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TRANSCRIPT
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
xiii
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
to play in consumer education. They have the means to provide consumers with
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.
xvi
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.
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.
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
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. 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
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. 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.
The problem is that there are no effective sanctions against misleading
advertisements. What needs to be emphasized is that the poor, uneducated consumers
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.
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
guarantees, imitation, sales gimmicks and unreasonable pricing.
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
The reports of National Commission for Applied Economic Research clearly
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
Source : Census of India 2011
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
Source : Census of India 2011
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
Source: Field Survey, CCS
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
Source: Field Survey, CCS
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
Source: Field Survey, CCS
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
Source: Field Survey, CCS
48
Purchase of Goods from Nearby Kasba/Town
Table 3.6
Purchase of Goods from Nearby Kasba/Town
Particulars Response
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
Source: Field Survey, CCS
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
Source: Field Survey, CCS
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
G.TotalAara Sitamarhi Total Kolhapur Amaravati Total
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
Source: Field Survey, CCS
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
Particulars Response
Bihar Maharashtra
G.TotalAara Sitamarhi Total Kolhapur Amaravati Total
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
Source: Field Survey, CCS
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
Source: Field Survey, CCS
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
Source: Field Survey, CCS
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
Aara 62.3 13.0 12.6 5.1 2.3 4.7Sitamarhi 41.6 28.6 10.5 12.2 2.5 4.6Total 51.4 21.2 11.5 8.8 2.4 4.6
Maharashtra
Kolhapur 53.3 15.2 10.3 6.1 6.7 8.5Amaravati 50.6 19.0 8.1 3.3 2.7 16.3Total 51.5 17.7 8.9 4.2 4.0 13.7
G.Total 51.5 19.4 10.1 6.4 3.3 9.4
Source: Field Survey, CCS
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
Aara 62.3 14.9 0.9 3.3 1.4 17.2Sitamarhi 59.7 21.0 2.9 4.6 2.1 9.7Total 60.9 18.1 2.0 4.0 1.8 13.2
Maharashtra
Kolhapur 51.5 10.3 0.0 17.6 5.5 15.2Amaravati 56.0 10.5 2.1 14.5 2.7 14.2Total 54.5 10.5 1.4 15.5 3.6 14.5
G.Total 57.6 14.1 1.7 10.0 2.7 13.9
Source: Field Survey, CCS
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
G.TotalAara Sitamarhi Total Kolhapur Amaravati Total
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
Source: Field Survey, CCS
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
Source: Field Survey, CCS
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
Source: Field Survey, CCS
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
Source: Field Survey, CCS
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
Particulars Response
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
Source: Field Survey, CCS
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
Particulars Response
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
Source: Field Survey, CCS
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
Aara Sitamarhi Total Kolhapur Amaravati Total G.Total
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
Source: Field Survey, CCS
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
Source: Field Survey, CCS
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.
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Table 4.4
Kind of Impact ‘Jago Grahk Jago’ has on Consumers Buying Behavior
Particulars Q_40 Bihar Maharashtra
Aara Sitamarhi Total Kolhapur Amaravati Total G.Total
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
Source: Field Survey, CCS
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.
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 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
guarantees, imitation, sales gimmicks and unreasonable pricing.
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.
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. 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
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. 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.
The problem is that there are no effective sanctions against misleading
advertisements. What needs to be emphasized is that the poor, uneducated consumers
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
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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
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
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.