Purchasing pattern in rural retail markets
Muhammed Rizard, Management and Commerce, Faculty South Eastern
University and Mohamed Irshad, Senior Lecturer, Management and Commerce,
Faculty South Eastern University.
Implementing marketing strategies and reaping the benefits of it in
the rural markets are crucial endeavours for the companies. Marketing to
rural customers becomes for eternity a challenging practice for even big
multinationals and conglomerates.
The purchasing pattern of customers has radically improved in
Understanding their culture has been the most difficult process for
Colossal amounts of money are pumped into society in turn to
understand the complexity of culture of consumers.
Still, the adoption process of customers towards new brands is
mysterious and companies, which introduce new products to this class of
markets, see the customers as late majority and laggards.
Some companies' brands such as personal care brands referred as
shampoo brands, toothpaste brands, confectionery brands are in the
growth stage in its product life cycle in rural markets, whereas some
brands of even of multinationals which are in the growth and mature
stage in product life cycle in urban markets lack will to exploit its
potentials in rural markets.
We could denote some brands as examples in this scenario such as
health- care brands of big hospitals (Nawaloka, Asiri and Lanka
Hospital), fashion brands, leisure brands referred as Excel World and
theme parks, (See Table 01).
The reasons, which were found to have this sort of perception among
customers towards brands, have been the customers' culture and the
adoption level for brands.
The customers' culture is a unique for a society, a group of people,
and an individual.
It has been built through a long lasting behavioural change of the
customers' mindset, and it is like always Ice-berg syndrome, where we
can see small part of the iceberg in the superficial manner, but the
hidden area of that ice-berg would be a huge part under the sea,
normally we can not see that.
However, one or two thirty-second commercial advertisements on TV or
PR activities would never change the mindset and the culture of them
Indeed, as they are depicted to an antiquated culture, their
purchasing pattern also becomes rapidly a crucial factor for
multinationals, big conglomerates and small and medium companies whose
brands mostly in Sri Lanka are marketed to rural customers.
Thus, they are considered as late majority and laggard segments in
the adoption process or curve introduced by Everett N Rogers.
Changing purchasing pattern of customers in rural markets
Comparatively, the mindsets of customers in rural areas were changed
fairly, because according to the concerns of writers, two factors played
a key role in changing the perception of mindsets and fine tuned their
Continuous innovation in technology and education level enormously
transformed gradually the customers' state of mind, their culture and
purchasing pattern from the landscape of antiquated culture.
In the 1990's, the customers were old archaic, and there were a very
few of the boutiques and small Kades where the customers regularly
purchased the goods and services in each village of rural areas.
Japanese brands were dominating the markets in almost all categories
of brands. Customers' perceptions were also towards durability of
brands. They wanted brands that can be used for many years.
However, after 2000, technology was certainly a breakthrough in every
business, such as telecommunications, information and communications
technology fields, use of credit cards for banks and use of ATM in
banking transactions and sophisticated mobile phones. These all changed
and brought a new paradigm shift in the culture and consumer behaviour.
As a result of it in rural markets, the consumers were aware of new
brands, modern lifestyle of the other customers in local as well as
international markets, and their purchasing styles and behaviours.
Consequently, the continuous innovation in using different
technologies on the products created a new demand for them. The living
style and their spirit of culture also were somewhat changed.
Although, this type of customer segments out of total segmentations
of companies' brands have been very narrow which we can call early
adopters and early majority in the rural markets, it is just a difficult
for the companies still to get the rest of the segments to use their
brands in the adoption process.
A plenty of activities have to be induced at this moment on which
companies should instigate strategic planning in terms of changing the
strongly-bonded perceptions of customers.
Another important factor which changed extensively the cultural
elements of customers in rural markets is the level of education.
Comparatively, the educational level of students, and IT literacy rate
of people in particular after 2006 were drastically augmented.
Most of the people in rural areas migrated to foreign countries for
managing their livelihood incomes and some of them shifted for higher
In the case of such people, their families live a greater extent of
life with higher exposure to modern shopping style. Bulk purchases,
purchasing under one roof, use of highly sophisticated devices and
gadgets, whether it be mobile phones, laptops, iPad, iPod, iPhone,
engaging to adventurous and fun trips are the utmost characteristics of
those families. The families whose children are in foreign countries
mostly prefer to purchase in supermarkets than other families whose
proprietors are middle income earners and government job holders. The
arrival of Cargills Food City to liberated rural areas made a
significant change in the customers' mindsets and the purchasing pattern
of customers also radically is improved in rural markets. Before
Cargills, some of the boutiques and small shops tried with the
imitations of Cargills' name boards and same slogan of Cargills "On your
way home" to offer one stop shopping experience to customers under one
This retailing initiative of such organizations caused to bring
change into the consumers' mindset and thought a little bit of
supermarket experience even though that practice was treated as illegal
Thus, with that sort of awareness programs, Cargills simply entered
to these rural markets and dominates customers with innovation because
Cargills has been known as a pioneer brand in the retailing markets
among customers in the rural market too.
However, still retailing organizations like Cargills should think how
they will have to induce strategic planning to transform the mindsets of
customer segments such as Late Majority and Laggards in rural areas.
Here are some strategies that could be adopted along with the
marketing planning for those retailers who would like to prepare their
strategic planning for the transformation of customers' mindsets and
consumer behaviour into modern purchasing style.
Marketers' reactions for transformation of customer's mindsets.
Along with the marketing strategies of retailers, they should prepare
their strategic planning for the customer segments in rural markets. The
following strategies should be adopted in their planning process.
Social Marketing: Comparatively to urban customers, the rural
customers are highly concerned about social responsible programs of
companies. Enhancement of education and poverty reduction are the most
successful programs that will bring high impact to the brands and
companies in rural markets.
Based on the financial capability of organization, they may think
even small level of programs that are matched to the marketing
objectives and strengths of organizations. Further, this would be the
fundamental of creating a strong word of mouth campaign among customers.
Experiential marketing initiatives: In-store events or programs that
induce the interest of customers with experiencing, tasting,
understanding the value of products, its promises and entire phenomenal
brand attributes, would be most successful strategies that reduces the
gaps between companies' brands and customers.
Revisit the pricing: What the price that the retailing organizations
charge to their customers in developed markets or urban markets will not
be applicable for rural customers. An affordable price for the products
or else reduced price will be useful for retailers because unlike the
customers in urban markets, rural people do not purchase the products
and brands for prestige or its image but they look only price, quality
and durability of products.
Targeting the reference group: For rural customers, certainly there
is at least one educated family representative in each family.
The other family members always listen to the words of that
representative on what he or she talks about. So the message designers
in the communication part should consider the reference group in order
to recommend your brands. A comprehensive and demonstrative message will
be an effective core element in the communication part for their
customers and it should talk about your product attributes, brand
promises, customer value and retailing experience.
If you understand and satisfy level of expectation of reference group
members, and deliver those branding elements and identity, that will
definitely become as top of the mind brand.
Creating word of mouth campaign: Along peer groups and educated
groups, creating word of mouth is important because it works well in
rural markets, and makes those groups to recommend the brands to others.
A specific message time to time should reach customers and the
organization should keep the momentum with customers at regular
There are many strategies that could be pursued by companies in this
scenario, but to change the customers' mindsets in rural areas the
specific emotional strategies like what we have touched will help to
transform their mindsets.
However, all we have argued in this article is for the platform to
make the changes happen but in a long term perspective, the innovation
in selling the products, maintaining category management, in-store
merchandising options, in-store favourable customer experience and
delivering the brand promises will help organizations sustain customers