Consumer Behavior Toward Organic Product In India

Osamah Al-Maamari
Master of commerce – First semester
PoojaBhagavat Memorial Mahajana Education Center , Mysore

ABSTRACT
Availability of organic input and output is critical for improve of organic
forming in the country. Development of efficient marketing system is the need of the hour
for strengthening the organic production in India. This paper made a humble attempt to
understanding the consumer perception about organic product and marketing in india.
The results concluded that most of the consumer especially in urban people prefer organic
food product. Marketing of organic product is so poor in India so the demand for organic
product is increases but supply is very low. The major reasons are organic producer are
low, adequate market facility is not there, few number of shops, lack of awareness, and so
on. Therefore if farmer as well as government give interest to organic farming easily
enhancing good marketing system in India.

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 non-organic foods.
Organic food is a product which is made without the help of any kind of pesticides,
herbicides or insecticides.

Keywords: Organic products, price, attitude, consumer behavior, Health

consciousness, consumer satisfaction , purchase

INTRODUCTION
There is no common definition of “organic” due to the fact that different
countries have different standard for products to be certified “organic”. In simplest words
organic foods are minimally processed to maintain the integrity of the food without

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artificial ingredients, preservatives or irradiation. Organic products are obtained by
processes friendly to the environment, by cultivation techniques that consider both the
attributes of the final product and the production methods. A wide range of consumers of
organic food and non organic food were addressed and scrutinized to obtain their
observations and visions towards organic food. All organic food consumers are not having
the same method of approach towards organic food. Subsequently the statistical process
guides us to comprehend the relation and the model of the consumer behavior trends in
organic food in India. The Definition of the word “Organic”, an ecological management
production system that promotes and enhances biodiversity, biological cycles and soil
biological activity. It is based on the minimal use of off-farm inputs and on management
practices that restore, maintain and enhance “ecological harmony” (National Standards
Board of the US Department of Agriculture) (USDA).

More of the research was done in the countries related to organic food
consumers. A review on Organic food consumption demonstrates that efforts have been
made to inspect customers' view of Organic food, calculates factors that have encouraged
or kept the Organic food consumption decision, buyers' states of mind, and additionally
explanations behind buy/non-buy.

Important of the study

This study attempted to gain knowledge about consumer attitude towards
organic food products Consumption and Market potential of Organic food product
in India.

Literature Review
Raghavan, N. and Mageh, R . (2013). A study on consumers’ purchase intentions towards
organic products .Previous studies have provided a general analysis of the major
motivations that stand behind the organic food buying behavior of consumers.
Paul et al., (2015) .With the growth of health consciousness and environmentalism among
the Indian consumers, organic products have become a popular alternative to switch from
inorganic or synthetic consumption to organic consumerism. Indian consumers are
gradually seeking organic products not only in the food sectors but also in other sectors
such as organic cosmetics, organic cloths or fabrics etc. This increase in awareness is due
to the various environmental and health issues that have emerged during the last decade .

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Cherrier et al.,( 2011).The increase in awareness has to be supported by various other
marketing and promotional strategies by the Indian government and marketers to
reinforce the purchasing pattern of the consumers and change the perception towards the
organic products positively.
Salvadr v.Gariboy and Katke Jyothi: Market opportunities and Challenges for Indian
Organic products
Hughner et al., (2007):101; Yiridoe et al., 2005: 198 .A large share of research reveals the
fact that among many motivating factors for organic consumption, health factor of the
organic products has been identified as the primary factor.

ORGANIC FARMING IN INDIA

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 buildup 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

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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 requirements for agro-inputs, and reduce his costs. Chemical
agriculture and the 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. Organic farming was the backbone of the Indian economy and cow
was worshipped (and is still done so) as a god. The cow, not only provided milk, but also
provided bullocks for farming and dung which was used as fertilizers.

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.

Objectives of the Study

1/ ORGANIC FARMING IN INDIA

2/ To study Organic Food Preference.

3/ To study the advantages of organic farming for small farmers.

4/ To study the Purchase intention towards Organic Food Products.

5/ To study the Purchase Behavior Towards Organic Food

6/ To understand the consumer preference towards organic food purchase.

7/ To identify the buying pattern of Organic food.

8/ To study purchase intention towards of Organic food

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SCOPE AND IMPORTANCE OF THE STUDY
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. Organic food promotes a balance of human, other living organisms
and the nature. It also promotes no artificial preservatives and best maintain the
originality of food. This prevents excess use harmful ingredients and thereby ensures
health. This study attempted to gain knowledge about consumer attitude towards organic
food product consumption and to see whether there is any potential this might have for
changing their behaviour. The rationale for carrying out this study is that consideration for
the environment could come only from well-informed citizens who are aware of, and fully
committed to their rights to a quality health and environment. Nevertheless, before any
behaviour can be changed, it is necessary to evaluate the current state of consumers’
awareness and knowledge. Therefore consumer’s attitude, perception towards organic
food products, willingness to pay for organic food product and intention to purchase
organic food will be the main agenda of this study.

Organic Food Preference

Consumers generally make their choices considering the product information,
product attributes and evaluating the consequences of using the product. Consumers
consider health as an important parameter and then they buy the product. There are
various reasons consumer prefer to buy organic food. The consumers prefer organic food
due to some of their demographic characteristics. Households with graduates were less
likely to buy organic produce,while households with children under 18 were more likely to
buy organic produce1 Females and individuals with more education and income have
more awareness and knowledge of food hazardous to health2. As per the research,
organic consumer profile includes demographic variables, life style and environmental
attitudes. The regular organic food consumer is educated, affluent and of a higher social
class3. It was found that there is strong correlation between increasing consumption of
organic food and the level of formal education. Organic consumers have willingness to pay
10% premium for organic food product with an average of 9.5% by women and 11.4% by
men4. A widely held belief in the organic trade circle is that price and income do not
necessarily track organic sales5. There are various factors that impact the consumer
preference to buy organic food products.

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GIVEN BELOW ARE SOME OF THE ADVANTAGES OF
ORGANIC FARMING FOR SMALL FARMERS
High premium: Organic food is normally priced 20 - 30% higher than
conventional food. This premium is very important for a small farmer whose
income is just sufficient to feed his/her family with one meal.

Low investment: Organic farming normally does not involve capital

investment as high as that required in chemical farming. Further, since organic
fertilizers and pesticides can be produced locally, the yearly costs incurred by
the farmer are also low. Agriculture greatly depends on external factors such
as climate, pests, disease. Furthermore, most of the small farmers are
dependent on natural rain for water. Therefore in cases of natural calamity,
pest or disease attack, and irregular rainfall, when there is a crop failure, small
farmers practicing organic farming have to suffer less as their investments are
low. (It should be noted that while shifting from chemical farming to organic
farming, the transition might be costly).

Less dependence on money lenders: Many small farmers worldwide

commit suicide Since chemical inputs, which are very costly, are not required
in organic farming, small farmers are not dependent on money lenders. Crop
failure, therefore, does not leave an organic farmer into enormous debt, and
does not force him to take an extreme step.

Synergy with life forms: Organic farming involves synergy with various
plant and animal life forms. Small farmers are able to understand this synergy
easily and hence find it easy to implement them.

Traditional knowledge : Small farmers have abundance of traditional

knowledge with them and within their community. Most of this traditional
knowledge cannot be used for chemical farming. However, when it comes to
organic farming, the farmers can make use of the traditional knowledge.
Further, in case of organic farming, small farmers are not dependent on those
who provide chemical know-how.

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ISSUES & CHALLENGES
DRIVERS
Huge export markets.
Organized retail enhancing distribution system.
Government benefits.
Increasing health consciousness among consumers.

CHALLENGES
High prices of organic food.

Lack of integrated supply chain and difficulties for farmers.

Certification barriers.

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.

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.

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Organic food is not easily available in the market because of small scale
production. The demand assessment of organic food is difficult to determinebecause of its
weak marketing.

Research Problem
This Study deals with the organic foodindustry 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.

In the organic sector we often hear the question: is organic more

expensive, and why is that? The fact is organic foods are not more expensive when
considering social, economic, political and environmental dimensions, but to understand
that statement we have to look at who and what pays for the true costs of food
production. Non-organic agriculture is subsidized in most part of the world. In other
words, if the market does not pay what it costs to grow a crop the government often steps
in with a subsidy to the farmers. Then It Is The Tax Payers Who Pays. The most important
Costs for Organic Agriculture are the Costs for the Consultants, Inspection & Certification
Process. Certified by National organic standard board , USDA, etc.

Purchase intention towards Organic Food Products

Consumer buying intention is based on attitude. Past research has supported
the factor attitude is an important motivation factor, which influence purchase intention.
Positive attitude leads to the positive perception and hence it

motivates the consumer towards the product or service. Attitude can be

developed based on internal and external stimulation the consumer has observed or
experienced. Voon et al. (2011) in their study investigated the determinants of willingness
to purchase organic food among consumers in a Malaysian city, using a questionnaire
survey. The results indicated that efforts to promote consumption growth should focus on
influencing consumer attitudes. Tsarkiridou et al. (2008) found from their study that
organic food products are believed to be healthier and higher quality than conventional
food products. They found that care for the environment and health were important
factors in the purchase of organic food products. Lea & Worsley (2005) examined
consumers’ beliefs about organic foods and their relationship with socialdemographics and

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self-transcendence (universal, benevolence) personal values in Australia. The majority of
the participants in the study believed organic food to be healthier, tastier and better for
the environment than conventional food. However, expense and lack of availability were
strong barriers to the purchasing or organic foods. The results indicated that, generally,
women were more positive about organic food than men. The personal value factor
related to nature, environment and equality were the dominant predictor of positive
organic food beliefs, followed by sex. A study by Fillion and Arazi (2002), found that
organic orange juice was perceived as tasting better than conventional orange juice.

Purchase Behavior Towards Organic Food

Raghavan and Megeh (2013) studied the consumers’ purchase intentions
towards organic products in Chennai city. The findings of the study showed that
perceptions towards organic food product had the strongest relationship with the buyer’s
intention to buy organic food product. A study carried out by Padiya and Vala (2012) in
Ahmedabad city, illustrated the organic food consumers as less price sensitive, believers in
quality and information; generally seek information from newspaper, magazines and at
the point of purchase. Shafie and Rennie (2012) study found that price was the restrain
factor towards organic food consumption. Balaji and Bhama (2012) critically analyzed the
consumer perception towards organic food products in India. The findings of the study
revealed a significant relationship between various psychographic factors on the overall
satisfaction of consumers towards organic food products. Sakthirama and Venkatram
(2012) analysed the purchase intention of organic consumers in Coimbatore city, India
and the findings revealed that purchase intention of consumers towards organic food
products was influenced by attitude and knowledge and familiarity to consumers.
Sangkumchaliang and Huang (2012) analyzed consumers’ perceptions and attitudes or
organic food products in Northern Thailand. Their Results indicated that the main reasons
for purchasing organic food products are an expectation of a healthy and environmentally
friendly means of production. Further, the results showed that buyers tend to be older
and higher educated than those who do not buy them. Saleki et al. (2012) in their study in
Iran, determined the influence of organic knowledge, quality, price consciousness,
subjective norms and familiarity on attitude and organic buying behavior. Vlahovic et al.
(2011), in a study in Serbia, analyzed the consumer attitude towards organic food
consumption. The prime objective of that study was to identify the determinant factors
that influence the demand and consumption of organic products and to examine
consumers’ preferences, motives that resulted in purchasing organic food products in

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Serbia. The findings showed that most of the consumers were not adequately informed
about the importance of organic food consumption; high price was found to be a limiting
factor and fruits and vegetables were the mostly preferred and purchased organic
products. Chakrabarti (2010), in a study in India, related the consumers’ attitude as one of
the important factors which influences the purchase process of organic food consumers.
The study used descriptive survey and explanatory survey. The results indicated that the
influence of customer value towards organic food products had a significant influence to
the customer loyalty for the organic food products. Gupta (2009) explored the consumer
behavior for food products in India. The study found that though quality of food products
was one of the most important parameters for food product purchase decision, people did
not see much improvement in the quality related parameters for food items during the
last ten years. People rated various parameters differently for different product groups.
The results also indicated that cleanliness and free from pesticides were the most
important criteria for products like food grains, pulses; store quality, marketing mix and
taste, flavour explained the maximum variance in the purchase decision of fruit and
vegetables. Choo et al. (2004) studied purchasing behaviour of new food product among
innovator groups in India. They have found that consumers’ attitudes will positively affect
Indian consumers’ intention to buy new processed foods. Besides, in India the experts also
rated the attitude of the consumer is one of the most important factors in the organic
consumers’ purchase process. Ajzen (2002) indicated that the more favourable the
attitude with respect to behaviour, the stronger is the individual’s intention to perform the
behaviour under consideration and showed that when behaviours pose no serious
problems of control, they can be predicted from intentions with considerable accuracy.
The result of researches shows that there is a positive relation between attitude toward
organic food and buying intention of organic food (Chan & Lau, 2000; Aertsens et al., 2009;
Gracia & Magistris, 2007). The higher of attitude score toward organic food, the higher of
buying intention of organic food.

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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
offer 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.

Suggestions
1/ Allocation of separate shares for organic food products in departmental
stores.

2/ The study shows that further steps have to be taken to increase the
awareness level of organic products. Government can increase the trend for consumption
of organic foods by increasing public awareness (such as programs and advertisements in
TV and other channels) and further government should come forward to provide subsidy
for organic producers.

3/ Organic food particularly fruits and vegetables are highly quality, nutritious
and taste better. The same can be maintained to hang on to current customers and focus
on new customers by increasing availability of the products.

Conclusion
Consumer behavior involves the psychological processes that consumers go
through in recognizing the needs, finding ways to solve these needs; collect and interpret
information; make plans and implement these plans, making purchase decisions and post-
purchase behavior. Previous research has indicated that consumer behavior is changing
towards purchase of many environmentally-friendly and organic products, due to
awareness of environmental degradation and the related issues. The emergence of
organic shops in markets supports the same and create the awareness to stimulate the
customer need, wants and demand.

There is also a rise in concern that organic agriculture is essential in preserving

the environment and in improving public health. Promotion of organic food is not only

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beneficial for producers, but also will respond to consumers’ desire for higher food quality
and food production that is less damaging to environment. The actions that people take
and the choices they make to consume certain products and services have direct and
indirect impacts on the environment, as well as on personal well-being (Jackson, 2005).

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References
Raghavan, N. and Mageh, R. (2013). A study on consumers’ purchase intentions towards
organic products. Indian Journal of Research, Vol.2(1), pp.111-114
Consumer Acceptance Towards Organic Food Mohamed Bilal Basha1, Cordelia Mason2,
Mohd Farid Shamsudin1, Hafezali Iqbal Hussain1, Milad Abdelnabi Salem1, Azlan Ali1
1UNIKL Business School 2Unirazak Graduate School of Business Corresponding Author
Salvadr v.Gariboy and Katke Jyothi: Market opportunities and Challenges for Indian
Organic products
Paul et al., (2015)
Cherrier et al.,( 2011)
Hughner et al., (2007):101; Yiridoe et al., 2005: 198
www.google.com
http://www.faqs.org/nutrition/Ome-Pop/Organic-Foods.html
http://ressources.ciheam.org/om/pdf/c61/00800166.pdf
http://en.wikipedia.org/wiki/Organic_food
http://ofai.org/
http://www.satavic.org

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