Sip Presentation on Consumer behavior towards Organic food

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BY: ASHISH CHAUHAN PG20095343

INDUSTRY BACKGROUND• Organic food industry is an opportunity in India.• Organic food industry is growing at 30% annually.• It contributes 18%-20% in annual GDP.• India has 4% market share of organic foods.• The global organic food market grew by 9.7% in 2009

to reach a value of $60 billion. • In 2014, the global organic food market is forecast to

have a value of $96.5 billion, an increase of 60.7% since 2009.

• The fruit and vegetables segment generated 31.5% of the global organic food market's overall revenues.

COMPANY PROFILE• A part of B.S. Associates.• FOUNDER- Mr. Vinod Goel• Near2Nature means “Close To Nature”.• Believes in quality, purity & eco-friendly organic

product.• To bring people “BACK TO BASICS”.

OBJECTIVE • Near 2 nature has been established with the essence

of purity and belief that the right of every individual to EAT HEALTHY and LIVE HEALTHY is accomplished.

COMPANY PROFILE Contd…

CORPORATE OBJECTIVE

“It is our aim to become one of the top organic food companies in India and to become a cornerstone of B.S. associates In India.”

CORPORATE MISSION

“To be an ethical and innovative global leader in providing genuine organic products and solutions for conscious and healthy living.”

Consumer Buying Behavior• Study of consumer preferences• Based on their past experience• Related to the segmentation, target and

positioning of the customer• Consumer plays 3 distinct role- user, payer and

buyer.• It concern with action, needs and satisfaction.

RESEARCH OBJECTIVE

• To study the consumer buying behaviour for organic foods in the Indian domestic market.

• To analyze the potential for organic products in the Indian domestic market.

• To study the marketing mix of organic foods in India.

RESEARCH METHODOLOGY

• Study the consumer behavior for the organic foods and their feedbacks through the market survey-

DATA SOURCE- Primary & Secondary data

RESEARCH APPROACH- Survey Approach

RESEARCH METHODOLOGY- Descriptive method RESEARCH INSTRUMENT- Questionnaire

SAMPLING PLAN• POPULATION DEFINITION- Mostly House-wives &

Working Ladies • SAMPLING METHOD- Random Sampling Method

• SAMPLE SIZE- 100

• PRIMARY DATA- Questionnaire Survey

QUESTIONNAIRE USED

FINDINGS & ANALYSIS

Above 5015%

Between 21-50

85%

AGE GROUP

WORKING49%

HOUSE-WIFE51%

OCCUPATION

PART B: Information about Organic food

Porter’s Five Forces

Competitive

Rivalry

Potential Entrants

BuyersSubstitut

es

Suppliers

Heating Up

Cool To Warm

Porter’s 5 Forces – Near2Nature Market

Forces Description Strength of Force

Threat of Substitute Products

Easy switch to the conventional retailers. Specialty stores built right in to their strategies.

High

Bargaining Power of Suppliers

Largest food processors acquiring organic food producers. Only 1% of farmland used for organics.

Medium to High

Bargaining Power of Buyers

For the most part, buyer can switch to other high quality products

High

Intensity of Competition

Degree of commitment by the conventional retailers will determine the intensity.

High

Threat of New Entrants

Entrants are already there. Their intensity of their pursuit of the natural/organic market is the question.

Low – Medium

Marketing mix

Marketing Mix

• Product– High Quality Natural and Organic Food – Offerings vary based on store size and tastes of

local clientele– Private label products– Emphasis on daily foods

Marketing Mix

• Price– Goal is competitive price at highest quality– Organic foods are 25 – 75% more costly to grow

and market– Price and Quality are competing forces

• Near2Nature chooses to focus on Quality, therefore prices are higher than conventional grocers

Marketing Mix

• Place– No standard store design. Layout customized for

site and product mix.

– Presentation• Highly regarded food displays, cleanliness, wide aisles

Marketing Mix

• Promotion– Primarily rely on word-of-mouth

recommendations– 0.5% of revenue spent on advertising– Most marketing spend is for in-store signage and

events– Store personnel is knowledgeable and

personable

SWOT AnalysisNear2Nature Foods

STRENGTHSHighest Quality Organic Foods SellerHuge selection/varietyFree Home deliveryFirst Mover in organic productsEco-Friendly

WEAKNESSESPrice – up to 75% higherLocations – only in affluent areasAdvertising Budget very low (WOM approach)Promotional Offers – no couponsCertification

OPPORTUNITIESExpand private label selection – lower price for customersAdvertise more, create coupons and promotions to get people in the storeHype right now is to eat healthier and protect the environmentRewards program – frequent buyer cards Back to Basics – buy more local products that people will pay more for

THREATSConventional Supermarkets Bad EconomyLocal Farmers’ Markets/Independent Retail Chains

What are the future challenges for Near2Nature?

Future Challenges• Pricing – being able to compete against the

conventional grocery chains

• Getting more people in the store to buy organic food

• Convince new customers to shop at Near2Nature rather than more convenient stores

LIMITATIONS

• The sample size for the analysis of the satisfaction level of the customers and testing the perceptions of the people towards organic food was restricted to 100 due to time factor constraint involved.

• Support from customers.

• Sometimes people may not provide us with the correct information.

• Restricted to one area i.e. Delhi and NCR.

CONCLUSION

• Focus on consumer preferences.• Create awareness about the organic foods and

their availability.• Advertisement and promotion of the

products.• Maintain a trust & brand name.

Recommendations for Near2Nature

Recommendations• Lower Price to Compete with Grocery Stores

– Add a customer rewards program for frequent buyers

– Coupons to customers

• Catering– Offer catering to local businesses & events

• Expand Private Label Selection– Lowers manufacturing costs, could offer discounts

to customer for using Near2Nature brand products

Reference

• Mr. Abhishek Singla Manager (Operations) Near 2 Nature Pvt. Ltd. Sec-21, Rohini, New Delhi