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Understanding of rural consumers needs to improve

News, 30 January 2017
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ASIA: Rural consumers in emerging markets are increasingly tech-literate and brand-aware, but much about their behaviour remains misunderstood, according to a leading academic.

Vijay Mahajan, a professor of marketing at the University of Texas at Austin and author of Rise of Rural Consumers in Developing Countries, told Knowledge@Wharton that, while the global trend towards urbanisation is not about to stop, nor is the rural population going to become rapidly less significant.

"Almost half of the world's population is non-urban," he noted. Also, the aspirations of rural consumers are very similar to those of their urban counterparts.

There are many reasons for this, including government pushes to tackle poverty, urban and international migrants remitting money and experiences, the spread of technology and information beyond cities thanks to televisions and mobile phones

But the mere possession of modern products does not mean they are always used in the way one would expect.

Mahajan related his meeting with a farmer in rural India, who, in reply to his various inquiries said that "of course" he had a TV, a vehicle, a mobile phone, a toilet. It subsequently transpired, however, that he didn't use the toilet himself, preferring to go out to the fields. "I can't do that at home because it smells and it's only for the ladies," he explained.

There is a lot about consumer behaviour, like family relationships, that needs to be understood, Mahajan observed.

Marketers don't always appreciate the importance of the harvest, he added. "I think so long as there is some component of the agriculture sector, the entire lifestyle in rural areas will be around the harvest, the seasons, and many of the religious and social holidays."

In many countries migrant workers return home to help out at harvest time. "The most interesting was in Indonesia," he said. "During the harvest season and also during Ramadan, they all go home. And the rich people move into hotels because there is no help."

Mahajan also had an idea about how rural areas could move forward: he proposed a block of ten countries, rather like the BRICs, which could hold a CES-like conference every year to showcase innovations from around the world that could help developing countries and, specifically, rural areas.

Data sourced from Knowledge@Wharton; additional content by Warc staff

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