Customer attitude

towards organic food in

Bengaluru a study

Table of Contents
I.

INTRODUCTION...............................2

II.

REVIEW OF LITERATURE...................2

III.

Features.........................................4

IV.

Objectives of the Study...................4

V.

Research Problem...........................4

VI.

Scope of the Study..........................5

VII. EXECUTIVE SUMMARY......................5

VIII. MAJOR FINDINGS.............................5
IX.

COMPETITION..................................6

X.

CONCLUSIONS.................................6

XI.

PROBLEM DEFINITION......................7

XII. STATEMENT OF THE PROBLEM..........7

XIII. RESEARCH DESIGN..........................8
XIV. Data collection Methodology...........8
XV.

Questionnaire development and pretesting

XVI. Data analysis................................12

XVII. SCALING TECHNIQUES...................16
XVIII.....................................................CONCLUSION
XIX. REFERENCES.................................17

17

10

INTRODUCTION
Background for the study
Organic farming works in harmony with nature rather than against it. This
involves using techniques to achieve good crop yields without harming the
natural environment or the people who live and work in it. Organic farming
does not mean going back to traditional methods. Many of the farming
methods used in the past are still useful today. Organic farming takes the
best of these and combines them with modern scientific knowledge. Organic
farmers do not leave their farms to be taken over by nature; they use all the
knowledge, techniques and materials available to work with nature. In this
way the farmer creates a healthy balance between nature and farming,
where crops and animals can grow and thrive. To be a successful organic
farmer, the farmer must not see every insect as a pest, every plant out of
place as a weed and the solution to every problem in an artificial chemical
spray. The aim is not to eradicate all pests and weeds, but to keep them
down to an acceptable level and make the most of the benefits that they
may provide.

REVIEW OF LITERATURE
This literature review aims to provide a detailed account of literatures on the
consumer attitude towards organic food. In general the consumers believe
that organic food products are expensive. The survey by MORI(2003) has
found that there is a strong opinion among the public that sustainable
products like organic food are often perceived as expensive products.
A number of demographic variables are believed to influence the purchase
decisions of consumers using organic products. A study by Lockieet al.
(2002) identified a strong correlation between increasing consumption of
organic food and levels of formal education. A number of studies have
consistently established the fact that gender has been a significant predictor
of the purchase behavior of organic food products. Female consumers are
more likely to purchase organic food products OFP compared to males (Grof
et al., 1993, Buzby & Skees 1994, Underhill & Figueroa 1996, Govindasamy &
Italia 1999, Radman 2005). The income level of the consumers is more likely
to afect the purchase decisions of organic food products. Cranfield and
Magnusson (2003) noted that consumers with higher income levels are more
likely to spend more on organic food products. The reason could be that
organic food products are perceived as costlier than conventional products in
general.
A number of similar studies have shown that regular consumers of organic
food product tend to be educated, affluent and of higher social class (Padel&
Foster, 2005; Stobelaaret al., 2006). Similarly, studies by McIntosh et al.
CUSTOMER ATTITUDE TOWARDS ORGANIC FOOD IN BENGALURU A STUDY -

(1994) and Torjusenet al.(2001) have analyzed the awareness of consumers

about food hazards. The result of the study indicates that female consumers
and individuals with more education and income possess better awareness of
food hazards and knowledge of food hazards.
A large number of studies are available in the literature which identified
reasons for purchasing of organic food products. In a study by Chinnici et al.
(2002) and Harper and Makatouni (2002) it was found that one of the most
important reasons for purchasing organic products has been the perceived
health benefits of organic food products when compared to conventional
food products. In another study by Cranfield and Magnusson (2003), it was
reported that because of health-related reasons, older individuals were
willing to deviate and switch to organic food products. Cranfield and
Magnusson (2003) observed that those younger consumers are more willing
to pay over 6% in their food products to ensure food products are pesticide
free. Govindasamy and Italia (1999) have made an interesting observation
that older consumers are highly hesitant and are more conservative in trying
out new food products when compared with younger people who are open to
new products and ideas.
A study by Vermeir and Verbeke (2004), have proved that consumers weigh
up health benefits of organic food products on a higher scale than its
environmental benefits or benefit to the community in their decision to
purchase organic food products.According to Grunert and Juhl (1995), if a
customer concerns for the environment then he/she knows that the
production, distribution, disposal and use of products result in external
costs, and sees such costs negatively and tries to reduce them as much as
possible through his/her personal actions.
Werner and Alvensleben (2011) stated that there is a relationship between
the quantity of consumers concern for the environment and their motivation
to buy products that are organic. Huamg (1996) noted that there is a strong
relation between the growth in organic product consumption and the growth
in environmental concern in the public.
Why farm organically?
Organic farming provides long-term benefits to people and the environment.
Organic farming aims to:
increase long-term soil fertility.
control pests and diseases without harming the environment.
ensure that water stays clean and safe.
use resources which the farmer already has, so the farmer needs less
Money to buy farm inputs.
produce nutritious food, feed for animals and high quality crops to sell at a
Good price.
Why consume organic food?
CUSTOMER ATTITUDE TOWARDS ORGANIC FOOD IN BENGALURU A STUDY -

To start with, they exclude all the foreign materials added to traditional foods
which tend to be toxic. If one practices eating organically produced foods,
one is guaranteed of a better and healthier diet to sustain the human body.
Consumption also reduces the risk at which one can get cancer which is very
important. These foods are 90% safer in the sense that human waste or
animal excretions are not being incorporated in the production. In traditional
foods, it is believed that the water supplies have a percentage of human
waste and animal excretions present. Organic foods support the
environmentally friendly cause in that it doesnt allow the secretion of
harmful materials into the atmosphere and ultimately the environment.
Pesticides and herbicides used in traditionally produced foods are harmful to
the environment especially to aquatic organisms. Therefore organic foods
encourage the cause to make the environment a safer place to live in and
help in improving the environment. These foods dont result in the emission
of greenhouse gases which afect and unstabilize the atmospheric
conditions.

Features

Globalization of organic food and its culture are the core factors for
future popularization.
Main motivation for these organic foods is fast growing health markets.
Retail outlet culture is now growing rapidly in India.
Shelf life of these foods is at least 2-3 months.
Quality, Taste and Flavor of these foods remains as good as
conventional food.

Objectives of the Study

To study the market penetration of Organic food.

To study the consumer perception of Organic foods.
To identify the buying pattern of Organic food.

Research Problem
This Study deals with the organic food industry in India. The study also aims
at understanding the factors influencing the popularity of organic food in
India. The factors under consideration are health awareness, high prices,
weak marketing, high cost of production and small scale farming.

CUSTOMER ATTITUDE TOWARDS ORGANIC FOOD IN BENGALURU A STUDY -

Scope of the Study

The project is a study of what are the factors that is afecting consumer
buying behaviour of Organic food in India. The study is undertaken to
understand all the negative and positive perceptions about the organic food.
-In the study we have highlighted the following points:

Percentage of people aware about organic food & have purchased it.
What people like in the organic food market as compared to natural food.
How often the respondents consume organic food?
Which products people prefer more in organic food categories?
Points people gave to prefer organic food as an option when needed.

EXECUTIVE SUMMARY
Ever since the concept of organic food got famous in the country, India has
emerged as one of the largest markets in the world for organic food.
The organic foods or products are healthy, contain no chemicals or
preservatives, are totally natural and are much better than any form of nonorganic foods. Organic food is a product which is made without the help of
any kind of pesticides, herbicides or insecticides.

MAJOR FINDINGS
MARKETS
If we analyze the markets of the organic food then initially total market for
organic food in India was valued at USD 129.3 million in the year 2008.Since
organic food ofer more health benefits than the conventional food,
Government of India is leading from the front to ensure multi fold growth in
organic market. Exports of organic food market are expected to grow further
in the near future.

CERTIFICATIONS REGULATIONS
Certification of the organic food products is the major concern for the
producers to prove the authencity for their product and generate consumer
confidence. Government has shown positive signs by improving the status of
the certification agencies. The process of the certification is well defined,
although it is costly for small farmers.

CUSTOMER ATTITUDE TOWARDS ORGANIC FOOD IN BENGALURU A STUDY -

DRIVERS
CHALLENGES
1. Huge export markets.
1. High prices of organic
2. Organized
retail food.
enhancing distribution
2. Lack of integrated supply
system.
chain and difficulties for
farmers.
3. Government benefits
3. Certification barriers.
4.
Increasing
health
consciousness among
consumers.

COMPETITION
The market is highly competitive with large number of producers and
promoters. India enjoys comparative advantage of being an agricultural
country at a predominant stage with larger quantities of production. Major
share of the market is occupied by promoters who are involved in the
distribution of these products to the end consumers through various retail
outlets.

CONCLUSIONS
In a country like India where
labor -intensive farming is more suitable
organic farming would be a better option. Organic crops need less water
content and most of the agriculture irrigation requirements is still dependent
on monsoon so organic farming suits more. As the high price of the organic
food is due to the gap in demand and supply if supply will increase price will
automatically come down and within the competing levels with non-organic
food items.
And last but not the least the quality of food would be way much better than
then non organic food.

CUSTOMER ATTITUDE TOWARDS ORGANIC FOOD IN BENGALURU A STUDY -

PROBLEM DEFINITION
BACKGROUND
Organic food is not so much popular in India. Organic food involves high cost
of production and generally the price of organic food is 25% higher than the
original because they are produced on small scale.
Consumer survey indicates that the public is concerned about the safety of
the produce that they purchase in stores due to possible pesticides
contamination. Consumer often prefer to purchase tastier varieties grown
locally under organic conditions in proper handling of organic food after
harvest may result in product contamination and in food borne illnesses.
Organic food is not easily available in the market because of small scale
production. The demand assessment of organic food is difficult to determine
because of its weak marketing.

STATEMENT OF THE PROBLEM

The main problem associated with organic food is its popularity among the
Indian consumers.

APPROACH TO THE PROBLEM

The main approach in solving problems of organic food was through
consumer survey and analysis of the results arising out of that survey.
The main reasons for lack of popularity of organic foods among Indian
consumers were less promotions and high prices. To analyze the current
status of the organic food of India a set of questionnaires was formed by us
regarding the organic food information and we did a survey. After that we
analyzed each and every input of the customers on the SPSS (Statistical
Package for Social Sciences) software and found various variations like
Variance, Co variance, Correlation and Regression etc.
After the analysis we were able to generate the customer satisfaction level,
the awareness among customers regarding organic food.

CUSTOMER ATTITUDE TOWARDS ORGANIC FOOD IN BENGALURU A STUDY -

RESEARCH DESIGN
Research Design Formulation
A research design is a framework or blueprint for conducting the marketing
research project. It details the procedures necessary for obtaining the
information needed to structure or solve marketing research problem.
We did the blend of exploratory and descriptive research work to carry out
the organic food project work.
The primary objective of the exploratory research work is to provide insights
into and an understanding of the problem confronting the researcher. Here
we had to first find out the major problem associated with the organic food
i.e low popularity and then we had to gain additional knowledge about all
these products.
During the exploratory research many issues were in our mind regarding
organic food like:

Why it is highly priced?

Why it is not promoted widely?
Why it is more preferred in areas where people are

Data collection Methodology

The sources of data used in this project report are both primary and
secondary data.

Primary data
Primary data consists of original information gathered for specific purposes
at hand. These are gathered for a specific purpose or for a specific research
project. Primary data was collected online as well as manually. A survey
questionnaire was made, prints out were taken and then it was circulated to
the sample and the result was compiled. We did a survey amongst the 30
customers. The main areas of survey were Spencers Hypermarket and
students. We were able to collect lot of details from them as to which types
of food they prefer whether conventional food or the organic food and what
health benefits they feel after consuming it.

CUSTOMER ATTITUDE TOWARDS ORGANIC FOOD IN BENGALURU A STUDY -

Secondary data
Secondary data consists of information that already exist and that were
being collected in the past for some other purposes. Secondary data used in
this study were collected from external sources like books, blogs, wiki etc.
Some websites which were really helpful are www.google.com,
www.organicfood.com.

Sample design
The sampling technique used for survey was a non-probabilistic convenience
sampling. The sample size was chosen keeping in mind the target market for
organic food segment, Hostel/paying guest, gym instructors, Individuals
working hard to lose weights and bachelors between the age group of 18-40.

Tools & Techniques

Data was collected with the help of questionnaire. The questionnaire is of
structured non-disguised type. The questions were of mixed type.

Sample Size
The total no of respondents were 30 of the total 40 approached. The age
group in which the sample lied is 20-40.The occupation of this sample size
was a healthy mix of self-employed individuals, working people and students.
The respondents included 17 people from Hostel/Paying guest which form a
large chunk of the target market for organic foods.

Questionnaire development and pretesting

1. What grade, you would like to give if you have to compare Indian organic
food sector with international markets? ( A excellent to D Poor)

CUSTOMER ATTITUDE TOWARDS ORGANIC FOOD IN BENGALURU A STUDY -

-^-------------------^------------------^---------------^
A
EXCELLENT

C
GOOD

D
FAIR

POOR

2. How often do you consume organic food in a week?

A.ONCE A WEEK

..

B.TWICE A WEEK

C.THREE DAYS IN A WEEK

..

D.MORE THAN 3 DAYS

3. Which product you prefer most in organic foods? Is it basic grains only or
vegetables as well as honey?
PRODUCT
1.BASIC GRAINS
2.VEGETABLES
3.HONEY
4.OTHERS

PREFERENCE

4. Is there any kind of fear while consuming the organic foods? If Yes what?
A. YES .

B.NO ..

REASONS:-.
.

5. Do the prices of these organic foods suit you or you want some amendments?

A.SUITS ME .

B. NEED IMPROVEMENT .

CUSTOMER ATTITUDE TOWARDS ORGANIC FOOD IN BENGALURU A STUDY -

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6. In todays era where we are getting hybrid vegetables, what are your views
regarding them?
.
..

7. What health benefits you felt after you first consumed the organic food?
HYGEINE

..

NUTRITION VALUE

IMMUNE SYSTEM

DIGESTIVE SYSTEM

NERVOUS SYSTEM

8. What factors contributes to organic food?

1.
2.
3.
4.

INGREDIENTS
QUALITY
QUANTITY
CONSUMER PREFERENCES

..
.

..

NAME: .

Data analysis
Once the data was collected, analysis of the information was done. The
collected data was entered in SPSS. SPSS consists of both data view and
variable view. Various variables were taken with regard to organic food like
age , gender , preference among organic food , consumption of organic food
in a week etc. various tests were conducted like chi-square test , regression
CUSTOMER ATTITUDE TOWARDS ORGANIC FOOD IN BENGALURU A STUDY -

11

test & co-relation. The scaling techniques taken to analyse the result are
nominal and scaling techniques.
To analyze the result, firstly chi- square test was conducted using nominal
scale and hypothesis test.
For this the two variables taken were age and gender of consumers:
Ho : There is no relationship between age & gender of consumers.
Hi : There is relationship between age & gender of consumers.
Using chi- square test on nominal scale, the value came out to be 6.728 at 9
degree of freedom. The optimal significance level to be taken is 0.05. Hence
taking 0.05 significance level at 9 degree of freedom, the table value comes
out to be 16.919. Since table value is greater is than actual value so we will
reject the null hypothesis that says that there is no relationship between age
& gender. So we will accept the alternate hypothesis that there is
relationship of age & gender.

AGE * GENDER Cross tabulation

Count
GENDER
MALE
AGE

Total

FEMALE

Total

20-25

11

26-30

12

13

31-35

ABOVE 40

23

30

Now we will take another set of variables to judge the relationship. The
variables taken are gender & consumption of organic food. Using hypothesis
analysis:Ho: There is no relationship between gender & consumption.
Hi: There is a relationship between gender & consumption.
CUSTOMER ATTITUDE TOWARDS ORGANIC FOOD IN BENGALURU A STUDY -

12

The value came out to be 1.207 at 3 degree of freedom. But the value at
0.05 at 3 degree of freedom is 7.815. Since table value is again greater than
actual value, hence we will reject the null hypothesis & will accept the
alternate hypothesis which means that there is a relationship between
gender & consumption.

Chi-Square Tests
Asymp. Sig. (2Value
Pearson Chi-Square

df

sided)

8.451a

.038

Likelihood Ratio

8.156

.043

Linear-by-Linear

2.938

.087

Association
N of Valid Cases

30

a. 6 cells (75.0%) have expected count less than 5. The

minimum expected count is .47.

Now secondly t- test using scaling technique will be used to check hypothesis
test. The next variables which we took into consideration was liking of
organic food & grading done as per in comparison with international market.
Using hypothesis analysis:Ho: There is no association of liking of organic food with grading.
Hi: There is association of liking of organic food with grading.
Looking at the value which came out to be at significance level of 0.000, we
will reject the null hypothesis because this value is less than 0.05. This
means that there is association of liking of organic food with comparison of
Indian market with international market.
The second set of variables taken are liking of organic food & factors
afecting the demand for organic food.
Ho: There is no association of liking of organic food with factors

CUSTOMER ATTITUDE TOWARDS ORGANIC FOOD IN BENGALURU A STUDY -

13

Afecting demand of organic food.

Hi: There is association of liking of organic food with factors afecting
Demand of organic food.
The value, after solving this comes out to be 0.086 which is more than 0.05.
So we will accept that there is no association of liking of organic food with
factors afecting demand of organic food.
After this we move on to co-relation. Co- relation is the statistical
measurement of the relationship between two variables. Now we will take
another two set of variables as liking of organic food & grading of Indian
organic food with international organic market. On this we came to know that
both set of variables are less positively co related. The value comes out to
be 0.290 which is less than 0.5

LIKE OF ORGANIC FOOD

Pearson Correlation

LIKE OF

GRADING OF

ORGANIC

ORGANIC

FOOD

FOOD
1

.290

Sig. (2-tailed)
N
GRADING
FOOD

OF

ORGANIC Pearson Correlation

Sig. (2-tailed)
N

.120
30

30

.290

.120
30

30

Considering other set of variables called grading of organic food & factors
afecting demand of the same. The value comes out to be 0.201 which again
is less positively co related.

CUSTOMER ATTITUDE TOWARDS ORGANIC FOOD IN BENGALURU A STUDY -

14

LIKE OF ORGANIC FOOD

LIKE OF

FACTORS OF

ORGANIC

ORGANIC

FOOD

FOOD

.089

Pearson Correlation
Sig. (2-tailed)

FACTORS OF ORGANIC
FOOD

.639

30

30

Pearson Correlation

.089

Sig. (2-tailed)

.639

30

30

Regression is a technique used to discover a mathematical relationship

between two variables, dependent & independent, using individual data.
Solving the regression equation using variables like of organic food & grading
of organic food, we get:Y= a + bx
Where Y is dependent variable
A is constant variable
X is independent variable
b is beta
Taking these values as a basis for analysis, the new equation will be formed
as follow:Like of organic food = 2.240 + 0.290
The significance level is 0.120 which is more than 0.05 so we will accept that
there is no association between like of organic food & grading of organic
food.
ANOVAb
Sum of
Model
1

Squares
Regression

df

Mean Square

1.908

1.908

Residual

20.792

28

.743

Total

22.700

29

Sig.

2.570

a. Predictors: (Constant), GRADING OF ORGANIC FOOD

b. Dependent Variable: LIKE OF ORGANIC FOOD

CUSTOMER ATTITUDE TOWARDS ORGANIC FOOD IN BENGALURU A STUDY -

15

.120a

Now taking another set of variables namely, factors of demand of organic

food & grading, we will get the following regression equation:Grading of organic food = 6.454 + 0.201
Significance level is 0.287 which is more than 0.05, hence we will accept that
there is no association of grading of organic food with factors of demand of
organic food.

ANOVAb
Sum of
Model
1

Squares
Regression

df

Mean Square

.866

.866

Residual

20.601

28

.736

Total

21.467

29

Sig.

1.177

.287a

a. Predictors: (Constant), FACTORS OF ORGANIC FOOD

b. Dependent Variable: GRADING OF ORGANIC FOOD

SCALING TECHNIQUES
In our project , in order to find out the data and to analyze the same , noncomparative scale was used. Non- comparative scale includes continuous
rating and itemized rating scale. However the main scale used in our project
is linkert scale. This scale is the most widely used rating scale that requires
that requires a respondent to indicate degree of agreement or disagreement.
LIMITATIONS OF THE RESEARCH

Due to resource constraint, we could gather only this much of

information. We could have gathered more information by increasing our
sample. We were not able to target a larger sample size of 100.

CUSTOMER ATTITUDE TOWARDS ORGANIC FOOD IN BENGALURU A STUDY -

16

CONCLUSION
1)
In a country like India where labor -intensive farming is more suitable
organic farming would be a better option.
2)
Organic crops need less water content and most of the agriculture
irrigation requirements is still dependent on monsoon so organic farming
suits more.
3)
As the high price of the organic food is due to the gap in demand and
supply if supply will increase price will automatically come down and within
the competing levels with non-organic food items.
4)
And last but not the least the quality of food would be way much better
than then non organic food.

REFERENCES
1.

www.google.com

2.

http://www.faqs.org/nutrition/Ome-Pop/Organic-Foods.html

3.

http://ressources.ciheam.org/om/pdf/c61/00800166.pdf

4.

http://en.wikipedia.org/wiki/Organic_food

5.

http://ofai.org/

6.

http://www.satavic.org/

7.
Organic Control, 2000 Organic food production in Italy past and
future.

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17