Subject: Customer Orientation and Relationship Management

Topic : Consumer Buying Behaviour of Organic Fruits and Vegetables in

Telangana state

Submitted to:
Dr. K. Shilpa
Assistant Professor

Submitted by:
GROUP 6
Akash Ani Mathew-48
B Yaswanth Reddy-56
Ganesh B.K-64
Gowri Balah G-65
Sanjay Verma-84
 CONSUMER BUYING BEHAVIOR OF ORGANIC FRUITS AND
VEGETABLES IN TELANAGANA STATE

INTRODUCTION
The approach and outlook towards agriculture and marketing of food has seen a
quantum change worldwide over the last few decades. Whereas earlier the seasons and the
climate of an area determined what would be grown and when, today it is the "market" that
determines what it wants and what should be grown. The focus is now more on quantity and
"outer" quality (appearance) rather than intrinsic or nutritional quality, also called "vitality".
Pesticide and other chemical residues in food and an overall reduced quality of food have led
to a marked increase in various diseases, mainly various forms of cancer and reduced bodily
immunity. This immense commercialization of agriculture has also had a very negative effect
on the environment. The use of pesticides has led to enormous levels of chemical build up in
our environment, in soil, water, air, in animals and even in our own bodies. Fertilizers have a
short-term effect on productivity but a longer-term negative effect on the environment where
they remain for years after leaching and running off, contaminating ground water and water
bodies. The use of hybrid seeds and the practice of monoculture have led to a severe threat to
local and indigenous varieties, whose germplasm can be lost forever. All of this is for
"productivity". In the name of growing more to feed the earth, we have taken the wrong road
of unsustainability. The effects already show - farmers committing suicide in growing
numbers with every passing year; the horrendous effects of pesticide sprays by a government-
owned plantation in Kerala some years ago; the pesticide contaminated bottled water and
aerated beverages are only some instances. The bigger picture that rarely makes news
however is that millions of people are still underfed and where they do get enough to eat, the
food they eat has the capability to eventually kill them. Yet, the picture painted for the future
by agro-chemical and seed companies and governments is rosy and bright. Another negative
effect of this trend has been on the fortunes of the farming communities worldwide.

This is where organic farming comes in. Organic farming has the capability to take
care of each of these problems. Besides the obvious immediate and positive effects organic or
natural farming has on the environment and quality of food, it also greatly helps a farmer to
become self-sufficient in his Dr .H.M. Chandrasekhar International Journal of Research in
Business Studies and Management 53 requirements for agro-inputs, and reduce his costs.
Chemical agriculture and food distribution systems have developed, propagated, sustained
and now share a symbiotic relationship which affects each of us in many ways. Organic
farming was practiced in India since thousands of years. The great Indian civilization thrived
on organic farming and was one of the most prosperous countries in the world, till the British
ruled it. In traditional India, the entire agriculture was practiced using organic techniques,
where the fertilizers, pesticides, etc., were obtained from plant and animal products.

With rising concern of health issues and food safety, many consumers have turned
their site to organic products. The increased consumers' interest in organic food has been
attributed among others to the growing demand for food free from pesticides and chemical
residues.

The consensus of international research provides a very clear picture of the reasons
why people buy organic produce. Although there may be differences in the ranking of the
important issues due to the specific cultural and demographic factors, the main reasons, in
order of priority, are: personal health; product ‘quality’; and concern about degradation of the
natural environment. These were identified some time ago and have consistently been
supported by subsequent research. From some perspectives, the results from the past 20 years
of investigation into who buys organic produce have been disappointing. The desire to
identify the characteristics of organic produce buyers within the mass market is
understandable and the majority of the literature has concerned itself with demographics as a
segmentation variable; however, from this perspective, a clear profile has remained elusive.

This study aims to throw light on the customers in Hyderabad, who buy organic fruits
and vegetables based on their demographic characteristics and understand their perception
about organic produce.
 REVIEW OF LITERATURE

A huge range of organic products is available today for most customers. This was not always
the case. The industry was born out of a grassroots philosophy based on customer access to
chemical-free food. Initially, customers were faced with a minimal variety of fresh seasonal
organic produce, often shipped directly from the producer. The aesthetics and appearance of
this food were generally considered secondary to the chemical-free nature of the produce. If
anything, pest holes, bird markings, and deformed shapes were thought to be evidence of the
chemical-free nature. As a result, organic produce gained a reputation for poor physical
appearance and inconsistent supply. However, with increased production knowledge and the
development of modern organic supply chains, it is now possible to purchase the vast
majority of grocery items in an organic form throughout the year. For example, most large
supermarkets include organic and conventional products on their shelves. The organic
industry has undergone a quiet revolution (Finch, 2005) from a grassroots phenomenon to
one that reflects the contemporary Western world: an industry characterised by choice for
customers. This industry evolution has not been smooth; many hurdles have been overcome.
For example, under organic certification standards, producers could not resort to conventional
chemical quick-fix chemical solutions for weed and parasite control. Nor could stock be fed
traditional feed. Over the years, new methods were developed, including solutions such as a
reliance on integrated pest management, animal manures, stock and crop rotations. Also there
have been obstacles to conquer for processed organic products. Processors faced the twofold
challenge of first sourcing certified organic products, and second, ensuring continuity of
supply. The latter was extremely difficult in an industry based on seasonality and
characterised by many small producers. It is also interesting to note that organic has its
largest presence in food. Organic products are available in all the major food categories in
developed countries. For example, supermarkets have produce that includes all the major
fresh fruit and vegetable lines; meats—beef, lamb, chicken, pork, and even some processed
meats such as sausages; dry goods—flour, sugar, and semi prepared products such as pancake
mix; bottled and tinned goods—apple juice, baked beans, baby foods, tomato sauce; dairy—
milk, cheese, yogurt; bakery—bread, cakes; and confectionary—chocolates, sweets, and
biscuits. Further, convenience foods and cosmetics are starting to make an appearance and
are forecast to be the fastest growing segments in the industry in the United Kingdom (SA,
2006; Smithson, 2006). However, organic does not currently have a significant presence in
other areas such cleaning agents or paper products. It is important to consider what makes
this wide range of organic products different from conventional products. In the vast majority
of cases customers have a choice; they may choose either an organic or conventional form of
the product. Thus an organic product is different only because an independent organisation
has certified that it has been produced without artificial chemicals.

Throughout the world, when customers are asked why they purchase organic products
the three most commonly mentioned reasons are environment, health, and quality.
Environmental concerns focus on minimising the negative impact that some production and
processing methods have on the natural environment. Health issues revolve around reducing
customers’ exposure to, and ingestion of, artificial chemicals. Finally, a product of a higher
quality may, for example, be an apple that is fresher, sweeter, and generally tastier
(Fotopoulos & Krystallis, 2002; Magnusson, Arvola, Koivisto Hursti, Aberg, & Sjoden,
2001; Makatouni, 2002; Zanoli & Naspetti, 2002). The order, or priority, for these three
reasons varies. This variation may be caused by many factors. For example, health is very
important to customers who purchase organic products because of their own medical
problems. On a broader level, other individuals may purchase organic food as a way of
enabling them to support a food production system that is more sustainable in its impact on
the natural environment. Previous research has also identified the two most commonly
mentioned reasons for not purchasing organic products:they are not available where
customers do their shopping, and where available, they are often significantly more expensive
(Halpin & Brueckner, 2004; Lea & Worsley, 2005; Pearson, 2002; Zanoli, 2004). Whilst not
ignoring the great diversity in this industry it is valuable to consider all organic products and
the implications of the reasons given for purchasing, or not purchasing, them. Customers do
not have the resources to investigate the production system and they may rely on the
reputation of the retail outlet that confirms that the product is organic, or the contents of a
label indicating that the product is certified organic. Hence the existence and credibility of an
organic certification body, and/or the credibility of the organisation selling the organic
product are important in the marketing of organic products. Thus, organic products occupy a
niche where customers choose between them and conventional products. The positive
attributes of organic products relate to their perceived superior claims in the areas of
environment, health, and quality. However, to purchase these products customers must
overcome the negative attributes of price premiums and limited availability. Finally,
customers rely on an organic brand and/or the credibility of the retail outlet to confirm that
the product is genuinely organic.
 Although the price of organic products and their inherent premium is generally
perceived as an impediment to increasing sales, detailed investigation suggests a more
complex situation in which price premiums may not be very important for some customers as
well as the absolute necessity of them for other customers.

OBJECTIVES OF THE STUDY:

 To understand the demographic characteristics of the buyers of organic fruits and

vegetables
 To study the customer perception towards organic fruits and vegetables in the study
area

RESEARCH METHODOLOGY:

Area of study: The area of this study is Telangana

Sample population: The sample population constitutes of people who consume fruits and
vegetables in Telangana state

Sample size: 174 respondents were selected to conduct the survey

Sampling technique: Simple random sampling

Data collection methods:

The study is conducted based on both primary and secondary data.

The primary data is collected from consumers and producers of organic fruits and vegetables

The secondary data is collected from Department of Horticulture, websites of agencies

involved in organic cultivation, IFOAM publications.

Tools for collecting data: Google form, interview

Tools for analysing data: Descriptive analysis (mean, mode, pivot table, charts)
 MAJOR FINDINGS

Out of the 175 respondents, majority of the respondents were female.

Count of Do you consume organic Fruits and Column

Vegetables? Labels
Grand
Row Labels No Yes Total
Female 4 108 112
Male 3 56 59
Grand Total 7 164 171

It was found that out of 112 female respondents, only 4 do not consume organic fruits and
vegetables. But out of 59 male respondents, 3 do not consume organic fruits and vegetables.

Count of Do you consume organic Fruits

and Vegetables? Column Labels
more
less than 2 than 4 Grand
Row Labels 2 - 4 lakh lakh lakhs Total
No 1 5 1 7
Yes 10 144 9 164
(blank)
Grand Total 11 149 10 171
The respondents were primarily students and their income is less than 2 lakh per annum.
These groups prefer organic products.
 Count of Do you consume organic Fruits
and Vegetables? Column Labels
Row Labels No Yes Grand Total
Graduate 7 156 163
High school 3 3
Primary 5 5
Grand Total 7 164 171

Out of the 163 graduates, 156 consume and all the respondents in the primary and high
school education consume organic fruits and vegetables.

Count of
Origin Column Labels
Grand
Row Labels No Yes (blank) Total
Rural 4 35 2 41
Urban 2 129 1 132
(blank)
Grand Total 6 164 3 173

Out of the 131 urban respondents, 129 consume organic fruits and vegetables. Out of the 41
rural respondents 35 consume organic fruits and vegetables which indicate that the awareness
for organic fruits and vegetables are higher in urban area.

Count of Do you consume organic Fruits and

Vegetables? Column Labels
Grand
Row Labels No Yes (blank) Total
Government employee 2 2
Private sector employee 3 15 18
Student 3 32 35
Grand Total 6 49 55

The awareness among the people of all occupation is relatively high which indicates that
people in all occupations invariably consume organic fruits and vegetables.
 Do you think organic fruits and
vegetables are expensive?
No Yes

6%

94%

Majority of the respondents perceive that organic fruits and vegetables are expensive when
compared to inorganic produce. All the respondents unanimously agree that the organic fruits
and vegetables are healthier.

Attributes ratings
3.15
3.097701149
3.1
3.070175439
3.045977011
3.05

2.95 2.936781609

2.9

2.85
healthy superior quality ethical reasons sustainablity

The Superior quality of the organic produce is the reason why majority of the people
consume organic fruits and vegetables.
 What do you understand by the term 'organic'?

Traditional/ indigenous 1

Natural 60

Healthy 32

Chemical free 17

0 10 20 30 40 50 60 70

People perceive that organic products are natural and healthy. They are less aware that
organic produce are chemical free.

Price sensitivity

5%
10%

Maybe
No
Yes
85%

However, majority of the people are ready to buy organic fruits and vegetables even if the
price of organic produce keeps rising.
 Need for a system of verification of
organic fruit and vegetables
No
1%

Yes
99%

Need for a system of verification of organic fruits and vegetables are on the higher need as
per the responses.

What would help increase your level of trust

towards products which claim to be organic?

SCIENTIFIC EVIDENCE ON PACKAGING 96

GOVERNMENT REGULATION OR OFFICIAL STAMP 75

CELEBRITY ENDORSEMENT 3

0 20 40 60 80 100 120

Respondents develop trust on the product if there is scientific evidence on the packaging of
the organic fruits and vegetables.

Source of information on organic fruits and vegetables:

The most popular source of information about organic foods is word of mouth and
teachings at school or college across the different ideologies of what organic foods are. Other
popular sources of information included television programs or adverts and radio programs or
adverts. The survey however noted a significant increase in mentions of TV and Radio as a
source of information across the countries (IFOAM, 2013).

This study proved that the majority of the people are aware of organic fruits and
vegetables through their friends and information obtained in schools/ colleges.

General Business Issues in Relation to Customer Preferences

The producers in Ratnapuri Polytechnic of Agriculture and Agriculture Engineering

were asked to state the three most common issues they encounter in their business relating to
consumer preference for food products. The following issues were mentioned:

• High quality products

• Availability of products/supply

• Price / affordability

• Demand / customer taste and preferences / taste

• Origin / source of product– is it credible / trustworthy?

• Presentation / packaging

• Weight

SUGGESTIONS

 The organic fruits and vegetables producers should focus on maintaining the quality
of their produce. This is because people perceive that organic produces are expensive
and of superior quality. They are insensitive to the price of the product if it meets their
expectations.
 The producers should consider providing scientific evidence on the packaging of
organic fruits and vegetables, which may increase their sales.
 Women in the study area are more health conscious and prefer organic products and
hence the firms can come up with strategies to attract women to buy their produce.
 CONCLUSION

The demographic characteristics of the buyers of the organic fruits and vegetables in
Telangana state are female population, average income group, urban and graduates. People of
all occupation consume organic fruits and vegetables.

Consumers perceive organic fruits and vegetables as healthy, superior quality, expensive and
natural. Also majority are insensitive to the price of the organic produce. There is a need for a
system of verification for organic produce.

REFERENCE

1. Pearson, D., & Henryks, J. (2008). Marketing organic products: Exploring some of
the pervasive issues. Journal of Food Products Marketing, 14(4), 95-108.
2. H.M. Chandrashekar (November 2014). Consumers Perception towards Organic
Products - A Study in Mysore City. International Journal of Research in Business
Studies and Management Volume 1, Issue 1, PP 52-67
3. Samuel K. Ndungu (2013). Consumer Survey of Attitudes and Preferences Towards
Organic Products in East Africa
4. Roitner-Schobesberger, B., Darnhofer, I., Somsook, S., & Vogl, C. R. (2008).
Consumer perceptions of organic foods in Bangkok, Thailand. Food policy, 33(2),
112-121.
5. Roitner-Schobesberger, B., Darnhofer, I., Somsook, S., & Vogl, C. R. (2008).
Consumer perceptions of organic foods in Bangkok, Thailand. Food policy, 33(2),
112-121.
6. Tarkiainen, A., & Sundqvist, S. (2005). Subjective norms, attitudes and intentions of
Finnish consumers in buying organic food. British food journal, 107(11), 808-822.