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Buying
Buying behaviour of consumers behaviour of
for food products in an emerging consumers
economy
109
Jabir Ali and Sanjeev Kapoor
Centre for Food and Agribusiness Management,
Indian Institute of Management, Lucknow, India, and
Janakiraman Moorthy
Indian Institute of Management Calcutta, Kolkota, India
Abstract
Purpose – The purpose of this paper is to develop a marketing strategy for a modern food/grocery
market based on consumer preferences and behaviour.
Design/methodology/approach – A total of 101 households having sufficient purchasing power
were personally surveyed with a structured questionnaire. These households are spread across the
well-developed Gomtinagar area of Lucknow city. Simple statistical analysis such as descriptive
statistical analysis, frequency distribution, cross tabulation, analysis of variance, and factor analysis
to assess the consumers’ preferences for food and grocery products and market attributes were carried
out.
Findings – The preferences of the consumers clearly indicate their priority for cleanliness/freshness
of food products followed by price, quality, variety, packaging, and non-seasonal availability. The
consumers’ preference of marketplace largely depends on the convenience in purchasing at the
marketplace along with the availability of additional services, attraction for children, basic amenities
and affordability. Results suggest that most of the food and grocery items are purchased in loose form
from the nearby outlets. Fruits and vegetables are mostly purchased daily or twice a week due to their
perishable nature, whereas grocery items are less frequently purchased.
Research limitations/implications – This paper analyses the buying behaviour of the consumers
under survey with respect to food and grocery items. These consumers are in a relatively
advantageous position in terms of purchasing power and awareness of health and nutrition.
Practical implications – The results may help the food processors and outlet owners to understand
a diversified set of preferences for products and market attributes, so that they can make better
decisions in the emerging organized food and grocery retail environment.
Originality/value – The topic is relatively less researched in emerging markets especially where
organized retail is still in its early stages.
Keywords Consumer behaviour, Food products, Retailing, India
Paper type Research paper
1. Introduction
Food purchase behaviour of consumers in most emerging economies such as India has
significantly changed due to an increase in the per capita disposable income, global
British Food Journal
The authors would like to thank the Director, State Agricultural Marketing Board, Government Vol. 112 No. 2, 2010
of Uttar Pradesh for funding the project “Feasibility study of Apna Bazaar in Gomti Nagar, pp. 109-124
q Emerald Group Publishing Limited
Lucknow”. The authors are also grateful to the editor and two anonymous referees for their 0007-070X
valuable inputs and comments for improving this paper. DOI 10.1108/00070701011018806
BFJ interaction, information and communication technologies, urbanisation, education and
112,2 health awareness, movement of households towards higher income groups, changes in
lifestyle and family structure (Rao, 2000; Shetty, 2002; Deshingkar et al., 2003; Vepa,
2004; KPMG, 2005; Kaushik, 2005; Kaur and Singh, 2007; Pingali, 2007). Consumer
buying behaviour for food and grocery products has always been influenced by a
number of economic, cultural, psychological and lifestyle factors (Shaw et al., 1993;
110 Brokaw and Lakshman, 1995; Asp, 1999; Roux et al., 2000; Roslow et al., 2000;
Roininen, 2001; Choo et al., 2004; Ling et al., 2004; Ahlgren et al., 2004; Goyal and Singh,
2007; Nagla, 2007). In the recent decades, sustained economic growth and increasing
urbanisation are fuelling a rapid growth in the demand for high value food products
like fruits, vegetables, milk, meat, eggs and fish (Bhalla and Hazell, 1998; Kumar, 1998;
Bhalla et al., 1999; Kumar et al., 2003; Landes et al., 2004; Pingali and Khwaja, 2004; Rao
et al., 2006).
On an average, an urban household in Uttar Pradesh[1] spends about 47 per cent of
its consumption expenditure on food items, out of which, about 30 per cent is spent on
grocery items and about 16 per cent on fruits and vegetables (NSSO, 2006). Increase in
income, particularly of the lower and middle-income households, is having a significant
impact on the demand for food items, because these groups tend to spend a relatively
larger share of their income on food consumption. Middle income and urban consumers
also spend a greater part of their income on upgrading and diversifying their diet
towards high value products like fruits and vegetables, eating out more often and
eating more processed and convenience food items (Landes et al., 2004).
In addition, a growing consumer preference for shopping convenience is fostering
the growth of modern retailing in India, which in turn demands greater efficiency,
quality and safety standards in the food supply chain (Chengappa et al., 2005;
Mukherjee and Patel, 2005; Umali-Deininger and Sur, 2007). Consumers have now
become more discriminating in their food product choices and have started
emphasising more on convenience, freshness and quality of the products
(Quagrainie et al., 1998; Acebrón et al., 2000). With the emergence of the
supermarket and hypermarket culture, consumer preference for packaged food
products has increased significantly in the recent years (Stewart-Knox and Mitchell,
2003; Silayoi and Speece, 2004; Wells et al., 2007). The desire for convenience and an
increase in the number of working women are some of the important factors driving a
strong growth of packaged food products (Goyal and Singh, 2007). Besides, consumers
have now started preferring quality food intake and are becoming more conscious in
terms of nutritional diet, health and food safety issues (Ruth and Yeung, 2001; Rimal
et al., 2001).
With the evolution of food retail modernization and rapid changes in the buying
behaviour of consumers, the retail market for food and grocery is growing by leaps and
bounds. To capture the opportunities of a growing organized retail market in the
country, big corporate organizations are foraying into this segment. These
organizations are in the process of investing huge amounts for creating retail chains
throughout the country.
Given the above situation of a demand for modernization of the retail food segment,
there is a need to assess the various products and market attributes for designing an
appropriate food retail market structure.
2. Research objectives and hypotheses Buying
Food purchase patterns in developing economies like India are characterised by daily behaviour of
or frequent purchasing from nearby marketplaces called “mom and pop stores”
(Veeck and Veeck, 2000; Sabnavis, 2008). This paper analyses the buying behaviour
consumers
of consumers with respect to food and grocery[2] products. These consumers are
relatively in an advantageous position in terms of their purchasing power and
awareness of health and nutrition. Empirical evidence argues that socio-demographic 111
factors such as gender, age, educational status and income play an important role in
determining the food consumption pattern across the world (Roux et al., 2000; Roslow
et al., 2000; Turrell et al., 2002; Choo et al., 2004; Rao et al., 2005; Krystallis and
Chryssohoidis, 2005; Batte et al., 2007; Goyal and Singh, 2007; Bukenya and Wright,
2007). Several other empirical studies also show that store choice is recognized as a
cognitive process which is highly influenced by consumers’ socio-demographic
characteristics (Arnold et al., 1998; Arnold and Luthra, 2000; Sinha and Banerjee,
2004; Fox et al., 2004; van Waterschoot et al., 2008). In view of such evidence, this
study aims at identifying the factors which influence consumer choices for food and
grocery products and also analyses the nature of marketplace preferred by consumers
for purchasing food and grocery products. The result obtained from this analysis can
help in identifying a diversified set of preferences for products and market attributes
which in turn can help in better decision making by the retail chains in the emerging
organized food and grocery retail environment. The analysis of the buying behaviour
of relatively advantageous consumers has greater relevance for the emerging
organized retail organizations in the food and grocery segment in India, as consumers
belonging to this group are considered as potential early adapters of organized retail
chain culture. The specific hypotheses tested in this study are as follows (see
Figure 1):
H1. While purchasing grocery, fruits and vegetables, consumers give similar
emphasis to various purchase decisions such as frequency of purchase,
monthly expenditure, preferred marketplace, distance to the marketplace and
food packaging.
H2. The socio-demographic profile of consumers (gender, age, education and
income) significantly influences the purchase decisions for grocery, fruits and
vegetables.
H3. Consumers lay similar emphasis on various food product attributes (freshness
and cleanliness, product price, quality, variety, packaging, convenience and
non-seasonal availability) while purchasing food products.
H4. Consumers give similar importance to various market attributes (related to
products, market infrastructure, additional services, etc.) while selecting a
marketplace for food purchasing.
H5. The socio-demographic profile of consumers (gender, age, education and
income) significantly influences the underlying factors of product and market
attributes in food purchase decisions.
BFJ
112,2
112
Figure 1.
Research framework
study also indicate that grocery items dominate the monthly household expenditure
with an average of Rs 839 per month followed by fruits (Rs 431) and vegetables (Rs
371).
Table II indicates that most of the consumers prefer nearby marketplaces to meet
their food consumption requirements. Grocery food items are generally purchased
from nearby grocery shops situated in the residential localities, whereas fruits and
vegetables are purchased from roadside shops. With rapid changes in the preferences
of the consumer towards convenient purchasing, the supermarket culture is coming up
very fast. These supermarkets offer conveniently packaged food items with choose and
pick facilities. About 10 per cent of the respondents prefer supermarkets for grocery
food purchasing. Food purchasing is distance sensitive (Table II) and most of the
respondents desire for availability of food products within one kilometre radius.
Therefore, H1, which assumes that the consumer’s purchase decisions are similar for
grocery, fruits and vegetables, is rejected.
A comparative study of consumer responses on the five aspects of food purchase
behaviour with the demographic profile of the respondents was done by analyzing the
variance (ANOVA) to assess if there are any significant differences in the individual
responses for grocery, fruits and vegetables (Table III). Results indicate that out of the
five aspects, the responses of males and females differ significantly on the frequency of
purchase and preferred market distance for grocery items and monthly expenditure
and preference on packaging for vegetables. Males generally prefer to purchase
grocery once a month; while some of the female respondents prefer a weekly purchase.
On the other hand, male respondents may travel more distance for purchasing grocery
while females prefer a neighbourhood marketplace.
In case of monthly expenditure, males spend more on vegetables as compared to
female respondents; while in case of packaging, females are more inclined towards
BFJ
Purchase decisions Products Gender Age Education Income
112,2
Frequency of purchase Grocery 6.742 * * 0.692 1.13 0.318
Fruits 0.11 1.897 0.506 3.824 * *
Vegetables 0.67 2.598 * 0.961 5.731 * *
Monthly expenditure Grocery 0.561 1.043 0.453 1.153
116 Fruits 0.247 0.625 0.7 3.003 * *
Vegetables 4.161 * 0.613 2.872 * 4.283 * *
Preferred marketplace Grocery 1.492 0.849 0.732 0.39
Fruits 0.717 1.096 1.445 1.335
Vegetables 1.25 0.941 1.28 0.781
Preferred market distance Grocery 7.909 * * 2.057 * 2.869 * 1.085
Fruits 0.214 3.655 * * 1.253 1.412
Table III. Vegetables 1.063 0.981 0.968 1.358
Analysis of variance Preferences on food packaging Grocery 0.2 0.752 0.625 1.634
between food purchase Fruits 0.479 0.608 0.747 3.882 * *
behaviour and Vegetables 5.591 * 0.875 1.103 1.938
demographic
characteristics Notes: *Significant at the 0.05 level; * *Significant at the 0.01 level
Factors
Quality and Storage and Product price Convenience
Product attributes variety (P1) packaging (P2) (P3) (P4)
Variety of
products 0.754 20.022 0.140 0.070 0.238 119
Quality of
products 0.742 20.056 0.124 0.390 0.122
Approachability 0.684 0.255 2 0.072 0.119 20.022
Hours of
operation 0.534 0.239 0.312 2 0.138 0.338
Post office 2 0.114 0.795 0.183 2 0.059 0.065
Dispensary 0.040 0.744 0.119 0.186 0.128
Medical shops 0.245 0.717 0.095 0.163 20.108
Bank (branch/
ATM) 0.518 0.559 0.242 0.046 20.119
Low traffic 0.278 0.530 2 0.280 0.238 0.142
Children’s
entertainment 0.274 0.015 0.737 2 0.167 20.090
Toy shops 2 0.076 0.162 0.723 0.027 0.205
Snack counter 0.178 0.080 0.585 0.204 0.037
Availability of
toilets 0.164 0.267 0.046 0.738 20.293
Sufficient parking 0.282 0.057 2 0.046 0.727 0.232
Hotel/restaurant 2 0.245 0.246 0.510 0.570 0.167
All at one place 0.073 20.040 0.087 0.042 0.781
Reasonable price 0.436 0.214 0.055 0.034 0.617
Total variance
explained (%) 16.278 15.494 11.849 10.501 8.598
Cumulative
variance
explained (%) 16.278 31.722 43.621 54.122 62.720 Table VII.
Factor analysis – rotated
Notes: Extraction method – Principal Component Analysis; Rotation method – Varimax with Kaiser component matrix for
normalization market attributes
Notes
1. It is India’s largest state by population and fifth-largest by area, located in the northern part
of the country.
2. Includes food items such as rice, wheat flour, pulses, edible oils, spices, pepper, sugar, tea
and coffee etc
3. Lucknow is the administrative and legislative capital of Uttar Pradesh. It is a vibrant city
with a population of 2.5 million, witnessing an economic boom and is among the top ten
fastest growing non-major-metropolitan cities of India (http://en.wikipedia.org/wiki/ Buying
Lucknow).
behaviour of
4. Almost all states in India have a State Agricultural Marketing Board under the Agricultural
Produce Marketing (APM) Act, which gives state governments the sole authority to consumers
establish and manage wholesale markets, where all “notified” agricultural commodities,
grown in the defined command areas surrounding the market, are required by law to be sold
only through these markets, with the number of notified commodities varying by state and 121
market (Umali-Deininger and Sur, 2007). These regulated markets are solely for wholesale
purpose, where only registered traders can participate.
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Corresponding author
Jabir Ali can be contacted at: jabirali@iiml.ac.in