Abstract
Purpose: This paper aims to identify the factors that influence the FMCGs purchase decision in the rural areas of Bangladesh. In addition the study measures the impact of each factor on FMCGs purchase decision.
Design/Methodology/Approach: The study sample consisted of 150 rural consumers selected based on convenient sampling method. Data was collected using self administered questionnaire via personal visit to the consumers. Factor analysis was applied to identify the factors and later multiple regression analysis was done to measure the impact of each factor on FMCGs purchase decision.
Findings: Factor analysis revealed that 24 variables loaded on 9 factors. Among 9 factors Retailers Recommendations, Sales Promotion, Product Attribute, Life Style and Product Quality were found statistically significant in explaining 58.1% variation in the FMCGs purchase decision in rural areas of Bangladesh.
Practical Implications: The study findings bring some suggestions for the marketers who want to develop product and execute marketing plan for rural consumers.
Originality/Value: This study contributes to the body of empirical research on rural consumers because scholars of FMCG products regularly explore the urban consumer behaviors whereas the rural consumer behaviors are understudied.

INTRODUCTION

Fast Moving Consumer Goods (popularly known as FMCG) are frequently purchased products like soap, shampoo, toothpaste, detergents, packaged foodstuff, dairy products, cooking oil, bread, butter, cereals, beverages like tea & coffee, pharmaceuticals, confectionery, biscuits, glassware, stationary items, soft drinks and grocery items which actually touches every aspect of our human life (Narayana & Mathew, 2015). In Bangladesh, the FMCG market dominated by few large Multinational Companies (MNCs) with some local operators (Ullah & Prince, 2006) has been divided into two segments-urban and rural due to the demographic, economic and behavioral differences. The urban segment is characterized by high penetration levels, high income level, high spending propensity, high level of brand awareness and communication access. On the other hand the rural economy directly or indirectly dependent on agriculture is characterized by relatively low level of penetration, low level of income, low level of literacy, low level of brand awareness, asymmetric information, inadequate communication and transportation facilities (Kumar & Joseph, 2014). But almost 70% people of Bangladesh live in the rural area which provides a massive opportunity for the FMCG companies to sell their products on a sizeable scale whereas the urban markets are almost saturated and highly competitive. As a result penetration in the rural market has become an inevitable business policy for sustainable business growth. Besides this the purchasing power of the rural consumers has increased and consumption pattern is also changing day by day. The rural people are now keen to take the test of modern urban lifestyle (Rashid, 2014). Socio Economic and political change over the last few years have also made the rural areas more attractive compared to urban areas (Anbarasan & Kumar, 2014). Easy access of electronic and social media, rising aspiration of rural people has also contributed to the development of rural market (Kotler et al., 2009). So there are ample opportunities for the FMCGs producers to enter into the rural market spontaneously. But the Companies offering FMCGs can’t be successful in the rural market with their general marketing strategies. Instead, they need to devise rural specific strategies due to the rural people’s low level of incomes, low levels of literacy, low levels of brand awareness, communication and inadequate transportation facilities (Yuvarani, 2013; Kumar & Joseph, 2014). In comparison to India in their different states there are few researches on rural consumers are available in Bangladesh. However in order to be successful the companies need to know the rural consumers’ buying behavior, the factors they consider while buying FMCG, the factors influence them and their brand awareness (Sumathi & Saravanave, 2003).

Hence this study aimed to find out the factors affecting the selection of FMCGs by the rural consumers in Bangladesh. The findings of the study can be essential for the product development, market development and execution of new marketing plan in the rural areas of Bangladesh. The producers as well as marketers can get the idea regarding how the rural consumers behave towards the purchase of FMCG and what factors influence them before purchasing.

OBJECTIVES OF THE STUDY

The major objectives of this study are:

• To identify the factors that influence the FMCGs purchase decision of the rural consumers in the Khulna District of Bangladesh.
• To measure the impact of each factor on the FMCGs purchase decision.
• To find out the statistically significant factors from the factors identified.
• To recommend some managerial implications of the findings from this study.

REVIEW OF LITERATURE

Today in the highly competitive market the FMCGs consumers are enjoying the benefits of making their purchase decision from a number of brands which differ in price, quality, attributes etc. Consumers’ preferences and attitudes towards certain brands also vary due to their affordability, product availability, brand awareness, life style etc. As a result the rural marketers of FMCG products have to differentiate themselves on designing strategies targeting the rural consumers (Anand & Hundal, 2008). They need to understand the factors that influence the rural purchase decision towards FMCGs. Available literature also mentions that various factors like packaging, brand name, quality, price and promotions influence the purchase decision of rural consumers (cited in Narayana & Mathew, 2015). In one study Kundu (2013) examined that electronic media like TV commercials, print advertising and word of mouth play a significant role in influencing the FMCGs purchase decision in the rural areas. Negative emotional advertising appeals used in the television advertisements also influence the customers’ intension to purchase some selective FMCGs brands by forming positive attitudes towards those brands (Jayswa l& Shah, 2012). On the other hand public relation was found to be the most important element in a study conducted by Sukhmani et al. (2012) to increase the sales of FMCGs in the rural areas.

According to Singh & Singh (2014) price, quality, warranty, advertisement, brand, friends’ recommendations, family members’ recommendation and packaging were found to be influential while taking the FMCGs purchase decision by the rural consumers. In their study it was also found that factors effect on rural consumers vary according to the demographic factors like age and the income level. Sulekha & Mor (2013) in a study dealing with 22 variables loaded on six factors also concluded that the rural customers are not only price sensitive but also think about quality, performance, reliability, brand, packaging, lifestyle and other critical aspects while purchasing fast moving consumer goods. But Narayana & Mathew (2015) argued that irrespective of price most of the illiterate and literate people prefer branded products because they believe that quality is associated with the reputed brand as well as reputed companies assuming that the usage of branded products of reputed companies will increase their status and image in that village. Retailers’ recommendations resulting from the trust over the retailers in the rural areas is another significant factor to affect the rural consumers’ FMCGs purchase decision (Anbarasan & Kumar, 2014) though many other aspects including product aspect, lifestyle aspect, value aspect and promotional aspect affect their purchase decision. In another research conducted in the rural areas of south India, Ali et al. (2012) also suggest that retailers’ recommendations is the most significant variable in the trust factor of influencing the purchase of FMCGs. So retailers act as the opinion leaders and exert a powerful influence on the rural consumption (Sayulu& Reddy, 1996). Factors like reliability and product attributes also plays a very important role in influencing the FMCGs purchase decision of the low income and price conscious set of respondents though they nourish the aspiration value of branded products which remains restricted due to lack of money (Srivastava , 2013). In a study Gautam & Gangal (2011) claimed that the major reasons for using bathing soaps, toothpaste and detergents are some product attributes like fragrance, cleanness, freshness and protection of gums whereas the consumers purchase hair oil for hair care and good looks. And the determinants of purchasing toothpaste (oral care products) are cleanliness. So the study found that most of factors influencing the purchase decision are product factors like design, quality, durability, small size with low priced sample packets, price scheme, celebrity endorsement etc.

Jain & Sharma (2012) analyzed the brand awareness and customer preferences for FMCG products in rural market of Garhwal region. The study found that rural consumers have an average awareness in case of shampoo, washing powder, soap, tea, toothpaste respectively, which infers that people in the rural market have on an average awareness about most of the products. But Vani, et al. (2010) found that consumers are not aware of the toothpaste brands in Bangalore city where the brand image, advertising and offer play an important role in influencing as well as switching form one product to another. On the other hand Gautam & Gangal (2011) argued that 4 A‟s (i.e. Awareness, Affordability, Adoptability and Availability) are responsible in influencing the rural consumers purchase decisions. After reviewing the existing literature it is clear that a number of researchers have considered different factors that influence the purchase decision of rural consumers in different parts of the world. But above studies have not worked with factors influencing the purchase decision in the rural areas of Bangladesh where 70% people are living in the rural areas. So the present study focuses only on the “The Factors Influencing the Purchase of FMCGs Products in the Rural Areas of Bangladesh.”

METHODOLOGY OF THE STUDY

A descriptive research study was conducted with the intension to find out the influencing factors in the FMCGs purchase decision in the rural areas of Bangladesh. Data was collected from a total of 150 rural consumers selected from different villages of Dumuria Upazila under Khulna District of Bangladesh based on convenience sampling method. Sample size was 150 because for the Factor Analysis we need 5 times or more of the number of variables used in the study. Hence there were 24 variables in the current study; a sample size of 150 consumers was enough for using Factor Analysis. The consumers were provided with a self-administered questionnaire translated into both Bangla and English due to the low level of English language proficiency in the rural areas. But few of the respondents were able to provide information through self administered questionnaire. As a result, 3 volunteers were employed to help them fill up the questionnaire. In the questionnaire there were two sections. One section was designed to collect demographic information of the respondents and the other section was designed with 24 statements or variables developed from the review of earlier studies and a pilot survey with the few rural consumers. 5-point Likert scale (1=Strongly Disagree, 2=Disagree, 3=Neutral, 4= Agree, 5=Strongly Agree) was used to express their opinion on each statement. After the data collection, internal consistency of the data was justified by the Cronbach’s α score which was 0. 638. Later the Factor Analysis, a data reduction tool was applied to group the 24 variables on some significant factors. Kaiser-Meyer- Olkin (KMO) measure of sampling adequacy was used to prove the data appropriateness for factor analysis. Varimax rotation, a principal component of the factor analysis was used to identify the factors. After that multiple regression analysis was done to measure the impact of each factor on the FMCGs purchase decision in the rural areas of Bangladesh. All the data analysis was done using statistical package SPSS 20.

DATA ANALYSIS AND FINDINGS

Table 1 of Kaiser-Meyer-Olkin (KMO) Measure of Sampling Adequacy represents the test of data appropriateness for Factor analysis. From the table 1 it can be seen that the value of KMO statistic is .659 which is more than 0.5 supporting the application of Factor analysis and Bartlett’s test of sphericity with significance (.000) means that the relationship among the variables was strong.

Source: Survey Data, 2016

Once, it has been determined that factor analysis is an appropriate technique for analyzing the data, one method must be selected from the two basic approaches of factor analysis: Common factor analysis (CFA) and principal component analysis (PCA).Principal component analysis (PCA) has been used as the aim of this study is to determine the minimum number of factors responsible for maximum amount of variance in the data. And the table 2 shows that the cumulative percentage of variance explained in the current study is 73.126 implying that 9 factors are responsible for 73.126% of variance.

Source: Survey Data, 2016

Table 3 shows that 24 variables are loaded on 9 specific factors using varimax procedure, most commonly used orthogonal rotation method which minimizes the number of variables with high loading values on a factor. Each factor is composed of the variables with loading value of 0.30 or higher. And the factors have been titled and interpreted according to the variables of highest loading value (Table 4).

Source: Survey Data, 2016

Source: Survey Data, 2016

As shown in Table 5, regression model shows a good fit with the F Value 21.534. R Square value of .581 indicates that 58.1% variation in the FMCGs purchase decision is explained by the independent variables. Retailers Recommendations, Sales promotions, Products Attributes, Life Style and Product Quality are found statistically significant in explaining the FMCGs purchase decision in the rural areas of Bangladesh. The model also points out that Retailers Recommendations, Sales Promotions, Products Attributes are the stronger predictors followed by Life style and Product Quality.

*p<.05
Source: Survey Data, 2016

Table 6 shows a general understanding of rural consumers towards the variables that affect their FMCGs purchase decision. It is found that the mean values of most of the variables are more than 3 on a 5 point Likert scale. So it can be inferred that the rural people admit that the said factors certainly affect their decision while purchasing the fast moving consumer goods.

Source: Survey Data, 2016

RESULT AND DISCUSSION

The first factor is titled as the Retailers Recommendations comprising of four variables. Recommendations of the retailers or shopkeepers emerged as the key variable (.857 factor loading) under the factor. So it is proven that there is a close relationship between the shop keeper and their customers. Rural consumers believe the shopkeepers. The factor accounts for 17.332% of variance explained. The second factor is termed as Sales Promotion factor which accounts for 13.539% of variance explained. Three variables have loaded on the factor where the most influencing variable is adding new ingredients or adding something extra with a loading value of .872. The other variables are discount offer, billboards and news paper advertisement. The study realizes that the rural consumers are more interested to purchase the products (soap or shampoo) that offer any discounts or awards or add new ingredients. Another factor that influences the rural consumers with reference to the purchase of FMCG products is Media Advertisements responsible for 8.914% of variance explained. The study found that though Radio and TV commercials loading value of (.772 and .631 consecutively) can’t significantly influence the rural consumers, they try to relate the product with the celebrity (loading value of .688) who endorses the product. The fourth factor is referred as Product Attributes which accounts for 7.630% of variance explained. The most influencing variable under this factor is small size of the product with a loading value of .809. This indicates that in Bangladesh the rural consumers’ purchase of FMCG is greatly influenced by the small size of the products. Due to their poor income capacity they prefer to buy the small sized soap or shampoo or toothpaste. They prefer the products that last long. Products like soap or shampoo with good fragrance often motivates them to purchase. Life Style is another factor to affect the purchase of rural consumers. Current research proved that the rural customers link purchase and consumption of FMCG for the improvements in their lifestyles. Rural consumers consume the personal care products to maintain their personality or to increase the prestige in the society. This factor accounts for 6.459% of variance explained. The sixth factor is titled as Brand Loyalty loading by the three significant variables. The survey of the research proved that the most of the time the rural consumers repeat their purchase for same brand. Another thing is that the consumers purchase more during any occasion like Eid or puja. So it is evident that brand loyalty is affecting the purchase of FMCG. And the factor explains 5.462% of variance. Packaging is the first impression of a product and it affects the purchase of rural consumers. But the real survey of this research identified that rural consumers are not always motivated by the attractive packaging. Rather they prefer to purchase the large packet for their large sized family. As a result large family size is key variable (loading value of .677) under this factor which explains only 4.968% of variance. The eighth factor is identified as Price of the product. And lower price with a loading value of .706 is the major variable of the factor. The current research reveals that rural consumers are price sensitive. They give value to that product which is low priced, satisfy their need, have extra benefits and affordable for their pockets. (Sulekha & Mor, 2013). 4.586% of variance is explained by this factor. The rural consumers are not only price sensitive but they seek the quality products (a loading value of .821) as well as Halal enriched products. So under this research it is once again proved that rural people seek Quality explaining 4.235% of variance. Among these 9 factors 5 factors including Retailers Recommendations, Sales promotions, Products Attributes, Life Style and Product Quality are statistically significant in explaining the FMCGs purchase decision in the rural areas of Bangladesh. Retailers Recommendations, Sales Promotions, Products Attributes are the stronger predictors followed by Life style and Product Quality.

CONCLUSIONS

The study has put a great stride to find out the factors that ultimately influence or affect the rural consumers in Bangladesh while purchasing the Fast Moving Consumer Goods. Retailers’ recommendations, Sales promotion, Media advertisement, Product attributes, Life style, Brand loyalty, Packaging & family size, Price and Quality have been found as the influencing factors towards the purchase decision of FMCGs in the rural areas. According to the findings of this study it can be inferred that the rural consumers in Bangladesh believe in the information provided by the retailers or shopkeepers. They feel comfort to make their purchase decision according to the retailers’ recommendations. Sales promotions including coupon, discounts or adding new ingredients also motivate the rural consumers of Bangladesh to switch from one brand to another. Television/ radio advertisements or the product endorsements by their favorite celebrity act as great stimuli to affect the purchase decision of any FMCG brands. The rural consumers also consider the products attributes like size, durability and good fragrance as one of the most important factors. Now they link purchase and consumption of FMCG for the improvements in their lifestyles. The study has also proved that product quality is also important to the village consumers like the urban consumers of Bangladesh though the study has failed to reveal some factors like brand awareness, brand preferences and emotional aspect that also affect the rural consumers’ purchase decision. But what identified is obviously not less important. On the other hand the sample of the study limits the generality of the findings as the rural consumers of Dumuria Upazila are only a subset of the total rural consumers in Bangladesh. So future researches must be conducted with a sample more representatives of entire rural consumers of Bangladesh. However, the findings of this study have a clear implication for the FMCG manufacturing companies because the study outcomes can be essential for the market development or product development or the strategy development in the rural areas of Bangladesh.

RECOMMENDATIONS

From the study findings it is conceived that Retailers Recommendations, Sales promotions, Products Attributes, Life Style and Product Quality are the significant factors in explaining the FMCGs purchase decision in the rural areas of Bangladesh. As a result, the manufacturing companies should take different strategies while marketing the products in the rural areas. They should educate the retailers or shopkeepers more as the rural consumers ask retailers recommendations while purchasing any FMCG brands due to their low level of education and brand awareness. Strategically the companies can apply the push strategy by motivating the retailers to convince the rural consumers. They should make the products available to the rural consumers. Sales promotions should be designed in a way that becomes attractive to the rural consumers. Products attributes especially the size of the products should be given priority due to the rural consumers’ less affordability to purchase big sized products given that few rural consumers have started linking the product usage to the improvements of their life style. Further product quality must be ensured though most of the rural consumers are ignorant of product quality, even are not aware of product information.