Reliance Jio launched the JioPhone, an affordable internet-enabled feature phone, catering to rural needs for basic connectivity and long battery life.
Rural consumer V/s Urban consumers-
A. Understanding basic difference between Rural and urban consumers’ behavior
B. Understanding the nature of competition in rural marketing.
Introduction
In India, rural consumers value quality, durability, and community involvement more than urban consumers who seek ease, brands, and trends. This is because rural spending (68.84% of population) is higher than urban spending (31.16%). Because their wages change with the seasons, people in rural areas like small packs and local shops, while people in cities choose high-end, tech-driven purchases. In rural areas, loyalty is shown through symbols, and in cities, it’s shown through ads.
Key Differences
| Aspect | Rural Consumers | Urban Consumers |
| Purchase Frequency | Weekly, small packs for affordability | Less frequent, bulk/economy packs |
| Brand Loyalty | High via color/logo, less ad-driven | Brand-conscious, influenced by trends |
| Shopping Channels | Village shops, haats for credit/bargains | Malls, online for convenience |
| Decision Factors | Family/elders, price sensitivity | Individual, tech/products |
| Product Preference | Durables for utility, sachets | Advanced gadgets, fast food |
Examples
Rural: Bihar villagers buy FMCG sachets post-Digital India exposure, valuing presence over ads. Urban: Delhi youth prefer online fast food via apps, prioritizing speed. Rural favors two-wheelers for practicality; urban opts luxury cars for status.
Case Studies
Godrej’s “Godrej Ki Doli” campaign reached 1 crore+ rural consumers in 28,000 UP/AP/Maharashtra villages via door-to-door, contacting 1.7 lakh retailers and building loyalty without heavy ads. Bihar online buying study showed rural 35% rise via YouTube, but urban leads in tech adoption due to infrastructure. Migrants from rural to urban retain haat habits initially but shift to malls.
A. BASIC DIFFERENCES BETWEEN RURAL AND URBAN CONSUMER BEHAVIOR
1. Income and Spending Power
- Rural Consumers: Usually have lower and more irregular incomes, leading to cautious spending and preference for affordable products.
- Urban Consumers: Typically have higher, more stable incomes, allowing greater discretionary spending and willingness to try premium or new products.
2. Product Awareness and Information Sources
- Rural Consumers: Rely more on word-of-mouth, local opinion leaders, and traditional media (radio, regional TV). Advertising impact is limited unless localized.
- Urban Consumers: Exposed to multiple information channels like digital media, TV, print, social networks. More aware of brands and product options.
3. Buying Behavior
- Rural Consumers: Prefer small pack sizes (sachets, single-use), buy less frequently, and make purchases mostly from local kirana stores or markets. Price sensitivity is high.
- Urban Consumers: Buy in bulk or larger packs, shop more frequently in supermarkets, malls, and online platforms. More brand and quality conscious.
4. Brand Loyalty
- Rural Consumers: Less brand loyal; will switch brands for price or availability.
- Urban Consumers: More likely to be brand loyal, influenced by advertising and perceived quality.
5. Influencers
- Rural Consumers: Influenced by family, community leaders, and local traditions.
- Urban Consumers: Influenced by celebrities, social media influencers, peer groups, and advertising.
6. Payment Methods
- Rural Consumers: Prefer cash; digital payment adoption is growing but still limited.
- Urban Consumers: Comfortable with digital payments, cards, and wallets.
Example
- Shampoo Purchase:
- Rural Consumer: Buys ₹1 sachet from a kirana shop, influenced by neighbor’s recommendation.
- Urban Consumer: Buys a branded family-size bottle from a supermarket or online, influenced by TV/online ads.
Case Study 1: Sachet Revolution (Hindustan Unilever Limited)
Problem:
HUL’s shampoo bottles were too expensive for rural consumers, who were hesitant to spend a large amount at once.
Solution:
HUL introduced ₹1 shampoo sachets, making the product affordable and accessible for rural consumers who preferred buying in small quantities.
Impact:
- Massive increase in rural sales.
- Urban consumers continued buying large bottles, valuing convenience and long-term savings.
Learning:
Rural consumers prioritize affordability and immediate needs, while urban consumers value convenience and are less sensitive to price per unit.
Case Study 2: Mobile Phones – JioPhone vs. Smartphones
Situation:
Urban consumers demand smartphones with advanced features for communication, work, and entertainment.
Solution for Rural Markets:
Reliance Jio launched the JioPhone, an affordable internet-enabled feature phone, catering to rural needs for basic connectivity and long battery life.
Impact:
- JioPhone saw massive rural adoption.
- Urban buyers continued purchasing high-end smartphones (Samsung Galaxy, iPhone).
Learning:
Urban consumers seek technology and status, while rural consumers focus on essential functions and affordability.
Case Study 3: Media Consumption and Advertising
Scenario:
A detergent brand wants to reach both rural and urban markets.
Approach:
- Urban: Runs TV and digital ad campaigns featuring celebrities, and partners with e-commerce sites.
- Rural: Sponsors local events, uses folk media, and organizes product demonstrations at village fairs, relying on word-of-mouth.
Impact:
Urban sales rise due to aspirational advertising; rural sales grow through trust-building, personal interaction, and localized messaging.
Conclusion:
Rural consumer behavior is driven by price, accessibility, and local influence, while urban consumer behavior is shaped by higher income, brand value, modern retail, and digital exposure. Successful businesses tailor their strategies to these fundamental differences.
B. UNDERSTANDING THE NATURE OF COMPETITION IN RURAL MARKETING
Nature of Competition in Rural Markets
- Fragmented Market: Many small players and unorganized local brands compete with large national brands.
- Low Brand Loyalty: Rural consumers often switch brands based on price, availability, or local influence.
- Price Sensitivity: Price is a key factor; even a small difference can sway consumers.
- Distribution Challenges: Companies compete to reach remote locations and ensure product availability.
- Communication Barriers: Marketing must overcome language, literacy, and cultural diversity.
- Trust and Relationship Building: Local relationships and word-of-mouth are vital; brands often compete for trust as much as for sales.
- Product Adaptation: Competition may lead to product modifications (smaller packs, local flavors, etc.) to suit rural needs.
- Non-traditional Promotions: Competitors use fairs, melas, van campaigns, and local influencers instead of only mass media.
Case Studies and Examples
Case Study 1: HUL vs. Local Brands – Detergent Market
Scenario:
Hindustan Unilever Limited (HUL) markets Wheel detergent in rural India, but faces competition from local, unbranded detergents sold at lower prices.
Competitive Strategies:
- HUL introduced smaller, affordable sachets.
- Launched rural-specific promotions (e.g., “Wheel Lucky Draw” at village fairs).
- Built a robust rural distribution network using local wholesalers.
Outcome:
Wheel became a leading rural brand, but HUL had to continually innovate on price, pack size, and promotions due to persistent competition from local brands.
Case Study 2: Colgate vs. Neem Sticks
Scenario:
Rural India traditionally used neem sticks for oral hygiene.
Competitive Approach:
- Colgate marketed toothpaste in small sachets to make it affordable.
- Ran educational campaigns in villages about dental hygiene, sometimes partnering with local health workers.
- Sponsored rural events and distributed free samples.
Outcome:
Colgate became the No.1 toothpaste in rural India, but competition from traditional practices and local brands remains strong, requiring ongoing education and adaptation.
Case Study 3: Britannia vs. Local Bakeries
Scenario:
Britannia aimed to grow biscuit sales in villages where local bakeries sold loose, unpackaged biscuits.
Competitive Moves:
- Introduced low-priced “Tiger” biscuits in small packs (₹2–₹5).
- Partnered with rural retailers and offered incentives.
- Used mobile vans to reach remote villages, creating brand visibility.
Outcome:
Britannia gained a strong rural presence, but continues to face price and availability competition from local bakers.
