Rural Marketing Research

UNIT 7 CASE STUDY : RURAL BUYING

BEHAVIOUR IN INTERNET ERA: A
CASE STUDY OF RURAL & URBAN
COSTUMERS’ BUYING BEHAVIOR
FOR MOBILE HAND SETS
Learning Outcomes
After going through this unit, you should be able to:
 discuss the influence of information communication technology led innovations
on buying in rural India,
 analyse the diversity of buying behaviour across rural and urban customers
for mobile handsets and its implications for marketers
 appreciate the kind of effort needed to approach the rural consumers.
Structure
7.1 Introduction
7.2 The Growth of Mobile Phone Industry
7.3 Rural Buying Behaviour
7.4 Case Study
7.5 Summary
7.6 Self- Assessment Questions
7.7 Suggested Readings

7.1 INTRODUCTION
Rural marketing has undergone a paradigm shift thanks to mobile phones.Marketers
now have the means to connect with people in India’s rural areas. They may establish
a Wi-Fi hotspot where users can go and download stuff that stays on their phones,
but they still have a “van and a man” Option. It might be a video game, localized
content, or a marketing message laced with fun. The best feature of digital advertising
is the ability to microtarget and limit the display of adverts to a certain area near a
village. Creating a reach for a marketing message in the hinterland is therefore no
longer as difficult; the true difficulty is making the messaging successful in convincing
customers to purchase a brand or change their purchasing habits.

7.2 THE GROWTH OF MOBILE PHONE INDUSTRY

There are two big reasons for the rapid growth of mobile phones industry in India.
First, there is a huge market for entry-level mobile phones. And second, the high-
end mobile phone buyers too exist in the Indian mobile phone market. These reasons
encourage the top mobile phone manufacturers to experiment their products from
different categories in the Indian market.
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Understanding The Rural In India, there will be 1 billion smartphone users by 2026, according to Deloitte’s
Consumers
2022 Global TMT (Technology, Media and Entertainment, Telecom) forecasts, with
rural areas driving the market for internet-enabled phones. In India, there were 1.2
billion mobile subscribers in 2021, with 750 million of them using smartphones. From
2021 to 2026, the rural sector is expected to grow at a compound annual growth
rate (CAGR) of 6%, outpacing the urban sector’s growth at a CAGR of 2.5%.
According to the ASER (Annual State of Education Report) survey, 36.5% of rural
Indians had access to smartphones in 2018, and that number rose to 61.8% in
2020 and 67.6% in 2021.
This significant demand will probably be mostly generated following the rollout of
5G. In 2026, devices with 5G capabilities will make up 80% of all smartphones
sold. It is estimated that 95 percent of replacements in the urban market in 2026
will be for new smartphones, while only 5 percent will be for pre-owned phones,
compared with 75 percent and 25 percent, respectively, in 2021. The typical phone
lifespan in rural areas is four years, thus it is anticipated that they will follow
a similar path. Over 80% of replacements in 2026 are projected to be for new
smartphones, while 20% will be for used ones. As a result of an increase in
smartphone users, it is predicted that feature phones will gradually stop being
replaced by smartphones.
Increased internet connectivity in rural areas, as well as cheaper data plans, also
played a significant role in enabling individuals to purchase smartphones and stay
updated about global events. For example, Reliance JioInfocomm Limited (RJIL)
entered the Indian telecom industry in September 2016 with its “Jio welcome offer,”
which included a free data and voice plan that was later extended until December
2016. After that, it unveiled the “Happy New Year offer,” which extended the previous
plan through March 31, 2017. It charged low prices even in 2018 and 2019 to
provide high speed internet and voice, which fuelled the Indian digital revolution.
The cheapest recharge package, priced at just Rs. 39, was announced by Reliance
Jio in 2021. In addition to 100 MB of data for 14 days, the pack offered unlimited
voice calls. Rural workers could now connect with family members working in different
regions of the country via the video call features on cellphones, bridging the gap
between them.
Internet customers in urban India had increased by roughly 22.15% as of December
2019, whereas those in rural India had increased by a staggering 55.91%. With
the government’s intention to fiberize every village by 2025 as part of the BharatNet
initiative, internet-enabled products in rural markets will also see growth. Demand
for smartphones is anticipated to increase with increased internet access.
In order to reach India’s rural market, smartphone manufacturers also figured out
how to provide their goods at reduced prices by setting their prices at competitive
levels beginning at 5,000 rupees. Equated Monthly Instalments (EMIs), which replaced
loans as the favored means of buying smartphones, emerged as a result of relieving
the poor of the difficulties associated with taking out loans. Governments and non-
governmental organizations have also stepped up to offer free smartphones to low-
income families. As a result, individuals in rural areas are increasingly becoming more
open to buying to smartphones in one way or another.
Historically, whether in India’s small towns or villages, rural marketing was the
high point for media dark areas. The places are no longer as media-dark, though,
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as a result of significant digital penetration brought on by a rise in mobile phone Case Study
use and internet connectivity. Because of rising literacy rates, more people can
read, and spoken, visual, and informal communication have all gained
strength.Mobile applications in vernacular languages may advance faster with the
use of mobile messaging in these languages. The basis for future revenue “growth”
is Hindi and other regional languages (Punjabi, Marathi, Tamil, Bengali, Telugu,
Gujarati, and Kannada). Messages were still being sent one month after the
experiment ended thanks to a leading Indian operator’s presentation of Hindi
predictive mobile texting to consumers in Haryana, according to the pilot project’s
findings.Now, that search has become more vernacular, rural customers are spending
more time on their mobile devices. In terms of data consumption, India is number
one in the world.

7.3 RURAL BUYING BEHAVIOUR

Compared to their urban counterparts, rural consumers have different interpretations
of colors, symbols, and social activities. Rural consumers show a preference for
bold, primary colors; the red color connotes happiness and auspiciousness, and
the green color, prosperity. Ownership of a large tractor, a large house (a “pucca
house”), a mobile phone, and other high-value consumer durables, as well as the
education of children in cities, are considered status symbols.
Opinion leaders and people who are perceived to be knowledgeable regarding this
product category, play an important role as information providers and advisors. In
rural consumers’ purchase decisions, word-of-mouth is more important. Prior to
making decisions about purchasing more expensive things, family members, relatives,
and friends are consulted. Rural customers are learning more about products and
services as a result of increased exposure to mass media and information technology,
and they are becoming less dependent on conventional reference groups as a result.
Due to the growing importance of self-help groups and other governmental entities
engaged in developmental activities, experts working for these organizations serve
as reference sources. People frequently show more faith in goods and services that
the government and its agencies support. Due to the higher perceived risk associated
with brand switching, rural consumers also tend to be more loyal.
Rural customers’ consumption habits have drastically changed during the past few
years. Spending on non-food products has increased along with incomes and
expenditures in rural areas. Changes in patterns can be used to explain the rise in
demand for numerous things. Rural income, on the other hand, is cyclical in nature
and heavily influenced by uncontrollable variables like draughts and floods, crop
failures brought on by pests, and similar reasons. Wages are paid out in small
installments daily, monthly, or fortnightly to the working class in rural areas. As a
result, rural communities see seasonal demand for a variety of goods.
Rural consumers’ behavior is influenced by a wide range of variables. In contrast
to urban areas, rural areas experience a larger impact from societal norms, traditions,
castes, and social practices on consumer behavior. Rural customers’ demand is also
heavily influenced by the seasonality of agricultural production. Due to the fact that
daily wage workers and landless laborer’s receive payments in installments, their
purchase is limited to modest amounts of goods at a time, typically once every day
or every two to three days. 125
Understanding The Rural
Consumers 7.4 CASE STUDY
The purpose of this study was to apply a consumer decision-making model to examine
the mobile shopping styles involving specific shopping pattern differences among
rural consumers and urban consumers and aims to find answers to questions like-
In what situations do rural consumersuse their phones? How important are specific
area consumers to the mobile market? What extra efforts are needed to increase
their sales and market share? and so on.
Objectives of the Study
 To explore the motivational factors for buying Mobile Handsets by rural
and urban costumers.
 To study the impact of competitive brands of Mobile Handsets on Buying
Behavior of rural and urban costumers.
 To examine the comparative buying behavior of rural and urban customers
towards the purchase of mobile handsets.
Research Method
 Research Type – Descriptive in nature
 Sampling Type - Judgmental and Convenience, non probabilistic.
 Sampling Unit - Users of mobile phone.
 Sample Size -120, 60 each from rural and urban areas.
Data Collection
Secondary data - Secondary data was collected through Books, journals, magazines,
newspapers, industry Reports, Company’s internet site other relevant studies material
and Website.
 Primary data - Primary data for the study was collected though self-
structured questionnaire comprising of 11 items. Reliability of questionnaire
was checked with the help of Cronbach’s alpha; its value was found to be
0.641. Validity of questionnaire was checked with the help of academic
experts in the field. Five point Likert scale ranging from 5 (Strongly Agree)
to 1(Strongly Disagree) was used for measuring perception of respondents.
Result and Discussion
The study was confined to Raipur City of Madhya Pradesh and two villages
Taranaand Panthpiplai. The profile of the respondents is given in Table 7.1
Table 7.1 : Demographic profile of respondents
Age Frequency Percent
18-25 yrs 45 37.5
25-40 yrs 52 43.3
Above 40 23 19.2
Gender
Male 76 63.3
Female 44 36.7
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Case Study
Location
Urban 60 50
Rural 60 50
Profession
Service 33 27.5
Business 26 21.1
Farmers 41 34.2
Students 20 16.7

It is exhibited in Table 7.1 that approximately 38% of the respondents were in the
age group of 18-25 years, 43% were in the age group 25-40 years and 19% were
above 40 years of age. Male dominated as respondents with 64% and female were
36%. 34% were farmers, 21% were having self business, 28% belonged to service
class and 17 % were student. Respondents were included in equal number from
rural and urban area for the study.
Urban users Source of Information for Handsetsis shown in Table 7.2.
Table 7.2 : Urban users Source of Information for Hand sets
Source Frequency Percent
Newspaper 1 1
TV 13 22
Internet 13 22
Friends & Family 30 50
Other 3 5
Total 60 100
It show that out of 60 urban respondents 1% have used news paper as a source
of information for buying handsets, 22% have got information through TV & Internet,
where as majority of respondents (50%) have received Friends & Family suggestion
and other sources of information was limited to 5%.
Rural users Source of Information for Handsetsis shown in Table 7.3
Table 7.3 : Rural users Source of Information for Hand sets
Source Frequency Percent
Newspaper 4 7
TV 10 17
Internet 1 1
Friends & Family 39 65
Other 6 10
Total 60 100
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Understanding The Rural It show that out of 60 rural respondents 7 % have used news paper as a source
Consumers
of information for buying handsets, 17% have got information through TV, 1% through
Internet, where as majority of respondents (65%) have received Friends & Family
suggestion and other sources of information was 10 %.
Mean and standard deviation of attributes considered for buying mobile handsets
are given in Table 7.4
Table 7.4 : Mean and Standard Deviation of Measuring Attributes
Attributes Location Mean Std.
Deviation

Price influences my buying behaviour of Urban Rural 4.20004.7833 1.02180.63318

Mobile Handset

Promotional activity influences my buying Urban Rural 3.86674.3000 .96492.56148

behaviour of Mobile Handset

Availability of handset influences my Urban Rural 3.58334.5333 1.07816.74712

buying behavior Mobile Handset

Friends & Family suggestion influences Urban Rural 4.13334.3500 .96492.77733

my buying behaviour of Mobile Handset

Brand name influences my buying Urban Rural 4.45004.6500 .92837.57711

behaviour of Mobile Handset

Battery back-up influences my buying Urban Rural 4.28334.5000 .82527.74788

behaviour of Mobile Handset

Multiple sim handset influences my Urban Rural 3.33334.0500 .87656.79030

buying behavior of Mobile Handset

Visual appearance of handset influences Urban Rural 3.96673.8000 .82270.89821

my buying behavior of Mobile Handset

5G service handset influences my buying Urban Rural 3.84483.5500 1.12080.85222

behavior of Mobile Handset

(Smartphone handset influences my Urban Rural 3.60003.3000 .97772.92608

buying behavior of Mobile Handset

GPRS supportinfluences my buying Urban Rural 3.93333.2667 .954321.24692

behaviour of Mobile Handset

It was observed in the study (Table 7.4) that rural respondents were significantly
more influenced than urban respondents that price of handset, promotional activities
and availability of handsets affects their buying behavior. Both rural and urban
respondents were consistent in their opinions that Friends and Family members
suggestion, Brand name of handset, Battery backup influences their buying of handset,
but rural respondents were relatively more influenced by these factors. Whereas
Urban users were relatively more influenced byVisual appearance of handset, 5G
adoptive services, and Smartphone handset and GPRS support handsetsthan rural
users.

7.5 CONCLUSION
The study shared above on Comparative Analysis of Rural & Urban costumers’
128 Buying Behavior for Mobile Handsets has revealed differentiating factors which
motivate the rural and urban users. Findings of the study can be incorporated in Case Study
developing marketing strategy formulation by mobile handset manufacturers and
marketers for rural markets for efficient targeting their products and optimizing their
marketing goal achievement. It must be clearly realized by the marketers of mobile
handsets that their rural marketing efforts cannot succeed if the marketing strategy
and action plans are only extrapolation or minor modification of the urban marketing
strategy and plans. In view of the differential buying behaviour displayed by the
rural consumersthe marketing strategy will need to be have to be differentiate and
innovative and in their product offering to urban and rural mobile handset users.

7.6 SELF- ASSESSMENT QUESTIONS

1. Compare the buying behavior influences described aboveusing your understanding
of influences operating on the rural and urban consumers. Identify keydifferences.
2. Comment upon the role of mobile phones as marketing communication tools
in rural setting based on the above case.
3. What are the marketing implications of the observations made in the study interms
of:
a) channel of distribution
b) promotion mix
c) product mix

7.7 SUGGESTED READINGS

Kotler, P., Keller, K.L., Chernev, A., Sheth, J.N., Shainesh, G. (2021), Marketing
Management 16th Edition, Pearsons
 Balaji Satyanarayana, (2007), Rural Marketing the Road for Sustainable Growth,
Marketing Mastermind, 8(5), 22-24.
 C.S.G. Krishnamacharyulu, Lalitha Ramkrishnan (2012). Rural Marketing,
2ndedition, Pearson Education Singapore.
 Jha Mithileshwar, (2007), Rural Marketing in India. In Kotler, P. and Keller,
K. L., Koshi Abraham and Jha Mithileshwar, Marketing management, 12th
edition, pp A1-A6, Delhi, India, DorlingsKindersley(India) Pvt, Ltd.
 Kotler, P., Keller, K.L., Chernev, A., Sheth, J.N., Shainesh, G. (2021), Marketing
Management 16th Edition, Pearsons
 https://www.livemint.com/opinion/columns/packaged-goods-marketing-in-rural-
pockets-gets-a-facelift-and-a-digital-push-11657133968006.html
 https://www.outlookindia.com/business/india-smartphone-users-rural-india-
smartphones-india-smartphone-sales-news-183490
 https://www.decryptage-citoyen.org/post/how-smartphones-are-aiding-rural-
india-s-transformation

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Understanding The Rural
Consumers

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