Page 84 - DMGT509_RURAL MARKETING

Unit 4: Rural Consumer Behaviour

Firms produce large volumes of products and hence need large quantity of materials. An Notes
individual will buy a TV picture tube as a replacement only, if his TV set’s picture tube has
become defective. A TV set manufacturer will be buying picture tubes in thousands for putting
them in the TV sets. Yet as compared to individual buyers, TV set manufacturers will be far less
in number.
In most cases industries are established near the source of one or two major raw materials
needed for manufacture. Hence, most industries are concentrated in that area. Gujarat has lot of
cotton, which accounts for large number of textile mills in that region. Villages too have handloom
operators.

The demand of raw materials is derived from the plan of manufacture of products, which use the
material. The tyre sale is dependent on the number of cars manufactured in a particular period.
For such intermediary products the demand remains inelastic over long periods of time with
only marginal changes. However, it could also be grammatically changed in case the buyers
find different usages of the product when the demand will increase. If the product becomes
obsolete, the demand could just disappear, as happens often in fashion garments.
Purchase in such cases becomes a professional discipline. Depending on the value in money
terms and also in availability terms, the importance is given to purchase decisions.
Buying situations can be classified as follows:
1. First buy is when a new firm makes the purchases or an old firm tries out a new
product.
2. Re-buy takes place when a satisfied buyer buys the product again. This happens when
besides the product other factors like firms after sales service, satisfies the buyer and the
buyer accepts behaviour of its sales people.
3. Modified re-buy is made when the manufacturer accepts customer’s suggestions and
product is suitably modified to suit the firm.
4. New task purchase depends on the launch of new products and is planned accordingly.
System for buying in the organizations consists of the following persons:
Initiators are the people who place the requirement of the product before the firm’s authorities.
In most firms they would be either R& D persons or purchase executives.
Users are the people who define the product with specifications and would ultimately use it.
They would be R&D engineers, production engineers etc.
Influencers are the people who influence the purchase decision, or e.g. which brand or model to
buy, and from which dealer. These could be R&D Managers, or consultants.

Deciders are the authorized people who can decide spending of money for making the purchase.
They are of the rank of General Managers.
Approvers are the people with power of approving the purchase like Chief Executive Officers
and Managing Directors.
Gatekeepers are those who filter information and see to it that only relevant information reaches
the decision-makers about the product. These could be receptionists, purchasing agents etc.
Consumer behaviour in organizational buying therefore becomes complex, with a number of
persons involved in the decision-making. Therefore unlike in consumer products the role of
advertisement in organizational buying is limited to, (a) image building of the firm and
(b) providing detailed information to the buyers about the products.

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