Organic Foods in India Essay

Purpose – The purpose of this paper is to investigate the consumers’ decision-making process for purchase of organically produced foods in India Design/methodology/approach – Using already existing research model and scale, forming hypothesis, and testing its validity in Indian context. Using convenient sampling (Tier 1, 2 B school Graduates) to gather data for factor loading. Type of Research – Descriptive Research Introduction Organic production system is a system that produces organic foods in harmony with nature and the environment. In other words, this is a unique system which ensures that the â€Å"best practices† in the area of production are utilized to ensure that the output is a healthy and safe apart from having a positive symbiotic effect with the environment. Thus, one can say in lay man’s terms that an organic food product is one that has been produced using only natural agents in the production process. For the vast majority of human history, food has been produced organically. It was only during the 20th century that new synthetic chemicals were introduced to the food supply. Under organic production process, the use of conventional non-organic pesticides, insecticides and herbicides is heavily regulated. In the case of livestock, they are reared without the routine use of antibiotics and growth hormones. Scenario in India Organic foods are fast changing from a fad to a serious proposition in India. Today, the reach of organic foods is expanding to gradually find its way into the average Indian household. An indicative reason for the same is the rising health consciousness among Indian consumers. Pegged at Rupees 6. 5 billion in 2010, the organic food market is witnessing the shift from being an elitist to a healthy product. Although production and consumption figures for organic food in India are way behind the world average, the market is now showing signs of a strong growth trend. Slowly the deterrent of high price is being out-weighed by nutrition, quality and a chance to shape a safe environment. The organic food products market has been continuously facing the issue of absence of recognizable brands, small range of products, high prices and faulty government policies and a general lack of retail presence which has translated to low demand in the domestic market. In spite of this industry players are optimistic about the future prospects, as they are of the opinion that this industry holds a lot of promise. The export industry remains undeveloped with most producers being either small or marginal farmers, small cooperatives or trade fair companies. The small farmers, scattered across the country, offer an incomplete product range that are mostly available as a local brand. This is especially an issue in developed countries where the shelves of an average supermarket is stocked with a large range of certified organic foods. Problem Statement The question on everyone’s mind is where exactly is the organic food industry falling short? What are the main factors that influence a consumer’s decision to purchase organic foods? The fact of the matter is that this area has suffered from lack of interest/attention and a very low level of research. Thus, our Problem Statement is as follows â€Å"What influences the decision to buy organic food products in India? † Research objective The purpose of this assignment is to understand the primary influencers that motivate our target study group of individuals belonging to the upper middle-class category in their decision to buy organic foods products in India. Since the students of the top B-Schools either belong to or will be a part of the aforementioned category and will be starting new families, they are part of core prospective customer segment for this market. Hence, we have decided to focus our research on them. Literature Review Scope This research study focuses on understanding the primary influencers motivate our subjects (individuals from the upper middle class category) to buy organic foods. Students of B-Schools are from diverse backgrounds and origins. Most belong to the upper middle class category and we can safely assume that those that aren’t will be a part after they graduate. Moreover, they are also in that stage of life where they start a family of their own and assume additional personal responsibilities. This makes them appropriate subjects for this study. This study will analyse their responses with respect to knowledge about and attitude towards organic food, and their sensitivity to the health and environmental benefits associated with it. Sources and their Details: Honkanen, P. (2006), â€Å"Ethical values and motives driving organic food choice†, Journal of Consumer Behaviour , 5, pp. 420-430 The paper tries to investigate the role of ethical motives in consumers’ choice of organic food. The relation between ethical food choice motives, attitudes and intention to consume organic food was studied by estimating a structural equation model. We were able to comprehend ethical motives better and were thus able to incorporate it under environmental Consciousness. Donovan, P. , McCarthy R. (2002), â€Å"Irish Consumer preference for organic meat†, British Food Journal, Vol. 104 No. 3/4/5, pp. 353-370 The paper tries to examine Irish perception of organic meat. It identified three consumer groups. Beliefs and purchase intentions of consumers and non-consumers were differentiated. Proposed factors leading to purchase intention were Health Consciousness, Perceived value, Income and environmental concern. After validation checks they had had to make the constructs less abstracts due to low values. Aertsens, J. , Verbeke, W. , Mondelaers, K. , and Huylenbroeck, G. V. (2009), â€Å"Personal determinants of organic food consumption: a review†, British Food Journal, Vol. 111 No. 10, pp. 1140-1167 It uses theliterature concerning personal determinants of organic food consumption. This is the ? rst paper providing a comprehensive overview and linking the literature on organic food consumption to the values theory and the theory of planned behaviour, including the role of personal norm and focusing on emotions. The proposed integration of mental processing in an organic food consumption model leads to interesting hypotheses and recommendations for policy makers, researchers and stakeholders involved in the organic food market. Padel, S. , Foster, C. (2005), â€Å"Exploring the gap betweenattitudes and behaviour, Understanding why consumers buy or do notbuyorganic food†, British Food Journal, Vol. 107 No. 8, pp. 606-625 Its results show that most consumers associate organic at ? rst with vegetables and fruit and a healthy diet with organic products. Fruit and vegetables are also the ? rst and in many cases only experience with buying organic product. The decision-making process is complex and the importance of motives and barriers may vary between product categories. The motives and barriers provided herein helped us in adapting the survey questionnaire. Baker, S. (2004), â€Å"Mapping the values driving organic food choice, Germany vs the UK†, European Journal of Marketing, Vol. 38 No.8, pp. 995-1012. This study explores the reasons why the behaviour of consumers in the UK and Germany has been so divergent despite both groups of consumers holding similar attitudes about organic foods. This was done by investigating the underlying values driving food choice behaviour using means-end theory and Laddermap 5. 4 software. The dominant means-end hierarchies were uncovered and the cognitive process mapped. {draw:frame} Makatouni, A. (2002), â€Å"What motivates consumers to buy organic food in the UK? , Results from a quantitative study† , British Food Journal, Vol. 104 No. 3/4/5, pp. 345-352 Its main objectives are to identify beliefs, with respect to organic food, of parents who buy and do not buy organic food; the positive as well as negative attitudes towards organic food of those who buy and do not buy organic food; the impact of those attitudes on food choice for parents who buy and do not buy organic food; and to model the food choice behaviour of parents with respect to organic food. It employs both qualitative and quantitative methods. This paper also uses the means-end chain approach. The key idea is that product attributes are a means for consumers to obtain desired ends. It provides a very detailed means end chain which helped us finalize some aspects of our questionnaire. Magistris, T. , Gracia, A. (2008), â€Å"The decision to buy organic food products in Southern Italy†, British Food Journal , Vol. 110 No. 9, pp. 929-947 Its findings provide more evidence on consumers’ underlying motivations to buy organic food to the already existing evidence in Europe to evaluate the future implementation of the Regulation (EC) no. 834/2007 of 28 June 2007 on organic production and labelling of organic products. In addition to this the empirical results would help local policy makers to establish appropriate market strategies to develop the future demand for these products. It indicates that consumer’ attitudes towards organic food, in particular towards the health attribute and towards the environment are the most important factors that explain consumers’ decision-making process for organic food products. It has been found that larger information on the organic food market, which drives to a higher consumers’ organic food knowledge, is important because it positively in?uences consumers’ attitudes towards organic food products. It also that consumer who try to follow a healthy diet and balanced life are likely to have more positive attitudes towards organic food products and towards the environment, inducing a more likely intention to purchase organic foods. This paper provided with the adequate Structural equation model. It also possessed the relevant constructs and variables which could be easily adapted to Indian requirements. Since for the target segment of our paper income is not an issue, it proved easy to adapt to the theoretical model according to our needs. The questionnaire has been validated, which has been duly adapted by us. Outcome Through this study we hope to drawing links between knowledge about and attitude towards organic food, and their sensitivity to its health and environmental benefits and the decision to buy it. Also, we can gauge as to which are the primary contributors to the purchase decision. This can go a long way in helping a player in the organic food industry understand the market and position himself appropriately to achieve success. Research framework and hypothesis specification A study on the food choice is a complex phenomenon that represents one of the most important parts of human behavior, where several cognitive and behavioral factors can vary sharply between individuals. In other words, whether the consumers intent or decide to purchase organic foods is a difficult task because it depends on many factors that cannot be directly observed. Thus based on the above mentioned paper by Magistris, T. , Gracia, A.(2008), it can be conclude that the more favorable health and environmental attitudes consumers have, the more likely they will buy organic food product. In accordance with this, the first hypothesis of the proposed model is defined as follows: Hypothesis1: When consumer’s attitudes towards organic food (H1-a) and towards the environment (H1-b) are positive, consumers’ intention to buy organic food products will also be more likely to be positive. Hypothesis 2: When a consumer has higher organic food knowledge, he/she will be more likely to have positive attitudes towards organic food products. Hypothesis 3: Consumers’ lifestyles related to healthy diet and balanced life influence internal factors of consumers, such as, attitudes towards organic foods (H3a) and attitudes towards the environment (H3b) during the decision process to buy organic food products. Proposed Research Model {draw:rect} {draw:rect} {draw:rect} Explanation of factors and observed variables Intention to purchase organic foods Intention is the cognitive representation of a person’s readiness to perform a given behaviour, and it is considered the immediate antecedent of behaviour. Findings from many studies reveal that consumers’ attitudes towards different organic food attributes (human health, safety, etc. ) and towards the environment are the most important factors that explain consumers’ decision-making process for organic food products. Organic knowledge Knowledge It indicated the knowledge the consumer possesses about organic food Definition Does the consumer know that, â€Å"_Organic foods are produced without the use of conventional pesticides, arti? cial fertilizers, human waste, or sewage sludge_†? Healthy diet and balanced life Exercise Processed food. Fruits and vegetables Red meat Additive free Health check ups Balanced life The observed variables are self-explanatory Environmental attitudes Pollution Belief that the current developmental path and consumeristic culture will end up destroying the environment Damage It quantifies the feeling that unless we do something the damage to the environment will be irreversible. Conservation Describes whether one performs conservatory tasks. Recycled Preference for consuming recycled products Recycling Whether one partakes in recycling of products Attitudes towards organic food products. Health Does on believe that organic products are healthier? Quality Do organic products have superior quality? Taste Are organic products are more tasty? Research Methodology Data will be collected from a survey conducted across the top B-Schools of the country. It is our opinion that the budding managers from these institutions are (or will be) part of our target group of affluent customers for organic food products. The ? nal sample will include 200 students selected through convenience sampling. This method has a reputation of being less reliable but it is the best suited due to its convenience and low cost. Moreover, it is known to work with a sample that contains students. A questionnaire will be designed to analyze the knowledge of organic food, attitudes towards organic foods and purchase behavior of the selected students. The ? rst question was related to their knowledge on organic food products. The second set of questions comprised of those related to organic food consumption (consumption level, intention) purchase, frequency of purchase, perceived quality, place of purchase, etc.). The third and final question includes several questions on consumers’ attitudes towards organic food products and environmental aspects. The questionnaire also contains questions on socio-demographic characteristics (i. e. sex, family size and composition, age, education, income and lifestyles). The questionnaire format will be validated using a small pilot survey before being administered to the students. Questionnaire Would I buy organic food products? How will you rate your knowledge on organic food products? What is your opinion on â€Å"Organic foods are produced without the use of conventional pesticides, arti?cial fertilizers, humanwaste, or sewage sludge â€Å"? I do exercise regularly I avoid eating processed food I often eat fruit and vegetables I avoid eating food products with additives I take regular health check-ups I try to have an organized and methodical lifestyle Is the current development path is destroying the environment? Unless we do something, environmental damage will be irreversible I practice environmental conservation tasks I prefer consuming recycled products I partake in product recycling Organic products are healthier Organic products have superior quality Organic products are more tasty Activity and time based plan Data Analysis/ The Data analysis will be carried out on the valid survey responses obtained from the respondent pool to which the survey is administered to. We will be using SPPS 17. 0 to carry out various correlation tests to figure out what factors affect the ‘intention to buy organic foods’ and also what sub-factors affect them. This will also allow us to point out which all factors show strong correlations and which all show less correlations. Bibliography Honkanen, P.(2006), â€Å"Ethical values and motives driving organic food choice†, Journal of Consumer Behaviour , 5, pp. 420-430 Donovan, P. , McCarthy R. (2002), â€Å"Irish Consumer preference for organic meat†, British Food Journal, Vol. 104 No. 3/4/5, pp. 353-370 Aertsens, J. , Verbeke, W. , Mondelaers, K. , and Huylenbroeck, G. V. (2009), â€Å"Personal determinants of organic food consumption: a review†, British Food Journal, Vol. 111 No. 10, pp. 1140-1167 Magistris, T. , Gracia, A. (2008), â€Å"The decision to buy organic food products in Southern Italy†, British Food Journal , Vol. 110 No. 9, pp. 929-947 Padel, S. , Foster, C. (2005), â€Å"Exploring the gap between attitudes and behaviour, Understanding why consumers buy or do not buy organic food†, British Food Journal, Vol. 107 No. 8, pp. 606-625 Baker, S. (2004), â€Å"Mapping the values driving organic food choice, Germany vs the UK†, European Journal of Marketing, Vol. 38 No. 8, pp. 995-1012 Makatouni, A. (2002), â€Å"What motivates consumers to buy organic food in the UK? , Results from a quantitative study† , British Food Journal, Vol. 104 No. 3/4/5, pp. 345-352 Zanoli, R. and Naspetti, S.(2002), â€Å"Consumer motivations in the purchase of organic food: a means-end approach†, British Food Journal, Vol. 104 No. 8, pp. 643-53. Yiridoe, E. K. , Bonti-Ankomah, S. and Martin, R. C. (2005), â€Å"Comparison of consumer’s perception towards organic versus conventionally produced foods: a review and update of the literature†, Renewable Agriculture and Food System, Vol. 20 No. 4, pp. 193-205. 10. Soler, F. , Gil, J. M. and Sanchez, M. (2002), â€Å"Consumer’s acceptability of organic food in Spain: results from an experimental action market†, British Food Journal, Vol. 104 No. 8,pp. 670-87. 11. Connor, R., Douglas, L. (2001), â€Å"Consumer attitudes to organic foods†, Nutrition & Food Science, Vol. 31, Issue: 5 12. Grunert, S. C. and Juhl, H. J. (1995), â€Å"Values, environmental attitudes, and buying of organic foods†, Journal of Economic Psychology, Vol. 16, pp. 39-62. 13. Chinnici, G. , D’Amico, M. and Pecorino, B. (2002), â€Å"A multivariate statistical analysis of the consumers of organic products†, British Food Journal, Vol. 104 Nos 3/4/5, pp. 187-99. 14. Shepherd, R. , Magnusson, M. and Sjoden, P. O. (2005), â€Å"Determinants of consumer behaviour related to organic foods†, Ambio, Vol. 34 Nos 4-5, pp. 352-9.