Patronage Behavior of Indian Rural Consumers

The study has been conducted by Rajnish Tuli and by Amit Mookerjee in 2004. The study is entitled Retail Formats: Patronage Behavior of Indian Rural Consumers and has been published in the South Asian Journal of Management in its July to September 2004 issue. The purpose of the research is to investigate the customer and behaviors that marketers must consider in catering to rural consumers. The research focused on response and patronage behavior of rural consumer in their evaluation of retail outlets in India, and the decision factors influencing such behavior.

In particular, the retail formats that were investigated were village shops and haats. The study presents that shopping activity cost and product purchase cost were the most influential variables for the village shot retail format. Moreover, it has been found that “bargain” and promotion incentives cause them to buy from other markets. The information derived from the study shall be useful in crafting effective product placement marketing efforts. 2) Explain the business problems under investigation. The research aims to determine the reasons for the behavior and patronage of retail outlets by rural consumers.

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In determining such factors, retailers would be able to draft appropriate marketing strategies that influence these variables. The study proceeded with identifying the differentiators of village shops and haats in terms of various perceptual dimensions. Specifically, the study assessed the factors which affected the decision of rural consumers to either purchase from a village shop or at an outshopping center. Moreover, it is not only limited to physical attributes, but rather on psychosocial traits that affect their decision to purchase and patronage. These advantages are congruent with consumers’ value.

The following are the specific objectives that the study addressed (expressed in verbatim): 1) To identify the relevant decision variables influencing the rural consumers’ patronage behavior towards existing retail setup; and 2) To identify the most critical decision variable, which differentiates the perception of rural consumers towards the retail setup. There were several decision variables involved in the study, including access route, traveling cost, product variety, price of a particular item, credit facility, credit period, bargaining facility, bargaining gains, product quantity, returns and adjustments, and promotions.

Access route pertains to the presence of geographical connections among settings or places. The study hypothesized that there is no significant difference in the perception of access route associated with the two shopping centers. The next dimension, traveling cost, refers to the cost of getting to the shopping center. It is hypothesized that there is no significant difference in the traffic barrier related to the two shopping centers. The third dimension, product variety, refers to the number of products offered by the center.

The price of a particular item is defined as the economic value perceived by the consumer in purchasing a specific product from an outlet. The next dimension is credit facility which pertains to the concession accorded to consumers in purchasing from a center. Another variable is credit period which pertains to the length of time allowed for a consumer to pay off his purchase. Bargaining gains is defined as the reduction in the cost that a consumer may have access to as an outcome of negotiation with the retailer. Product quantity refers to the amount of merchandise that a consumer may avail of in choosing a center.

Another variable is returns and adjustments, which pertains to the ease with which returns or defective goods are dealt with. Finally, promotions are the incentives provided by the retailer to consumers for increased brand usage and patronage. 3) Identify the parties involved in conducting the research. The respondents of the study were from 12 gram panchayats from villages in Western Uttar Pradesh and South Uttaranchal. The villages were selected using purposive sampling, with the following inclusion criterion: with more than 1000 population, having a strong retail setup with a minimum of 8 retail outlets.

Tea was the product used in assessing purchase decision. 4) Describe the methods involved to conduct the research project. The dimensions utilized in retail store selection have been assessed by rural consumers in the current study. The questionnaire required respondents to make assessments through a 7-point Likert scale. A pilot study has been undertaken to evaluate the scale reliability, resulting in the dropping of two variables, namely, peer shopping behavior and retailers’ attitude. The respondents of the study were from 12 gram panchayats from villages in Western Uttar Pradesh and South Uttaranchal.

The villages were selected using purposive sampling, with the following inclusion criterion: with more than 1000 population, having a strong retail setup with a minimum of 8 retail outlets. Tea was the product used in assessing purchase decision. The statistical tests that were used for the analysis included the mean, paired t-test, discriminant analysis and factor analysis. These all helped determine the pertinent factors that differentiated the two retail outlets. References Tuli, R. & Mookerjee, A. (2004). Retail formats: Patronage behavior of Indian rural consumers. South Asian Journal of Management, 11(3) 57-73.

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