advertising do you often come in contact with. 4. How much is the usefulness of ads in
your life for buying necessary products.
The consolidated result based on the responses received suggests that mass media approaches
negatively impact the attitude of rural consumers towards new products that are introduced by
advertisers because most items advertised are neither conveniently available nor affordable to rural
consumers. Rural consumers are not able to verify the credibility of the advertised message unlike urban
consumers due to lack of opportunity. One more reason attributed to the lukewarm approach rural
consumers towards the ads are the living arrangement of both urban and rural consumers. Unlike urban
consumers people in rural places still live in close knit traditional communities where personal contacts
are much more important than the advertisements and sales person therefore rural consumers rely more
on friends ,relatives, family members and neighbors than mass media advertising to make critical buying
decisions.
IMPLICATIONS
Most of the previous studies on Indian consumer behaviour focused on urban consumers in a few
metropolitan areas. Only a few studies have explored the regional variations in consumer characteristics
and their marketing implications. This study is an attempt to fulfill that gap.
The living standard of urban consumers will slowly be adopted by the rural consumers. As the rural
consumers adopt the consumption patterns of urban consumers, those objects that were once luxuries
will become necessities. The new symbolic consumption patterns among urban consumers like Washing
machines and PC’s will ultimatelyspread among rural consumers which implies that the marketers can go for an “upward pull strategy” to tap the rural consumers. The upward pull strategy involve marketing
communications using values, lifestyle and other characteristics of social class that target market
members wish to attain (Lantos, 2010). Many luxury car brands like Mercedes, Lexus, Jaguar also
launch entry level models for aspiring middle class shoppers while the wealthy upper class are still the
core customers.