Consumer Behaviour: Rural Vs Urban Customer

People, whether located in city or village, buy products and consume them. They are all consumers. However, the locale has influence on their buying behaviour and some dissimilarities have been noticed in their purchase, decision making process and use of the products. This article dwells on the differences between the rural and the city customers. Irrespective of the kind, the customers are of equal importance to the marketers and it is imperative that one understands the differences between the two categories of customers to serve them well and for the effective use of the resources. 

It is obvious that a customer from a rural area is called a rural customer. What is not clear is the term ‘rural’. The term ‘rural’ is defined differently by different people. Government of India has defined rural area as that which is not urban and urban area is defined as:  

*All locations within a municipality/corporation, cantonment board or a notified town area committee, 

*All other locations satisfying all of the following criteria: 

However, this definition of rural area does not meet the requirements of marketers. Most of the companies have their own interpretation of what is rural. Companies, depending on the products they sell, have classified places ranging from below 20,000 to 50,000 population as rural. There is yet another classification of India, as Urban, Rural and Rurban (Jha, 2003) in a continuum from urban and rural. With the rapid strides in economy, technology and population, a large number of settlements have grown larger to be a typical rural area. However, they are not yet urban. These areas which have a population of more than 5,000 are now called as Rurban areas. Rurban is an area which rural in nature and has some urban amenities. It may have basic sewerage, drainage, health care unit, water supply and transport facilities. It might have more people involved in non-agricultural activities. In a marketing sense, they neither behave like a rural market or an urban market. 

Marketers who have been long ignoring the uneducated, dhoti clad poor, have now realized that – “The real India lives in the villages”. (Zia Haq, 2008). As described by Adi Godrej, Chairman of Godrej Group, “The rural consumer is discerning and the rural market is vibrant. At the current rate of growth, it will soon outstrip the urban market. The rural market is no longer sleeping. We are.” The silent metamorphosis that the Indian countryside is undergoing has not gone unnoticed by the marketers. They have realized the importance of understanding the rural consumers and their behaviour. 

The economic growth experienced in India may have reduced the absolute number of poor (depending on which report one refers to) and lifted millions out of poverty, however, income disparities and regional imbalances persist. The variations in the level of development in a region have resulted in tremendous heterogeneity. The success of marketing lies in understanding these differences. 

1. Although there are more literate people in rural India (49.3 crore) than in urban India (28.54 crore), the rural literacy level is only 68.9% compared to 85% in urban area[1]. A rural customer may not be very educated but has lot of common sense. He is as intelligent if not more and sharper in many ways than his urban counterpart. This is bought out by an incident where in an aggressive farmer held out a cut section of a tyre in his hand and complained to the tyre company executive that though the tyre companies claimed that the tyres had ’8 plys’ and he could see only 4 plys in the tyre. The executive had to explain in detail about the process of tyre making to convince the farmer that not all the 8 layers used in making the 8 ply can be seen[2]. 

2. A rural customer is very conscious of “value for money”, and may not always go for cheap products or premium or image products[3]. As he may not afford high price, he does not fancy products with features that do not enhance the basic functions of the product. 

3. Rural customers do not trust the outsiders easily. It is not very easy to convenience a rural customer. It is a challenge to introduce anything new to rural customers. 

4. Rural customers are more brand loyal than urban customers. However, as the literacy level is low they recognize the brand more through colour, symbol and logo. 

5. The rural customer’s involvement in purchase of any product is high. In some cases such as buying TV, he consults a number of people. Both rural and urban consumers experience significant influence of their families for buying the select products. However the rural consumers experience greater influence of their families as compared to their urban counterparts. (Singh, 2012) 

6. Another important difference is that the rural customer’s life is highly routinised and laid back. Sunday is not a holiday in the village and the he cannot be made to hurry through. 

7. The rural income mostly depends on the agriculture and hence income and purchase reaches greater heights after harvest time. Hence, the disposable income varies across the nation depending on the area, crop, weather etc. Consequently, the buying patterns vary with urban buying patterns. 

8. Traditional values, customs and perceptions have a stronger hold on the rural customers than urban customers. This impacts developing common communication programme for entire country. 

Keeping the differences between the two class of customers in mind, Hindustan Unilever’s started a unique multi-brand rural marketing programme called ‘Khushiy
on Ki Doli’ in 2010 in three states namely Uttar Pradesh, Andhra Pradesh and Maharashtra. Through this initiative more than one crore consumers were contacted directly in more than 28,000 villages across these three states in 2010. Through this initiative about 1,70,000 retailers were also contacted in these villages in 2010. This programme, which turned out to be a success, is being extended to other parts of India. 

Another marketing giant ITC, is coming out with an advanced version of e-Choupal. “Distribution of FMCG products in rural markets through the e-Choupal network gained traction with throughput during the year 2009-10 recording an increase of 44%,” said S Sivakumar, ITC’s chief executive (agri-business). ITC has recently come out with ‘Choupal Pradarshan Khet’, in order to help the small and marginal farmers. 

Godrej, very innovatively and bravely introduced a nano refrigerator – Chotu Kool – especially for the rural market. It was priced at Rs. 3,200 and was designed to withstand the erratic power supplies in the rural areas. This too has proved to be a success. 

The rural market (68.84%) is larger than urban market (31.16%) and the marketers cannot afford to ignore studying the rural consumer behavior. Dipanker Gupta writes, in an insightful article. “The Changing Villager” in Seminar. “Clearly the village is not what it used to be. When one reads accounts of rural India of the 1950s and 1960s, it appears as if we are describing another country. Where are all those landlords? Those bonded laborers? They are difficult to find even in Bihar or east UP. But this should not be startling. If 80% of the landholdings are below 5 acres, where is the scope to hire workers on the farm? In fact, there is an excess of family labor in most agrarian households. This is why villagers hope to send as many of their boys as they can to the city.” This is reflected in the increased level of urbanization from 27.81% in 2001 Census to 31.16% in 2011 Census. With so much of changes happening in the major part of market – with the fortune lying at the bottom of pyramid – it is vital that the marketers understand the rural customers well. 

Jha, M. (2003). Understanding Rural Buyer behaviour. IIM B Management Review , 15 (3), 89. 

Prahalad, C. K. (2010). The Fortune at the Bottom of the Pyramid – Eradicating poverty through profits. New Delhi: Dorling Kindersley (India) Pvt. Ltd. 

Rajan, R. V. (2001). Knowing the Rural Customer. Anugrah Madison. 

Singh, B. D. (2012). Influences on Rural and Urban Consumer Buying. Global Journal of Management and Business Research , 12 (7), 35-42. 

Zia Haq, H. T. (2008, February 28). Real India lives in villages. Hindustan Times . 

Appendix:

[1] Figures as per Census of India 2011 (Provisional Population Totals) NEW DELHI: 15th July 2011. 

[2] “Knowing the rural customer” By R V Rajan, Chairman & Managing Director, Anugrah Madison (Nov 1, 2002) 

[3] “Knowing the rural customer” By R V Rajan, Chairman & Managing Director, Anugrah Madison (Nov 1, 2002)