IJSTE - International Journal of Science Technology & Engineering | Volume 2 | Issue 10 | April 2016 ISSN (online): 2349-784X All rights reserved by www.ijste.org 1 Factors Affecting Buying Behaviour of Rural Consumers in Dilla, Ethiopia Arun Korath Dr. Sangheethaa .S Department of Management Department of Electrical & Computer Engineering College of Business and Economics, Dilla University, College of Business and Economics, Dilla University, Dilla Ethiopia. Dilla Ethiopia. Berhanu Getinet Assistant Professor Department of Economics College of Business and Economics, Dilla University, Dilla Ethiopia. Abstract The study is done to identify the factors affecting buying decisions of rural consumers and whether importance of these factors varies with age and income of respondents. The factors taken into consideration by the rural consumers for purchasing a commodity are price, quality, warranty, advertisement, brand, friend’s recommendations, family members recommendation and packaging. It was found that factors have an impact on rural consumer and it varies with age and income. Importance of all factors in buying behaviour of rural consumer found increasing trend with increase in their age and income. The effect of price and quality on buying behaviour of rural consumer increases significantly with increase in age and income. Advertisement and brand of products found significantly very important to high income rural consumers than lower income consumers. Friends and family members’ recommendations had significantly more impact on buying decisions of lower income consumers than high income consumers. Packaging had significantly more impact on buying decision of lower income consumers than high income consumers. Keywords: Buying behavior, factors ________________________________________________________________________________________________________ I. INTRODUCTION Thrust on rural development since 1950 eventually made Ethiopia into an attractive rural market (Ali et al., 2012). Increased awareness along with rise in income levels influenced the rural marketing environment in the country (Velayudhan, 2002). Other factors that contributed to the growth of rural markets are access of media, rising aspiration of rural people and good packaging of products (Bijapurkar, Rama, 2000; Kotler et al., 2009). Rural market is not all about low price point and PR building. With penetration of TV advertisement and other informative media, the awareness level of rural people is increasing gradually. The urban markets got saturated with products and brands which forced marketers to turn towards rural markets (Nain and Kumar, 2009). According to Mckinsey survey 2007, rural India, with population of 627 million would become larger than the total population of consumer markets in countries like South Korea or Canada in coming 20 years. Many experts and organizations have differing views on what constitutes the term, ‘rural’. Collins Cobuild Dictionary (2001) describes the word ‘rural’ as ‘place far away from towns and cities’. According to Velayudhan (2002), rural marketing includes all those activities of assessing, stimulating and converting the rural purchasing power into an effective demand for specific products and with the aim of raising the standard of living. Rural marketing is any marketing activity in which one dominant participant is from rural area (Kotler, et al., 2009). Consumer behaviour is defined as activities people undertake when obtaining, consuming, and disposing of products and services (Blackwell et al, 2001). The study of consumer behaviour does not only include reasons for buying but also the consumption process of buying , consumers get driven by influences such as feelings, motivation, income, lifestyle, opinions, culture, personality etc (Srivastava,2013). II. REVIEW OF LITERATURE Host of factors affect the consumer behaviour like socio-cultural, price, ads and any promotional scheme but in India is increasingly getting more and more conscious of brands. The rural youth does not compromise for the quality of branded items and even prepared to pay more prices for the branded product. The choice of brand ambassador has a very significant effect on the purchase behaviour of rural consumer (Nain & Kumar, 2009). Rural consumers in Haryana not only aware of branded products rather they purchase variety of branded products and concluded that rural consumers are willing to buy a variety of products and brands if their prices are lowered in future. Income was found to be the most important factor followed by education, occupation. Caste is one of the most important factors in rural Haryana affecting purchase decision of rural consumers