report on buying behaviour of rural consumers in india · report on buying behaviour of rural...

Report on

Buying Behaviour of Rural Consumers in India

Project Directors

Prof. Suresh Misra

Dr. Mamta Pathania

Project Associates

Mr. Virendra Nath Mishra

Mr. Pankaj Kr. Singh

Mr. Ashutosh Dixit

Sponsored by

Department of Consumer Affairs,Ministry of Consumer Affairs, Food & Public Distribution

Government of India, New Delhi

Conducted by

Centre for Consumer Studies

Indian Institute of Public Administration

Indraprastha Estate, New Delhi-110002

i

Preface

In a country like India, where a substantial number of the rural people are living below the poverty line, having high level of unemployment and poor literacy level; consumer awareness continues to remain low. Several studies have shown that rural consumers are generally ignorant and they are also unorganized. Under these circumstances, the sellers or the manufacturers, exploit the consumers. Though, the consumers in India have been provided with various safety measures against their exploitation, still the sellers and producers are hoarding and black-marketing the essential goods, involving economic corruption and frequently cheating the consumers. Rural markets are full of sub-standard goods and duplicity of branded goods is another major problem in rural areas. As there is no check on production and sale of such products in the rural markets, many consumers of these goods and products also sustain injuries. Spurious drugs are causing major health hazards. The vulnerable sections are generally women, children and farmers. It is common to find that farmers are supplied defective seeds, adulterated pesticides and other commodities. The expansion of mass media has further given impetus to consumerism in the rural areas.

The expansion of service sector has added to the problem. Services like insurance, banking, electricity and medical have expanded in the rural areas without any checks and balances and the rural consumers continue to be exploited by the service providers. Deficiency in services is a major area of concern. The reports of National Commission for Applied Economic Research clearly reveal that the rural growth rates have already outpaced urban ones and will continue to do so through the next decade. Rural India accounts for more than 50 percent of the GDP. Out of 62.97 million households of India those who are getting more than 5 lakhs per annum, nearly 28.68 million households (46percent) live in Rural India. The rural market in India is projected to be bigger than the urban market for fast moving consumer goods; rural consumption expenditure is accounted for around 60 percent of the country's total consumption expenditure. Due to rising rural prosperity the taste, preferences and consumption pattern of the rural consumers is undergoing a change. The demand for products and services is increasing in the rural areas. Rural consumers also tend to buy products that were earlier mainly for the urban consumers. In India where all the consumer protection laws are in place, the consumers are not really aware of them and the mechanism in place to redress their grievances. Those who know the laws know that the process is very slow and cumbersome. There are a number of steps taken to protect the rural consumer but without much impact due to the prevailing socio - economic conditions of the rural consumers. They generally base their purchasing decisions on the advertisement campaigns and promotional strategies employed by the organizations and also lack choice.

Keeping this in mind, the need was felt to evaluate and assess the buying behavior of the rural consumers and the factors that determine his purchase decisions. It is equally important to understand the level of awareness among the rural consumers about various consumer protection issues and that provide him a safety mechanism in the market. There is no doubt that unfair trade practice is very common in the rural markets. Moreover in terms of quality, potency, weights and measures, adulteration the rural consumers are often taken for a ride mainly due to ignorance and absence of redressal mechanism. Therefore, the focus of the present research work is to evaluate the changing profile of the rural consumers; understand the buying behavior and the factors that influence buying decision and also assess the rural consumers’ current knowledge, attitudes, behaviour and practices while purchasing goods or availing services under the backdrop of level of consumer’s awareness in different parts of rural

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India and to draw conclusions from the study and suggest measures for better protection of rural consumers.

We are thankful to the Department of Consumer Affairs, GoI for sponsoring this study to CCS/IIPA and also for the support extended in conducting this study. We are particularly thankful to Shri. Keshav Desiraju, Former Secretary, DCA, Shri Gurucharan, Special Secretary, DCA and Shri Manoj Parida, Former Joint Secretary, Department of Consumer Affairs, GoI for their help. We would also thank Dr T Chatterjee, Director IIPA, New Delhi for his encouragement and guidance. Our colleagues in the Centre, particularly, Shri. R.C. Mangla, Ms. Deepa Bisht and Mr Anup have been of immense help in completing this study. Our thanks to all of them.

Our thanks are due to our colleagues in the Centre for Consumer Studies particularly Mr Amit Kumar Singh, Mr. Virendra Mishra , Mr Pankaj Kumar Singh and Mr. Ashutosh Dixit for not only providing valuable inputs and rendering support in completing the study but also in taking up most of the field work. We also acknowledge the use of data from various sources for which appropriate references are given.

We are confident that this report will be useful to various stakeholders and policy makers to reorient policies and programmes for better protection of the rural consumers. Unless the consumer movement reaches the village, the consumers will continue to be exploited.

New Delhi Suresh Misra

January, 2016 Mamta Pathania

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CONTENTS

Preface i-ii

Executive Summary iv-xvi

Chapter I Introduction 1-24

Chapter II Profile of Rural Consumers 25-36

Chapter III Buying Behaviour and Spending Pattern of the

Rural Consumers

37-58

Chapter IV Level of Consumers Awareness in Rural Areas 59-75

Chapter V Findings & Recommendations 76-89

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EXECUTIVE SUMMARY

1. Background

With the growth in rural markets and due to poor knowledge about their rights

and lack of skills to take a rational decision based on information about the product or

services, the rural consumers in India are being exploited in many ways. The rural

consumer has been made to endure sub-standard products and services, adulterated

foods, short weights and measures, spurious and hazardous drugs, exorbitant prices,

endemic shortages leading to black marketing and profiteering, unfulfilled manufacturing

guarantees and host of other ills. The rural consumers who generally depend on weekly

markets to purchase essential things are often cheated due to lack of choice.

The rural consumers in India are generally ignorant and they are also

unorganized. Thus, they are exploited by the manufacturers, traders and the service

providers in different way. The rural consumers are not only scattered but also diverse

and heterogeneous. As a result of globalization and liberalization the rural market in

India is the largest potential market in the world. Thus, there are vast opportunities for

rural marketing. The manufacturers and traders take advantage of the condition of the

rural consumers. It has been observed that the condition of the rural consumers is

deplorable because they are largely exploited in the rural markets on account of lack of

competition among the sellers. The rural consumers face various problems like

adulteration, short weighing and measuring, lack of safety and quality control in

appliances and equipment’s, electrical and mechanical, unfair warranties and

guarantees, imitation, sales gimmicks and unreasonable pricing.

2. Objectives of the Study

The main objectives of the study are as follows:

1. To evaluate the changing profile of the rural consumers in India

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2. To examine the rural consumers’ knowledge, attitudes, behavior and practices

while purchasing goods or availing services.

3. To study the buying behavior and factors that influence the purchase decisions of

the rural consumers

4. To assess the level of satisfaction of the rural consumers regarding various

products and services available in the rural areas

5. To understand the level of awareness of rural consumers on various consumer

protection measures initiated by the Government of India and other agencies.

6. To draw conclusions from the study and suggest measures for better protection

of rural consumers.

3. Methodology

The present study is an empirical research based on both primary and secondary

data. It is a blend of both descriptive and analytical methods of study. The secondary

data was collected from government publication, books, journals, newspapers and

various prominent Voluntary Consumer Organizations working in this area. The

information regarding level of satisfaction, awareness, attitude and behavior of rural

consumers at individual and household level was gathered through primary surveys. For

the purpose, an interview schedule was prepared. The questionnaire was subjected to

reliability by pre-testing the constructed tools by administering it to 100 consumers

randomly. The questionnaire was modified based on the responses from the

consumers. Besides focus group interaction, search conferences were also held to

elicit the views of the stakeholders.

4. Sample Plan

The sample areas were selected in a way that they can best represent the

developed and underdeveloped state of the country, therefore Maharashtra as

developed and Bihar as underdeveloped state were selected. From each State two

Districts and from each district two blocks were randomly selected. 270 households

were covered from different parts of each respective district. From each block, four

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villages were randomly selected. It was not difficult to identify a consumer as everyone

is a consumer and either buys a product or avails a service for consideration. The

households from these villages were selected by random sampling technique. Total

sample of 1080 households was taken for investigation from 24 villages (45 household

from each village) spreading across four Districts of two selected states. The data so

collected was analyzed and tabulated. Appropriate statistical methods were applied to

classify and analyze the data, collected on the subject. The information collected

through the questionnaire was analyzed with the help of SPSS, interpreted and

presented in a report form. The Report is divided into five chapters.

5. Majors Findings

1. The survey revealed that as the monthly incomes of the two states is concerned,

the highest monthly income in Bihar was below ` 2000 (as per 46.4 percent of

respondents of Bihar) and for Maharashtra it was between ` 2000-5000 (as per

41.2 percent of the respondents).

2. The expenditure pattern of both the states shows interesting results as in Bihar

for most of the respondents (58.3 percent) the expenditure is below ` 2000 and

in Maharashtra the expenditure is ` 2000-5000 (39.9 percent of respondents).

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3. Most of the respondents, (53.8 percent) said that there was only one earning

member in their family, 35 percent had two earning members, 5 percent had

three and 3.9 percent had four earning members in their family. A very small

percent of 1.4 had more than five earning members. 2.5 percent in Bihar had

more than five earning members while it was only 0.3 in Maharashtra.

4. 76.8 percent of the respondents said that they had no family member living in

town/urban areas. 12.2 percent respondents had only one member of their family

living in town/urban areas, 6 percent had two members, 2.6 percent had three

and only 2.3 percent had more than three family members living in town or urban

areas.

5. The survey results for the two states clearly show that migration level in the state

of Bihar is on the higher side as compared to Maharashtra.

6. As per the survey, 91.9 percent of the respondents said that they have shops in

their villages, 80.4 percent said they had pukka roads in their village, 78.3

percent of the respondents said they had electricity, 74.6 percent had telephone

facilities in their villages, 71.8 percent said they had toilet facility and 55.5

percent had television. Only 13.9 percent of the respondents said they had

internet facility in their villages

7. The comparative pattern of the facilities available in the two states show that the

prosperity level in the sample villages of Maharashtra is higher than Bihar as

Maharashtra had more cloth, jewellery, electricity and mobile shops than Bihar.

8. 79.7 percent of the respondents said the male head of their family was the main

decision maker. 7.8 percent said the woman as the head of the family was the

decision maker, 1.7 percent said that children were the main decision makers in

the family. Only 10.8 percent of the respondents said that all the decisions were

taken by all the members with consensus.

9. The survey results show that in both the states the percentage of respondents

buying products from the village shops whenever there is a requirement is 76.5

percent for Bihar and 71 percent for Maharashtra. Majority of the respondents in

both the states visit the village shops once a month

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10.Out of respondents who go to village shops, majority of respondents 94.3 percent

in Bihar and 88.3 percent Maharashtra prefer village shops because they are

near to their homes. As far as availability of quality products is concerned, 20.3

percent Maharashtra and 14.9 percent in Bihar said that they prefer village shops

as because they get quality products in village shops. But this percentage level

for quality products is quite low as rural markets are home for lot of fake and

duplicate products.

11.Most of the respondents, (43.4 percent) bought goods from kasba /town shops

because there was availability of different products there, 18.5 percent bought

because they got quality goods from the Kasba/town shops. 30.1 percent said

they bought because these shops gave goods at fair price while 16.3 percent of

the respondents preferred because they are near to their homes.

12.Out of the respondents who buy products from kasba/towns, 20.9 percent in

Maharashtra and 16.2 percent in Bihar buy products from Kasba/ towns rather

than from village/ local haats due to the availability of quality products in these

shops. However majority of respondents prefer these shops due to availability of

different and quality products at these shops.

13.As far as purchasing goods from the cities is concerned, half of the respondents

(51.9 percent) bought because there was availability of different products in

cities, 37.7 percent bought because they got quality goods. 24.7 percent

preferred these shops due to fair price of the shop. 13.9 percent said they bought

because these shops gave consumers more choice in goods.

14.As regards the spending pattern of respondents, 42 percent of the respondent

said they preferred to spend the most on merchandise. Health expenditure was

the second on the list with 18.3 percent of the respondents saying they spend the

most on health,13 percent on agriculture and 10.5 percent spend the most on

education. Expenditure on clothes, jewelry, cosmetic products, electric goods

and entertainment were other items of expenditure in the decreasing order of

preference.

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15.As per the survey results for 73.2 percent of the respondents, price of the product

was the determining factor in making the purchase, 49.9 percent made their

decision based on the quality of the product, 20.1 percent followed the advice of

the shopkeeper. While 14.9 percent of the respondents depended on the brand

and only 4.9 percent respondents said endorsement by celebrities was the most

important factor which determined their decision.

16.For price as a deciding factor for a purchase, 62 percent respondents said it

meant low cost items, 20.2 percent said they would purchase at a cost lower then

MRP, 14.3 percent said they would purchase items sold on MRP

17.For 33.6 percent brand signified quality, 25.5 percent said brand meant good

experience of using the product, for 17.7 percent respondents branded products

were those suggested by the shopkeeper, 12.8 percent respondents said

branded products were those shown in advertisements and endorsed by

celebrities, 9.8 percent said those suggested by people were branded products

and for 0.6 percent branded products meant expensive products.

18.The results clearly show that in both the states the respondents consider price

and quality as prime factors before buying a product. As the purchasing power of

the rural consumer is low, price becomes a major determining factor while

purchasing a product.

19. For 57.6 percent of the respondents, quality implied durability of items, for 14.1

percent quality product was one recommended by the shopkeeper, 13.9 percent

said past experience of usage could help determine quality of a product and10

percent respondents said products bearing standard marks implied quality and

only 1.7 percent said quality products meant as suggested by

family/friends/relatives .While for only 2.7 percent of the respondents quality

meant products with MRP.

20.On quality as main factor behind buying goods in Bihar (60.9 percent and in

Maharashtra 54.5 percent) of respondents said by quality they meant durability of

items.

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21.66.8 percent felt that their food habits were most influenced by the migrated

member of the family, 67 percent respondents felt that the sense of dressing and

fashion was most influenced. The use of cosmetics products and FMCG products

was the aspect most influenced for 40.9 and 63.3 percent of the respondents

respectively.

22.The influence is maximum on the food habits (74.2 percent), dressing sense

(66.6 percent), and FMCG products (64.7percent) in the state of Bihar. While in

Maharashtra the influence is on dressing sense (67.4 percent), food habits (59.5

percent) and FMCG (62 percent)

23.Most of the respondents in Bihar do not bother to enquire about terms and

conditions quantity and expiry date of the products. While in Maharashtra

respondents seem to be better aware.

24.Majority of the respondents in the two states never check the standard marks

before buying the products. However in comparison to Bihar in Maharashtra

people prefer buying standard mark, ISI mark product.

25. In Bihar as awareness regarding consumer protection is low respondents find

less impact of the JGJ campaign while in Maharashtra most of them say the

campaign has made impact on their buying behavior.

Recommendations

With the growth of the rural markets and lack of appropriate safety measures, the

consumer is left vulnerable to exploitation by the marketers. There is an emergent need

to device policies, programmes and strategies to meet the new challenges being faced

by the rural consumers in the country. Some of the recommendations in this direction

are:

1. Marketers need to understand the product specific evaluation process from

primary research to mapping the succession of their brand from consideration set

to choice set.

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2. Marketers need to address the perceived risk of rural buyers by showcasing the

experience of users and ensuring service delivery close to the consumer‘s

doorstep.

3. Standardization of products and availability of packed commodities will help the

rural consumers to a large extent.

4. The survey revealed that the rural consumers are not only price sensitive but

also think about quality, performance, reliability, brand and other critical aspects,

it is recommended to promote FMCG on lines of rationality rather than just

making low price appeals. FMCG companies should make such marketing

strategies which create a favorable environment for rural consumers and help to

understand which product suits best to them. Rural marketers should design

innovative promotional strategies for rural markets that can express messages in

an easy way to the villagers and compatible with their education and

understanding levels.

5. Marketers need to focus on reducing the information search time by suggesting

product trials and successfully reaching out to the consumer through ideal

information channels.

6. Media (TV, Radio) could be employed extensively to promote/advertise/inform

the rural consumers regarding the information they ought to seek before buying a

product e.g. expiry date, details reg. ingredients etc. Rural consumers are not

aware about various standardization marks and therefore, unable to read and

understand the labels on the products. Both print and electronic media must be

used to propagate this message among the rural consumers. It is imperative to

acquaint the rural consumers regarding standard marks and symbols. They need

to be educated to check the products for these verification standards before

making a purchase. This will ensure they buy original goods rather than fake/look

alike imitation.

7. It’s time that rural consumers are not viewed as a homogeneous group. Rural

women, children and farmers have specific problems and specific policies should

be in place to educate and protect them.

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8. There is a need to provide internet facility in rural areas. Internet penetration is

marginal in rural areas. It will enable the use of the use of Information and

Communication Technologies (ICTs) can provide rural people with access to

information and knowledge and thereby enhance their quality of life and

accelerate the pace of rural development. Inspite of ICT interventions including

those initiated by the government, non-governmental and other private players its

acceptability and utilization has been very low in the rural areas.

9. The rural markets are mostly unorganized. Therefore, there is also a need to

regulate the rural markets in terms of quality, safety and weights and measures.

The Department of Legal Metrology (Weights and Measures) in the states has to

play a proactive role in this. Pamphlets and leaf lets should be distributed in the

rural markets periodically highlighting these points and what the consumers can

do to prevent being cheated.

10.There is a need to step up “Jago Grahak Jago” campaign in rural areas,

especially in Bihar. Panchayats could be involved in promoting this campaign

such local involvement will enhance the effectiveness of the campaign.

11.Rural Markets are flooded with substandard goods, adulterated food items and

unsafe products. The rural markets are dumped with lookalike and pass off

products. Therefore, there is a need to prioritise the protection of rural consumers

by strengthening the enforcement mechanism. In the emerging scenario it is

necessary to protect the rural consumers by educating them about their rights

and empowering them to make decisions based on full and correct information

about the goods and services.

12.The meetings of Gram Sabha can be utilized as a forum to educate the

consumer about their rights and obligations and enhance their knowledge about

fake and spurious products. An integrated approach needed to empower the

rural consumer.

13.The survey reveals that inspite of 27 years of the CP Act, the rural consumers

are largely unaware about the Act and its various provisions. It would be

appropriate that a chapter on consumer protection is incorporated in the school

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curriculum so that the children become aware about the Act and they could act

as change agents thereby influencing the family members, relatives, neighbours

to make wise buying decisions.

14.The SIRDs (State Institute of Rural Development) have the mandate to organise

training programmes for the elected representatives and other local functionaries

of various departments implementing programmes and schemes. The SIRDs

should include a module on consumer welfare in their training programmes to

educate the participants on the need and importance of consumer protection.

15.No doubt some initiatives have been taken in this direction and capacity building

and awareness programmes are being organized by IIPA, through the State

Institutes of Rural Development but to reach such a large number of rural

consumers, a vigorous campaign with the involvement of the panchayats needs

to be taken up. Specific capacity building programmes for the elected members

of the PRIs are to be developed with adequate financial sanctions.

16.Self help groups could play an instrumental role in increasing the awareness

among consumers. This would also ensure women participation in the decision

making process in the household.

17. Organisations like Nehru Yuva Kendras, NSS and NCC should be involved in

consumer education at the grass root level as they can play an important role in

enhancing awareness. The strategy should be to use various organisations to

take forward the consumer movement.

18.All stakeholders need to coordinate their activities and ensure that adequate

literature is also made available in the local languages. Street plays and folk

songs can be meaningful instruments to create awareness in the rural areas.

Apart from these there is also a need to formulate appropriate policies and

strategies to protect the rural consumers particularly the farmers, women and

children

19.Preference should be given to rural areas while setting up consumer advisory

and mediation centres. The rural consumers should also have the benefit of ADR

as it will save both money and time. Such centres should be funded by the

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state/central government and set up at each block headquarters to start with. The

local VCOs can be involved in managing the advisory centres. This will help the

rural consumers to a large extent.

20.Consumer organizations and similar civil society groups have an important role

to play in consumer education. They have the means to provide consumers with

information and help them to make informed choices.

21.Awareness using various medium has to be created among the rural consumers.

So far the consumer movement has largely been confined to the urban centers,

and with the expanding rural markets now the focus has to shift to protect the

rural consumer. In generating awareness at grassroot levels both traditional and

contemporary media can play an important role. Community radios local cable

TV channels and local newspapers can also be good medium for generating

consumer awareness as they are communicating with the people in the local

language. With increasing reach of IT even internet and social media can be

used for educating rural consumers.

22.There is also a need for the effective implementation of various provisions of the

legislations enacted to protect the consumers from fake and adulterated products

from entering the markets so that the consumer’s interests could be safeguarded.

Misleading Advertisements and Role of Media

The media has a greater responsibility towards the vulnerable sections of the

society. The rural consumers are one such. Rural consumers today have access to

diverse media with the advent of modern technology.

The advertising firms are studying consumer behaviours to design effective

communication strategies without caring for the welfare of the consumer. In most parts

of the rural areas in the country there is considerable awareness on various latest

products that are available in the market.

The problem is that there are no effective sanctions against misleading

advertisements. What needs to be emphasized is that the poor, uneducated consumers

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in the rural areas are most likely to be harmed. More generally, as a recent World

Development Report rightly emphasized, ‘information problems are often at the core of

the difficulties that poor people in developing countries encounter in their daily struggle

to survive and to improve their lives.

Rural Consumers: Need for Education and Empowerment

In the emerging scenario it is necessary to protect the rural consumers by

educating them about their rights and empowering them to make decisions based on

information about the goods and services. Awareness has to be created among the

rural consumers. So far the consumer movement has largely been confined to the urban

centres, and with the expanding rural markets now the focus has to shift to protect the

rural consumer.

Consumer organizations and similar civil society groups have an important role


information and help them to make informed choices.

Strengthening Redressal Mechanism

Redress of complaints is a major concern for consumers. Having a right to

access the redressal mechanism is of prime importance. For the right to redress to

have a practical value, a mechanism must exist to ensure that it can be exercised

effectively. If consumer confidence is to be built up they need assurances that if things

go wrong they can seek redress. The District Consumer Disputes Redressal Forums

which act as the first point of contact in case of a complaint have to play a pro-active

role in building consumer confidence. The district forums should be strengthened and

initiatives aimed at promoting access to simple, swift, effective and inexpensive legal

channels be taken up. In many states the District forums are short of members and

also lack the required infrastructure. The state governments should address the

problems of district forums as well as the consumers to make the redressal mechanism

more effective and also responsive.

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Role of Voluntary Consumer organizations

VCOs are advocacy groups that seek to protect people from corporate abuse like

unsafe products, deficiency in services, misleading and false advertisements and other

unfair practices resorted to by the business. Consumer organizations may operate via

protests, campaigning or lobbying. They may engage in single-issue advocacy or they

may set themselves up as more general consumer watchdogs.

One common means of providing consumers useful information is the

independent comparative survey or test of products or services, involving different

manufacturers or companies which is currently being done by NGO’s Like VOICE, Delhi

and CERC Ahmedabad. The aim of consumer organizations may be to establish and to

attempt to enforce consumer rights.

Role of Panchayati Raj Institutions

To reach the rural consumers, it is imperative to involve the Panchayati raj

institutions in not only educating consumers but also ensuring that fake and spurious

products are not sold in the rural markets. These institutions can play a meaningful role

in consumer protection and consumer welfare and this has been recognized by the

policy makers.





centers, and with the expanding rural markets now the focus has to shift to protect the

rural consumer.

1

INTRODUCTION

Empowering Rural Consumers

India lives in numerous villages, scattered throughout the country. Rural areas

currently are home to nearly 70 percent of India’s population and have historically

accounted for more than half of Indian consumption. Even with increasing urbanization

and migration, it is estimated that 63 percent of India’s population will continue to live in

rural areas by 2025. In terms of economic output, rural India accounts for almost half

(48percent) of the country’s economy, and the rural markets have the potential to reach

$500 billion by 2020. Thus rural areas will continue to remain vitally important to the

Indian economy. However, it is an unfortunate truth that a large percentage of this

population lacks even basic services like education, health, drinking water, sanitation

and employment.

Globalisation, liberalisation and privatization have enabled the entry of several

private traders, including large multinationals, who have transformed the Indian

economy into a vibrant, rapidly growing consumer market. The markets are now flooded

with different kinds of goods and services, substantially effecting and changing the

purchasing pattern of the consumers. The rural markets, which were earlier ignored by

most of the big international market players, are now being seen as a land of great

business opportunity. The impact of globalisation is being felt in rural India as much as

in urban. But it is slow. However, in the long run it will have its impact on target groups

like farmers, youth and women. In some states, for e.g., the affluent farmers, today

'keep in touch' with the latest information and maximize both ends. They use their cell

phones to be constantly connected to global markets. Surely, price movements and

products' availability in the international market seem to drive their local business

strategies.

1

2

The estimated annual business from rural markets is around 1, 23000 crores,

comprising 65000 crores of FMCG, ` 5000 crores of durables, ` 45000 crores of

agricultural inputs including tractors and Rs. 8000 crores of two wheeler and four

wheelers. Similarly the retail sector has a huge potential for growth and the

opportunities in retail sector is expected to touch $43 billion by the year 2010. The 61st

Round NSS data reveals that the share of expenditure in 2004-05 on food in rural India

was 55 percent of the total expenditure, while non-food expenditure was 45 percent,

thus the growth of food related expenditure has been much lower than the growth of

non-food expenditure. The increase in monthly per capita expenditure on food was of

18.8, while on non-food was of 53.83. The fastest growing non- food expenditure

categories are education, healthcare. Consumer durables are another category that is

growing fast. Rural consumers are now opting for life improving products and services

of real quality or durables that enhance productivity and increase earnings. As the

disposable income of the masses is growing, more and more corporate houses are

entering into the rural markets with their new goods and products. According to experts,

the four factors which influence demand in rural India are- access, attitude, awareness

and affluence. Some companies have successfully used these to influence the rural

market for their products.

In a country like India, where a substantial number of the rural people are living

below the poverty line, having high level

of unemployment and poor literacy level;

consumer awareness continues to

remain low. Several studies have shown

that rural consumers are generally

ignorant and they are also unorganized.

Under these circumstances, the sellers

or the manufacturers, exploit the

consumers. Though, the consumers in India have been provided with various safety

measures against their exploitation, still the sellers and producers are hoarding and

black-marketing the essential goods, involving economic corruption and frequently

cheating the consumers. Rural markets are full of sub-standard goods and duplicity of

3

branded goods is another major problem in rural areas. As there is no check on

production and sale of such products in the rural markets, many consumers of these

goods and products also sustain injuries. Spurious drugs are causing major health

hazards. The vulnerable sections are generally women, children and farmers. It is

common to find that farmers are supplied defective seeds, adulterated pesticides and

other commodities. The expansion of mass media has further given impetus to

consumerism in the rural areas.

The expansion of service sector has added to the problem. Services like

insurance, banking, electricity and medical have expanded in the rural areas without

any checks and balances and the rural consumers continue to be exploited by the

service providers. Deficiency in services is a major area of concern.

Therefore, it has widely been realized that the fate of the consumers cannot be

left to the market forces. In view of this the Government of India has taken a number of

legal measures to protect the consumers by enlarging the scope of consumer

protection. In present situation, consumer protection, though as old as consumer

exploitation, has assumed greater importance and relevance. Now there exist laws and

policies which focus on consumer protection and welfare. Special emphasis is being

given to consumer education so that people become aware about their rights and

responsibilities as consumer and know how to redress their grievances. In India various

Acts intended to protect the consumers directly or indirectly against different forms of

exploitation were enacted from time to time. However, except for the Monopolies and

Restrictive Trade Practices (MRTP) Act, 1969, all the other Acts were mainly punitive

and preventive in nature. Inspite of these Acts the consumers did not have any effective

mechanism or institutional arrangements for the speedy redressal of their grievances

there is also a lack of effective popular movement for consumer protection that has

isolated the consumer and his plight has only increased.

Seeing the pressure mounting from various consumer protection groups and the

consumers themselves the Parliament enacted the Consumer Protection Act in 1986.

Of the various legal remedies, the Consumer Protection Act, 1986 enacted on 24th

4

December 1986 is the principal legal remedy available to the consumers. This is an

important Act which seeks to provide better protection of the interests of the consumers.

Figure 1.1

Rising Rural Prosperity and Changing Consumption Pattern

Trends in percentage Composition of Monthly Per Capita Expenditure of Rural

Consumers since 1987-88

53.6

46.455.0

59.4

63.2

64.0

36.0

36.8

40.645.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

1987-88 1993-94 1999-2000 2004-05 2009-10

food total

non-food total

Figure 1.2

Trends in percentage Composition of Monthly Per Capita Expenditure of

Urban Consumers since 1987-88

40.7

59.3

42.548.1

56.454.7

45.343.6

51.957.5

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

1987-88 1993-94 1999-2000 2004-05 2009-10

food total

non-food total

According to McKinsey Report, by 2020 the rural India will be a market worth US

$ 500-600 billion. Rural consumption levels are also anticipated to equal current urban

levels by 2017. The economy is vibrant, incomes are rising and the habits, preferences

5

and attitudes of rural India are changing rapidly. According to the 66th round of NSSO

survey, the real spending by each person in rural India rose by 6.3 percent in the five

year period from 2004-05 to 2009-10. The year after 2004 saw the government waive

unpaid farm loans, announce pay hikes

for government employees through the

sixth pay commission and put in place

its flagship rural employment guarantee

programme. The survey also shows that

the share of the food basket in total

consumption expenditure is coming

down in rural India. The share of food in

consumer expenditure was 57percent for rural India. In rural India people are spending

less and less on cereals, edible oils and fruits. They are spending more on pulses, milk,

non-vegetarian items and beverages. Consumption of non-food items, which include

consumer durables, education and recreation among others has gone up as a result of

decline in expenditure on food items. Between 1999 and 2009 expenditure on food

increased by about 70 percent among rural families but the spending on education

jumped up as much as 378 percent in rural areas. Even after correcting for inflation, the

expenditure on education increased by a phenomenal 162 percent in rural areas during

the decade.

The NSSO data suggests that there has been an improvement in the living

standards of the rural population. The monthly expenditure in rural India was ` 953.05 in

2009-10, an increase of 64.6 percent from 2004-05. Thus the rural households are

spending more on consumer goods like durables, beverages and services. The breakup

of the expenditure, or how households spent their money, suggests a break away from

mere subsistence for the vast majority. In rural households cereals accounted for only

15.6 percent of expenditure in 2009-2010 down from 22.2 percent in 1999-2000. During

the same period, share of their spending on consumer durables almost doubled to

4.8percent from 2.6 percent. The rise in spending on durables indicates on the overall

increasing affluence of the rural population. Infact when the global recession hit the

urban demand it was the strong rural demand that rescued the economy. All kinds of

6

consumer product companies-from toothpaste marketers and mobile hand set makers

to car makers and television companies have been expanding their rural reach in recent

years.

A number of studies have revealed that the rural consumers have acquired

importance as India is now seeing a dramatic shift towards prosperity in rural

households. Rural India with its traditional perceptions has grown over the years, not

only in terms of income but also in terms of thinking. The purchasing power in rural India

is on steady rise and it has resulted in

the growth of the rural markets. The

market has been growing at 3-4

percent per annum adding more than

one million consumers every year.

According to a study by the National

Council for Applied Economic

Research (NCAER), there are as many

middle income and above households

in the rural areas as are in the urban areas. Moreover, there are almost twice as many

lower middle income households in the rural areas as in the urban areas. At the highest

income level there are 2.3 million urban households against 1.6 million households in

rural areas. As per the NCAER projections, the number of middle income and high

income households in rural India was expected to grow from 80 million to 111 million by

2007. In urban India, the same is expected to grow from 46 million to 59 million. Thus,

the absolute size of rural India is expected to be double that of urban India.

A survey by NCAER, shows the increase in purchase of durables and

expendables by rural consumers in comparison to urban buyers. (Table 2)1

1 NCAER, The Great Indian Market, http://www.ncaer.org/downloads/PPT/thegreatindianmarket.pdf

7

Table: 1.1

Urban Rural Usage Pattern (Per ‘000 households)

Consumer Durables

Urban Rural

2001-2002 2009-2010 2001-2002 2009-2010

Motorcycle 134.3 320.7 109.0 250.9T V 942.8 1258.9 616.3 561.3Car 31.4 52.2 1.6 3.5Consumer Expendables

Urban Rural

2001-2002 2009-2010 2001-2002 2009-2010

Edible Oil 1000.0 1000.0 1000.0 1000.0Shampoos 827.8 1000.0 354.5 458.4Washing Powder 904.7 1000.0 775.4 946.9

The above table displays the figures and selling capacity of the sales force and

also brings forth the fact that there is a steady rise in the purchasing power of the

farmers. The percentage of Below Poverty Line (BPL) families has come to 26 percent

from 42 percent. At present 42 million rural households avail banking service. Scope

provided by the rural market is wide but entry into it brings forth challenges as poor

infrastructure, dispersed settlements, lack of education and a virtually nonexistent

medium for communication.

In India, out of 6, 00,000+ villages, only 10,000 villages have access to organized

retailing. This also has a positive indication that that these villages have fair connection

with the media. The rest, without any guidance or proper awareness are consuming

spurious products. In such interior places the conventional mass media techniques

turns out to be helpless mainly due to two reasons: First, due to lack of network

coverage and secondly even if there is coverage, conviction of people residing in such

interior areas is not easy to be won over. But at the same time the emergence of the

lucrative rural market can also be not forsaken as NCAER reports that rural India is

home to 720 million consumers.

Source: NCAER, The Great Indian Market, http://www.ncaer.org/downloads/PPT/thegreatindianmarket.pdf

8

Table-1.2

Rural and Urban Demand

Category 2001-02

(figures in ‘000)

2009-10

(figures in ‘000)

Growth in

percentage

Edible oil Urban 2328.0 3986.5 71.24

Rural 4681.6 666.2 42.3

Health Beverages Urban 96.5 223.4 131.5Rural 37.0 88.9 140.2

Packed Biscuits Urban 550.4 1091.0 98.2Rural 294.4 521.6 77.1

Shampoos Urban 13.6 31.4 130.8Rural 6.7 16.3 143.2

Toilet Soap Urban 335.9 464.2 38.1Rural 469.4 657.7 40.1

Washing Cake Urban 510.7 616.5 20.7Rural 1351.7 2104.5 55.6

Washing Powder Urban 847.1 1485.4 75.3Rural 1005.2 1847.8 83.8

Source: The Great Indian Market, NCAER

From the above table we can see that percentage increase in demand of edible

oils and packed biscuits are more in urban areas as compared to rural areas. Whereas

in all other items like health beverages, shampoos, toilet soaps, washing cakes and

washing powder the increase in demand is more in rural areas in comparison with urban

areas. Therefore, it indicates that consumption of such items in rural areas is increasing

at a high pace, even higher than the growing demand in urban areas.

Marketing and Research Team, (MART) an organization involved for decades in

rural marketing research, has over the years built up a veritable trove of research on

rural consumers and their consumption patterns. Some of the findings were presented

by the President, MART at the Rural Marketing and Communication Conference

organized by the Federation of Indian Chamber of Commerce and Industry (FICCI) at

Delhi held in 2003. The following are the findings of MART:

1. The rural consumer may not be very educated, but he is certainly astute, with a lot of common sense and practical experience of handling the vagaries and uncertainties of life. He displays great ingenuity and adaptability as evidenced by his learning to repair his tractor, hand pump and motorbike, and finding a host of local solutions in everyday life.

9

2. Though low on economic resources, he does not go in for only 'cheap’ products but looks for value for money. Perception of a premium product is not yet relevant in rural markets, with consumers more concerned with functionality than unnecessary ‘frills’ with a consumer durable. Too many features with a product tend to confuse the rural consumer.

3. Rural consumers are generally mistrustful and wary of urbanities and turned off by their patronizing attitudes. It is not easy for a rank outsider to get the rural consumer to spend money.

4. Brand adherence is high among village consumers. This may not necessarily be on account of loyalties. Limited access to alternatives and lack of information about possible choices do make them 'stick' to tried and tested brands.

5. Brand recognition is often on the basis of logos, symbols, colours rather than the exact brand name. This tendency is partly responsible for the widespread menace of spurious products in rural markets, as it is easy to deceive the rural consumer with look-alikes.

6. A very high degree of involvement characterizes purchase of expensive products like consumer durables. A lot of checking and counterchecking is done to seek reassurance on the soundness of the buying decision. Marketers must embody reassurance and provide opportunity to 'see and touch' the product in their marketing communication processes.

7. Routine is important to a rural consumer's life as a lot of time consuming activities characterize his everyday life. The routine is governed by nature and seasons, not by the calendar or the clock. Sunday is not typically a holiday. In buying processes, the consumer is not in a hurry and cannot be pushed into a hasty purchase for these segments.

8. Rural incomes show a great seasonality for a large segment of farmers. The segment of petty farmers, farm labour, non farm workers and the salaried class show a greater regularity of income patterns so the consumption cycles are also more regular and predictable.

9. On account of far higher degree of inter personal communication characterizing village life and relatively low penetration of mass media, word of mouth is a very effective medium of influence generation. Existing users, dealers, village influential, youth studying or working in urban locations are all consulted before making purchases.

10. The rural youth are increasingly becoming more exposed to urban lifestyles on account of their frequent visits to urban locations either for higher education or for work. Their media exposure to television is also much higher. This makes urban lifestyles an inspirational model for them and their preference for national brands is on the rise.

11. While culture and social norms have a greater hold on rural consumer than urban ones, perceptions, traditions and values vary from state to state, sometimes from region to region. It is, therefore, difficult to work with a pan

10

rural Indian communication package. Two step flow of communication, usingboth opinion leaders and mass media, seems to work better in rural settings.

12. These observations made on the basis of a host of research based inputs make it very clear that rural marketing effort cannot be visualized as a simple extension of the urban marketing process. It is a different market and presents a different set of premises on the basis of which suitable marketing.

Fake Brands and Spurious Products

One of the major problems being faced by the rural consumers is that of fake

brands and spurious products. The brand image of the successful FMCG majors has

been imitated by some of the small regional companies. These fake brands have been

sold mostly in rural areas. Fake products are of two types – counterfeit products and

two pass - off products. Counterfeit products are fake

products that bear identical name of a

product/packaging/graphics/colour scheme and even

same name and address as the genuine manufacturer.

Someone produces these to look exactly like real

products other than the legal owner of the real product,

trademarks and product packaging. Sometimes it

becomes difficult to tell which the real product is. A

rural consumer is brand loyal and understands

symbols better and this also becomes a problem as it is easy to misguide the rural

consumer. The FMCG industry alone has been facing losses of over Rs 5,000 crore per

year, due to counterfeit products, of the Rs. 113,000-crore FMCG market in India.

Counterfeit products result in an annual loss of approximately Rs 30,000 crore to the

industry and Rs 15,000 crore to the Government exchequer. (February 2, 2010, India

PRwire)

Pass- off products use (similar sounding) or is similar in spelling. They use

similar type of packaging or colour or design. These are look-alike products that

resemble the original products, mainly through misspelling of the trademark. For

example, Sunslik instead of Sunsilk, Clemic Plus or Clinic Plus or Cosmic Plus instead

of Clinic Plus, Collegiate for Colgate, Vips Rub or Vives Rub as a pass-off for Vicks

11

Vaporub. They come out with the motive to mislead and cheating ordinary consumers

who are uneducated or in a hurry while purchasing products.

A study conducted by AC Neilson, a leading research agency reveals that FMCG

industry loses around 2500 crores annually to counterfeits and pass- off products. It is

also estimated that top brands in India are estimated to lose up to 30 percent of their

business to fake products. Besides the loss of revenue, the trading companies also face

the loss of damage to brand image and brand loyalty to consumers. Apart from the loss

of revenue and brand image fake products cause immense damage to consumer’s

health. 10 percent of all major soft drinks sold are spurious, while 10-30 percent of

cosmetics, toiletries and packaged food are counterfeits. Fake gold and precious metals

are worth Rs. 60 billion in India.

Another interesting point is that FMCG counterfeit products only come in smallest

size of packing. In the rural segment where fake products thrive, the consumer’s low

purchasing power makes sachets and smaller packs popular. It is in the case of these

small packs that consumers are duped more easily as the quantity is not large enough

for the buyer to discern its quality. This is especially so in sachets of shampoo, hair oils,

detergents and so on.

Figure 1.3

12




diverse media with the advent of modern technology. Advertising is the major or even

the main sources of information about many new products or newly introduced

products. The changes in advertising are in part a response to the rapid growth in

markets due to globalization. Due to the entry of a large number of players in the rural

market and also due to stiff competition there are large numbers of misleading

advertisements in the print and electronic media resulting into exploitation of the

consumers.

The advertising firms are studying consumer behavior to design effective


of the rural areas in the country there is

considerable awareness on various latest products

that are available in the market. This has been

possible due to the penetration of cable and satellite

channels that have brought down the world at the

fingertips of the common man. The media has

13

influenced the mindset of the rural consumers to such an extent that people who have

money start purchasing the products unmindful of the costs, just to satisfy their needs

as well as their ego.







Exploitation of Rural Consumers

With the growth in rural markets and due to poor knowledge about their rights

and lack of skills to take a rational decision based on information about the product or

services, the rural consumers in India are being exploited in many ways. The rural

consumer has been made to endure sub-standard products and services, adulterated

foods, short weights and measures, spurious and hazardous drugs, exorbitant prices,

endemic shortages leading to black marketing and profiteering, unfulfilled manufacturing

guarantees and host of other ills. The rural consumers who generally depend on weekly

markets to purchase essential things are often cheated due to lack of choice.

The rural consumers in India are generally ignorant and they are also

unorganized. Thus, they are exploited by the manufacturers, traders and the service

providers in different way. The rural consumers are not only scattered but also diverse

and heterogeneous. As a result of globalization and liberalization the rural market in

India is the largest potential market in the world. Thus there are vast opportunities for

rural marketing. The manufacturers and traders take advantage of the condition of the

rural consumers. It has been observed that the condition of the rural consumers is

deplorable because they are largely exploited in the rural markets on account of lack of

competition among the sellers. The rural consumers face various problems like

adulteration, short weighing and measuring, lack of safety and quality control in

14

appliances and equipment’s, electrical and mechanical, unfair warranties and


Factors Influencing Buying Behavior

Buying Behavior refers to the buying behavior of final consumers - individuals

and households who buy goods and services for personal consumption. All of

these final consumers combined make up the consumer market. In a broader sense

consumer behaviour includes all the psychological and physiological reasons of

individual consumer’s response to marketing activities. Consumer psychology is based

on the consumer’s knowledge, attitude, intention and motive. Physiology is based on

purchases and uses of goods and services. In nut shell consumer behaviour is the

behaviour exhibited by people in planning, purchasing and using of economic goods

and services.

About 70 percent of India’s population lives in rural areas and Consumers in this

huge segment have displayed vast differences in their purchase decisions and

the product use. Villagers react differently to different products, colours, sizes, etc.

in different parts of India. Therefore, it is important to study the thought process that

goes into making a purchase decision.

Consumer behavior is complex and dynamic and influenced by various factors

Enormous literature is available on the factors that influence the buying behaviour of the

rural consumers. Scholars have examined and analyzed the

various factors that affect buying behavior of rural consumers. Some of the important

factors are:

1. Environment of the Consumer -

The environment or the surroundings, within which the consumer lives, has a very

strong influence on the buyer behavior, e.g. Electrification, water supply

affects demand for durables.

15

2. Geographic Influences -

The geographic location in which the rural consumer is located also speaks

about the thought process of the consumer.

3. Family –

It is an important buying decision making organization in consumer markets. Family size

and the roles played by family members exercise considerable influence on

the purchase decisions. Industry observers are increasingly realizing that at times,

purchase of durables has less to do with income, but has more to do with the size

of the family & that’s where rural India with joint family structures, becomes an

attractive proposition.

4. Economic factors-

The quantum of income & the earning stream are one of the major deciding factors,

which determine to a great extent, what the customer will be able to buy. Many people

in the rural market are below poverty line & for large number of people, agriculture is the

primary occupation. More than 70percent of the people are in small-scale agricultural

operation. These factors affect their purchase decisions.

5. Place of purchase-

This is another important factor which influences the purchase decision of consumers.

Consumers prefer haats due to better quality, variety & price). Companies need

to assess the influence of retailers on both consumers at village shops and at haats.

6. Awareness to Urban Lifestyles-

Due to increase in mobility and migration from rural to urban areas the extent of

exposure of rural consumers to urban lifestyles also influences their buying behavior.

7. Cultural Influences

Cultural factors exert the broadest and deepest influence on consumer behavior.

Culture is the most basic element that shapes a person’s wants and behaviour. In India,

there are so many different cultures, which only gives rise to a variety of goods and

services which are culture specific.

16

Some of the few cultural factors that influence buyer behaviour are:

1. Product: In the rural areas due to illiteracy and ignorance the colour, size, design

and shape are the factors on which the consumers rely in making their purchase

decisions.

2. Social practices: India is a mosaic of cultures. It is a traditional society influenced by

various social practices and customs. There are so many different cultures, and

each culture exhibits different social practices. This also influences their buying

behavior.

3. Decision-making by male head: India continues to be a patriarchal society. The male

in Indian culture has always been given the designation of key decision maker.

In a house the male head is the final decision maker. In rural areas, this trend

is very prominent.

4. Changes in saving and investment patterns: In the recent past the savings and

investments patterns have also undergone a change. The rural consumers invest in

from gold, land, to tractors, VCR’s, LCV’s.

Brand Loyalty and Purchase Decision

The brand loyalty in the rural areas is much higher as compared to the urban

ones. But building brands in rural areas is different. This requires a specific committed

focus and may not happen as spill over from urban market or by doing slight

modification in communication and brand building efforts that were planned for urban

markets to successfully build their brand in the rural markets. A brand is recognized in

the rural market with the help of colours, visual effect or any other identification rather

than name which facilitates easy brand recall. But some brands are known by their

names, for example, Nirma and Pan parag also.

The challenges in creating a brand identity in rural area involve the need to relate

the brand with the rural lifestyle and behaviour, with appropriate status symbols, or with

the rural environment. As most brands are introduced in urban markets and then move

17

to rural, creating a brand identity in rural markets is really a tough job. An urban

individual is free to take independent purchase decision. In a village, because of strong

social structure, including caste consideration and low literacy level, community decision

making is quite common.2

Indian Rural Market – The 4 A’s approach3

The rural market may be appealing but it is not without its problems: Low per

capita disposable incomes that is half the urban disposable income; large number of

daily wage earners, acute dependence on the vagaries of the monsoon; seasonal

consumption linked to harvests and festivals and special occasions; poor roads; power

problems; and inaccessibility to conventional advertising media. However, the rural

consumer is not unlike his urban counterpart in many ways. The more daring MNC’s are

meeting the consequent challenges-availability, affordability, acceptability

and awareness. (the so-called 4 A’s)

Availability

The first challenge is to ensure availability of the product or service. India's 627,000

villages are spread over 3.2 million sq km; 700 million Indians may live in rural

areas, finding them is not easy. However, given the poor state of roads, it is

an even greater challenge to regularly reach products to the far-flung villages.

Affordability

The second challenge is to ensure affordability of the product or service.

With low disposable incomes, products need to be affordable to the rural consumer,

most of who are on daily wages. Some companies have addressed the affordability

problem by introducing small unit packs. Most of the shampoos are available in smaller

2Sandeep saxena, How to manage Brand in Rural Places? http://www.ajtmr.com/papers/vol1issue1/CONSUMER-BEHAVIORIN-RURAL-MARKETING.pdf3Consumer Behavior and Rural Marketing.FT-405M/Consumer Behavior and Rural Marketing/Prof. Arpit Loya1,Module,14RURAL CONSUMER BEHAVIOR,http://www.sapientindore.org/sm/mba/semiv/405M/Rural%20Consumer%20Behavior.pdf

18

packs. Fair and lovely was launched in a smaller pack. Colgate toothpaste launched its

smaller packs to cater to the travelling segment and the rural consumers.

Acceptability

The third challenge is to gain acceptability for the product or service. Therefore, there is

a need to offer products that suit the rural market. With large parts of rural India

inaccessible to conventional advertising media — only 41 per cent rural households

have access to TV — building awareness is another challenge.

Awareness

Brand awareness is another challenge. Fortunately, however, the rural consumer

has same likes as the urban consumer — movies and music — and for both the urban

and rural consumer, the family is the key unit of identity. However, the rural consumer

expressions differ from his urban counterpart. Outing for the former is confined to local

fairs and festivals and TV viewing is confined to the state-owned Doordarshan.

Consumption of branded products is treated as a special treat or indulgence.

Buying Behaviour and Decision Making Process

As discussed earlier consumer buying behaviour refers to the buying behaviour

of the ultimate consumer. A person buying his regular needs of daily use and groceries

will identify the need and purchase from the nearest shop. It is in the purchase of high-

involvement products that a rural consumer displays different motives relating to the

problem recognition, source of information, evaluation procedures, collective decision

and different post purchase behavior. This creates need to treat each stage of the

marketing process differently for rural and urban consumers. When purchasing any

product, a consumer goes through a decision process. This process consists of up to

five stages:4

- Stage 1: problem recognition,

- Stage 2: information search,

- Stage 3: evaluation of alternatives,

4 superprofesseur.com/19.html

19

- Stage 4: purchase decision

- Stage 5: post purchase behaviour

The length of this decision process will vary. A consumer may not act in isolation

in the purchase, but rather may be influenced by any of several people in various roles.

The number of people involved in the buying decision increases with the level of

involvement and complexity of the buying decision behaviour. Consumer’s buyer

behaviour and the resulting purchase decision are strongly influenced by cultural, social,

personal and psychological characteristics. An understanding of the influence of these

factors is essential for marketers in order to develop suitable marketing mixes to appeal

to the target customer.

Factors Affecting the Decision Making Process5

A consumer decision-making style is defined as a mental orientation

characterizing a consumer’s approach to making choices. It has cognitive and affective

characteristics (for example, quality consciousness and fashion consciousness). In

essence, it is a basic consumer personality, analogous to the concept of personality in

psychology.

Factor one: This factor measures a perfectionist, high-quality conscious

consumer characteristic. Items loading on this factor measure a consumer’s search for

the very best quality in products. Those consumers higher in perfectionism could also

be expected to shop more carefully, more systematically, or by comparison. They are

not satisfied with the “good enough” product.

Factor two: This factor identifies a brand conscious, “price equals quality”

consumer characteristic. It measures consumers’ orientations toward buying the more

5 A Methodology for Profiling Consumers’ Decision–Making Styles ,Sproles , George B; Kendall, Elizabeth L, The Journal of Consumer Affairs (1986-1998); Winter 1986; 20, 2; ABI/INFORM Complete ,Pg 267

20

expensive, well-known national brands. High scorers are likely to believe that a higher

price means better quality. They appear to have positive attitudes toward department

and specialty stores, where brand names and higher prices are prevalent. They also

appear to prefer best selling, advertised brands.

Factor three: This factor measures a novelty-fashion conscious consumer

characteristic. High scorers on this characteristic are fashion conscious and apparently

novelty conscious as well. They are likely to gain excitement and pleasure from seeking

out new things. They keep up-to-date with styles, and being in style is important to

them. Variety-seeking also appears to be an important aspect of this characteristic.

Factor four: This measures a recreational and hedonistic shopping

consciousness characteristic. Those scoring high on it find shopping pleasant; they

shop just for the fun of it. In previous research, this was a “shopping avoider” or time-

saver factor, and thus several items load negatively on it. However, the loadings show

that this factor measures shopping for recreation and entertainment.

Factor five: This measures a price conscious, “value for money” consumer

characteristic. Those scoring high look for sale prices and appear concerned with

getting the best value for their money. They are likely to be comparison shoppers.

Factor Six: This factor measures an impulsive, careless consumer orientation.

Sequential Stages to represent the purchase and consumption Process6

There are certain stages which clearly represent the buying behaviour of

consumer’s .The four stages are briefly described below:-

6 Asian Journal of Technology & Management Research [ISSN: 2249 –0892] Vol. 01 – Issue: 01 (Jan -Jun 2011)

21

Access- the first step is to provide access to the product/services for consumer within rural areas. Access pertains to physical access as well as the economic access.

Buying Behaviour- this stage encompasses all factors impacting decision making and choice within a rural area. Example of these factors includes perception, attitude and consumer responses such as brand loyalties.

Consumer Characteristics- the specific products/services that are purchased and consumed may be different in each area. The cultural orientation and serial class distribution will determine consumption pattern within a culture.

Disposal-many rural areas are becoming more environmentally conscious and are moving away from throw away products. Hence marketers need to design systems to facilitate the safe disposal, recycling, resale of products. They also meet their social especially in relation to public safety responsibilities and environmental pollution.

Need of the Study

The reports of National Commission for Applied Economic Research clearly

reveal that the rural growth rates have already outpaced urban ones and will continue to

do so through the next decade. Rural India accounts for more than 50 percent of the

GDP. Out of 62.97 million households of India those who are getting more than 5 lakhs

per annum, nearly 28.68 million households (46percent) live in Rural India. The rural

market in India is projected to be bigger than the urban market for fast moving

consumer goods; rural consumption expenditure is accounted for around 60 percent of

the country's total consumption expenditure. Due to rising rural prosperity the taste,

preferences and consumption pattern of the rural consumers is undergoing a change.

The demand for products and services is increasing in the rural areas. Rural consumers

also tend to buy products that were earlier mainly for the urban consumers. Keeping this

in mind, the need was felt to evaluate and assess the buying behavior of the rural

consumers and the factors that determine his purchase decisions. It is equally important

to understand the level of awareness among the rural consumers about various

consumer protection issues and that provide him a safety mechanism in the market.

There is no doubt that unfair trade practice is very common in the rural markets.

Moreover in terms of quality, potency, weights and measures, adulteration the rural

consumers are often taken for a ride mainly due to ignorance and absence of redressal

mechanism. Therefore the focus of the present research work is to evaluate the

22

changing profile of the rural consumers; understand the buying behavior and the factors

that influence buying decision and also assess the rural consumers’ current knowledge,

attitudes, behaviour and practices while purchasing goods or availing services under the

backdrop of level of consumer’s awareness in different parts of rural India.

Objectives of the Study

The main objectives of the study are as follows:

1. To evaluate the changing profile of the rural consumers in India

2. To examine the rural consumers’ knowledge, attitudes, behavior and practices while purchasing goods or availing services.

3. To study the buying behavior and factors that influence the purchase decisions of the rural consumers

4. To assess the level of satisfaction of the rural consumers regarding various products and services available in the rural areas

5. To understand the level of awareness of rural consumers on various consumer protection measures initiated by the Government of India and other agencies.

6. To draw conclusions from the study and suggest measures for better protection of rural consumers.

Methodology

The present study is an empirical research based on both primary and secondary

data. It is a blend of both descriptive and analytical methods of study. The secondary

data was collected from government publication, books, journals, newspapers and

various prominent Voluntary Consumer Organizations working in this area. The

information regarding level of satisfaction, awareness, attitude and behavior of rural

consumers at individual and household level was gathered through primary surveys. For

the purpose, an interview schedule was prepared. The questionnaire was subjected to

reliability by pre-testing the constructed tools by administering it to 100 consumers

randomly. The questionnaire was modified based on the responses from the

consumers. Besides focus group interaction, search conferences were also held to

elicit the views of the stakeholders.

23

Sample Plan

The sample areas were selected in a way that they can best represent the

developed and underdeveloped sate of the country therefore Maharashtra as developed

and Bihar as underdeveloped state were selected. From each State two Districts and

from each district two blocks were randomly selected. 270 households were covered

from different parts of each respective district. From each block, four villages were

randomly selected. It was not difficult to identify a consumer as everyone is a consumer

and either buys a product or avails a service for consideration. The households from

these villages were selected by random sampling technique. Total sample of 1080

households was taken for investigation from 24 villages (45 household from each

village) spreading across four Districts of two selected states. The data so collected was

analyzed and tabulated. Appropriate statistical methods were applied to classify and

analyze the data, collected on the subject. The information collected through the

questionnaire was analyzed with the help of SPSS, interpreted and presented in a

report form. The Report is divided into five chapters

24

Work Plan and Timeline

Work Plan Months

1 2 3 4 5 6

Phase 1- Preliminary work

Phase 2- Collection of Primary and Secondary Data

Phase 3- Data Analysis and Report writing

Phase 4- Final Report Preparation and Plan formulation

25

Profile of Rural Consumers

Introduction

The rural population in India comprises the core of Indian society and represents

the real India. According to the 2001 census, there are 5, 80,779 villages in India and

about 74 percent of Indian population lives in these villages. The number of people

living in each of these villages also varies considerably. It is found that most of the

Indian villages have a population of less than 10,000 while there are only a few villages

where more than 10,000 people live (Table 1). The country opened up its economy in

1992 and since then due to globalisation and liberalisation the market is flooded with

new products and services. Technological revolution and information explosion have

also given tremendous boost to consumer culture. The consumers have been sucked

into the market economy and today the market determines the needs and preferences

of the consumers. This consumer culture and the changing consumption pattern is now

not only confined to the urban areas but is going deep down to the rural markets. The

rural markets are the new hunting grounds for the business.

Table: 1

Location and Concentration of Rural Population

Population Range

(No of Persons)

Number of

Villages

Proportion to

Total Village

Proportion to

total Rural

Population

Less than 200 103952 17.9 1.7

200 to 499 141143 24.3 7.8

500 to 9991 144998 25 16.8

1000 to 1999 114395 19.7 25.7

2000 to 4999 62915 10.8 29.8

5000 to 9999 10597 1.8 11.2

10000 and above 2779 0.5 7.0

Total 580779 100 100

Source: Census of India, 2001

2

26

India Brand Equity Foundation (Trust established by Ministry of Commerce with

the Confederation of Indian Industry) reports7 that the fast moving consumer goods

(FMCG) industry is the fourth largest sector in the Indian economy and creates

employment to three million people in downstream activities. The current Indian market

at present is estimated to be in size of 13.1 billion dollar, which is expected to rise to

33.4 billion dollar by 2015. Also, FMCG and retail giants are making good use of

technology to reach out to rural India. From low-cost handsets to tablet PCs, the Indian

FMCG and retail sector is latching on to technology and applications to reach out to

rural India.

According to NCAER, in 2009, of the 222 million households in India, the

absolutely poor households (annual incomes below 45,000) accounted for only 15.6

percent of them or about 35 million (about 200 million Indians). Another 80 million

households are in income levels of 45,000-90,000 per year. CIA World Fact book

indicates 72 percent of Indians belongs to rural India. Hence a good enough proportion

is distributed mostly in rural area, which offers excellent opportunity for FMCG industries

and retailers. The consumer durable market in rural India will witness a 40 percent

growth in the next fiscal, as against the current growth rate of 30 percent. The sudden

enhancement is due to the change in lifestyle and higher disposable income of the rural

populace. These statistics along with increase in disposable income of rural population

proportionately accompanied by their desire to improve existing lifestyle has created the

necessary excitement within the producers.

The arenas of untapped rural mass has provided a scope away from the

saturated market scenario to develop new market with existing products The bottom of

the pyramid (BoP) is made up of the mass and needs to be addressed to ensure

sustainable growth in India. The consumers at the BoP are fairly ambitious in their

attitude. These consumers are focused on improving their lives, use education as a tool

7 The Great Indian Bazaar, India Brand Equity Foundation, http://www.ibef.co.in/download/indianbazaar_jan19.pdf

27

to improve life and dream big for their children. The following data by FICCI-Nielsen is a

witness to this: Figure 1

Figure: 1

Source: Report: Challenges Before An Integrated India:Bridging The Urban-Rural Divide,2009


reveals that the rural growth rates have already outpaced urban ones and will continue

to do so through the next decade. Rural India accounts for more than 50 percent of the

GDP. Out of 62.97 million households of India those are getting more than 5 lakhs per

annum, nearly 28.68 million households (46 percent) live in Rural India. The rural

market in India is projected to be bigger than the urban market for fast moving

consumer goods; rural consumption expenditure is accounted for around 60 percent of

the country's total consumption expenditure. The rural consumers need to be educated

about their rights and adequate steps be taken to ensure that they get the value for their

money as consumers.

The Indian rural consumer lives in around 600,000 villages across the country

and they account for over 70 percent of the population of the country. While the rural

consumer is generally seen as the less affluent, as compared to his urban cousin,

things are changing in rural India over the last ten years. Like any market that has seen

a demand and awareness boom, rural India has been witnessing considerable rise in

28

purchasing power. A change in consumption patterns and access to communication

media have made rural market a vital cog in the sales-growth wheel, especially with

demand for many categories of products and services plateauing in the urban markets.

Inspite of increasing number of rural consumers, provisions for consumer protection and

welfare are often based on the general standard and circumstances of those living in big

cities and towns. Although consumers as a whole are in an equal bargaining position,

there are certain recognizable groups which are disadvantaged in more ways than the

others. Disadvantaged consumers are those who are less able to assert their rights and

rural consumers comprise one such group. Rural consumers remain disadvantaged as

their right to information, choice, redress, and consumer education are not sufficiently

fulfilled. Consequently such consumers need support in maintaining their rights so that

they can bargain equally with the producers or the service providers.

Literacy

An important characteristic of the population, on which information is obtained in

the census, is literacy. For the purpose of census, a person is deemed to be literate if

he or she can read and write with an understanding of any language. A person who can

merely read but cannot write is not considered as literate. A person could, however, be

a literate without having had any formal education or having passed any minimum

educational standard. Ability to merely sign one’s name is not adequate to qualify a

person as literate. In the earlier Censuses, that is, till 1971, all children of the age of 4

years and less were treated as illiterate, even if some among them attended school and

had picked up reading and writing of a few odd words. However, since 1981, the

population aged seven years and above is to be classified as literate or illiterate. In view

of this, during 2001 Census, the question on literacy was canvassed only for population

aged seven years and above.

As per census of India 2011, Bihar has a total literacy rate of 63.8 percent.

Overall Males and Female literacy rate is 73.4 percent and 53.3 percent respectively.

Literacy rate in Maharashtra has seen upward trend and is 82.9 percent as per 2011

population census. Of that, male literacy stands at 89.8 percent while female literacy is

29

at 75.5 percent. In the literacy ranking, Bihar ranks 35th as compared to Maharashtra at

number 12. (Table 2.1)

Table 2.1

Literacy Rate of Sample Districts

States Districts

Total

Rate Male Female

Literacy

Rank

Bihar

State Total 63.8 73.4 53.3 35

Sitamarhi 42.0 49.1 34.0

Bhojpur 58.6 68.1 48.2

Maharashtra

State Total 82.9 89.8 75.5 12

Kollhapur 72.9 78.7 66.8

Amravati 78.0 81.5 74.2

India 74.0 82.1 53.3

Source : Census of India 2011

The Below Poverty Line is an economic benchmark and poverty threshold used

by the government of India to indicate economic disadvantage and to identify individuals

and households in need of government assistance and aid. It is determined using

various parameters which vary from state to state and within states. The percentage of

population below poverty line in India is 33.8 percent in rural India and 20.9 percent for

urban India. For the sample states of Bihar and Maharashtra the BPL percentage

stands to 53.5 percent for Bihar and 24.5 percent for Maharashtra. The percentage itself

clearly shows the prosperity level of the two states as in Bihar still half of the people are

below poverty line as compared to Maharashtra. (Table 2.1)

Table 2.2

Percentage of Population below Poverty Line

States Rural Urban Total

Bihar 55.3 39.4 53.5

Maharashtra 29.5 18.3 24.5

India 33.8 20.9 29.8


30

As far as employment statistics in the organized sector is concerned, the table

2.3 shows that Bihar lags behind Maharashtra to a large extent. As against 42.55

percent of employment level in Maharashtra the level of employment is only 4.23

percent in Bihar.

Table 2.3

Employment in the Organised Sector - 2010

(Latest As on 31.3.2010) (In lakhs)

States Public Private Total

Bihar 3.96 0.26 4.23

Maharashtra 20.78 21.77 42.55

India 178.62 108.46 287.08


Providing rural India with better access to services, technology, education and

health care will reduce inequality, alleviate poverty for hundreds of millions of India’s

citizen and add an additional engine of growth to India’s bulging economy. Though large

parts of rural India continues to be abjectly poor and dependent upon unprofitable

agriculture business, yet there is a new emerging and expanding rural India as well.

This rural India is prosperous and has money power, consisting of self-employed

people. Thus rural India with significant income growth and employment diversity is a

potential market for business to capture. The rural consumers have now started

demanding life improving products and services of real quality and durables that

enhance productivity and increase earning. Though the penetration of most products in

rural India is still very poor, however, a small penetration of a large population results in

a very large actual market size. Thus rural markets are and will continue to remain

attractive and important.

The study attempts to evaluate the changing profile of the rural consumers in

India, assess the rural consumers’ current knowledge, attitudes, behavior and practices

while purchasing goods or availing services, assess the level of satisfaction of the rural

consumers on various products and services available in the rural areas and this

chapter works out an interplay of the socio-economic profile of the respondents of the

two selected states.

31

Socio-economic Profile of the Respondents

(a) Sex, Family Profile, Age Profile and Educational Status

The respondents for the study from various strata of the society so as to make it

a representative sample. Males constituted 82.2 of the sample size whereas 17.8

percent were females (Table (2.4 i)). As far as the educational level of the respondents

is concerned, 15 percent had no schooling, 11.3 percent of them had attended school

up to the primary level, 20.7 percent had middle schooling, 25.7 percent had studied up

to high school, 18.9 percent had schooling up to intermediate level and 6.7 percent

were Graduates. Post graduates consisted of 0.9 of the respondents (Table 2.4 (ii)).

Rural consumers across different age groups were interviewed to understand

their buying behavior. As far as the age is concerned, only 12.5 percent of the

respondents were below 20 years of age. 24.1 percent belonged to the age group

between 21 -30 years, 31.1 were from the age group of 31-40 years, 17.7 percent were

within 41-50 years of age and 14.6 percent of the respondents were above 50 years of

age. Joint family is still the norm in rural areas, whether it is in developed (Maharashtra)

or backward State (Bihar). 75.4 percent of the respondents interviewed were living in

joint family household and only 24.6 percent were living in single family household

(Table (2.4(i)).

32

Table 2.4 (i)

Sex, Family Profile, Age Profile of Respondents

Gender Family Profile Age Profile

States

Districts

Mal

e

Fem

ale

Join

t

Sin

gle

Bel

ow 2

0 Y

ears

21-3

0

31-4

0

40-5

0

Abo

ve 5

0 Y

ears

Bihar

Aara 90.2 9.8 81.9 18.1 12.6 16.7 17.7 25.6 27.4Sitamarhi 91.2 8.8 60.5 39.5 10.9 23.1 34.9 15.5 15.5Total 91.2 8.8 70.6 29.4 11.7 20.1 26.7 20.3 21.2

Maharashtra

Kolhapur 82.1 17.9 77.9 22.1 14.7 27.4 40 15.8 2.1Amaravati 76.9 23.1 80.1 19.9 12.9 27.9 33.8 15.2 10.2Total 77.9 22.1 79.7 20.3 13.3 27.8 35 15.3 8.7

G.Total 82.2 17.8 75.4 24.6 12.5 24.1 31.1 17.7 14.6

Table 2.4 (ii)

Educational Status of Respondents

Educational Status

States

No

scho

olin

g

Fift

h C

lass

Mid

dle

Cla

ss

Hig

h sc

hool

Inte

rmed

iate

Gra

duat

ion

Gra

duat

ion

Bihar

14 11.6 17.2 25.6 14.9 13 3.8

27 13.9 22.7 16.4 12.6 5.9 1.2

21 12.8 20.1 20.8 13.7 9.3 2.4

Maharashtra

4.2 6.3 24.2 31.6 27.4 4.7 3.2

9.7 10.7 20.6 29.9 22.9 3.2 1.5

8.7 9.9 21.3 30.2 23.7 4.4 1.8

G.Total 15 11.3 20.7 25.7 18.9 6.7 0.9

(b) Number of Members in the Family

As discussed, rural areas are still marked by joint family system of households. The

members of the family live together under the same roof and most often the number of

members exceeds five, as evidenced from the table 2.5. 44.4 percent of the

33

respondents had more than five members in their family. 21.7 percent had five

members and 20.3 percent had four members. 8 percent of the respondents had three

members in their family, 3.5 percent had two members and 2.1 percent had only one

member in their family. The survey results show that in Bihar 64.2 percent of

respondents say they have more than five members in the family as compared only

districts of Maharashtra.

Table 2.5

Number of Members in the Family

No. Of Members in family

One Two Three Four Five Five +

Aara 1.9 1.9 3.7 8.4 13.0 71.2

Sitamarhi 1.7 4.2 3.4 10.9 21.8 58.0

Total 1.8 3.1 3.5 9.7 17.7 64.2

Kolhapur 1.2 2.4 17.6 32.1 19.4 27.3

AMARAVATI 3.0 4.5 9.3 28.9 28.3 25.9

Total 2.4 3.8 12.1 30.0 25.4 26.4

G.Total 2.1 3.5 8.0 20.3 21.7 44.4

(c) Number of Earning Members in the Family

Rural areas have a high dependency ratio. There are large families with few earning

members who have to bear a huge burden of catering to the needs of all members as

they share a common household. Majority of the respondents (53.8 percent) said that

there was only one earning member in their family and 35 percent had two earning

members. 5 percent had three and 3.9 percent had four earning members in their

family. A very small percent of 1.4 had more than five earning members. 2.5 percent in

Bihar had more than five earning members while it was only 0.3 in Maharashtra. In both

the states majority of the respondents are having only one earning member in their

family. (Table 2.6)

34

Table 2.6

Number of earning members in the Family

States Districts Earner

One Two Three Four Five Five +

Bihar Aara 52.0 31.0 4.8 7.0 1.9 3.3

Sitamarhi 64.5 24.6 3.7 4.2 1.3 1.7

Total 58.3 27.8 4.3 5.6 1.6 2.5

Maharashtra Kolhapur 45.9 43.8 7.3 2.4 0.6 0.0

Amravati 52.7 40.4 4.2 1.8 0.3 0.6

Total 49.3 42.1 5.8 2.1 0.5 0.3

G.Total 53.8 35.0 5.0 3.9 1.0 1.4

(d) Number of Family Members Living in Towns/ Urban Areas

The villages surveyed did not have a high migration of members to urban areas

or towns.76.8 percent of the respondents said that they had no family member living in

town/urban areas. 12.2 percent respondents had only one member of their family living

in town/urban areas, 6 percent had two members, 2.6 percent had three and 2.3

percent had more than three family members living in town or urban areas.

Table 2.7

Number of Members of the Family Living in Town/ Urban Area

State Number of members

Districts One Two Three Three+ None

Aara 24.7 11.2 9.3 7.4 47.4

Sitamarhi 16.8 9.2 0.8 2.1 71.0

Total 20.5 10.2 4.9 4.6 59.8

Kolhapur 7.3 4.2 0.0 0.0 88.5

AMARAVATI 3.3 1.2 0.9 0.3 94.3

Total 4.6 2.2 0.6 0.2 92.4

G.Total 12.2 6.0 2.6 2.3 76.8

35

The survey results for the two states clearly show that migration level in the state of

Bihar is on the higher side as compared to Maharashtra. Nearly 30.7 percent of their

households have one or two members of the family living in town/urban areas. (Table

2.7)

(e) Monthly Income and Monthly Expenditure of the Respondents

The purchasing power of an individual depends upon his income. With the rising

rural prosperity and also in the era of globalization and liberalization the markets have

become tempting therefore it is important to know the income of the respondents. The

survey revealed that majority of the respondents (44.4 percent) had a monthly income

between ` 2000 - 5000.

Table 2.8

Monthly Income and Monthly Expenditure of the Respondents

Monthly Income Monthly Expenditure

Bel

ow-

2000

2000

-500

0

5000

-100

00

1000

0-20

000

2000

0-40

000

Mor

e th

an 4

0000

Bel

ow-

2000

2000

-500

0

5000

-100

00

1000

0-20

000

2000

0-40

000

Mor

e th

an 4

0000

Aara 37.8 36.5 10.8 7.9 3.3 3.7 49.5 25.8 14.9 6.9 2.3 0.6Sitamarhi 55.0 22.3 10.1 9.7 2.5 0.4 67.0 19.7 8.1 3.7 1.5 0.0Total 46.4 29.4 10.5 8.8 2.9 2.1 58.3 22.8 11.5 5.3 1.9 0.3

Kolhapur 23.6 39.7 17.2 8.5 4.4 6.6 22.6 49.6 15.2 8.5 2.4 1.7AMARAVATI 33.1 42.6 15.2 4.1 1.8 3.2 52.7 30.1 13.3 2.1 1.4 0.4Total 28.4 41.2 16.2 6.3 3.1 4.9 37.7 39.9 14.3 5.3 1.9 1.1

G.Total 37.4 35.3 13.3 7.6 3.0 3.5 48.0 31.3 12.9 5.3 1.9 0.7

The group with less than ` 2000 monthly income constituted 37.4 percent, 35.3

percent had monthly income between `. 2000- `5000. 13.3 percent of the respondents

had income between ` 5000-10000, 7.6 percent had monthly income between `10000-

20000. Those whose income was more than Rs. 40000 constituted 3.5 percent of the

sample size. As far as comparative monthly incomes of the two states is concerned in

Bihar and Maharashtra the highest monthly income in Bihar was below `2000 as per

36

46.4 percent of respondents of Bihar and for Maharashtra it was between ` 2000-5000

as per 41.2 percent of the respondents.

The expenditure incurred depends upon the income earned. As evidenced from

the above table, 48 percent respondents incurred expenditure below `2000, 31.3

percent had monthly expenditure between `2000-`5000 a month. 12.9 percent spend

between `5000- ` 10,000 a month. 5.3 percent spend between `10,000 and `20,000,

1.9 percent between `20,000 and `40,000. A very small percent of respondents (0.7

percent) spend around ` 40,000 in a month. The expenditure pattern of both the states

shows interesting results as in Bihar for most of the respondents the expenditure is

below ` 2000 (58.3 percent) and in Maharashtra the expenditure is ` 2000-5000 (39.9

percent) (Table 2.8)

37

Buying Behaviour and Spending Pattern of the Rural

Consumers

Rural market has created some distinguished demands for products which are

now specialized categories for many of the companies marketing their products in India.

Due to wider penetration of media and allied

services in rural areas, consumers nowadays

have become more knowledgeable and

empowered, which gives opportunities for

many firms to design and develop products

which suit rural market requirements. The

country opened up its economy in 1992 and

since then due to globalisation and

liberalisation the market is flooded with new

products and services. Technological

revolution and information explosion have also

given tremendous boost to consumer culture. The consumers have been sucked into

the market economy and today the market determines the needs and preferences of the

consumers. This consumer culture and the changing consumption pattern are now not

only confined to the urban areas but are going deep down to the rural markets. The

rural markets are the new hunting grounds for the business.

Consumer behavior in rural marketing is a behavior which is exhibited by people

in planning, purchasing and using of economic goods and services. Now-a-days the

consumers’ tastes and preferences have changed their lifestyle. The change in lifestyle

of rural households is affecting their consumption patterns bringing a noticeable change

in their living standard. The lifestyle changes can be seen with respect to food

consumption, fashion trends, entertainment, and use of technology. The Indian market

has seen a tremendous change in lifestyle of a common man. The remarkable change

3

38

in urban lifestyle has trickled across the rural population too. Island of poverty still exists

but most of the rural area has transformed

beyond imagination. A few decades ago rural

consumer was a silent person who

uncomplainingly purchased the goods. But

this is not so today. Now the consumer is

choice empowered. The companies of late

have started recognizing the potential of the

rural market. The changing lifestyle, higher

education, better per capita income of the

rural consumers and high growth rate of the rural economy has forced the companies to

redesign their marketing strategies. They have started focusing on the changing tastes

and demand of the new modern rural consumers.

This change in consumption pattern is observed due to enhanced awareness,

expansion of information technology, changes in consumer taste, preference and

income at micro level, structural shift in the overall environment at macro level and more

importantly governmental intervention through legislations. It ultimately affects the

buying behavior of consumers. The research study indicates that the rural consumers

are becoming quality conscious in their food consumption, like dining outside and

preference for fast food, readymade items is increasing as it reflects affluence and

saves women's time. In fashion, they are opting for branded outfits and latest fashion

trends which further reinforce the affluence of rural consumers. A higher trend of outings

and visits to restaurant and movie halls is visible. Media, especially television has a

major role in this emerging consumption pattern.

Rural Consumer: Change in Mindsets

The rural consumers are having the mindset which is taking turn towards

comfortable and stylish life-style conditioned with utility and economy based behavior.

They exhibit certain behavior unique to rural settings and this makes it important for

marketers to understand rural consumers through appropriate research. They have

39

greater trust in products and services endorsed by the government and its agencies.

They are more brand loyal, as habits once formed are difficult to change and they tend

to feel a sense of pride in getting a good deal rather than paying premium prices for

products and services. That’s why while formulating framework for rural markets,

marketers should focus around: plugging the segments with the right product, using

value for money pricing, selecting the most appropriate channel of distribution, building

long term relationships with the customers.

Furthermore, the consumption of the Indian rural consumer is fast increasing.

The age old habits and lifestyle of the rural people of India has changed significantly.

Uses of consumer durable goods along with

the daily commodities have increased very

rapidly. The advent of media and globalization

has significantly changed the lifestyle of Indian

rural masses. The data indicates that the Indian

rural consumers have reduced their

expenditure on food articles and increased

expenditure on non-food articles. Marketers

should try to understand the psychology of the

rural consumers before designing the product for them. The goods designed for the

urban market and then pushed into the rural market may not attract the rural

consumers. The whole dynamics of rural market is so different that one needs to think

beyond 4Ps and adopt 4As of marketing. The 4A’s of Marketing are: Affordability,

Acceptability, Availability, and Awareness.

The rural consumer is generally seen as the less affluent, as compared to his

urban counterpart but things are changing in rural India over the years. Like any market

that has seen a demand and awareness boom, rural India has also been witnessing

considerable rise in purchasing power. A change in consumption patterns and access to

communication media have made rural market a vital cog in the sales-growth wheel,

especially with demand for many categories of products and services plateau in the

urban markets.

40

Marketing and Research Team, (MART) an organization involved for decades in

rural marketing research, has over the years built up a veritable trove of research on

rural consumers and their consumption patterns. Some of the findings were presented

by the President, MART at the Rural Marketing and Communication Conference

organized by the Federation of Indian Chamber of Commerce and Industry (FICCI) at

Delhi held in 2003. The following are the findings of MART:

1. The rural consumer may not be very educated, but he is certainly astute, with

a lot of common sense and practical experience of handling the vagaries and

uncertainties of life. He displays great ingenuity and adaptability as evidenced

by his learning to repair his tractor, hand pump and motorbike, and finding a

host of local solutions in everyday life.

2. Though low on economic resources, he does not go in for only 'cheap’

products but looks for value for money. Perception of a premium product is

not yet relevant in rural markets, with consumers more concerned with

functionality than unnecessary ‘frills’ with a consumer durable. Too many

features with a product tend to confuse the rural consumer.

3. Rural consumers are generally mistrustful and wary of urbanities and turned

off by their patronizing attitudes. It is not easy for a rank outsider to get the

rural consumer to spend money.

4. Brand adherence is high among village consumers. This may not necessarily

be on account of loyalties. Limited access to alternatives and lack of

information about possible choices do make them 'stick' to tried and tested

brands.

5. Brand recognition is often on the basis of logos, symbols, colours rather than

the exact brand name. This tendency is partly responsible for the widespread

menace of spurious products in rural markets, as it is easy to deceive the

rural consumer with look-alikes.

41

6. A very high degree of involvement characterizes purchase of expensive

products like consumer durables. A lot of checking and counterchecking is

done to seek reassurance on the soundness of the buying decision.

Marketers must embody reassurance and provide opportunity to 'see and

touch' the product in their marketing communication processes.

7. Routine is important to a rural consumer's life as a lot of time consuming

activities characterize his everyday life. The routine is governed by nature and

seasons, not by the calendar or the clock. Sunday is not typically a holiday. In

buying processes, the consumer is not in a hurry and cannot be pushed into a

hasty purchase for these segments.

8. Rural incomes show a great seasonality for the segment of large farmers. The

segment of petty farmers, farm labour, non-farm workers and the salaried

class show a greater regularity of income patterns so the consumption cycles

are also more regular and predictable.

9. On account of far higher degree of inter personal communication

characterizing village life and relatively low penetration of mass media, word

of mouth is a very effective medium of influence generation. Existing users,

dealers, village influential, youth studying or working in urban locations are all

consulted before making purchases.

10. Among the households with TV ownership, TV viewing is the highest among

women and children who in contrast to the traditional, household head

dominated decision scenario are fast emerging as demand generators for the

household goods. Decisions on durables like radio, TV and two wheelers are

still male dominated decisions, taken in consultation with other people in the

community.

11. The rural youth are increasingly becoming more exposed to urban lifestyles

on account of their frequent visits to urban locations either for higher

education or for work. Their media exposure to television is also much higher.

42

This makes urban lifestyles an inspirational model for them and their

preference for national brands is on the rise.

12. While culture and social norms have a greater hold on rural consumer than

urban ones, perceptions, traditions and values vary from state to state,

sometimes from region to region. It is, therefore, difficult to work with a pan

rural Indian communication package. Two step flow of communication, using

opinion leaders and mass media both, seems to work better in rural settings.

These observations made on the basis of a host of research based inputs

make it very clear that rural marketing effort cannot be visualized as a simple

extension of the urban marketing process. It is a different market and

presents a different set of premises on the basis of which suitable marketing.

Rising Rural Prosperity

Rural consumers have acquired importance as India is now seeing a dramatic

shift towards prosperity in rural households. Rural India with its traditional perceptions

has grown over the years, not only in terms

of income but also in terms of thinking. The

purchasing power in rural India is on steady

rise and it has resulted in the growth of the

rural markets. The market has been growing

at 3-4 percent per annum adding more than

one million consumers every year. According

to a study by the National Council for Applied

Economic Research (NCAER), there are as

many middle incomes and above households in the rural areas as are in the urban

areas. Moreover, there are almost twice as many lower middle income households in

the rural areas as in the urban areas. At the highest income level there are 2.3 million

urban households against 1.6 million households in rural areas. Thus, the absolute size

of rural India is expected to be double that of urban India. The rural households

43

constitute 72.6 percent with a population of 74.6 percent while 27.4 percent constitute

the urban households with a population of 25.4 percent.

Table 1

Percentage Distribution of Households

Area Households Population

Rural 72.6 74.6

Urban 27.4 25.4

All-India

100 100

Source: Social Changes and the growth of Indian Rural Market: An Invitation to FMCG Sector by S. John Mano Raj & Dr. P Selvaraj

The focus of this chapter is on the buying behavior and spending pattern of the

rural consumers in the light of facilities available in the rural areas and also exhibits the

impact of urban lifestyles and craze for branded products due to the advertisements.

Facilities Available in the Village

An emphasis on the development of villages by the various schemes of the

Government has led to the availability of various facilities in the villages. As per the

survey, (Table 3.1), 91.9 percent said they had shops in their villages, 80.4 percent said

they had pukka roads in their village ,78.3 percent of the respondents said they had

electricity , 74.6 percent had telephone facilities in their villages, 71.8 percent said they

had toilet facility and 55.5 percent had televisions. However, Internet facility in villages is

remarkably low as compared to the penetration of other facilities .Only 13.9 percent of

the respondents said they had internet facility in their villages. The availability of facilities

is on the higher trend in state of Maharashtra as compared to Bihar as shown in the

table 3.1.

44

Table3.1

Facilities Available in the Village

PariticularsBihar Maharashtra

G.TotalAara Sitamarhi Total Kolhapur AMARAVATI Total

Electricity 59.1 61.8 60.5 92.1 95.8 94.6 78.3Drinking water 12.1 4.2 7.9 90.9 85.5 87.3 49.5Toilet 69.3 45.0 56.5 90.9 83.1 85.7 71.8Puckka Road 67.4 85.3 76.8 77.0 87.0 83.7 80.4Bank 37.2 35.7 36.4 38.8 27.4 31.2 33.7Post Office 55.8 45.0 50.1 54.5 42.2 46.3 48.1Hospital 27.9 33.2 30.7 49.1 41.6 44.1 37.7Shop 96.3 84.5 90.1 98.8 91.0 93.6 91.9Telephone 83.3 60.1 71.1 75.2 79.2 77.9 74.6Television 58.1 24.4 40.4 70.3 68.7 69.2 55.5Radio 54.4 25.2 39.1 47.3 30.4 36.0 37.5Internet 13.0 3.8 8.2 22.4 17.5 19.1 13.9

Source: Field Survey, CCS

Availability of Shopping Facilities in the Villages

Shops selling different items can be easily spotted in and around near the

villages. 97.2 percent of the respondents said there was a merchandise shop situated

close to their village, 72.6 percent of the respondents had a mobile recharge shop close

by. Availability of chemist shops, sweet shops, shops selling electrical items, jewelry

and clothes in the village or nearby were identified by a considerable percentage of

respondents. The comparative pattern of the facilities available in the two states show

that the prosperity level in the sample villages in Maharashtra is higher as compared to

Bihar as Maharashtra has more cloth, jewellery, electricity and mobile shops than Bihar.

(Table 3.2) The shops are in Maharashtra also much better in terms of infrastructure

and quality as compared to Bihar.

45

Table 3.2

Availability of Shopping Facilities in the Village

ShopsBihar Maharashtra

G.TotalAara Sitamarhi Total Kolhapur Amaravati Total

Merchandise Shop 97.2 96.2 96.7 100.0 96.4 97.6 97.2

Cloth Shops 24.7 45.8 35.8 61.8 51.8 55.1 45.9

Electricity Items 14.4 28.6 21.9 52.7 49.1 50.3 36.7

Sweet Shop 47.0 57.6 52.5 51.5 53.9 53.1 52.8

Jewelry 19.1 28.6 24.1 56.4 43.4 47.7 36.4

Chemist 42.3 54.6 48.8 63.6 52.7 56.3 52.7

Mobile recharge 60.5 73.9 67.5 76.4 77.7 77.3 72.6

Others 25.6 60.1 43.7 69.9 53.3 64.4 54.5


Decision maker in the Family

Patriarchy is a characteristic traditional feature of the Indian society and it is evident to a

greater extent in the villages. How decisions are made in the family is a reflection of

patriarchal norm as 79.7 percent of the respondents said the male head of their family

was the main decision maker. 7.8 percent said the woman as the head of the family was

the decision maker. 10.8 percent of the respondents said that decisions were taken by

consensus. (Table 3.3) Both the states exhibit almost same results as in both the states

the male member as head of the family is the main decision maker.

Table 3.3

Decision maker in the Family

States Districts Male Decision Women Decision maker Children All Members

Bihar

Aara 89.3 5.1 1.4 4.2Sitamarhi 84.5 7.6 1.3 6.7Total 86.8 6.4 1.3 5.5

Maharashtra

Kolhapur 72.7 13.3 4.2 9.7AMARAVATI 73.5 6.9 0.9 18.7Total 73.2 9.1 2.0 15.7

G.Total 79.7 7.8 1.7 10.8


Place of purchase of goods of daily use

The rural consumers have little choice and option while purchasing goods of daily

use. The relationship between the rural consumer and the shopkeeper is of a different

nature as they live in the same village. It’s more of a loyalty and trust and if a product is

46

not good the shopkeeper generally tends to change it and there is no dispute between

the two. The rural consumer prefers to purchase his daily needs from the same shop

even if the items purchased are of not good quality, but the shopkeeper agrees to

change it or refund the amount. It is also a fact that many rural consumers particularly

the poor purchase on credit so they have no choice. Therefore they stick to the

shopkeeper who gives goods on credit. Even though they may not be satisfied with the

products they purchase from him, but they have no alternative as they lack choice. The

consumer does not like to file a complaint or take up the matter with appropriate

authorities, as the shopkeepers generally redress their grievances. Moreover, the rural

consumer thinks that it is a waste of time and money to fight with the shopkeepers.

Buying Goods from a Village Shop/Local haat

With the rise in the purchasing power due to the growing prosperity in the rural

areas of the country, the rural consumer has come to purchase a variety of goods and

also avail a number of services.

Table 3.4

Purchase of Goods of Daily use from Village Shop /Local Haats

Particulars Response

Bihar Maharashtra

G.TotalAara Sitamarhi Total Kolhapur Amravati Total

How often do you go to Village shop

Always 74.0 78.3 76.2 76.7 79.0 77.9 77.0

Sometime 24.1 19.5 21.8 18.5 17.6 18.1 19.9

Never 1.9 2.2 2.1 4.8 3.4 4.1 3.1

When requireYes 91.2 61.8 76.5 81.2 60.8 71.0 73.8

No 8.8 38.2 23.5 18.8 39.2 29.0 26.3

Once in a weekYes 3.7 0.8 2.3 9.7 4.5 7.1 4.7

No 96.3 99.2 97.8 90.3 95.5 92.9 95.3

Once in 15 daysYes 0.9 0.0 0.5 1.2 1.2 1.2 0.8

No 99.1 100.0 99.6 98.8 98.8 98.8 99.2

Once in a month Yes 0.9 0.0 0.5 1.2 1.2 1.2 0.8

No 99.1 100.0 99.6 98.8 98.8 98.8 99.2


Respondents were questioned on how frequently they bought goods from the

village shop. 77 percent of the respondents said they always visited the village shop,

19.9 percent went only sometimes and 3.1 percent never went to the village shop. 73.8

percent visited the shop only when required to make a purchase. 4.7 percent visited

47

only once in a week. 0.8 percent visited once in 15 days or once in a month. The

survey results (Table 3.4) show that in both the states the percentage of respondents

buying products from the village shops whenever there is a requirement is 76.5 percent

for Bihar and 71 percent for Maharashtra. Majority of the respondents in both the states

visit the village shops once in a month.

Reasons for Buying Goods from Village/ Local Haats

The next question of enquiry was as to why do the consumer buy goods from the

village/ kasba and towns. The Respondents were asked the reason why they bought

goods from village/local haats. 35.1 percent of the respondents said they bought from

village/local haats due to facility given by the shopkeeper to purchase on credit. 91.2

percent respondents said they preferred to purchase from village shops because they

were nearer to home. 19.2 percent said they bought because the village shops gave

goods at reasonable price. 17.6 percent bought because they got quality goods from the

village shops. 29.5 percent bought because there was availability of different products

at fair price shops. (Table 3.6) Out of respondents who go to village shops, majority of

the respondents (94.3 percent in Bihar and 88.3 percent Maharashtra) prefer village

shops because they are near to their homes. Based on the availability of good quality

products, 20.3 percent respondents in Maharashtra and 14.9 percent in Bihar bought

from village shops. But this percentage level for quality products is quite low as rural

markets are home for lot of fake and duplicate products. (Table 3.6)

Table 3.5

Reasons for Buying Goods from Village/ Local Haats

Reasons

Bihar Maharashtra G.

TotalAara Sitamarhi Total Kolhapur Amaravati Total

Near to home 97.7 91.2 94.3 89.7 87.7 88.3 91.2

Credit by Shopkeeper 45.6 23.9 34.2 47.3 30.1 35.8 35.1

Fair Price 18.1 9.2 13.5 37.6 17.8 24.3 19.2

Availability of different goods 34.9 8.8 21.2 50.9 30.1 37.0 29.5

Quality Goods 17.7 12.1 14.9 24.7 15.9 20.3 17.6


48

Purchase of Goods from Nearby Kasba/Town

Table 3.6

Purchase of Goods from Nearby Kasba/Town


Bihar Maharashtra

G.TotalAara Sitamarhi Total Kolhapur Amravati Total

How often go to nearby town shop

Always 34.9 24.8 29.6 23.0 13.6 16.7 22.8

Sometime 54.4 45.4 49.7 69.1 51.2 57.1 53.6

Never 10.7 29.8 20.8 7.9 35.2 26.2 23.6

When requireYes 37.2 42.9 40.2 26.7 38.9 34.8 37.4

No 62.8 57.1 59.8 73.3 61.1 65.2 62.6

Once in a weekYes 39.1 8.0 22.7 41.8 12.3 22.1 22.4

No 60.9 92.0 77.3 58.2 87.7 77.9 77.6

Once in 15 daysYes 10.2 5.0 7.5 20.6 9.0 12.9 10.3

No 89.8 95.0 92.5 79.4 91.0 87.1 89.7

Once in a month Yes 3.7 5.0 4.4 4.2 2.7 3.2 3.8

No 96.3 95.0 95.6 95.8 97.3 96.8 96.2


Respondents were questioned on how often do they purchase goods from

nearby towns. 96.2 percent respondents said they visited the towns only once in a

month, 10.3 percent said they visited once in 15 days, 22.4 percent visited once in a

week, 37.4 percent visited only when required and 22.8 percent always went to the

towns when they had to make a purchase. Table 3.5 shows that 29.6 percent of

respondents in Bihar and 16.7 percent in Maharashtra always buy goods from the town

shop and majority of the respondents in both the states visit these towns once a month.

It has also been observed that normally goods of higher value are purchased from the

nearby towns.

Reasons for Buying Goods from Kasba /Towns

Respondents were also asked the reason for buying goods from the Kasba

/towns. Most of the respondents (43.4 percent) bought because of the availability of

different products, 18.5 percent bought because they got quality goods from the

Kasba/towns. 30.1 percent said they bought because these shops gave goods at fair

price. 16.3 percent of the respondents said they bought goods from Kasba /towns

because it is near to their home. Out of the respondents who buy products from

49

kasba/towns, 20.9 percent in Maharashtra and 16.2 percent in Bihar buy products from

Kasba/ towns rather than from village/ local haats due to the availability of quality

products in these shops. (Table 3.7)

Table 3.7

Reasons for Buying Goods from Nearby Kasba /Towns

Reasons

Bihar Maharashtra

G. TotalAara Sitamarhi Total Kolhapur Amaravati Total

Near to home 28.4 22.7 25.6 5.5 8.4 7.0 16.3

More Choice 54.9 20.6 37.8 35.8 29.2 32.5 35.1

Quality Goods 18.1 14.3 16.2 24.5 17.2 20.9 18.5

Availability of

different products 40.0 37.5 38.8 51.5 44.4 48.0 43.4

Fair Price 38.6 6.3 22.5 49.7 25.6 37.7 30.1


Reasons for Buying Goods from Cities

As far as purchasing goods from the cities is concerned, half of the respondents

(51.9 percent) bought because there was availability of different products in cities, 37.7

percent bought because they got quality goods. 22.7 percent preferred these shops due

to fair price of the shop. 13.9 percent said they bought because these shops gave

consumers more choice in goods. Only 2.2 percent of the respondents said they bought

goods from cities because they are near to their home. Table 3.8 clearly shows that in

both the states ,a wide range of quality products are available in the cities therefore

respondents who buy goods from these shops consider it to be a reason good enough

to prefer these shops than village/town shop.

The survey reveals that when it comes to availability of different products as well

as quality goods, consumers prefer to buy from the cities followed by kasba/towns.

50

Table 3.8

Reasons for Buying Goods from Cities

Reasons

Bihar Maharashtra

G. TotalAara Sitamarhi Total Kolhapur Amaravati Total

Near to home 2.8 5.5 4.2 0 0.6 0.3 2.2

More Choice 21.9 17.2 19.6 7.3 9 8.2 13.9

Quality Goods 42.3 38.1 40.2 37.9 32.6 35.3 37.7

Availability ofdifferent products 52.3 61.2 56.8 49.7 44.3 47.0 51.9

Fair Price 28.8 12.6 20.7 37.6 11.7 24.7 22.7Source: Field Survey, CCS

Spending Pattern of Consumers

NSSO data in the recent past has indicated a shift in the taste and preferences of

the rural consumers. Accordingly, the spending pattern has also changed. The

respondents were asked to state in preferential order the items of their expenditure.

42.0 percent of the respondents said they preferred to spend the most on merchandise,

followed by 18.3 percent who spend on health.

Table 3.9

Spending Pattern of Consumers

Particulars Bihar Maharashtra


Merchandise 31.4 40.1 35.8 43.7 52.7 48.2 42.0

Education 11.5 8.1 9.8 14.2 8.1 11.2 10.5

Health 27.2 29.6 28.4 6 10.5 8.3 18.3

Agriculture 15.1 12.6 13.9 9 15.1 12.1 13.0

Cloth 6.5 4.9 5.7 10.5 4.8 7.7 6.7

Cosmetics Products 1.4 0.9 1.2 3.1 0.6 1.9 1.5

Electric goods 0.9 0.5 0.7 2.4 0.9 1.7 1.2

Jewelry 2.8 1.8 2.3 4.8 3.6 4.2 3.3

Entertainment 0.9 0.5 0.7 1.8 0.6 1.2 1.0

Others 2.3 1 1.7 4.5 3.1 3.8 2.7


13 percent on agriculture and 10.5 percent spend on education. Expenditure on

clothes, jewelry, cosmetic products, electric goods and entertainment were other items

of expenditure in the decreasing order of preference. In Maharashtra, the spending

pattern of respondents is higher on merchandise (48.2 percent) as compared to Bihar

51

(35.8 percent). Spending pattern is more on health in Bihar (28.4 percent) as compared

to Maharashtra (8.3 percent). (Table 3.9)

Factors influencing Consumers Buying Behaviour

Different factors are responsible in determining the buying behavior of the

individual. An inquiry into the same was made which revealed that for 73.2 percent of

the respondents price of the product was the determining factor in making the purchase,

14.9 percent of the respondents depended on the brand, 39.2 percent made their

decision based on the quality of the product and 20.1 percent followed the advice of the

shopkeeper. Only 4.9 percent respondents said endorsement by celebrities was the

most important factor which determined their decision. The results clearly show that in

both the states the respondents consider price and quality as prime factors before

buying a product. (Table 3.10) As the purchasing power of the rural consumer is low,

price becomes a major determining factor while purchasing a product.

Table 3.10

Factors influencing Consumers Buying Behaviour


Bihar Maharashtra


PriceYes 92.1 73.5 82.8 66.1 61.1 63.6 73.2

No 7.9 26.5 17.2 33.9 38.9 36.4 26.8

BrandYes 19.5 11.8 15.7 12.7 15.7 14.2 14.9

No 80.5 88.2 84.4 87.3 84.3 85.8 85.1

QualityYes 29.8 24.5 27.2 49.7 52.7 51.2 39.2

No 70.2 75.5 72.9 50.3 47.3 48.8 60.8

Shopkeeper's adviceYes 28.4 19.3 23.9 16.4 16.3 16.4 20.1

No 71.6 80.7 76.2 83.6 83.7 83.7 79.9

Advertised by celebrities

Yes 5.6 5.9 5.8 4.2 3.9 4.1 4.9

No 94.4 94.1 94.3 95.8 96.1 96.0 95.1


Consumers’ Perception of ‘Price’

If price was the determining factor for a consumer to purchase a product, the

respondents were asked as to what price meant for them. 62 percent respondents said

it meant low priced items, 14.3 percent said they would purchase items sold on MRP

52

and 20.2 percent said they would purchase at a cost lower then MRP. 3.5 percent had

no response on the same. Respondents who consider price as main factor influencing

buying decision prefer buying low priced products. Consumers’ perception of price is

reflected in purchasing a low priced item and that is why lot of inferior and spurious

goods are available in the rural markets. Quality is not a major parameter among rural

consumers. Keeping this in view the marketers are launching small low priced products

in the markets. (Table 3.11)

Table 3.11

Consumers Perception of ‘Price’

States Districts

Low price items

MRP Items

Low MRP Items

No answer

Bihar

Aara 74.0 6.0 15.8 4.2

Sitamarhi 66.8 13.0 17.6 2.5

Total 70.2 9.7 16.8 3.3

Maharashtra

Kolhapur 52.7 17.0 26.1 4.2

Amaravati 55.4 19.3 22.0 3.3

Total 54.5 18.5 23.3 3.6

G.Total 62.0 14.3 20.2 3.5


Consumers’ Perception of Brand

As one becomes richer one becomes more brand conscious as well. It is a myth

that rural consumers are not brand loyal. Marketing strategists say that rural consumers

are equally brand loyal and it is difficult to dislodge that loyalty. Rural consumers

preference for lifebuoy soap for so many years speaks of strong brand loyalty. The

respondents were asked for their opinion on how they perceived a product to be

“Branded”. 12.8 percent respondents said branded products were those shown in

advertisements and endorsed by celebrities, 25.5 percent said brand meant good

experience of using the product and for 33.6 percent brand signified quality. 17.7

percent respondents said branded products were those suggested by the shopkeeper,

9.8 percent said those suggested by people were branded products and for 0.6 percent

branded products meant product with standard marks. Respondents, who consider

53

brand as main factor behind buying decision, prefer the brands due to their quality factor

(Maharashtra 39.8 percent and 26.7 percent for Bihar). (Table 3.12)

Table 3.12

Consumers’ Perception of Brand

States Districts

Product that

is Advertised

by Celebrity

Past

experience

High

Quality

Product

Product

Suggested by

shopkeeper

Product

Suggested by

friends/relatives

Products

with

standard

marks

Bihar

Aara 14.4 15.8 22.8 16.7 30.2 0.0Sitamarhi 9.2 29.0 30.3 26.9 2.9 1.7Total 11.7 22.7 26.7 22.1 15.9 0.9

Maharashtra

Kolhapur 13.3 26.7 41.2 12.7 6.1 0.0Amaravati 14.2 28.6 39.2 14.2 3.3 0.6Total 13.9 28.0 39.8 13.7 4.2 0.4

G.Total 12.8 25.5 33.6 17.7 9.8 0.6


Identification of Brand/Quality Goods by Consumers

It is very important that consumers are able to identify branded as well as quality

goods. This will help reduce spurious and imitated products being sold in the rural

markets. Counterfeiting of branded products is a major illegal industry today. This needs

to be checked as it results in severe financial loss to the government as well the

consumers. It is a health hazard as well. The respondents were questioned on how they

identified a branded or a quality product.

Table 3.13

Identification of Brand/Quality Goods by Consumers

States Districts By Name

By Standard

Mark

By Smell

& Color

By

Design

By

Shape

and size

By Company

Name

Bihar


Maharashtra


G.Total 51.5 19.4 10.1 6.4 3.3 9.4


54

Most of the respondents (51.5 percent) said they identified it by name, 19.4

percent identified a branded product by its standard mark, 10.1 percent identified it by

smell and color, 6.4 percent identified it by design, 3.3 percent identified the product by

its shape and size and 9.4 percent identified the product by the name of the company.

On identification of brand , half of the respondents identify them by name (51.4 percent

in Bihar and 51.5 percent in Maharashtra). (Table 3.13)

Consumers’ Perception of Quality

Quality of the product is of paramount importance to the consumer. It is important

that a consumer should get an assured quality of product and services. The

respondents were asked what they meant and understood by “Quality Product.” For

57.6 percent of the respondents, quality implied durability of items, for 14.1 percent

quality product was one recommended by the shopkeeper, while 10 percent

respondents said products bearing standard marks implied quality. 13.9 percent said

only personal experience of prior usage could help determine quality of a product. Most

of the respondents associated quality with high durability of good (60.9 percent in

Maharashtra and 54.5 percent in Bihar). (Table 3.14)

Table 3.14

Consumers’ perception of Quality

States Districts Durability

of the

Product

Products

Suggested

by

shopkeeper

Products

Suggested

by

Friends/

relatives

Products

with

Standard

Mark

Products

with

MRP

Past

experience

Bihar


Maharashtra


G.Total 57.6 14.1 1.7 10.0 2.7 13.9


55

Impact of Advertisement of Goods/Services on Consumers

Advertising through different mediums and channels influences and motivates

the consumers to buy the product or service. Television advertisements influenced 38.1

percent of the respondents in buying a product, Radio advertising influenced 29.5

percent respondents, Newspaper and magazine advertising influenced 24.2 percent

respondents, Internet advertising influenced 11.2 percent respondent and opinions of

friends and family members influenced 32 percent respondents. Other mediums

influenced 19.8 percent respondents. Table 3.15 clearly shows that most of the

respondents are influenced by family members while making their purchase decisions.

Table 3.15

Impact of Advertisement on Consumers

Source Response

Bihar Maharashtra


Television

Large extent 19.5 13.9 16.6 21.2 30.7 27.6 22.3

Some extent 58.6 67.2 63.1 17.6 14.2 15.3 38.1

Not at all 21.9 18.9 20.3 61.2 55.1 57.1 39.6

Radio

Large extent 27.4 35.7 31.8 37.0 22.6 27.4 29.5

Some extent 51.6 42.4 46.8 31.5 53.0 45.9 46.3

Not at all 40.5 45.4 43.0 27.9 32.5 31.0 36.7

Newspaper/magazine

Large extent 20.9 21.8 21.4 31.5 24.4 26.8 24.2

Some extent 16.7 31.9 24.7 47.3 34.9 39.0 32.2

Not at all 42.8 22.7 32.2 24.8 32.5 30.0 31.1

Family Members/Friends

Large extent 28.8 16.8 22.5 45.5 38.3 40.6 32.0

Some extent 43.7 56.3 50.3 42.4 44.3 43.7 46.8

Not at all 27.4 26.9 27.2 12.1 17.5 15.7 21.2

Internet

Large extent 8.8 7.6 8.2 12.7 14.5 13.9 11.2

Some extent 20.5 13.4 16.8 33.3 24.1 27.2 22.2

Not at all 70.7 79.0 75.1 53.9 61.4 59.0 66.6

Others

Large extent 15.3 26.1 21.0 20.0 18.1 18.7 19.8

Some extent 27.4 36.6 32.2 52.7 22.9 32.8 32.5

Not at all 57.2 37.4 46.8 27.3 59.0 48.5 47.7


Consumers Opinion on Buying Branded Goods/Services

Respondents were asked for their preference in buying branded products and services.

5.8 percent respondents “always” and 35.6 percent consumers “some times” bought

branded items. 50.8 percent respondents “never” bought branded items. Further,

56

consumers were asked if they bought look-alikes of branded products which are

available at a lower price. 30.7 percent respondents gave an affirmative response and

18.5 percent said look-alike products were not satisfactory. 50.8 percent did not have

any opinion on the same. (Table 3.16)

Table 3.16

Consumers Opinion on Buying Branded Goods/Services

States Districts

Like to buy branded Items If ‘No’ then Purchase imitating items Always Some time Never Yes No Can’t say

BiharAara 1.9 26.3 71.9 14.9 25.6 59.5Sitamarhi 2.1 28.2 69.7 12.2 28.6 59.2Total 2.0 27.3 70.8 13.6 27.1 59.4

Maharashtra

Kolhapur 10.9 37.3 51.8 37 10.9 52.1Amaravati 8.3 50.7 41 58.7 9 32.2Total 9.6 44.0 46.4 47.9 10.0 42.2

G.Total 5.8 35.6 58.6 30.7 18.5 50.8


Influence of Neighbors /Relatives/Friends on Buying Behavior

People with whom we interact and associate with in our daily lives shape our

behaviour and thinking in many ways. This applies to our buying behaviour as well.

Respondents were asked to state the extent to which they were influenced by the

neighbours, relatives and friends in deciding to make a purchase. 9.7 percent said they

were influenced to a “large extent”, 45.3 percent were influenced to “some extent”

whereas 45 percent said they were “not at all” influenced. The respondents in both the

states are influenced by the neighbors/relatives/friends to some extent. (Table 3.17)

Table 3.17

Influence of Neighbor/Relatives/Friends on Buying Behavior

States Districts Large extent Some extent Not at all

Bihar

Aara 10.2 38.4 51.4

Sitamarhi 6.7 39.6 53.7

Total 8.5 39.0 52.6

Maharashtra

Kolhapur 10.9 53.2 35.9

Amaravati 10.8 50.1 39.1

Total 10.9 51.7 37.5

G.Total 9.7 45.3 45.0


57

Influence of Family Members who live in City/Town on Buying Behavior

Urban lifestyle is remarkably different from rural lifestyle. Members of rural areas

who migrate to urban towns and cities get exposure to distinct urban ways which they

might adopt in a period of time. In their visit and interaction with their family back at

home, they share and impact the lifestyle of their folks as well. Respondents were

asked whether the migrated member of their family influenced their buying behavior.

32.8 percent respondents gave an affirmative response whereas 67.2 percent denied

any such influence. Table 3.18 clearly shows that out of the respondents whose

relatives/family members are there in city/town, (32.5 percent in Bihar and 33.2 percent

in Maharashtra) are influenced by the family members in purchase decisions.

Table 3.18

Impact of Family Members who live in City/Town on Consumers Buying Behavior

States Districts Yes No

Bihar

Aara 39.1 60.9

Sitamarhi 26.5 73.5

Total 32.5 67.5

Maharashtra

Kolhapur 37.6 62.4

Amaravati 31.0 69.0

Total 33.2 66.8

G.Total 32.8 67.2


Nature of Family Members who live in City/Town on Consumers

Family size and the roles played by family members exercise considerable influence on

the purchase decisions. Respondents were further asked to state which aspect of their

lives was most influenced by the views and opinions of the migrated family member.

84.3 percent respondents felt that the sense of dressing and fashion was most

influenced, 89.0 percent felt that their food habits were most influenced. The use of

cosmetics products and FMCG products was the aspect most influenced for 73.8 and

85.1 percent of the respondents respectively. The usage of modern gadgets was the

most influenced aspect for 82.8 of the respondents .The influence is maximum on the

food habits (74.2 percent), dressing sense (66.6 percent), and FMCG products

58

(64.7percent) in the state of Bihar. While in Maharashtra the influence is on dressing

sense (67.4 percent), food habits (59.5 percent) and FMCG (62 percent) .(Table 3.19)

Table 3.19

Nature of Influence of Family Members who live in City/Town on Consumers


Bihar Maharashtra

Aara Sitamarhi Total Kolhapur Amaravati Total G.Total

Dressing Sense/fashion

Large extent 82.5 50.7 66.6 69.7 65 67.4 67.0

Some extent 12.3 18.1 15.2 19.4 19.4 19.4 17.3

Not at all 5.2 31.2 18.2 10.9 15.6 13.3 15.7

Food HabitsLarge extent 81.3 67.0 74.2 67.3 51.7 59.5 66.8

Some extent 13.9 16.7 15.3 25.5 32.8 29.2 22.2

Not at all 4.8 16.3 10.6 7.3 15.5 11.4 11.0

Use of FMCGsLarge extent 74.1 55.3 64.7 63.6 60.3 62.0 63.3

Some extent 11.7 33.2 22.5 19.4 22.9 21.2 21.8

Not at all 14.2 11.5 12.9 17 16.8 16.9 14.9

Cosmetics productsLarge extent 63.9 53.5 58.7 18.8 27.3 23.1 40.9

Some extent 20.5 7.9 14.2 67.9 35.3 51.6 32.9

Not at all 15.6 38.6 27.1 13.3 37.4 25.4 26.2

Modern Gadgets Large extent 62.0 54.7 58.4 11.5 24.8 18.2 38.3

Some extent 23.2 30.5 26.9 77.6 46.6 62.1 44.5

Not at all 14.8 14.8 14.8 10.9 28.6 19.8 17.3


59

Level of Consumers Awareness in Rural Areas

Economic liberalization along with the rise in rural prosperity has opened the

flood gates for rural markets. The rural market is growing fast and touching the lives of

millions of the rural consumers. The rising prosperity in the rural areas and the impact of

media penetration has opened up the rural market for the multinational companies and

other producers. A range of products and services are available to the rural consumers.

However, due to ignorance and lack of information the rural consumer has to endure a

host of ills, such as sub-standard products and services, adulterated foods, short

weights and measures, spurious and hazardous drugs, exorbitant prices along with

unfulfilled manufacturing guarantees. In a market driven economy like ours, the

aspirations of the consumers including the rural consumers is on the rise due to a

number of reasons. Today the rural consumers are being lured by advertisements which

do not really educate the consumer nor provide information to them but only exploit his

ignorance and in the process we forget that the consumer is an important component of

society and every business has an obligation to him/her. The marketers resort to all

sorts of tactics to cheat the consumers especially when the goods are short in supply in

the market. High prices are charged by the producers and consumers have no choice

other than to purchase what is available. Therefore, the consumer is to be protected

from unsafe products, poor quality of goods and services, high prices, unfair trade

practices and misleading advertisements. The best way to empower the consumers is

to educate them and enhance their awareness, therefore if the consumers are to be

protected, it is necessary to educate the consumers and make them aware about the

various mechanisms available to them so that they are able to make a rational decision

while making a purchase.

The welfare of the consumer lies in the fulfillment of their and legitimate

expectations with regards to the goods they purchases and the services they avail. In a

country like India where all the consumer protection laws are in place, the consumers

4

60

are not really aware of them and the mechanism in place to redress their grievances.

Those who know the laws know that the process is very slow and has become

cumbersome. There are a number of steps taken to protect the rural consumer but

without much impact due to the prevailing socio economic conditions of the rural

consumers. They generally base their purchasing decisions on the advertisement

campaigns and promotional strategies employed by the organizations.

Consumers are exploited when they are cheated or when not informed

adequately about the product. Consumer exploitation is in many ways. They may be

exploited by giving incomplete or wrong

information. They may be exploited by sellers

who may weigh less or measure wrongly.

Sometimes, a consumer may be given low

quality of goods. One of the very common and

a serious problem by which a consumer may

be exploited and cheated by the shop-keeper

is by providing impure or adulterated goods

with harmful substances. Food adulteration is

a serious problem in the rural markets where the administrative machinery is not able to

tackle this menace. As far as the service sector is concerned a large number of

complaints regarding medical services, banking, insurance and electricity go unreported

as the consumer is unaware of the redressal mechanism. Cases of medical negligence

are common in the rural areas but then the consumer has no choice.

Consumers not only pay their hard earned money, but also have to undergo the

trauma of suffering from ill health and in some cases even risking their lives due to

spurious products. It is quite common that the rural consumers are unaware about

maximum retail price, expiry and manufacturing date and other information that is to be

provided on the products due to ignorance and illiteracy. The consumers are at risk with

such market practices. Sometimes the producers may deliberately conceal information

and circumstances in which the product must be used or the accompanying devices to

61

be used with the product or circumstances during which a product would not work. In

such situations the consumers feel helpless and trapped.

There are many factors leading the consumer exploitation in rural areas. Illiteracy

and ignorance is just one of the many causes of exploitation. Illiterate consumers can

easily be cheated as they can neither read the name of the product nor the instructions.

Illiteracy also affects the level of consumer awareness. Lack of information is another

cause as the seller may take advantage of the

freedom of the market and keep away, the

important or correct information from the

consumer. Price, composition, quantity,

conditions of use, and terms of purchase all

must be given to the consumer. Monopoly is

also a cause of consumer exploitation as the

consumers are forced to purchase the product or

avail the services. In markets where only one or few producers or sellers operate, the

consumer is more vulnerable. This is all the more so in case of essential commodities

like lifesaving drugs and food items without which the consumers cannot do. The

consumers in such areas are charged with high price; given a low quality and their

problems and complaints are not taken seriously. An economy, in which consumers are

aware and exercise their rights and obligations freely, will not only help the business but

also enable the economy and the society to flourish. An overall picture emerges that it

is due to lack of consumer education and awareness that consumers continue to be

exploited. We need to device new strategies to protect the rural consumer.

Consumer Awareness in India

The Consumer Protection Act enacted on 24th December, 1986 is a benevolent,

unique and highly progressive piece of social welfare legislation providing for simple,

speedy and less expensive remedy for the redressal of consumer grievances in relation

to defective goods and deficient services. Consumer Protection Act is a weapon in the

hands of consumers to fight against exploitation by traders, manufacturers and sellers

62

on one hand and providers of services on the other. The Act provides effective, people

oriented, broad based and efficient remedy to consumers against unfair dealings and

exploitation. It was enacted with an objective to provide better protection of the

interests of the consumers and to make provision for the establishment of Consumer

Councils and other authorities for the settlement of consumer disputes. Unlike other

laws, which are basically punitive or preventive in nature the provisions of the Act are

compensatory. It is a matter of great satisfaction that we can legitimately boast that we

now have in our country a statute, which provides more effective protection to the

consumers than any corresponding legislation in force in countries, which are

considered to be much more advanced and industrialized.

The Act contemplates establishment of adjudicatory and advisory structures in

the form of consumer fora and council structure respectively for the protection of

consumers’ rights. It extends to the whole of India except the State of Jammu and

Kashmir which has its own Consumer Protection Act. The Act applies to all goods and

services unless any good or service is expressly excluded by the Central Government

by notification. The Act extends to all sectors -public, private or cooperative. The

Consumer Protection Act is an alternative and additional remedy to the remedies

already available to the aggrieved persons/consumers by way of civil suit.

To provide cheap, speedy and simple redressal to consumer disputes, three tier

quasi-judicial machinery is set up at each District, State and National levels called

District Forums, State Consumer Disputes Redressal Commission and National

Consumer Disputes Redressal Commission respectively. At present, there are 662

District Forums, 35 State Commissions with apex body as a National Consumer

Disputes Redressal Commission (NCDRC). These quasi-judicial bodies are required to

follow summary procedure and Principles of Natural Justice to provide quick and

speedy justice to the consumers.

After the enactment of the Consumer Protection Act, 1986, the first independent

evaluation study of the implementation of this Act was done through a study conducted

by IIPA in 1994. It was found that large majority of the consumers belonging to various

63

categories and income groups were completely ignorant of the existence of the CPA

and the redressal agencies created under it. Eleven years later, according to a survey

commissioned through ORG Centre for Social Research by the C&AG, the position had

improved only marginally. The survey was conducted in July-August, 2005 in 25 States/

UT’s covering 48,732 consumers, 6237 complaints, 249 manufacturers / service

providers, 39 NGOs and 34 laboratories. The report of ORG-MARG revealed that: 8

Sixty-six percent of the consumers interviewed were not aware of consumer rights and 82 percent were even unaware of the Act.

Nearly 49 percent of the aware consumers had come to know about the Act only in the last 4 years though the Act had been in existence for the past 18 years.

Overall, only 13 percent of the consumers reported to have been aware of the existence of any redressal agency.

A majority of the complainants came to know about the redressal agencies through electronic media (48 percent), print media (61 percent) and friends/relatives (68 percent,), NGOs were not a popular source of awareness as only 4.9 percentage of the complainants attributed their awareness to the work of NGOs.

The consumers were not aware of the features of the simple and inexpensive system of lodging complaint in the beneficiary survey carried out by ORG –MARG revealed that 78 percent of the respondents were carrying a negative opinion of the efforts made by the government or had no idea about the same and were not aware that they could directly represent themselves in the Consumer Forums. It is pertinent to note that lack of awareness in this regard had deprived the consumers of the benefit of the adjudication mechanism as out of the total expenditure of ` 3387 incurred by the consumers on each case in the Consumer Forum on an average, as much as ` 2787 (82 percent) was the expenditure on advocates.

Therefore, one of the major hindrances in the consumer movement in the country

is the lack of awareness among the consumers. The consumers apart from being

unorganized do not have the mechanism to understand their rights and responsibilities.

These studies reveal not only lack of awareness but lack of consumer education as

8 CAG, Performance Audit of the Implementation of the Consumer Protection Act and Rules-Report of the Comptroller and Auditor General of India for the year ended March 2005, Union Government (Civil), Performance Audit, 2006, p. 9

64

well. A lot more needs to be done on this front. The right to consumer education has

been recognized under the Consumer Protection Act, 1986. However, unless

awareness increases realizing the rights to the consumers, consumer education

remains a distant dream.

Need for Consumer Education

The need for consumer education has increased over time as today the

consumers operate in an increasingly complex marketplace and are faced with

increasing amounts of information and an expanding choice of complex products and

services. As a consequence they are more exposed to fraud and require a wider range

of skills and knowledge than ever before. Consumer education is a potent tool for

empowering consumers as it equips consumers with information and skills necessary to

meet challenges posed by the markets. Through education, consumers obtain

information about the products and the services which empowers them and makes them

aware of their rights and responsibilities and helps to ensure their welfare.

Consumer education improves the position of the consumers in the marketplace

and helps them make informed choice and thereby enhance their welfare. It also

contributes to the well functioning of the markets by promoting effective competition. It is

thus in the common interest of governments, consumers and businesses to empower

the individual consumer as much as possible through awareness of his/her rights,

knowledge of how to defend himself against various pitfalls and to cope with the

subsequent consequences, as well as the ability to act proactively in the marketplace.

According to Wells and Atherton consumer education can be defined as:

“… a process of gaining skills, knowledge and understanding needed by

individuals in a consumer society such that they can make full use of consumer

opportunities presented in today’s complex marketplace.” 9

9 Wells, J and Atherton, M., “Consumer Education : Learning for Life”, Consumer 21, Autumn, 1998,pp. 15-20,

65

Most countries consider consumer education as an important tool for consumer

protection. However, the scope of consumer education differs significantly among

countries depending on the socio-economic and cultural conditions prevailing there. Yet

it generally covers one or more of the following areas: consumer protection, consumer

skills to help them make more informed decisions and protection of public interest which

relates to environmental and social issues. Countries have articulated consumer

education objectives in various ways, such as laws on consumer protection; education

on trade; government programmes and strategies; and school and college curricula.

High quality programmes focused on stimulating relevant issues can engage the

interest of consumers and help equip them with the skills and knowledge to make better

choices and to resolve problems when things go wrong. Empowered consumers are

knowledgeable, confident, assertive and self reliant. Consumer education has an

important role to play in supporting those with less developed consumer knowledge and

skills. By demanding high standards from business, consumers help promote vigorous,

competitive, markets. As a tool for empowerment, consumer education is therefore

important to make markets work well for consumers.

Structure of Consumer Education

Available literature indicates that consumer education takes many forms and

takes place in many different settings, from formal courses in schools or universities to

informal experience in families, communities and workplaces. Three forms of consumer

education are being implemented in OECD member countries and some non-member

economies which are as follows: 10

Formal education refers to learning through a programme of instruction in an

educational institution, adult training centre or in the workplace, and is generally

recognized by a qualification or a certificate. All countries acknowledge that children and

young people are particularly important targets of consumer education as theses age

groups account for an ever-increasing share of family consumption. At the same time

10 OECD, Promoting Consumer Education – Trends, Policies and Good Practices, OECD, 2009 pp. 11-31;

66

they are likely to be particularly vulnerable to making unwise decisions and or falling

victim to aggressive marketing. The fact that both parents often work outside the home

has led to a change in the role of parents in consumer training. With this in mind, many

countries have made consumer education compulsory in primary, secondary and in

some countries in upper-secondary grades. The objectives include helping pupils to:

gain knowledge of what it means to act as informed consumers; develop and

understand society’s function as a whole and specific role of consumers; master skills to

function as informed and responsible consumers; recognize the importance of being an

informed consumer. The ultimate goal is for consumers to act spontaneously in

informed, educated and responsible ways. 11

In most countries, consumer education is integrated into the school curriculum in

an interdisciplinary way. Subjects that may include consumer concepts are economics,

mathematics, biology, chemistry, language, arts, business education and home

economics. These subjects cover a variety of issues which are important for consumers

in contemporary society, including the effects of consumption on the environment,

production and consumption in a global perspective, health and food, product quality

and safety, and financial management. Relevant issues are thus addressed in cross-

curricular themes such as home economics, citizenship, civic education or social

studies.

In addition, a variety of non-formal education tools or activities (i.e. not included

in the curriculum) complement more traditional methods. These are websites, videos,

exercise books, school magazines as well as theme days, school competitions and

contests, consumer clubs, national fairs for teachers and pupils and special educational

programmes. These non-formal teaching tools are mostly produced by consumer

associations in co-operation with parent-teacher associations, and in some countries

with other stakeholders. Consumer education generally focuses on the primary and

11 Bannister, R. and C. Monsma, “Classification of Concepts in Consumer Education “ NASSP Bulletin,1982

67

secondary school curriculum. However, in some countries it also takes place in

universities.

Lifelong education- There is wide consensus that learning, which is of

significance to individuals as well as to communities and societies, must extend beyond

formal education. Lifelong education covers all purposeful learning activity “from the

cradle to the grave” which aims to improve the knowledge and competencies of all

individuals who participate in learning activities. A prerequisite for lifelong learning is a

sound foundation in basic educational competencies acquired in formal education and

opportunities for further learning once persons leave initial education and training.

Practically, this includes education available at community centres as well as loosely

organized education. Lifelong learning may take place at the individual level (e.g. self-

directed learning) or at the group level (e.g. at the workplace or within the family).

One of the fundamental features of lifelong learning is a systematic and

interconnected approach to the organization of learning rather than a fragmented

approach in which separate policies are implemented for each stage of education. This

is appropriate for consumer education, since consumers’ knowledge and information

needs to be frequently updated, and the attainment of informed and knowledgeable

consumption is a cumulative process. The adult consumers face a more complex

environment than young consumers, the range of knowledge they need also becomes

broader and more complex as they grow older.

Targeted education- It refers to a range of educational activities designed for

particular consumer groups that are considered vulnerable (e.g. women, the disabled

and the poor) to help protect them against fraudulent or deceptive practices in the

marketplace or other specific consumer–related issues. Specific groups which are

targeted in various countries in their major initiatives are: young children, the elderly,

women, people with a limiting or longstanding illness or handicapped, populations in

rural areas, unemployed persons and tourists.

68

These three concepts are not mutually exclusive. Lifelong education is a broad

concept that encompasses both formal and targeted education. At the same time,

several countries implement formal and/or targeted education but do not support the

lifelong learning concept. Lifelong and targeted consumer education may be “non-

formal” or “informal”:

Non-formal learning takes place through a programme but is not usually evaluated and does not lead to certification.

Informal learning is learning from daily work-related, family or leisure activities.

Framework for Consumer Education

Most countries have a centralized institutional framework for consumer

education, under which the central government develops consumer education policies

which reach local areas through local governments or through regional networks. In

many countries, local governments implement policies which are adjusted to the

regional environment but they lack discretionary power. A few countries operate

consumer education policies in a decentralized way. In this case, the central

government sets the overall policy framework but major initiatives are developed and

delivered at local levels.

Other market players and stakeholders actively involved in consumer education

include:

Consumer organizations and other civil groups whose objective is to promote consumer education.

Industry and trade associations and individual companies.

Universities and educational institutions.

Teachers’ associations, practitioners, teachers and instructors.

Family and parents associations.

Media

As the scope of consumer education has broadened and become more

proactive, more groups have been involved and there has been a greater focus on

69

influencing consumption behaviour in more conscious and critical ways. The respective

roles of the public and private sectors in enhancing consumer education vary among

jurisdictions, depending in part on their statutory situation. In general, the provision of

information and advice relating to consumer protection is mainly the task of government

and consumer organization. Yet the objective of raising consumer awareness involves a

broader range of stakeholders.

In this backdrop of ongoing efforts of Government of India to disseminate the

consumer rights to the people and to protect them from the exploitation of market

forces, this chapter attempts to find out the level of awareness among the rural

consumers on various initiatives prevailing in the markets and also explore the

ignorance of the consumers relating to their basic rights and obligations. It also

examines the buying behaviour and the market practices of the rural consumers.

What does Consumer inquire before buying a Product

Consumers generally do not seek information about the product they intend to

buy or service they intend to avail. Having full information about the product or service

helps a consumer to take a rational decision and make a choice. Consumers are

encouraged to make informed decisions when making a purchase and exercise their

rights enlisted in the Consumer Protection Act, 1986. Consumers were asked to state

what information they sought before making the final purchase of the good. 44.5

percent respondents inquired about the terms and conditions of the product, 53.8

percent asked about the available options, 68.4 percent asked about the quantity and

ingredients of the product, 82.3 percent asked about the price and 64.4 percent inquired

about the expiry date of using the product. Table 4.1 shows that most of the

respondents in Bihar do not bother to enquire about terms and conditions, quantity and

expiry date of the products, while in Maharashtra respondents seem to be better aware.

70

Table 4.1

What does Consumer inquire before buying a Product


Bihar Maharashtra G. Total

Aara Sitamarhi Total Kolhapur Amaravati Total

Terms & Condition

Always 6.1 4.2 5.2 36.4 25.3 30.9 18.0

Sometime 19.5 23.1 21.3 30.3 33.1 31.7 26.5

Never 74.4 72.7 73.6 33.3 41.6 37.5 55.5

Available option

Always 4.2 4.2 4.2 33.3 24.7 29.0 16.6

Sometime 32.6 22.3 27.5 44.2 49.7 47.0 37.2

Never 63.3 73.5 68.4 22.4 25.6 24.0 46.2

Quantity

Always 21.4 18.5 20.0 58.2 46.7 52.5 36.2

Sometime 32.1 33.6 32.9 28.5 34.6 31.6 32.2

Never 46.5 47.9 47.2 13.3 18.7 16.0 31.6

Price

Always 51.4 57.6 54.5 64.8 59.6 62.2 58.4

Sometime 30.9 22.7 26.8 19.4 22.9 21.2 24.0

Never 17.7 19.7 18.7 15.8 17.5 16.7 17.7

Expiry date

Always 20.0 15.2 17.6 59.4 42.8 51.1 34.4

Sometime 35.3 29.8 32.6 20.6 34.6 27.6 30.1

Never 44.7 55.0 49.9 20.0 22.6 21.3 35.6


Awareness about Standard Marks

Standardisation of products and services is perhaps one of the best ways to

protect the consumers. A comprehensive system of product certification has been

evolved by the Government to ensure the quality of goods and services for the safety

and protection of the consumers. Various standard symbols and marks are used which

when labeled on the product signify its quality, authenticity and safety of usage. The

Bureau of Indian Standard (BIS) and other organizations are working on this to ensure

quality and purity of the products so that the consumer gets value for money and is not

cheated. During the survey it was felt that the awareness level about such markings

should be enquired about. Consumers were asked about different marks to ascertain

their awareness of the same. 65.7 percent respondents were aware about ISI mark,

26.9 percent were aware about Agmark, 6.0 percent were aware about Hallmark, 4

percent were aware about BEE, 4.7 percent were aware about ECO mark, 11.5 percent

were aware of ISO and 28.3 percent were aware of Veg /Non-veg marking. Majority of

the respondents in the two states never check the standard marks before buying the

71

products. However, consumers in Maharashtra are relatively better off than those in

Bihar.

Table 4.2

Consumers Awareness about Standard Marks

Marks Response

Bihar Maharashtra


ISIYes 55.8 59.2 57.5 71.5 76.2 73.9 65.7

No 44.2 40.8 42.5 28.5 23.8 26.2 34.3

Ag MarkYes 26.5 12.2 19.4 38.2 30.5 34.4 26.9

No 73.5 87.8 80.7 61.8 69.5 65.7 73.2

Hall MarkYes 3.7 4.6 4.2 9.7 6.0 7.9 6.0

No 96.3 95.4 95.9 90.3 94.0 92.2 94.0

BEEYes 3.6 2.6 3.1 5.8 4.0 4.9 4.0

No 94.4 95.4 94.9 95.2 95.0 95.1 95.0

ECO MarkYes 3.7 5.0 4.4 4.8 5.4 5.1 4.7

No 96.3 95.0 95.7 95.2 94.6 94.9 95.3

ISOYes 3.3 11.3 7.3 10.3 21.1 15.7 11.5

No 96.7 88.7 92.7 89.7 78.9 84.3 88.5

Veg /Non-veg

Yes 25.6 19.3 22.5 30.9 37.3 34.1 28.3

No 74.4 80.7 77.6 69.1 62.7 65.9 71.7


Impact of ‘Jago Grahk Jago’ Campaign on Buying Behavior

Jago Grahak Jago is a popular advertisement issued by the Department of

Consumer Affairs, which intents to inform, educate and protect the consumers. With the

focus on empowering consumers, the Government has been implementing an

innovative and intensive multimedia campaign, "Jago Grahak Jago “to create consumer

awareness in the country. Respondents were asked to what extent they felt this

campaign has been able to impact their buying behaviour. 23.1 percent respondents

said the impact was felt to “a large extent”, 38.4 percent said that the impact was “to

some extent” and 10.1 percent said they were “not at all” impacted. 28.4 percent

respondents did not know about the campaign. In Bihar majority of respondents are not

aware of the JGJ campaign while in Maharashtra 33.6 percent of respondents know

about JGJ to large extent.

72

Table 4.3

Impact of ‘Jago Grahk Jago’ Campaign on Buying Behavior

State Districts

Response

Large extent

Some extent Not at all Don't know

Bihar Aara 11.6 36.3 14.0 38.1Sitamarhi 11.3 26.5 3.8 58.4Total 11.5 31.1 8.6 48.8

Maharashtra

Kolhapur 29.1 44.8 12.7 13.3Amaravati 35.8 45.2 10.8 8.1Total 33.6 45.1 11.5 9.9

G.Total 23.1 38.4 10.1 28.4


The awareness about Jago Grahak Jago is higher in Maharashtra when compared with

the sampled districts of Bihar.

Kind of Impact ‘Jago Grahk Jago’ has on Consumers Buying Behavior

Jago Grahak Jago” is an extensive and intensive campaign which subsumes

almost all the aspects related to consumer protection that ensure an enlightened

consumer. Respondents were asked to state what kind of impact was this campaign

able to make on their buying behaviour. 39.2 percent respondents said it helped them to

know about their rights as consumers, 30 percent said they learnt to check the expiry

dates of medicines and food products and were inspired to ask for a proper bill. 30.9

percent said they got to know that they could bargain on the MRP while making the

purchase and 6.2 percent said they got information about complaints filing procedure.

Table 4.4 clearly shows that in Bihar the impact of Jago Grahak Jago campaign is less

as compared to Maharashtra where there is relatively higher level of awareness among

consumers.

73

Table 4.4

Kind of Impact ‘Jago Grahk Jago’ has on Consumers Buying Behavior

Particulars Q_40 Bihar Maharashtra


Make aware of consumer rights/issues

Yes 31.6 21.8 26.5 42.4 54.8 50.7 39.2

No 68.4 78.2 73.5 57.6 45.2 49.3 60.8

Aware about Expiry date of products/medicine

Yes 17.7 18.5 18.1 43.0 39.8 40.8 30.0

No 82.3 81.5 81.9 57.0 60.2 59.2 70.0

Inspired to get receipt

Yes 19.1 16.4 17.7 35.8 44.6 41.6 30.2

No 80.9 83.6 82.3 64.2 55.4 58.4 69.8

Information about bargain on MRP

Yes 18.1 12.2 15.0 40.6 47.9 45.5 30.9

No 81.9 87.8 85.0 59.4 52.1 54.5 69.1

Information about filing of Complaints

Yes 1.4 4.6 3.1 18.2 4.5 9.1 6.2

No 98.6 95.4 96.9 81.8 95.5 90.9 93.8


Key Issues and Challenges in Consumer Education

Basically consumer education faces five main challenges: 12

Lack of overall strategies- Most countries do not have an overall consumer

education strategy. Even in countries where lifelong consumer education has

been endorsed, little appears to have been done to implement programmes to

support such learning.

Need to enhance the quality of education provided- According to the

country responses, the quality of consumer education could be enhanced in

terms not only of content, but also of delivery.

Limited opportunities for education in school settings- Because of the

limited time available in the school curriculum, it is not easy to find a place for

consumer education. In addition, responses indicate that the relevant

governmental institutions do not always fully see the importance of consumer

12 OECD, Promoting Consumer Education – Trends, Policies and Good Practices, OECD, 2009 pp. 39-40

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education and that school teachers hesitate to include consumer education in

their classes.

Lack of coherence in education initiatives- Although consumer education

in taught, there is a general lack of cohesiveness with other relevant

education policies, and it is implemented in a fragmented way.

Lack of sufficient self-motivation for both the educated and the

educator- Some responses suggest that it is difficult for policy - makers to

promote consumer education because both the educators and the educated

are not very motivated to find and profit from the relevant educational

opportunities and information.

Limited resources- All of these challenges require additional resources but

these are limited in many countries.

Since 1986, consumer education and awareness has attracted the attention of

the Government of India. The laws can only give certain rights to the consumers, but its

functioning and implementation largely depends on the awareness and efforts of the

consumers themselves. The problem is more acute in the rural areas. In fact, an

educated and aware person is an empowered consumer. Education equips a person

with the skill to make discerning choices, to sort out problems effectively and to seek

further information and help appropriately.


reveal that the rural growth rates have already outpaced urban ones and will continue to

do so through the next decade. Rural India accounts for more than 50percent of the

GDP. Out of 62.97 million households of India those are getting more than 5 lakhs per

annum, nearly 28.68 million households (46percent) live in Rural India. The rural market

in India is projected to be bigger than the urban market for fast moving consumer

goods; rural consumption expenditure is accounted for around 60 percent of the

country's total consumption expenditure. Hence, it is imperative to analyse the social,

legal and other measures taken in rural areas to protect the interest of consumers, as

more and more companies will try to sell their goods and products in rural markets. The

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rural consumers need to be educated about their rights and adequate steps are taken to

ensure that they get the value for their money.

Consumer protection initiatives by the Government hinge on 3 basic parameters.

Firstly, ensuring a legal framework that comprises of Consumer Protection Act. The

Consumer Protection Act enacted in 1986 has been recognised as one of the finest

basis of legislation enacted in any part of the world and India can boast of being the

only country having such specialised legislation for consumer protection. The CPA has

a three tier, simple, quasi judicial machinery at the National, State and District level for

hearing cases raised by consumers. Secondly, evolving standards for different

products to enable the consumers to make an informed choice about different products.

Standards which are the essential building block for quality play a key role in consumer

protection. Standard could be on technical requirement (specifications), improved

specific standard terminology (glossary of terms), codes of practice or test methods or

management systems standards. The standards are set generally by Government or

inter-Governmental bodies but worldwide it is being recognized that voluntary

establishment of standards plays an equally important role for protecting consumers.

Thirdly, consumer awareness and education is the main building block for consumer

protection.

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Findings and Recommendations

Like any market that has seen a demand and awareness boom, rural India has

been witnessing considerable rise in purchasing power. Rural consumers are buying

more health, hygiene, personal grooming, and packed foods products reflecting a rise in

prosperity. The expansion of mass media has further given impetus to consumerism in

the rural areas. A change in consumption patterns and access to communication media

has made rural market a vital cog in the sales-growth wheel. However, as there is no

check on production and sale of such products in the rural markets, many of these

products sold are of inferior quality. It is common to find that farmers are supplied

defective seeds and adulterated pesticides. Rural markets and haats are full of sub-

standard goods and duplicity of branded goods is yet another major problem. The rural

consumers face various problems like fake brands and spurious products, misleading

advertisements, adulteration, short weighing and measuring, lack of safety and quality

control in appliances and equipments - electrical and mechanical, unfair warranties and


The government has made it mandatory for the producers to give information

about the contents of the product on the label as well as indicate the MRP of the

product. It is also mandatory to mention the date of manufacture and the date of expiry

on packed items. During the survey it was found that not many of the rural consumers

bothered to know about the contents, the expiry date and other relevant information.

However, they were conscious about the price of the product and most of them sought

information about it. Thus with the growth in rural markets and due to poor knowledge

about their rights and lack of skills to take a rational decision based on information

about the product or services, the rural consumers continue to be exploited in many

ways. The major findings of the study are as follows:

5

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Findings

1. The respondents covered various strata of the society so as to make it a representative sample. Males constituted 82.2 of the sample size whereas 17.8 percent were females.

2. As far as the educational level of the respondents is concerned, 14.5 percent had no schooling, 11.3 percent of them had attended school up to the primary level, 20.7 percent had middle schooling, 25.7 percent had studied up to high school, 18.9 percent had schooling up to intermediate level and 6.7 percent were Graduates. Post graduates compared of 0.9 percent of the respondents.

3. The survey results show that only 12.5 percent of the respondents were below 20 years of age. 24.1 percent belonged to the age group between 21 -30 years, 31.1 percent were from the age group of 31-40 years, 17.7 percent were within 41-50years of age and 14.6 percent of the respondents were above 50 years of age.

4. 75.4 percent of the respondents interviewed were living in a joint family household and only 24.6 percent were living in single family household. Joint family is still the norm in rural areas, whether it is in developed (Maharashtra) or backward State (Bihar).

5. The survey revealed that as the monthly incomes of the two states is concerned,the highest monthly income in Bihar was below ` 2000 (as per 46.4 percent of respondents of Bihar) and for Maharashtra it was between ` 2000-5000 (as per 41.2 percent of the respondents).

6. The expenditure pattern of both the states shows interesting results as in Bihar for most of the respondents (58.3 percent) the expenditure is below ` 2000 and in Maharashtra the expenditure is ` 2000-5000 (39.9 percent of respondents).

7. 44.4 percent of the respondents had more than five members in their family. 21.7 percent had five members and 20.3 percent had four members. 8 percent of the respondents had three members in their family, 3.5 percent had two members and only 2.1 percent had one member in their family.

8. The survey results show that in Bihar, 64.2 percent of respondents say they have more than five members in the family as compared to both districts of Maharashtra.

9. Most of the respondents, (53.8 percent) said that there was only one earning member in their family, 35 percent had two earning members, 5 percent had three and 3.9 percent had four earning members in their family. A very small percent of 1.4 had more than five earning members. 2.5 percent in Bihar had more than five earning members while it was only 0.3 in Maharashtra.

10.76.8 percent of the respondents said that they had no family member living in town/urban areas. 12.2 percent respondents had only one member of their family living in town/urban areas, 6 percent had two members, 2.6 percent had three and only 2.3 percent had more than three family members living in town or urban areas.

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11.The survey results for the two states clearly show that migration level in the state of Bihar is on the higher side as compared to Maharashtra.

12.As per the survey, 91.9 percent of the respondents said that they have shops in their villages, 80.4 percent said they had pukka roads in their village, 78.3percent of the respondents said they had electricity, 74.6 percent had telephone facilities in their villages, 71.8 percent said they had toilet facility and 55.5 percent had television. Only 13.9 percent of the respondents said they had internet facility in their villages

13.97.2 percent of the respondents said there was a merchandise shop situated close to their village, 72.6 percent of the respondents had a mobile recharge shop close by.

14.The comparative pattern of the facilities available in the two states show that the prosperity level in the sample villages of Maharashtra is higher than Bihar as Maharashtra had more cloth, jewellery, electricity and mobile shops than Bihar.

15.79.7 percent of the respondents said the male head of their family was the main decision maker. 7.8 percent said the woman as the head of the family was the decision maker, 1.7 percent said that children were the main decision makers in the family. Only 10.8 percent of the respondents said that all the decisions were taken by all the members with consensus.

16.Both the states exhibit approximately same results on the main decision maker in their household, as in both the states the male member as head of the family is the man decision maker.

17.The survey results show that in both the states the percentage of respondents buying products from the village shops whenever there is a requirement is 76.5 percent for Bihar and 71 percent for Maharashtra. Majority of the respondents in both the states visit the village shops once a month

18.On buying goods from village shops, 77 percent of the respondents said they always visited the village shop, 19.9 percent went only sometimes and 3.1percent never went to the village shop.73.8 percent visited the shop only when required to make a purchase. 4.7 percent visited only once in a week.

19. Out of respondents who go to village shops, majority of respondents 94.3 percent in Bihar and 88.3 percent Maharashtra prefer village shops because they are near to their homes. As far as availability of quality products is concerned, 20.3 percent Maharashtra and 14.9 percent in Bihar said that they prefer village shops as because they get quality products in village shops. But this percentage level for quality products is quite low as rural markets are home for lot of fake and duplicate products.

20.Most of the respondents, (43.4 percent) bought goods from kasba /town shopsbecause there was availability of different products there, 18.5 percent bought because they got quality goods from the Kasba/town shops. 30.1 percent said they bought because these shops gave goods at fair price while 16.3 percent of the respondents preferred because they are near to their homes.

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21.29.6 percent of respondents in Bihar and 16.7 percent in Maharashtra always buy goods from the town shop and majority of the respondents in both the states visit these towns once a month. It has also been observed that normally goods of higher value are purchased from the nearby towns.

22.Out of the respondents who buy products from kasba/towns, 20.9 percent in Maharashtra and 16.2 percent in Bihar buy products from Kasba/ towns rather than from village/ local haats due to the availability of quality products in these shops. However majority of respondents prefer these shops due to availability of different and quality products at these shops.

23.As far as purchasing goods from the cities is concerned, half of the respondents (51.9 percent) bought because there was availability of different products in cities, 37.7 percent bought because they got quality goods. 24.7 percent preferred these shops due to fair price of the shop. 13.9 percent said they bought because these shops gave consumers more choice in goods.

24.As regards the spending pattern of respondents, 42 percent of the respondent said they preferred to spend the most on merchandise. Health expenditure was the second on the list with 18.3 percent of the respondents saying they spend the most on health,13 percent on agriculture and 10.5 percent spend the most on education. Expenditure on clothes, jewelry, cosmetic products, electric goods and entertainment were other items of expenditure in the decreasing order of preference.

25.As per the survey results for 73.2 percent of the respondents, price of the product was the determining factor in making the purchase, 49.9 percent made their decision based on the quality of the product, 20.1 percent followed the advice of the shopkeeper. While 14.9 percent of the respondents depended on the brand and only 4.9 percent respondents said endorsement by celebrities was the most important factor which determined their decision.

26.For price as a deciding factor for a purchase, 62 percent respondents said it meant low cost items, 20.2 percent said they would purchase at a cost lower then MRP, 14.3 percent said they would purchase items sold on MRP

27.For 33.6 percent brand signified quality, 25.5 percent said brand meant good experience of using the product, for 17.7 percent respondents branded products were those suggested by the shopkeeper, 12.8 percent respondents said branded products were those shown in advertisements and endorsed by celebrities, 9.8 percent said those suggested by people were branded products and for 0.6 percent branded products meant expensive products.

28. Influence by the migrated member of the family on the buying behavior, 67.2 percent denied any such influence while 32.8 percent respondents gave an affirmative response.

29.The results clearly show that in both the states the respondents consider price and quality as prime factors before buying a product. As the purchasing power of the rural consumer is low, price becomes a major determining factor while purchasing a product.

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30.Half of the respondents, (51.5 percent) said they identified the branded products by name, 19.4 percent identified by its standard mark, 10.1 percent identified by the color, 9.4 percent identified the product by the name of the company, 6.4 percent identified it by design, 3.3 percent identified the product by its shape and size .

31. For 57.6 percent of the respondents, quality implied durability of items, for 14.1 percent quality product was one recommended by the shopkeeper, 13.9 percent said past experience of usage could help determine quality of a product and10 percent respondents said products bearing standard marks implied quality andonly 1.7 percent said quality products meant as suggested by family/friends/relatives .While for only 2.7 percent of the respondents quality meant products with MRP.

32. 35.6 percent consumers bought branded items “sometimes”. 5.8 percent respondents “always” and 58.6 percent respondents did not have any opinion on the same bought branded items/products.

33.Respondents, who consider brand as main factor behind buying decision, prefer the brands due to their quality factor (Maharashtra 39.8 percent and 26.7 percent for Bihar).

34.On quality as main factor behind buying goods in Bihar (60.9 percent and in Maharashtra 54.5 percent) of respondents said by quality they meant durability of items.

35.On identification of brand, half of the respondents identify them by name (51.4 percent in Bihar and 51.5 percent in Maharashtra).

36.Out of the respondents whose relatives/family members are there in city/town, 32.5 percent in Bihar and 33.2 percent in Maharashtra are influenced by the family members in purchase decisions.

37.66.8 percent felt that their food habits were most influenced by the migrated member of the family, 67 percent respondents felt that the sense of dressing and fashion was most influenced. The use of cosmetics products and FMCG products was the aspect most influenced for 40.9 and 63.3 percent of the respondents respectively.

38.The influence is maximum on the food habits (74.2 percent), dressing sense (66.6 percent), and FMCG products (64.7percent) in the state of Bihar. While in Maharashtra the influence is on dressing sense (67.4 percent), food habits (59.5 percent) and FMCG (62 percent)

39.On buying look alike of branded products at cheaper price, 30.7 percent respondents gave an affirmative response and 18.5 percent said look-alike products were not satisfactory. 50.8 percent did not have any opinion on the same.”

40.On the awareness with regard to standard marks,65.7 percent respondents were aware about ISI mark, 28.3 percent were aware of Veg /Non-veg marking,26.9 percent were aware about Agmark, 11.5 percent were aware of ISO ,6 percent

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were aware about Hallmark, 4.7 percent were aware about ECO mark.Only4 percent were aware about BEE.

41.Most of the respondents in Bihar do not bother to enquire about terms and conditions quantity and expiry date of the products. While in Maharashtra respondents seem to be better aware.

42.Majority of the respondents in the two states never check the standard marks before buying the products. However in comparison to Bihar in Maharashtra people prefer buying standard mark, ISI mark product.

43.About the impact of JGJ Campaign, 38.4 percent said that the impact was “to some extent” and 23.1 percent respondents said the impact was felt to “a large extent”, 28.4 percent respondents did not know about the campaign while 10.1 percent said they were “not at all” impacted. In Bihar majority of respondents are not aware of the JGJ campaign while in Maharashtra 33.6 percent of respondents know about JGJ to large extent.

44.Respondents were asked to state what kind of impact was this campaign able to make on their buying behavior. In answer to this, 39.2 percent respondents said it helped them to know their rights as consumers, 30.9 percent said they were encouraged to bargain on the MRP while 30 percent said they learnt to check the expiry dates of medicines and food products and asking for a proper bill. 6.2 percent said they were inspired to buy energy saving electronic products.

45. In Bihar as awareness regarding consumer protection is low respondents find less impact of the JGJ campaign while in Maharashtra most of them say the campaign has made impact on their buying behavior.

Recommendations

With the growth of the rural markets and lack of appropriate safety measures, the

consumer is left vulnerable to exploitation by the marketers. There is an emergent need

to device policies, programmes and strategies to meet the new challenges being faced

by the rural consumers in the country. Some of the recommendations in this direction

are:

1. Customer satisfaction is the key to building a profitable and sustainable relationship with rural consumers. Marketers need to understand the product specific evaluation process from primary research to mapping the succession of their brand from consideration set to choice set. This deals with the product deficiencies in relation to competition and improves its chances of selection during evaluation.

2. For rural consumers the consumption pattern is greatly influenced by their family size and structure. After arriving at the choice set in the evaluation stage of the buyer decision process, all the selected brands are acceptable to the rural

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consumer. However, in this situation the final choice is guided by the perceived risk associated with the product as well as by the key influencers like family, friends and relatives. Perceived risk is high among rural consumers as they find it difficult to gather and process relevant information. Due to this reason they make a collective decision. Marketers need to address the perceived risk of rural buyers by showcasing the experience of users and ensuring service delivery close to the consumer‘s doorstep.

3. Lack of choice is a major problem in the rural areas as the consumers do not have access to a variety of products. The dependence of the rural consumers on the neighbourhood shops, who sell on credit, is adding to the problem. Therefore standardization of products and availability of packed commodities will help the rural consumers to a large extent.

4. For rural customers, value for money is very important when they purchased FMCG. The survey revealed that the rural consumers are not only price sensitive but also think about quality, performance, reliability, brand and other critical aspects, it is recommended to promote FMCG on lines of rationality rather than just making low price appeals. FMCG companies should make such marketing strategies which create a favorable environment for rural consumers and help to understand which product suits best to them. Rural marketers should design innovative promotional strategies for rural markets that can express messages in an easy way to the villagers and compatible with their education and understanding levels.

5. Quality and value are vital for the success of a new product as they bring improvement to consumer lives in terms of productivity. For products that generate the perception of providing comfort or improving the quality of everyday life, the price is not questioned and the role played by additional features is not significant in influencing choice. The rural consumer also depends upon observed source like exhibitions and road shows because they provide an opportunity to evaluate the product personally and absorb relevant information at their own relaxed pace. Marketers need to focus on reducing the information search time by suggesting product trials and successfully reaching out to the consumer through ideal information channels.

6. Media (TV, Radio) could be employed extensively to promote/advertise/inform the rural consumers regarding the information they ought to seek before buying a product e.g. expiry date, details reg. ingredients etc. Rural consumers are not aware about various standardization marks and therefore, unable to read and understand the labels on the products. Both print and electronic media must be used to propagate this message among the rural consumers. It is imperative to acquaint the rural consumers regarding standard marks and symbols. They need to be educated to check the products for these verification standards before making a purchase. This will ensure they buy original goods rather than fake/look alike imitation.

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7. It’s time that rural consumers are not viewed as a homogeneous group. Rural women, children and farmers have specific problems and specific policies should be in place to educate and protect them.

8. There is a need to provide internet facility in rural areas. Internet penetration is marginal in rural areas. It will enable the use of the use of Information and Communication Technologies (ICTs) can provide rural people with access to information and knowledge and thereby enhance their quality of life and accelerate the pace of rural development. Inspite of ICT interventions including those initiated by the government, non-governmental and other private players its acceptability and utilization has been very low in the rural areas.

9. The rural markets are mostly unorganised. Therefore, there is also a need to regulate the rural markets in terms of quality, safety and weights and measures. The balance used in the rural markets is not of standard quality. Stones are still being used to weight the products and in most of the cases the balance is never calibrated properly. The Department of Legal Metrology (Weights and Measures) in the states has to play a proactive role in this. Pamphlets and leaf lets should be distributed in the rural markets periodically highlighting these points and what the consumers can do to prevent being cheated.

10.There is a need to step up “Jago Grahak Jago” campaign in rural areas,especially in Bihar. Panchayats could be involved in promoting this campaign such local involvement will enhance the effectiveness of the campaign.

11.Rural Markets are flooded with substandard goods, adulterated food items and unsafe products. The rural markets are dumped with lookalike and pass off products. The quality of service being provided is not only poor, but lacks transparency resulting in consumer exploitation. Therefore, there is a need to prioritise the protection of rural consumers by strengthening the enforcement mechanism. In the emerging scenario it is necessary to protect the rural consumers by educating them about their rights and empowering them to make decisions based on full and correct information about the goods and services.

12.The meetings of Gram Sabha can be utilized as a forum to educate the consumer about their rights and obligations and enhance their knowledge about fake and spurious products. An integrated approach needed to empower the rural consumer.

13.The survey reveals that inspite of 27 years of the CP Act, the rural consumers are largely unaware about the Act and its various provisions. It would be appropriate that a chapter on consumer protection is incorporated in the school curriculum so that the children become aware about the Act and they could act as change agents thereby influencing the family members, relatives, neighbours to make wise buying decisions.

14.The SIRDs (State Institute of Rural Development) have the mandate to organise training programmes for the elected representatives and other local functionaries of various departments implementing programmes and schemes. The SIRDs

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should include a module on consumer welfare in their training programmes to educate the participants on the need and importance of consumer protection.

15.No doubt some initiatives have been taken in this direction and capacity building and awareness programmes are being organized by IIPA, through the State Institutes of Rural Development but to reach such a large number of rural consumers, a vigorous campaign with the involvement of the panchayats needs to be taken up. Specific capacity building programmes for the elected members of the PRIs are to be developed with adequate financial sanctions.

16.Self help groups could play an instrumental role in increasing the awareness among consumers. This would also ensure women participation in the decision making process in the household.

17. Organisations like Nehru Yuva Kendras, NSS and NCC should be involved in consumer education at the grass root level as they can play an important role in enhancing awareness. The strategy should be to use various organisations to take forward the consumer movement.

18.All stakeholders need to coordinate their activities and ensure that adequate literature is also made available in the local languages. Street plays and folk songs can be meaningful instruments to create awareness in the rural areas. Apart from these there is also a need to formulate appropriate policies and strategies to protect the rural consumers particularly the farmers, women and children

19.Preference should be given to rural areas while setting up consumer advisory and mediation centres. The rural consumers should also have the benefit of ADR as it will save both money and time. Such centres should be funded by the state/central government and set up at each block headquarters to start with. The local VCOs can be involved in managing the advisory centres. This will help the rural consumers to a large extent.

20.Consumer organizations and similar civil society groups have an important role to play in consumer education. They have the means to provide consumers with information and help them to make informed choices. Consumer information needs to be available at the right time and in the right place before or when purchasing decisions are made. Several NGOs are very active in the rural areas in advocating for consumer rights but due to their limited ability to put enough pressure on policy makers, they lack consumers support.

21.Awareness using various medium has to be created among the rural consumers. So far the consumer movement has largely been confined to the urban centers, and with the expanding rural markets now the focus has to shift to protect the rural consumer. In generating awareness at grassroot levels both traditional and contemporary media can play an important role. Community radios local cable

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TV channels and local newspapers can also be good medium for generating consumer awareness as they are communicating with the people in the local language. With increasing reach of IT even internet and social media can be used for educating rural consumers.

22.There is also a need for the effective implementation of various provisions of the legislations enacted to protect the consumers from fake and adulterated products from entering the markets so that the consumer’s interests could be safeguarded.




diverse media with the advent of modern technology. Advertising is the major or even

the main sources of information about many new products or newly introduced

products. The changes in advertising are in part a response to the rapid growth in

markets due to globalization. Due to the entry of a large number of players in the rural

market and also due to stiff competition there are large numbers of misleading

advertisements in the print and electronic media resulting into exploitation of the

consumers.

The advertising firms are studying consumer behaviors to design effective


of the rural areas in the country there is considerable awareness on various latest

products that are available in the market. This has been possible due to the penetration

of cable and satellite channels that have brought down the world at the finger tips of the

common man. The media has influenced the mindset of the rural consumers to such an

extent that people who have money start purchasing the products unmindful of the

costs, just to satisfy their needs as well as their ego.





86



Rural Consumers: Need for Education and Empowerment





centres, and with the expanding rural markets now the focus has to shift to protect the

rural consumer.

Consumer organizations and similar civil society groups have an important role


information and help them to make informed choices. Consumer information needs to

be available at the right time and in the right place before or when purchasing decisions

are made. Several NGOs are very active in the rural areas in advocating for consumer

rights but due to their limited ability to put enough pressure on policy makers, they lack

consumer support. This is the dilemma of NGOs in consumer protection. Regardless of

these limitations consumer empowerment programmes through regular training and

education are very crucial. It is also time to consider consumer education as part of the

school and college curriculum.

There is also a need for the effective implementation of various provisions of the

legislations enacted to protect the consumers from fake and adulterated products from

entering the markets so that the consumers interests could be safeguarded. Various

business houses, NGOs and the governmental agencies have to come together to join

hands to combat counterfeiting.

Strengthening Redressal Mechanism

Redress of complaints is a major concern for consumers. Having a right to

access the redressal mechanism is of prime importance. For the right to redress to

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have a practical value, a mechanism must exist to ensure that it can be exercised

effectively. If consumer confidence is to be built up they need assurances that if things

go wrong they can seek redress. The District Consumer Disputes Redressal Forums

which act as the first point of contact in case of a complaint have to play a pro-active

role in building consumer confidence. The district forums should be strengthened and

initiatives aimed at promoting access to simple, swift, effective and inexpensive legal

channels be taken up. In many states the District forums are short of members and

also lack the required infrastructure. The state governments should address the

problems of district forums as well as the consumers to make the redressal mechanism

more effective and also responsive. Moreover, it becomes difficult for a rural consumer

to go to the district headquarters to file a complaint and then pursue his complaint. It will

be better if the concept of circuit benches for the district forums is also introduced as in

the case of National Commission and the State Commissions so that access to justice

is ensured for the rural consumers. There is also a need to set up more than one district

forum in a district to clear up the pendency of complaints, which has increased

substantially. Any further delay in disposal of the complaints will only shatter the faith of

consumers in the redressal mechanism.

Role of Voluntary Consumer organizations

VCOs are advocacy groups that seek to protect people from corporate abuse like

unsafe products, deficiency in services, misleading and false advertisements and other

unfair practices resorted to by the business. Consumer organizations may operate via

protests, campaigning or lobbying. They may engage in single-issue advocacy or they

may set themselves up as more general consumer watchdogs.

One common means of providing consumers useful information is the

independent comparative survey or test of products or services, involving different

manufacturers or companies which is currently being done by NGO’s Like VOICE, Delhi

and CERC Ahmedabad. The aim of consumer organizations may be to establish and to

attempt to enforce consumer rights. Consumer organizations may attempt to serve

consumer interests by relatively direct actions such as creating and/or disseminating

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market information, and prohibiting specific acts or practices, or by promoting

competitive forces in the markets which directly or indirectly affect consumers (such as

transport, electricity, communications, etc.).

In India the consumer movement has been supported by a large network of

NGO’s operating down to the village level. The have helped strengthen the consume

movement. But it is equally true that many of the NGO’s lack capacity to perform and

therefore are ineffective. They lack basic skills of management, advocacy and

augmentation of resources. Therefore there is a need to build the capacity of the NGO’s

working in the area of consumer protection and welfare so that they can play a larger

role in strengthening the consumer movement in the country. Karnataka has a good

network of NGO’s working in the area of consumer protection and a capacity building

programme will help them to discharge their responsibilities in a better way.

Role of Panchayati Raj Institutions

To reach the rural consumers, it is imperative to involve the Panchayati raj

institutions in not only educating consumers but also ensuring that fake and spurious

products are not sold in the rural markets. These institutions can play a meaningful role

in consumer protection and consumer welfare and this has been recognized by the

policy makers. The recommendations contained in the 20th Report of the Standing

Committee on Food, Consumer Affairs and Public Distribution (14th Lok Sabha) on the

subject ‘Consumer Movement in the Country’ needs to be effectively implemented. It

recommended that the Department of Consumer Affairs should take the desired

initiatives to involve Panchayat raj institutions in various programmes related to

consumer awareness. The publication of the Department specifically ‘UPBHOKTA

JAGARAN’ should be brought out in regional languages and distributed to the elected

representatives of the PRIs.

The Committee further recommended that the best forum to educate the rural

masses about their rights as consumers as well as the techniques to redress to their

grievances is the meetings of the gram sabha. It felt that the Department of Consumer

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Affairs in consultation with the Ministry of Panchayati Raj should take desired initiatives

to have mandatory meetings of the Gram Sabha on 24th December (National Consumer

Day) where the villagers could properly be educated about their rights as consumers.

No doubt some initiatives have been taken in this direction and capacity building and

awareness programmes are being organized through the State Institutes of Rural

Development. But to reach such a large number of rural consumers, a vigorous

campaign with the involvement of the Panchayats needs to be taken up. Specific

capacity building programmes for the elected members of the PRIs are to be developed

with adequate financial sanctions. All stakeholders need to coordinate their activities

and ensure that adequate literature is also made available in the local languages. Street

plays and folk songs can be meaningful instruments to create awareness in the rural

areas. Apart from these there is also a need to formulate appropriate policies and

strategies to protect the rural consumers particularly the farmers, women and children.

Low literacy level, poor media reach and exposure and the huge and diverse

rural audience characterized by variations in language, culture and lifestyle poses

multiple challenges for communicating with the rural audience. For rural consumers the

message has to be simple and logical. The use of education with entertainment gets

more acceptances. In the emerging scenario it is necessary to protect the rural

consumers by educating them about their rights and empowering them to make

decisions based on information about the goods and services. Awareness has to be

created among the rural consumers. So far the consumer movement has largely been

confined to the urban centers, and with the expanding rural markets now the focus has

to shift to protect the rural consumer.

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