3/28/2018

Marketing Research on
Organic Food
FINAL REPORT

SUBMITTED TO - Dr M R Suresh Group – 8

Ashwij G R - 17054
Nandan C J - 17070
Parakh Jain - 17074
Sahil Silhi - 17082
Shron Pinto - 17085
Sumitesh Pattnaik- 17089
Contents
Executive summary ................................................................................................................................. 2
Definition of organic food ....................................................................................................................... 2
Overview ................................................................................................................................................. 2
Market share ........................................................................................................................................... 3
Need for organic food in India ................................................................................................................ 3
Top 5 organic products ........................................................................................................................... 3
Background of organic food in Mysore ................................................................................................... 4
Organizational Context ........................................................................................................................... 4
Decision making context ......................................................................................................................... 5
Research objective .................................................................................................................................. 5
Research Design ...................................................................................................................................... 5
Research questions ................................................................................................................................. 6
Information Resource Planning Table:.................................................................................................... 6
Research approach: Hypothesis .............................................................................................................. 7
Research methodology: .......................................................................................................................... 7
Types of research .................................................................................................................................... 7
Primary research: .................................................................................................................................... 7
Types of Interview .................................................................................................................................. 7
Sampling plan:......................................................................................................................................... 8
Sample: ................................................................................................................................................... 8
Data Collection ........................................................................................................................................ 8
The survey will be done in the following places in the city of Mysore .................................................. 8
Information Gathering ............................................................................................................................ 8
Number of respondents in terms of the sources of primary information:............................................. 8
Time Estimate ......................................................................................................................................... 9
Cost Estimate .......................................................................................................................................... 9
Analysis ................................................................................................................................................... 9
Student’s Perspective ............................................................................................................................. 9
Customer Perceptive............................................................................................................................. 14
Recommendations ................................................................................................................................ 18
Conclusion ............................................................................................................................................. 19

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Executive summary
The organic food industry is booming with lot of new opportunities. With increased awareness
about healthier alternatives of food and other products, organic products are becoming a trend.
An increase in health problems and diseases has made people more health conscious and has
led to change in lifestyles. Shift to organic products are a part of this healthy lifestyle.

Millets are gaining prominence since it is a healthier alternative to rice for diabetic patients.
Many talks by doctors have been held, which are organized by Dhatu. So the purpose of this
research is to understand how consumers perceive organic food products (focus on millets and
black rice) and to analyse the factors that influence their perception.

Definition of organic food

Organic food is food produced or grown without pesticides, bioengineered genes, and
fertilizers. Organic meat, eggs, and dairy products should not be from livestock injected with
antibiotics, growth hormones or any animal by-products. It should be given organic feed.

Overview
The organic food market in India is a booming market. It is estimated to be worth 1.36 billion
dollars by 2020. Although the market is growing at the rate of 25-30%, awareness about organic
food is still low. Farmers lack awareness too about organic farming and India is an untapped
market for organic food and it is highly unorganized.

People have become more health conscious and more aware about the healthier options that
exist in the market. Organic food is gaining popularity; vegan lifestyle is become a trend. In
countries like US, they have a farmer’s market where fresh vegetables and fruits are sold by
local farmers on a weekly basis. India is yet to see such growth, although it is gaining
prominence in metro cities.

According to the Delhi-based Indian Council for Research on International Economic Relations
(ICRIER) such foods that are labelled organic but not certified cannot be considered safe. The
ICRIER also mentioned the need for a uniform standard for organic foods in its last report.
Now, the Food Safety Standards and Authority of India (FSSAI) has launched the Food Safety
and Standards (Organic Foods) Regulations 2017 along with the unified logo for organic food
products, supported with the tagline “Jaivik Bharat.”

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All organic foods certified under this logo also need to convey the full and accurate information
on labels about the organic status of the food. The ‘Jaivik Bharat’ logo will henceforth be
recognised as a mark of the quality assurance given by the above-mentioned certification
bodies in India or any other bodies recognised by FSSAI.

Market share
The total market size of organic food is Rs.1000cr. With major players in the markets being:

Need for organic food in India

1. Protect the environment: organic farming protects land and water resources since it
conserves water, reduces soil erosion, and increases soil fertility.
2. Healthy: since organic food is pesticide free, it is free from carcinogenic elements
present in pesticides. These are naturally grown so it is a healthier option to food that
is processed or injected with chemicals to ripen sooner.
3. Future scope: India is an agricultural economy with a huge capacity of producing
organic food. This can increase farmers’ incomes and the government should invest in
this sector by introducing schemes and spreading awareness among farmers.

Top 5 organic products

1. Beverages and tea: these are beverages that avoid synthetic pesticides, growth
hormones, genetic engineering, and artificial flavours, colours, and preservatives,
among other things. Organic tea is free of synthetic fertilizers, herbicides, and
pesticides.

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 2. Organic rice: Being organically produced these rice are free from artificial colours,
flavours and chemicals. Rices available include:
 Red rice
 Basmati rice
 Brown rice
 Black rice
 White rice
3. Organic wheat flour: Organic grains are completely organic hence completely
parabens and harmful chemicals free and free from any additional colouring or
chemical enamelling.
4. Organic Millets/Flours: Millets are Ancient Grains that are naturally gluten – free,
low on carbs and high on fibre. Millets are ideal for diabetics looking for an alternative
grain to rice. (Jowar), Pearl Millet (Bajra), Finger Millet (Ragi, Nachni) are the major
millets. Minor Millets are small-seeded with different varieties such as Kodo Millet
(Paspalum setaceum), Proso Millet (Penicum miliaceum), Foxtail Millet (Setaria
italica), Little Millet (Panicum sumatrense) and Barnyard Millet (Echinochlo autilis).

5. Organic Pulses: organic pulses and food grains dominated demand for organic food in
the country since 2015 and it is believed that the segment is anticipated to continue
dominating the market through 2021.

Background of organic food in Mysore

Organic products that you frowned at after a glance at the price tag has come down to affordable
rates in the city. Many people have started consuming organic food due to health issues. People
believe that organic food has enhanced their life style. The farmers in Karnataka have the
opportunity to grow organic produce with financial help from the government.

Organizational Context
Organic food is growing in usage. Their prices have come down. The growth of Organic food
is growing due to the health consciousness of People.

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Mysore being one of the largest city in Karnataka is our primary area of target and with the
increase in population of organic food consumer we find a great opportunity of growth of
organic food in Mysore in the future.

Decision making context

The Study is focused on Studying the factors that have an influence on consumer perception
towards Millets and Black Rice (organic food products). This study will help the marketers to
form appropriate marketing strategies such as appropriate pricing and proper promotional mix
that will increase the visibility of organic products and make a positive impact on consumer
perception

Research objective
The main objective of the research is to understand the factors of consumer perception towards
organic food products. The research will be conducted among the people living in some areas
of Mysore (Kuvempu Nagar, URS Road, VontiKoppal) specially to the families who belongs
to the income group of middle class and above. Specifically, the research objectives are

1) To understand the factors of consumer perception towards organic food product

(Millets and Black Rice)
2) To find and analyse the factors of consumer perception and association of consumer
behaviour towards organic food products

Research Design
Type of research: Exploratory and Descriptive research

The survey will be conducted to a total of 100 customer living in the different areas of Mysore.

The questions cover various kinds of issues including

 Identify the frequency of consumption.

 Identify the effectiveness of organic product (Millets and Black Rice) towards health.
 Identify the reasons for the consumption.

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Research questions
1. What is the percentage of families currently using Millets and Black Rice in a particular
area?
2. What are the reasons for consuming organic Product?
3. How important is organic food Product in your life?
4. Are there any improvement requirements in the product?
5. Is Dhatu organic food product is an effective tool for our health?

Information Resource Planning Table:

Source of Primary/Secondary Information Points Measurement
Information Approach
Customers of Dhatu Primary 1. Preferred Nominal Scale
store product Ordinal Scale
2. Price
3. Quality
product
4. Buying millets
5. Buying Black
rice
Customers from Primary 1. Organic food Comparative Scale
Nesara store awareness Ordinal Scale
2. Need
3. Desired
Specifications
of organic
food
4. Ethical reason
Customers from Primary 1. Most Ordinal Scale
swadeshi bazar store preferable Nominal Scale
food
2. Fruits
3. Daily product
4. Vegetable

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 Students (google Primary 1. Buying millets Nominal Scale
doc) 2. Buying Black
rice
3. Price
4. Quality

Research approach:

Hypothesis
H0 Respondents are willing to go for an organic store for purchase of products.

H1 Respondents are not willing to go for an organic store for purchase of products.

Major portion of an organic store customers fall in the age group of (30-70) and
belong to middle and upper class.

1. Price plays the decisive role in selection of the product.

2. Advertisements and promotions creates awareness among the customers.

3. Customers intend to buy organic product because of its quality.

Research methodology:
Types of research
Primary research: Here the information is collected by interviewing people individually and later
analysis is done based on the collected data. There is no secondary research done.

Types of Interview
1. Face to face questionnaire type: The data is collected by conducting a survey from a
sample. We can ask the consumers as to which organic store they prefer and the reason
behind choosing the same and the factors considering for buying Millets and Black rice.
2. Focus Group: For in-depth information and data a focus group discussion was held with
students.

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Sampling plan:
We propose a convenient sampling to access the preferences and perception of consumers.

Sample:
 Population Size: - 25% of target population
 Sample size: -80-100 respondents
 Confidence level: - 95%
 Age Group: - 30-70

Geographical location: Within the limits of Mysore city in the organic stores (retail outlets),
from the students.

Data Collection
The survey will be done in the following places in the city of Mysore
1.Retail Outlets where the organic food is available (from the consumers as well as vendor)

2.Shopping Mall particularly Mall of Mysore and other local stores

3.Our college students

Information Gathering
We have gathered the information from the retail shop owners regarding the buying behaviour
of the consumers. We have recorded their experience by asking questions from retailers. Also,
we took Students’ responses through questionnaires. Opinions of the teachers were taken by
having a discussion with them.

Number of respondents in terms of the sources of primary

information:
SOURCE NUMBER

Online Face-to-face

Customers of Dhatu store 14

Customers from Nesara store 20

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 Customers from swadeshi 16
bazar store

Students (google doc) 50

Time Estimate
The research will be conducted in a span of one and a half month. The estimated time taken by
all the activities can be divided as:

 Designing the research: 4 days

 Data Collection: 10-12days
 Preparation and Analysis: 7 days
 Reporting the results: 3 days

Cost Estimate
The cost of doing research has been classified into the following heads-

 Logistics Cost including the cost of printing questionnaires.

 Transportation Cost for going to the organic food shops.

Analysis
The data was collected from various primary sources like from students and from the
customers. It was analysed based on the research questions.

Student’s Perspective

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Analysis- By the above chart we can see that the pattern of purchasing is evenly distributed,
and we can infer that there is a even demand for organic foods in India. By this it will help the
company to plan its inventory.

Analysis- we can easily say that the majority of the customers buys the organic product from
the retailers so we Can say that the company needs to concentrate on retail shops in developing
its marketing strategy.

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Analysis- The kind of organic food they buy is 58.3% food/ drinks so the company needs to
focus more on developing the products like food and drinks followed by cosmetics.

Analysis- The majority of the customers choose organic products because of the quality of
product, so the quality of the organic food needs to be given the top priority in order to sustain
in the market. Quality of the product should not be sacrifice so as to retain the market of organic
food.

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Analysis- The daily products is buyed the most followed by fruits, so this will help the company
in determining as to what product they need to concentrate and what are the product they should
concentrate less. The company should concentrate more on daily products and fruits and it
needs improvement on vegetables and others.

Analysis- Majority of the customers are willing to purchase the products even if the price is
increased, that is because of the people are health conscious, they won’t worry about the price.

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Analysis- we can observe that the majority of the persons believe in the information published
in the organic food. That shows the reliability among the customers.

Analysis- since this survey was done with student, they tend to change their preference easily
as they are more dynamic in nature. So they will move easily towards the non-organic products.

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Customer Perceptive

Analysis- By the above chart we can see that the pattern of purchasing is evenly distributed,
and we can infer that there is a even demand for organic foods in India. By this it will help the
company to plan its inventory

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Analysis- we can easily say that the majority of the customers buys the organic product from
the retailers, so we Can say that the company needs to concentrate on retail shops in developing
its marketing strategy.

Analysis- The kind of organic food they buy is 78% food/ drinks so the company needs to
focus more on developing the products like food and drinks followed by cosmetics.

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Analysis- The majority of the customers choose organic products because of the quality of
product, so the quality of the organic food needs to be given the top priority in order to sustain
in the market. Quality of the product should not be sacrifice so as to retain the market of organic
food.

Analysis- The daily products that is been purchased the most followed by fruits, so this will help the
company in determining as to what product they need to concentrate and what are the product they
should concentrate less. The company should concentrate more on daily products and fruits and it needs
improvement on vegetables and others.

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Analysis- Majority of the customers are willing to purchase the products even if the price is increased,
that is because of the people are health conscious, they won’t worry about the price.

Analysis- we can observe that most of the persons believe in the information published in the organic
food. That shows the reliability among the customers.

Analysis- since this survey was done with student, they tend to change their preference easily as they
are more dynamic in nature. So they will move easily towards the non-organic products.

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Recommendations

Consumers consider various factors while taking purchase decisions about organic food in
general and fruits & dairy products in specific. The final purchase decision is based upon the
importance of these factors in consumer’s mind and how these factors are placed in the current
organic market scenario. The following factors have the potential to make or break a purchase
decision. Presence of lack of these factors can significantly increase or reduce chances of
consumers purchasing these products.

1. Availability of organic food products - An important factor to drive repeat purchases

– currently, poor & irregular availability often lead to switching back to non-organic
varieties. Also, for non-buyers, low availability limits exposure and therefore reduces
possibility of trials.

2. Price Points- It is a critical factor to encourage repeat purchases and experimentation

with multiple products. Currently, prices perceived as too high especially when
compared to non-organic varieties though associated health benefits make them see it
as worth the money spent. For non-buyers, High prices inhibit trial by them since they
don’t see a pertinent need to spend more than current spends on nonorganic varieties.

3. Certification/ authenticity and Information-Currently, this is a grey area in the

organic market, with no assurance for consumers regarding the products authenticity
and claims made by companies Standardisation of quality parameters and certifications
will help consumers to take decisions easily Communicating to consumers about the
concept of ‘organic’ and related benefits will enable them to make informed decisions.

4. Visual Appeal - Currently, there is not much focus on visual appeal for consumers
since the basic requirements are still lacking with greater repeat usage of organic
products and greater penetration, this will an become important differentiator among
many product and retail brands selling organic food products.

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 5. Portion size/ Quantity - Consumers buy similar quantity of organic vs. non-organic
food products, implying that there is willingness to replace the latter with former,
provided other factors of price, availability etc are addressed. For non-buyers, Due to
inherent perception about high prices, introduction of smaller sized packs will help
induce trials.

Conclusion

Consumers’ interest in organic food has exhibited continued growth for the past two decades, which
has attracted entrepreneurs and corporations seeing a big potential for this industry. This led to the
creation of standards and regulations to guide the Organic food industry. There are clear challenges on
both demand and supply sides. Consumers are becoming more sophisticated in their purchasing
decisions of Organic Foods. The Organic food industry also faces some other challenges: (i)
maintaining and increasing consumers’ trust in the Organic food products and the Organic food industry
in general, and (ii) facing competition from other sustainability labels and initiatives.

The awareness level of Natural and Organic food was observed to be quite average in this region. The
study conducted also revealed that the elite income group people were having high awareness about
these food products but were not major buyers of the products. The major factors affecting the purchase
decision of consumers were observed to be the health benefits available from the products and overall
quality provided by the product to the consumer.

The consumers’ perception about feelings towards organic food products, consumption necessity of
these food products and their health effect on consumers, were observed to be somewhat positive, still
lots of scope for improvement was there in these food products. The major channels of procurement for
retailers were observed to be the distributor. Also, a considerable part of population was procuring
products directly from retailers for which they have to additional cost. The population who consumes
organic food may directly contact the company for hr supply of organic food. The major factors
encouraging the retailers to keep these food products of food product on their shelves was observed to
be, the ease of targeting high end consumers with help of this products. Also, many retailers believed
that these products were a very useful marketing tool for the store and it helps in cross selling of other
products on its shelves.

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