NEW DELHI INSTITUTE OF MANAGEMENT

ASSIGNMENT
ON
STUDY OF CONSUMER BEHAVIOR
AND
PREFERENCES TOWARDS READY TO EAT
PRODUCTS

FOR
CONSUMER BEHAVIOR

SUBMITTED TO: SUBMITTED BY:

Ms. Gauri Modwel Deepali Baranwal
Roll No: 12
Section: A

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 TABLE OF CONTENTS
Acknowledgement..................................................................................................... 2
Table Of Contents..................................................................................................... 3
Section 1: Introduction............................................................................................. 4
Introduction To Ready To Eat (Rte).........................................................................4
Motivation For The Study.........................................................................................
Objectives Of The Study...........................................................................................
Research Problem.....................................................................................................
Scope Of The Study..................................................................................................
Limitations Of The Study ........................................................................................
Defining The Variables.............................................................................................
Section2: Literature Review.....................................................................................
Theoretical Review................................................................... ...............................
Research Based Literature Review........................................................................
Section 3: Research Methodology ..........................................................................
Research Design.....................................................................................................
Data Collection Methodology................................................................................
Sample Design.......................................................................................................
Sample Size............................................................................................................
Section 4: Results And Findings ............................................................................
Section 5: Conclunsions And Recommendations.................................................
Conclusion.............................................................................................................
Recommendations..................................................................................................
Section 6: Bibliography...........................................................................................
Books.....................................................................................................................
Web-Resources......................................................................................................
Other References...................................................................................................
Section 7: Annexure ...............................................................................................

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 EXECUTIVE SUMMARY
In today’s competitive world the practical study forms an important part in each and
every professional course. The MBA is a course in which the theoretical knowledge
is backed by the practical study. That study is in the form of different projects which
are undertaken during the MBA course. Here we have done a project on a READY
TO EAT FOOD INDUSTRY as a part of MARKETING RESEARCH
INFORMATION SYSTEM course. The current situation is made known to the
students when they undertake the project. The project gives better insides into the
application part of the theory. The companies in an industry and their operations can
be better known by the students when they analyze the data, and prepare the project. 

This project is on the study of READY TO EAT FOOD market of India. We have
done analysis based on the primary data (which are collected through survey &
personal interview) and secondary data (which are collected from different sources
like internet, magazines, and reports of different Government agencies).

This project also includes the current news on ready to eat food and also includes the
details of the first international conference in India   on READY TO EAT FOOD
industry.

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 INTRODUCTION
Background for the Study

India has made lot of progress in agriculture & food sectors since independence in
terms of growth in output, yields and processing. It has gone through a green
revolution, a white revolution, a yellow revolution and a blue revolution. Today,
India is the largest producer of milk, fruits, cashew nuts, coconuts and tea in the
world, the second largest producer of wheat, vegetables, sugar and fish and the third
largest producer of tobacco and rice. Therefore, Indian Government is providing
more infrastructures for this sector. Excise duty is now ZERO % on RTE and 100 %
tax deduction for the first 10 years for new units. This allows manufactures to bring
down their prices & spreads its flavors to the world.

Now the time is to provide better food processing & its marketing
infrastructure for Indian industries to serve good quality & safest processed food
like ready to eat food. The ready-to-eat (RTE) market in India, currently estimated at
Rs. 128 crore (2006) is expected to expand to reach Rs. 2,900 crore by 2015,
according to an analysis done by Tata Strategic Management Group (TSMG).
In its analysis, TSMG said that the factors contributing to the growth would
be changes like cold chain development, disintermediation, streamlining of
taxation, economies of scale on the supply side, coupled with increasing
disposable incomes, diminishing culinary skills and the need for convenience on the
demand side.

Ready to Eat Meals like already cooked or prepared lunch & dinner are relatively
new products are now sold through retail general stores in especially made sealed
aluminum laminates. When customer needs to eat, the food item pouch is either put
in microwave oven to warm it or keep in heated water for a few minutes and then
serve to eat. Such ready to eat meals have been especially given to soldiers in army
of many countries who require carrying their rations while on war front or while
located far away from their main unit.

The market for food is simply huge and as of January 2010 estimated to be Rs 5000
billion annually. It is growing for two main reasons: population growth and
improvement in consumers spending ability. The ready-to-eat segment is small but

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growing. Corporate are only now beginning to look at the huge potential this
segment can offer. The market is expected to grow five-fold in next 5 years.

Why Ready To Eat Food

Globalization of Indian food and its culture are the core factors for
popularization of
ready to eat foods.
Main motivation for these ready to eat foods is fast growing foreign market.
Retail outlet culture is now growing rapidly in India.
Shelf- life of these foods are at least 12-18 months.
Quality, Taste and Flavor of these foods remains as good as fresh up to the
expiry date.
Women wanting to spend more time out of the kitchen.
More working bachelors staying away from homes.
Cost effective in comparison to the Indian cuisine served by the restaurants in
foreign countries.

Players in the Ready to Eat Segment

MTR
Kohinoor Foods
ITC
Haldiram
Tasty Bites

Motivation for the Study

According to ITC press release on March 2008, Indian RTE market is worth around
Rs 80-100 crore. The market is somewhat in a stagnant state and the growth is
minimal. The concept behind RTE is that urban families are strapped for tine and
will definitely buy RTE packs to save on cooking time however this doesn’t seem to
be so because in India people still prefer food cooked and served piping hot by
someone else or themselves so people hire cooks instead of buying RTE packs. A
study conducted by the Tata strategic management group also highlights that the
RTE market in India has remained under-penetrated owing to factors such as
consumers are penchant for freshness, low affordability and the Indian housewives
have preference for home-cooked food. Hence, this study was undertaken to
understand the psyche behind consumers and what factors goes into influencing
their buying decision making.

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This is a dilemma faced by marketers of Ready to eat Industry. Marketing being
very close to my heart and strategic marketing is my passion and hence I took up this
study to understand the problems that marketers face and what are the mean by
which strategically these hurdles can be overcome.

Indian Ready to Eat Food Industry

Indian lifestyle is undergoing a massive socio-economic change, which is also being

reflected in food habits. Owing to this fact, India is experiencing a significant
growth in the ‘Ready-to-Eat’ Food industry. The Indian ‘Ready-to-Eat’ industry is
making a huge progress and Ready-to-eat foods market in India is expected to reach
Rs 2900 Cr by 2015. 

The popularity of ready-to-eat packed food now is no longer marks a special

occasion. People want value for time, money in terms of quality and variety. The
food processing industry is one of the largest industries in India and it is the ranked
fifth in terms of Production, Consumption, Export and Expected growth. Processed
food market in India accounts for 32% that is Rs. 1280 billion or 29.4 billion US $ in
a total estimated market of Rs. 3990 billion or 91.66 US $.   The demand for this
industry comes from the global Indians as well. NRI’s and others are looking for
convenient food, (almost) authentic dishes and entrée on the go. This demand for
ready-to-eat meals has captured a large amount of the food retail market in India and
around the world. Walk in into any desi grocery shop in North America and one can
find a wide assortment of emerging desi brands. Also Euromonitor International, a
market research company says that amount of money Indian spend on ready to eat
snacks & food is 5 billion US $ in a year while on abroad Indian or Indian
subcontinents spend 30 billion US $ in a year. 

The factors contributing to this growth would be changes like cold chain
development, disintermediation, streamlining of taxation, economies of scale on the
supply side, coupled with increasing disposable incomes, diminishing culinary skills
and the rising need for convenience on the demand side. The new technologies and
techniques like retorting or sterilization process, which are developed to store the
ready to eat food.

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 RESEARCH METHODOLOGY

Objectives Of Project
To study   the market of   Ready to Eat food.
To determine the factors affecting the purchase decision of Ready to Eat Food. 
To understand the consumption pattern of Ready to Eat Food.
To analyze the competition among different brands.
.
Research Problem
This Study deals with the Ready to eat Industry in India. The study also aims at
understanding the factors influencing buying decision making of the RTE
packs. The factors under consideration are advertising, price, Product, Value
proposition etc.

Scope Of The Study

The project is a study of what are the factors that is affecting consumer buying
behavior of Ready to Eat Meals in India. The study is undertaken to understand all
the negative and positive perceptions about the Ready to Eat packs. In the study I
have highlighted the following points:
Percentage of people aware about RTE & have purchased it.
Percent bought an RTE on monthly basis vs. emergency basis.
How did the respondents come to know about RTE ± So that
awareness could be increased through those means?
Critical areas where communication is required to draw a change in the
perception/attitude of customers towards RTE segment.

Limitations Of The Study

For a generic study like this where the consumers are spread across a wide
area of India the sample size taken was very limited i.e. 60.
Lack of first-hand knowledge of conducting research.

Data Collection Method:

PRIMARY DATA
1. Questionnaire.
2. Personal Interview.

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 SECONDARY DATA
1. Internet
2. Magazines.
3. Companies’ Brochure.

SAMPLE SIZE: 60
LOCATION FOR SURVEY- New Delhi (Sangam Vihar and Saket)

RESEARCH FINDINGS AND ANALYSIS

Data Analysis
Based on what the various respondents’ opinion, the data collected was analyzed
using figures. No rigorous mathematical analysis could be done. All estimations are
solely on judgment. For questions percentage was calculated and represented in the
form of charts.

After representing the data in the form of charts the same were interpreted to get in-
depth knowledge about the problem as well as general information, which helped the
researcher to come at appropriate conclusions about the study and to give relevant
recommendations.

Field Work
The survey was conducted for 5 days in New Delhi. Some major places where
survey was conducted are Sangam Vihar, Khanpur and Saket.

Data Representation
To represent the data collected through mall-intercepts and telephonic survey, we
have used some graphical charts, tables and statistical tools.

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 1. Given a normal week, are meals (i.e. lunch & dinner) cooked at home.

12% 7%

all days
15% week days
weekends
never
66%

2. On days when meals are not cooked at home, how do you manage?

32% 22%

order fron a
restaurant
visit a restaurant
pick a ready to eat
packet
46%

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 3. Have you heard of Ready to Eat meals?

yes
no

100%

4. Have you purchased Ready to Eat meals anytime?

16%

yes
no

84%

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 6. How did you come to know about the Ready to Eat Packs?

60.00% 54.00%

50.00%

40.00%
30.00%

30.00%
16.00%
20.00%

10.00%
0.00%
0.00%
tv commercials display at malls word of mouth other sources

7. A. Ready To Eat Pack saves a lot of time and effort in cooking.

Strongly disagree 0

Disagree 2

Niether agree nor disagree 6

Agree 26

Strongly agree 16

0 5 10 15 20 25 30

A Ready To Eat Pack saves a lot of time and effort in cooking

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 B. A pack of ready to eat has sufficiently quantity.

Strongly disagree 2

Disagree 15

Niether agree nor disagree 13

Agree 16

Strongly agree 4

0 2 4 6 8 10 12 14 16
A pack of ready to eat has sufficiently quantity

C. A Ready To Eat Pack is easily available whenever I need it.

Strongly disagree 0

Disagree 2

Niether agree nor disagree 9

Agree 25

Strongly agree 14

0 5 10 15 20 25

A Ready To Eat Pack is easily available whenever I need it

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 D. I don’t see any sort of health problem due to the consumption of RTE.

Strongly disagree 0

Disagree 15

Niether agree nor disagree 19

Agree 13

Strongly agree 3

0 2 4 6 8 10 12 14 16 18 20

I don’t see any sort of health problem due to the consumption of RTE

E. I think a RTE pack is value for money.

Strongly disagree 3

Disagree 9

Niether agree nor disagree 21

Agree 16

Strongly agree 1

0 5 10 15 20 25
I think a RTE pack is value for money

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 F. I think the RTE meal is not as tasty as freshly cooked food.

Strongly disagree 2

Disagree 4

Niether agree nor disagree 9

Agree 22

Strongly agree 13

0 5 10 15 20 25
I think the RTE meal is not as tasty as freshly cooked food

G. I know that the RTE Packs are manufactured at best quality standards.

Strongly disagree 5

Disagree 16

Niether agree nor disagree 13

Agree 15

Strongly agree 1

0 2 4 6 8 10 12 14 16

I know that the RTE Packs are manufactured at best quality standards

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 H. I will surely use more RTE Packs if ready to eat rotis are also made
available.

Strongly disagree 1

Disagree 3

Niether agree nor disagree 31

Agree 14

Strongly agree 1

0 5 10 15 20 25 30 35
I will surely use more RTE Packs if ready to eat rotis are also made available

CUSTOMER’S PROFILE
I. Age Group
18
18
16
14 12
12
9
10 8
8
6
3
4
2
0
15-25 25-35 35-45 45-55 55 and above

II. Gender
27
27
26
25
24 23
23
22
21
male Female

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 III. Occupation

17
18
16 14
14
12
9
10
8 6
6 4
4
2
0
student business govt service private service retired

IV. Marital Status

26
26

25.5

25

24.5 24
24

23.5

23
married unmarried

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 V. You belong to a

17
18
16 14
14 12
12
10
7
8
6
4
2
0
hostel/Paying guest joint family nuclear family with in-laws

VI. Your family’s total income

15 15
16
14 12
12
10 8
8
6
4
2
0
less than 20,000 20,000-50,000 50,000-1,00,000 above 1,00,000

4.4 QUESTIONNAIRE ANALYSIS

As seen from the series of Results the following observations can be made:
56 respondents i.e. 93 % of respondents believe that RTE meals are a time
saving option for cooking. The marketers should use this as their USP to the
advertising and positioning should be done on these lines.
Only 29 respondents feel that RTE packs have enough quantity and 18 feel
they don’t and the rest have no opinion on this matter. It’s a mixed reaction

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 and response. The general conclusion that can be drawn is that people don’t
feel the quantity is enough for the money they are spending. Some verbatim to
support ³Quantity should be good.´
47 respondents i.e. 78% of the respondents feel that the RTE packs are easily
available when needed. This shows the commendable distribution network
established by RTE marketers.
21 respondents feel that RTE packs are value for money while only 14 people
feel they are not while the rest 25 respondents didn’t agree on either.
41 respondents feel that RTE meals are not tasty as homemade meals and only
8 people feel otherwise. This depicts the unique characteristics of Indian
household which always believes that home -made foods are more tasty and
nutritious.

OUR OBSERVATION
After my research we found that the taste and trends of areas in NCR are quite
different. The taste and trends also varies from age group to age group and from
profession to profession. The people in south and west delhi are basically somewhat
in higher income group and they don’t mind going in for packaged foods instead of
cooking the food at their home.

When we communicated with them we found that their eating habits are changing as
they have less time to cook food or they have surplus money so their spending habits
for these packaged foods is changing. They don’t mind going for these packaged
foods rather than cooking three to four times a week. So we found that even in the
kirana shops which are not of organized retail type have also stated keeping these
kinds of stuffs.

When we talked with these kirana shops owner they also told that the demand of
these types of food products are increasing and people asks for different varieties of
package and frozen foods. When we went to the organized retail types like Big
Bazaar, Reliance Fresh etc., we found that they have many racks of these foods as
well as different sections for frozen foods also which included frozen meats, cutlets,
fried fishes, soybeans etc. The main brands we saw in these stores were MTR, ITC
and some foreign brands like Kraft foods and Campbell. But the people are keen in
buying Indian brands. So my conclusion for this area is that the FMCG companies

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have a potential market and a dissent customer base for expansion of these kinds of
food items.

When we visited east delhi the trend here was quiet different from which we saw in
western and southern delhi. The people here are mainly middle class or students.
When we talked to them we got an idea that around fifty percent were not aware
what is ready to eat foods. The other half of the population was also preferring to
cook the food at their home. There we saw many small eating outlets supplying
foods to these students at much cheaper rate to these students. The income of people
are not that high so they prefer to cook the food at home and not spending much on
these costly food items. When we went to the kirana stores of these areas there also
we found that there is low demand of these products. But in Malls we found that
organized retail shops are keeping these food products. But there sale is low. So our
conclusion for this area is that this market area does not have much potential for
these food products and FMCG companies still has a long way to go ahead.

CONCLUSIONS
Price- Indian consumers are highly price sensitive. For any new product they
judge the product based on their price and more or less the repeat purchases
are impacted by price factor. Same is the case with Ready to Eat foods.
Value proposition- RTE foods should be perceived as a value proposition by
customers. Value proposition means it should be able to save lot of time and
money with sufficient quantity to act as a full meal.
Value for money- Consumers should perceive RTE packs as Value for
money i.e. they should feel the money they spent on it is well spent and not
wasted. This is where repeat buying can be induced. If consumers see RTE as
a Value for money option they won’t look for other options like ordering from
restaurants or going to a restaurant.
Quantity and taste of food - Indians are voracious eaters and the family size
is also large. And Indians are used to eating a 3 full course meal on any day.
Hence the quantity packaged in the RTE packs should be sufficient. And that
is where the buying decision will come into play if the quantity is insufficient
to fulfill the entire family then they won’t consider buying it again. The food
should also tickle the taste buds of consumers.
Manufacturing conditions - As is evident, the Target market for RTE foods

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 are the educated individuals who are short of time. These educated individuals
have their own opinion and won’t take anything as gives and health being
their main concern in this fast paced life.
Easy availability- The biggest competitor for RTE foods are restaurants
which are easily available geographically and accessible with the option
of doorstep delivery. Hence RTE has to be made available in such way that it
can be easily accessible by the consumers during normal shopping as
well as during emergencies.

RECOMMENDATIONS
As is seen from the survey the major concern for consumers is the
health aspect. They have a perception that these RTE meals are not
manufactured under good conditions. Secondly, they also feel that Ready to
eat meals is not good for health. Hence marketers have to touch upon this
point. The advertising, communication and promotion should revolve around
this point. Packaged foods are relatively new to India hence proper awareness
have to be created by companies.
Indian Households are averse to outside food and they feel only home cooked
food can provide the taste and quality. This is a big hurdle for the RTE
industry and the efforts should be taken to improve the quality of the food by
using better manufacturing, and packing methods.
The ready to eat marketers should bank upon its strengths i.e. time saving,
effort saving and easily option. The promotion, Packaging should revolve
around these characteristics as we all know in the traditional Indian urban
family time is less. People crave to spend time with their family after hard
work. However, various limitations like cooking food etc hamper this. RTE
should consider this as their positioning strategy.
The pricing strategy should be designed in such a way so as to be
competent with the restaurant rate. People do not mind spending more if it
saves time. However they will spend only a reasonable hike in price. If there
is a lot of difference between the restaurant price and RTE price they would
go for the former.

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 In the previous section its is seen that the consumers came to know
about RTE packs from Television Ads and display at malls and the word of
mouth was virtually nil. This proves that two promotion methodologies were
very effective. The third and the most important as far is food products
is concerned ³word of mouth´ is where marketers should work on. This
can only happen if the consumers are satisfied with their experience and will
they give a positive word of mouth feedback to their relatives and friends.
This is the most effective form of communication when it comes to
something edible as Indian consumers tend to trust people who have already
sued it rather than advertisement.

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 REFERENCES
http://www.oppapers.com/subjects/ready-to-eat-food-market-survey-questions-in-india-
page1.html
http://www.oppapers.com/essays/Meal-Ready-To-Eat/62652
http://www.oppapers.com/essays/A-Study-On-Indian-Ready-To-Eat-Food/331613
http://www.tsmg.com/media-and-press-releases/219-ready-to-eat-foods-market-in-
india.html
http://www.hinduonnet.com/thehindu/mp/2004/06/10/stories/2004061000130300.htm
http://www.oppapers.com/essays/Ready-To-Eat-Food-Market/361408
http://www.oppapers.com/essays/Ready-To-Eat-Food-Industry/198352
http://www.indianfoodindustry.net/

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 ANNEXURE
CUSTOMER BEHAVIOR SURVEY
QUESTIONNAIRE

PLEASE FILL THE QUESTIONNAIRE AND REPLY HERE

1. Given a normal week, are meals (i.e. lunch & dinner) cooked at home for

a. ALL DAYS
b. WEEK DAYS
c. WEEK ENDS
d. NEVER

2. On days when meals are not cooked at home, how do you manage? (Select more than one if
applicable)

a. We order food from a restaurant

b. We visit a restaurant
c. We pick up a Ready to Eat Packet

3. Have you heard of Ready to Eat meals?

4. Have you purchased Ready to Eat meals anytime?

5. Do you remember any of the Ready to Eat brands?

a. _______________
b. _______________
c. _______________
d. _______________

6. How did you come to know about the Ready to Eat Packs? (Choose more than one if applicable)

a. TV COMMERCIALS
b. DISPLAY AT MALLS
c. WORD OF MOUTH
d. OTHER SOURCES (PLEASE SPECIFY)

7. Kindly rate your opinion on the following parameters:-

STRONGLY AGREE NIETHER DISAGRE STRONGLY

AGREE AGREE NOR E DISAGREE
DISAGREE
A) A Ready To Eat Pack

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 saves a lot of time and
effort in cooking
B) A pack of ready to eat
has sufficiently
quantity
C) A Ready To Eat Pack
is easily available
whenever I need it
D) I don’t see any sort of
health problem due to
the consumption of
RTE
E) I think a RTE pack is
value for money
F) I think the RTE meal
is not as tasty as
freshly cooked food
G) I know that the RTE
Packs are
manufactured at best
quality standards
H) I will surely use more
RTE Packs if ready to
eat rotis are also made
available

Any suggestions or comments on Ready To Eat Meals:

______________________________________________________________________________________
______________________________________________________________________________________
______________________________________________________________________________________

A. Customers’ Profile

I. Name: ___________________________________________________________
II. Telephone/mobile: _________________________________________________
III. Age Group:

15-25

25-35

35-45

45-55

Above 55

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 IV. Gender:
Male
Female

V. Occupation:

Student

Businessman

Govt. service

Private Service

Retired

VI. Marital Status:

Married
Unmarried

VII. You belong to a:

Hostel / Paying Guest
Joint Family
Nuclear Family
With In-Laws

VIII. Could you please tick on your family’s total income

Less than 20,000
20,000- 50,000
50,000-1,00,000
Above 1,00,000

Thanks for the cooperation

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