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Astudyon-Consumer Behavior in Buying Vegetables With Respect To Food Retail in India
Astudyon-Consumer Behavior in Buying Vegetables With Respect To Food Retail in India
in India
A PROJECT SUBMITTED IN
PART COMPLETION OF
MASTERS IN MARKETING MANAGEMENT
TO
TIMSR
BY
MR. SHUKLA RATNESH
ROLL NO. 48
TIMSR
MMM Vth SEM
SHYAMNARAYAN THAKUR MARG, THAKUR VILLAGE,
KANDIVALI (E), MUMBAI 400 101.
CERTIFICATE
This is to certify that the study presented by Mr. Shukla Ratnesh to TIMSR in part
completion of Master in Marketing Management under A study on -
ACKNOWLEDGEMENT
Contents
SERI
AL
NO
TOPIC NAME
PAGE
NO
1.
Executive summary
2.
Introduction to problem
3.
Theoretical perspective
3(i)
Food retailing
13
20
Research Methodology
25
26
5(i)
42
Conclusion
52
Recommendation
53
8
9
Bibliography
Appendix
54
55
5(ii)
50
Executive Summary
Now a days there has been a mushrooming of food retail chains in India like Subhishka,
Reliance Fresh etc. The increasing number of nuclear families, double income
households and working women, greater work pressure and increased commuting time
have put the consumers under constant time pressure, thus it attract them toward these
food chain. But still a question remain unanswered that household will prefer go to buy
vegetables in these stores or buy from Local vendor or weekly Markets.
The study analysis the Consumer behavior in buying vegetables, what are the influencing
factors in buying vegetables like reference group, family group or the attitude of buyer is
itself the main motivational factor. The project also analyzed what are the evaluating
factors the consumer considers in buying vegetables like freshness, size etc.
The project also depict some light on the Value chain of food retail stores, how it is
different from traditional supply chain, where the influence of middlemen was higher
thus result in increase in price of vegetable. There are also some examples of recent food
chain and their specific model ( 4 ps).
The main focus is on alternate distribution channels and their respective advantages and
problems which help a food retailer to take benefit from its advantage and take cues from
other failures. The average price of vegetables is also shown of different alternative
channels which give a clear view of variation in prices,
It was also found out that household would like to go to food retail for buying groceries
and Fmcg products rather then vegetables, thus the food chain has to lay more focus on
attracting consumers toward shopping of vegetables.
With the increase in Variety, stock and stores they will be able to attract more household.
No doubt the price is lower than other channels but they have to find a mechanism to tell
it to every one.
Hence the future of food retail is bright but they have to solve the problems what the
buyer are facing form them and from other channels.
OBJECTIVES
6
To find out evaluating factors consumers take into consideration while choosing a
particular place for buying vegetables
To find out the need and future of food retail in India. and whether buyer prefer to
buy vegetables over groceries and other product in these stores.
2
Theoretical Perspectives
Food Retailing
Organized retailing in the last decade has emerged as the sunrise industry in India. The
boom in retail sector started after the liberalization measures which were initiated in 1991
in the country. Globally, retailing is done in a more organized way than it is done in
India. We are the nation of budding shopoholics. A recent study by Assocham pegs the
size of the Indian retail market at Rs. 5,88,000 Crores. This is particularly important for
the agricultural sector. Organized retailing will deliver an efficient farm-to fridge supply
chain wherein, the farmers will get a better return and the consumers will get products at
a reasonable price. This sector due to its tremendous growth opportunities has attracted
many investors giving rise to many food retail chains. The live examples that can be
quoted here are Food Bazaar, Food World, Nilgris, Trinethra, Subhishka, Mother Diary,
Retail Fresh those who have already entered into the organized food retailing and reaping
the benefits from it. Also we have Field Fresh of Bharti retail , which is joint venture
between Bharti and Rotchchild and they export the quality vegetables from India.
Food retailing-Indian scenario
Retailing is on the cusp of a transformation. A combination of increased consumer
demand, improved sourcing options and larger availability of real estate are creating the
foundation for a significant growth in the organized retail sector. The concept of retailing
though not new, but organized food retailing is a new concept. Retailing in India is still in
nascent stage. Most retail firms are companies from other industries that are now entering
the retail sector on account of its amazing market potential eg. Reliance and Bharti..
With more than one billion people, the third largest economy in Asia is on a track to
overtake China, as the most populous in the world by 2050. India is a young country,
with 24 percent of the population within the age group of 20-34. Its also becoming a
richer country: GDP per capita is expected to rise almost 4 percent per annum for the next
10 years, indicating significant increase in the purchasing power. According AT
Kearney report, by 2010, 49 percent of households are expected to be classified as
middle-to-high income group. Consumer spending will pick up even more as these more
affluent members of the middle class move in to urban areas and clamor for pricey
products will further increase.
Indias retail industry, both food and non-food, is the second largest employer (after
agriculture) and the second largest untapped market (after China). Organized retailing in
India constitutes only around 3 percent of the countrys overall retailing business.
According to a study on the food and grocery retail market by CRISIL More than 70% of
retailing in India comes from the largely unorganized food & grocery segment
At an estimated Rs.10 trillion in 2006, India's retail industry is almost one-third the
country's GDP. Food and grocery (F&G) items account for more than 70 per cent of all
retail sales. However, the penetration of organised retail in the F&G segment is negligible
at around 1 per cent.
The F&G segment consists of fresh fruits and vegetables, milk and milk products, fast
moving consumer goods and food grains. About half of the total F&G retail comes from
food grains and unprocessed fruits & vegetables - items that are purchased from farmers.
CRISIL Research estimates the retail value of these unprocessed items at approximately
Rs.3.8 trillion.
Food and grocery retail offers the biggest opportunity for growth, provided levels of
investment are high, says KSA Study., India is the most attractive destination for
retailers, according to A.T.Kearneys Global Retail Development Index 2006 (GRDI).
Information Technology is bound to open new vistas for food retailing. Use of ERP
packages like Retail pro, will bring down the lead time, inventory size, and software
packages like OCAP, CPFR, will aid in analyzing consumers behavior which in turn will
give the retailers to stay in the competitive market.
At this juncture when the GOI is mulling to allow phased FDI in retail sector the
opportunities for food retailing seems phenomenal. Income and consumption growth, rise
in literacy level, changing family structure, and gradual acceptance of frozen foods give
enough indications that future of food retailing in India will be sanguine. India is quickly
emerging on the radar of food retailing, thanks to its large 4-7 crore strong Indian middle
class which is focused in specific regions and give critical mass to retailers.
10
Despite the fact that the Indian consumers spend most of their monthly income on food
and grocery (48%), the development in this sector has been quite slow. The constraints to
food retailing in India are from many quarters. Some of the major implications and
bottlenecks that have deterred a fast growth of food retailing are as follows:
FDI Restrictions:
100 % Foreign direct investment in retailing is not allowed per se, foreign retailers can
operate in India through joint ventures, where the Indian partner is an export house, Eg
Rotchild ( Farm Fresh) Franchising/ local manufacturing/ sourcing from small sector,
cash and carry operations. It is acting as hurdle to entry of global players and exposure to
best practices.
A) Problems in consolidation
All the retail giants in the country believe that any good retail operation thrives on the
consolidation of purchases, which ultimately leads to volume benefits. In India, where
basic staples dominate a major proportion of the food purchases, this kind of
consolidation is almost non-existent. For this purpose, chain stores should ideally source
commodities in bulk from major growing areas. This would help the retailer to leverage
the quality to price benefits to the fullest. However, this does not happen, because of the
following reasons:
B. Legal Restrictions
11
The legal structure in the country does not allow free consolidation of produce by private
operators. Special licenses are required in order to purchase and store more than the
adequate quantity of staple goods. Such policy implications combined with inter-state
taxations do not create an encouraging environment for consolidated buying and bulk
storage.
C. Land and Space restrictions
In India, restrictive zonal laws post limitations on the use of land. The initial urban
planning of cities was done with smaller plots in mind, which along with rigid building
and zoning laws make it difficult for procurement of retail space.
There is a shortage of good quality retail space and rents are high for what is available.
One of the drivers of property prices is the high demand for space in the cities. Further,
only Indians can own property in India, which compliments the restrictions placed on
FDI, thereby restricting the entry of foreign players
D. Construction/infrastructure
There are no set standards or formats that exist in India for retail spaces. In addition,
power deficits add to overhead cost. This makes up a significant proportion of operating
costs in retailing.
Though the current trends poise to transform traditional Indian retailing to more
organized and globally competitive retail industry, the challenges that lie ahead are:
The first challenge facing the organized retail industry in India is: competition from the
unorganized sector. Traditional retailing has established in India for some centuries it is a
low cost structure, mostly owner-operated, has negligible real estate and labor costs and
little or no taxes to pay, consumer familiarity that runs from generation to generation is
one big advantage for the traditional retailing sector.
In contrast, players in the organized sector have big expenses to meet and yet have to
keep prices low enough to be able to compete with the traditional sector. High cost for
the organized sector arises from: higher labor cost, social security to employees, high
quality real estate, much bigger premises, comfort facilities such as air conditioning, back
up power supply, taxes etc. Further to cater to a wide diversity of customer needs, retail
chains have to hold large number of SKUs at store level.
The Indian farming industry is dominated by small and marginal farmers and has suffered
from lack of investment in the supply chain for years. Supply chain plays a very
important role as the whole distribution network and price mechanism depend upon it.
Traditional Agri supply chain has many flaws and irregularity which lead to wastage,
inefficiency in distribution, high cost of vegetables to end consumers and minimal price
of goods to farmers. But with the emergence of food Retail in India a new supply chain
has been made by these retailers which lead to elimination of middlemen and proper
utilization of resources which result in elimination of inefficiency of traditional supply
chain
13
Transporters: Transporters play in the whole system, as they are the ones who are
responsible for reaching the vegetable in the market in time so that rest of the chain
doesnt get disturbed. They have a considerable share in the total costing of vegetables.
They charge per trip to the market irrespective of the load.
14
Traditional Agri chain suffers from huge inefficiencies on the distribution side in terms of
lack of organized pricing information, inadequate storage and transport infrastructure and
a high level of intermediation. Cumulative wastage in this supply chain is estimated at
about US$11 billion, or 9.8% of the agriculture component of GDP.
Some of the problems that are faced by this chain are:
Fragmented structure of farm produce market: About 60% of the farm land area is with
marginal, small and semi-medium farmers (about 107 million land-holdings). The
average land size per farmer is only 0.005 square miles (1.4 hectares). These farmers lack
the bargaining power to deal with market intermediaries and hence are often exploited.
The archaic infrastructure for transporting agricultural produce from farm gate to
consumers has meant huge losses in transit and large mark-ups in pricing due to extra
layers of intermediation.
Outdated marketing structure and laws: Currently, much agricultural produce is sold by
farmers, primarily via government-mandated market yards (known locally as mandis).
Until, recently, the private sector was restricted from directly purchasing agricultural
produce from farmers. The market yards serve, at an average, a very high radius of
almost 459 square kms (177 square miles) owing to which farmers have to travel long
distances to sell their limited produce.
Additionally, the mandis
also suffers from inefficiencies. There is considerable
malpractice, which results in farmers realizing less than market value. Transactions tend
to favor traders.
The infrastructure of the marketplace is also lacking in terms of efficiency, frustrating the
farmers. Until recently, most states controlled the marketing of agricultural produce
through the Agricultural Produce Marketing Committee (APMC) Act. The governments
effort to regulate the farm produce market through the APMC Act, so as to ensure better
realization to the farmer, is now effectively becoming a major hurdle to achieving that
very objective. APMCs are supposed to be formed through regular elections with farmer
representation, but in many states government machinery dominates the governance of
these markets in practice.
15
16
The emergence of organized sector retail chain stores and a rise in competition is
encouraging Food Retailers to look towards improving efficiency in the agriculturerelated supply chain. Some of the large players are beginning to initiate efforts to
improve efficiency in terms of how the produce is procured from farmers. The private
sector is influencing the government to liberalize regulations that constrict the operational
environment. In addition, political pressure is also rising, invoking a response from the
government to change the regulations so as to enable farmers to operate more
productively.
Structure of new Retail Chain:
The large retailers directly take the produce from Market Yard where the small and
middle level farmers send their agri produce. There is elimination of middle men and as
result the farmers get the actual market price of their produce.
The large retailers then distribute the produce to their super markets, hyper markets and
stores and from their consumers purchase the goods at the less price form the near by
vendors due to elimination of various middlemen.
To cope up with the competition from unorganized retailers all the retail giants in the
country believe that it is imperative to follow tight inventory, ensure quality and restrict
margins to the minimum. To ensure this all the players in organized retailing are finetuning their supply chains. Some of the initiatives taken in this direction include:
Tight inventory control and logistics through the use of information technology.
Control price by direct sourcing from manufacturer and farmers.
Procurement of raw ingredients from the places that are reputed for their
production
Maintaining very high quality standards right from procurement to sale
Buy-back arrangement of leftovers
Use of modern technology such as RFID for better tractability, inventory control
and prevention of theft etc.
Below are the key changes in the farming-related business environment that should help
bring about an improvement in agricultural output over the next three to four years.
17
18
19
1)
Food World:
Food World is one of the biggest retail chains in India. The RPG group opened the first
Food World outlet on May 9 1996 at Chennai, which was a 2400 square feet store. It is
the only national chain, having Foreign Direct Investment to the extent of 49% that is
permitted in India. Now Food world, operates as a 51:49 joint venture with Dairy Farm
International of the Jardine Matheson Group, a US $ 4.5 billion\ retail giant operating in
the Asia-Pacific markets with the requisite experience.
Food World has decided to concentrate more on local areas rather than to go for a
nationwide presence in its expansion plans at the beginning. South India was chosen,
with focus on Bangalore and Chennai and later in Hyderabad. They identified areas
within the city with more than 4000 households in a 2-kilometer radius with an average
monthly income more than Rs. 4000. The important variables considered while setting up
an outlet are choosing the right location, sourcing the merchandise and recruiting a
trained workforce. A typical store is around 3000-3500 sq. ft. in size and carries about
5500 items. Food world handles on average 600 customers per day per store, which
translates to 1.5 million transactions per month. It is estimated that the chain serves more
than three lakh families.
Their product portfolio includes grocery of all kinds, fresh foods viz., fruits and
vegetables in fresh/chilled/frozen form, food that can be directly consumed, food and
non-food FMCG products, general merchandise required in homes like buckets, cups,
shelves etc. Indian Made Foreign Liquor is also sold at certain outlets.
Their Pricing strategy is to sell around 100-120 items at any point of time at below
Maximum Retail Price (MRP) rates. These are generally the key necessary items or the
items for which the customer attaches more value. In addition there are also lots of
schemes and offers to attract and retain customers. For procurement they follow a
strategy of Hub and Spoke. The purchasing for each state is done collectively to reduce
costs.
The distribution to each outlet is done by Food World in such a way as to reduce the total
handling costs. To source its daily requirement of fruits and vegetables, Food World
participates in the early morning auctions at the major wholesale markets and has a set of
suppliers who then grade, clean, pack and label the products in time for early morning
dispatch to the stores. At peak season, the Fruit & Vegetable shelf in a Food World store
stocks around 125 items, making it the widest range available under one roof in this
category.
20
2) Subhiksha:
Chennai-based Subhiksha started its service in 1997. The aim of Subhiksha is to setup an
outlet every 2 km in residential areas, where the average monthly income is more than Rs
4000. The retail outlets under this chain are mainly organized on the concept of a
discount store that meets all the monthly household needs of a family. Subhiksha not only
serves its customers through its outlets alone but also meets their demands through the
home delivery concept and currently, the company makes around 16,000 deliveries every
month.
The chain expects to earn a total turnover of about Rs 1200 crore in 2008-09 as it plans to
expand to other larger metros like Bangalore, Delhi, Bombay and Ahmedabad. The retail
food and pharmacy chain plans to have 550 stores in the next five years with an
anticipated investment of about Rs 145 crore for the expansion plan..
3) Namdharis fresh:
Namdharis Fresh, a subsidiary of Namdhari seeds that is involved in the production,
distribution and export of fresh vegetables and fruits. It is growing gradually to become
the leader in organized retailing of fresh vegetables and fruits. Namdharis Fresh, grows
vegetables and fruits in its own fields and green houses. To meet the growing demand for
fresh vegetables it also out sources produce from over 2000 growers. Procured vegetables
are transported in refrigerated trucks to the air conditioned grading halls where they are
graded hygienically and packed in bulk and consumer packs and distributed through its
own outlets spread all over the city of Bangalore. Namdharis Fresh, also packs
vegetables, garden fresh and exports it to European countries. Thus by amalgamating
both self growing activities and outsourcing from large number of farmers Namdharis
Fresh aspires to become a successful organized food retailer.
4) Safal:
The Fruit and Vegetables unit of the National Dairy Development Board (NDDB) was set
up in 1988 with the objective of ensuring a direct link between the farmers and the
consumers. The aim is to ensure that the customer gets the highest quality produce.
The processed products of the unit are marketed with the brand name SAFAL. The
Safal Group acts as the link between the farmer and the consumer in a procurement
process that benefits both. The farmers get the most remunerative price and the
consumers get the best produce at a reasonable price. A large and ultramodern central
distribution facility was set up to handle fresh and frozen fruits and vegetables. Initial
cleaning, grading, sorting is done followed by cooling to ensure the freshness till the
product reaches the consumers.
21
Specially designed modern retail outlets, the first of their kind in India, have been set up
at various localities in Delhi and Mumbai to market good quality. fruit and vegetables at
reasonable prices directly to the consumers. 279 specially designed modern retail outlets
have been set up in and around Delhi to market fresh and frozen fruit and vegetables,
directly to the consumers. Each shop caters to large number of customers, with a capacity
to sell 1,600 kilos of fruit and vegetables a day. The shops are equipped with electronic
machines that automatically weigh the produce and print item wise bills.
5) HOPCOMS:
Department of Horticulture of the Government of Karnataka took an initiative in 1959
and formed The Horticulture Producer and Cooperative Marketing Society (HOPCOMS)
with farmers as members. The prime objective of HOPCOMS is to promote and
encourage the development of horticultural produce. This is achieved by selling
horticultural produce through retailing and by providing cold storage and marketing
assistance to its members.
The Cooperative also provides training, technical advice and agricultural inputs to its
members (farmers).The society has gradually grown big and presently it has 11,680
member farmers .HOPCOMS has set up retail outlets throughout Bangalore, Bangalore
Rural, Mysore, Mangalore,Tumkur, Hassan and Kolar districts. There are around239
outlets in Bangalore. In addition there are around 150 outlets located in the other districts
of Karnataka.
These outlets are small, leased from the respective civic bodies at nominal rates and the
average number of employees per outlet is four. HOPCOMS collects the horticultural
produces directly from its member farmers as per the prefixed quota and sells them in
these outlets. Direct procurement of vegetables eliminates the intermediaries, and
consequently, a remunerative price is paid to the farmers. The farmer gets more than 70%
of the consumers price when he sells his produce to the HOPCOMS. Even when the
price falls during the glut seasons, HOPCOMS assures a minimum price to its member
farmers. It also pays the farmers on the day of transaction and thereby eliminates the need
for credit, which is prevalent in private business.
The selling price to the consumers too is also estimated to be about 10% less than the
prevalent retailers price. It spends around Rs. 10 lakhs a day for the purchase of
vegetables and fruits. Sales have steadily increased from around Rs 10 million in 19921993 to reach above Rs 400 million in 2000-2001. Sale of vegetable account for 91% of
the total sales whereas chemicals formed 6% and the remaining is from sales of seeds and
fertilizers. By its effective retailing business HOPCOMS earned a gross profit in each
year of operations. It also has cold storages for preservation of vegetables during the peak
season. To reduce its high overhead costs, HOPCOMS had decided to expand its
operations by establishing more retail outlets and introducing new products.
22
6) Rythu bazaar:
Farmers in India realize less profit due to middlemen intervention. To free the farmers
from the clutches of middlemen, the Government of Andhra Pradesh had came out with a
new concept of establishing farmers markets called Rythu bazaar. The concept of
Rythu bazaar benefits both the producer and the consumer. Farmer brings the produce
and sells directly to the consumers and realizes better profits. On the other hand
consumers get fresh vegetables and other produces at reasonable prices as the market
operations are free from middlemen who increase the prices to many folds.
Rythu bazaar was first established in 1999. Presently there are 97 Rythu bazaars spread
all over the state of Andhra Pradesh. The Government officials guide the farmers in
forming the proposed bazaar. After studying the need of setting up a Rythu bazaar the
State Government allots money to the Agricultural Produce Market Committees which in
turn release money for building all the basic infrastructures like shops, electricity, parking
and storage facilities required for the Rythu bazaar. Rythu bazaar is well organized from
the district level to the individual market level. The farmers sell their produce directly to
consumers at rates that are above the wholesalers rate and below the retailers rate in a
particular area. Nominal cess is collected from the farmers who have their stalls in the
Rythu bazaar. Every farmer in the bazaar sells his produce as a retailer and realize
expected profit.
7) Choupal fresh:
lTC's International Business Division has plans to develop Choupal Fresh, a fresh food
fruit and vegetable initiative for sophisticated metro dwellers. Choupal Fresh is a new and
unique format. These stores operate as wholesale stores between 5 am and 7 am and are
open for the retail customers for the rest of the day."
lTC's vast experience in backward integration with farmers and managing supply chain
dynamics, courtesy its e-Choupal rural initiative, will help it in making a grand success.
Having already set up stores in Hyderabad, Pune and Chandigarh, the company is now
looking at the other metros like Kolkata. And the model will be something akin to
Choupal Saagar
.
23
8) Food Bazzar:
(Ab Ghar Chalaana Kitna Aasaan)
Flagged off in April02, Food Bazaar is a chain of large supermarkets with a difference,
where the best of Western and Indian values have been put together to ensure your
satisfaction and comfort while shopping. It is venture of Pantloon group
At Food Bazaar consumer find a hitherto unseen blend of a typical Indian Bazaar and
International supermarket atmosphere. It has a unique a shopping experience, unique by
its ambience.
The western values of convenience, cleanliness and hygiene are offered through pre
packed commodities and the Indian values of "See-Touch-Feel" are offered through the
bazaar-like atmosphere created by displaying staples out in the open, all at very
economical and affordable prices without any compromise on quality
9) Reliance Fresh
These stores, ranging from 2,000 to 5,000 sq feet, will provide customers with a variety
of fresh fruits, vegetables, staple foods and other products in a world-class ambience,
The strategy is to open one Reliance Fresh store in a radius of three to four km to serve
1,000-2,000 families. This means about 30-40 stores in the major metros. Reliance Fresh
is selling vegetables and fruits sourced from farmers through the companys agri hubs.
Reliance Fresh is very different from what modern retail has offered in India so far.
Second, unlike global retailers who operate on thin margins, Reliance Retail is looking at
a fairly high-margin business model.
In its current pilot form, Reliance Fresh is a unique format. It has deliberately stopped
short of being a full-fledged supermarket (a tried and tested model in India). Rather, it
has limited itself to a food and grocery convenience store.
24
RESEARCH METHODOLOGY
SAMPLING PLAN
SURVEY 1: To understand the consumer behavior in buying vegetables with
respect to food retail in India.
Sample size: 60
Sampling area:
Sampling procedure: Area sampling
Contact method: Personal interview.
4
25
no of households
purchase of vegetable
28
30
25
22
20
15
10
10
5
0
daily
twice a
week
weekly
others
Response collected suggested that most of the household prefer to buy vegetables twice a
week as they buy the stock which can be kept maximum for 3 days, so that the fresh can
be purchased again and they have limited storage space. also
Most of the respondents purchase their vegetables weekly from the weekly markets as
they buy the vegetables in bulk quantity and if they find out the stock is going to finish
they go and buy from local vendors.
It has been found out that onion, tommato and potato are the most favourite of household
and they purchase it in the bulk from weekly markets.
Some of the household prefer to buy daily as they want to eat vegetables fresh and most
of them prefer to buy from mother diary at the time of morning walk as in morning the
vegetables are fresh or from local vendors which are near the parks etc.
Q2) Where do you prefer to buy vegetables?
26
no. of household
preferance of place
35
30
30
25
22
20
Series1
15
10
5
6
2
0
food retail
mother
diary
vendors
weekly
markets
Response collected from the respondents suggested that most of the households prefer to
buy from the local vendors as it is convenient to their home.
Consumer also likes to purchase from weekly markets as they get the cheapest price of
vegetables and the working woman saves their time to purchase the vegetables once in
bulk quantity.
Mother dairy are choosen by those people who buy vegetables in morning or at 4 pm
when the vegetables are fresh.
Very few people prefer t buy fron food retail outlet Subhishka as thier first choice as the
outlet is not at the stone throw away distance from their homes and they feel that
vegetables are no fresh at evening. And they also dont prefer to go to subhishka to buy
vegetables only.
Q3) On scale of 1-5 rank the evaluating factors which you take in buying vegetables?
27
no. of household
60
50
price
40
size
30
availabilty
20
freshness
Sp prop. of Veg,
10
0
rank 1
rank2
rank3
rank4
rank5
rank
The response collected from the respondents suggested that freshness is the most
important criteria in evaluating vegetables. After that price is being taken into
consideration.
Thirdly they rank the specific properties of the vegetables i.e. Potato should not be sweat
etc. availability of vegetables is one of the criteria as sometimes they buy what is
available at a particular vendor.
Size of the vegetable is the least evaluating criteria in choosing particular vegetable
Q4) Rank on scale of 1-4 the factors which influence you in buying vegetables?
28
no of households
50
40
refrence group
30
Family
20
Culture
Attitude of buyer
10
0
rank 1
rank2
rank3
rank4
rank
Response collected from the respondents suggested that Family members are the one who
most influenced the buyer to buy the vegetables of their particular choice. It is also been
told by the woman that sometimes they have to made food of choice of each family
members.
After family next influencer is Culture as the buyers generally prefer to buy veg, which
are in their tradition and culture.
Attitude of buyer is ranked third by the household because sometimes they generally
buys what they prefer and last it is the reference group which generally influence them
but it is not very motivational factor which influence them.
29
Q5) Rank factors on scale of (1-5) which you consider while choosing a particular place?
1) Local Vendors
rank 1
10%
3%
10%
price
3%
convenience
freshness
relationship
74%
bargaining
74% of respondents has ranked convenience as the main factor in choosing Vendor
rank 2
price
10%
27%
10%
3%
3%
3%
variety
conv.
ambience
freshness
10%
34%
relationship
bargaining
free. Veg
30
rank 3
price
5%
19%
variety
14%
10%
conv.
ambience
freshness
20%
3%
10%
19%
relationship
bargaining
free. Veg
rank 4
price
10%
28%
3%
0%
7%
variety
conv.
ambience
freshness
7%
25%
relationship
bargaining
20%
free. Veg
rank 5
price
4%
25%
variety
15%
conv.
11%
ambience
freshness
4%
15%
17%
9%
relationship
bargaining
free. Veg
31
Respose collected from the respondents suggested that the main reason to go to vendor is
convenience as these vendors are near to their house and it saves time of working woman
too.
After that second main reason is bargaining of prices as they cant bargain in mother
diary and subhishka. They feel that by bargaining they are getting psycocological feeling
that they are buying at reasonable price.
Thirdly freshness is the main consideration for going to vendors as they prefer to buy in
the morning from these vendors.
Other intresting reason is free vegetables like Dhaniya, chillies etc which they get with
other purchases. And rank fifth on relationship factor as they generally made a relation
with the vendor and feel that they are giving fresh veg.
Other reason is free home delivery by the vendors.
32
2) Mother Diary
rank 1
4%
9%
price
19%
variety
convenience
60%
8%
ambience
freshness
rank 2
0%
7%
26%
price
26%
variety
convenience
ambience
freshness
41%
rank 3
27%
13%
11%
price
variety
convenience
ambience
21%
28%
freshness
33
rank 4
5%
26%
46%
price
variety
convenience
ambience
13%
10%
freshness
rank 5
0%
16%
0%
37%
price
variety
convenience
ambience
freshness
47%
Response collected from the respondents suggested that Price is the main motive to go to
mother diary as the price of it is cheaper than local vendor.
Variety is ranked second by the buyers. And convenience is ranked third as mother
diaries are there in every locality; no doubt people generally have to go a long distance
than local vendors.
Freshness is the fourth and most interesting factor in case of mother diary as in Mother
diary vegetables came at 6.00 am and good/ fresh last till 8.30 am so buyer who goes for
34
morning walk or prefer to buy from M. diary normally go and buy vegetables at that time
and rest shy away as they feel that it is not fresh after that. And in second shift of fresh
veg. that came at 3.30 pm working people cant buy at this time.
Ambience is fifth factor which made them buy from mother diary.
Also one of the reason is regarding Frozen vegetables ( SAFAL) for which they go to
Mother diary.
3) Weekly Markets
rank 1
4%
7%
0%
price
41%
variety
conv.
freshness
48%
bargaining
rank 2
4%
23%
23%
price
variety
conv.
freshness
9%
41%
bargaining
35
rank 3
12%
21%
12%
price
variety
conv.
freshness
17%
bargaining
38%
rank 4
4%
15%
0%
price
variety
conv.
44%
freshness
37%
bargaining
36
rank 5
8%
0% 8%
price
16%
variety
conv.
freshness
68%
bargaining
Response collected from the respondents suggested that Variety is the main motivator for
people to purchase vegetable from weekly markets.
Secondly price is the reason to choose weekly markets as the price of vegetable is cheap
as compared to local vendor, mother diary and equivalent to food retail.
Lastly bargaining is also one of the factor as generally people bargain for prices of
vegetable at night as after 10 pm they get the vegetables at dirt cheap price.
37
rank 1
4%
17%
price
12%
variety
conv.
4%
63%
ambience
freshness
rank 2
0% 5%
23%
34%
price
variety
conv.
ambience
freshness
38%
rank 3
9%
9%
28%
5%
price
variety
conv.
ambience
freshness
49%
38
rank 4
23%
34%
price
variety
conv.
6%
11%
ambience
freshness
26%
rank 5
11%
11%
price
variety
conv.
ambience
56%
22%
freshness
0%
Response collected from the respondents suggested that Ambience is the most imp
motivator for going to food retail,
Secondly the variety of vegetables is good which attract the household to go to foods
retail. The price of Subhishka is cheapest as compare to other channels but still people
does not go their as it is far from their places.
Problem of freshness is same as of Mother dairy as timing for arrival of vegetables is at 6
and 3.30 pm in afternoon.
Those people generally prefer to go to Subhiska who lives near to it.
39
70
60
no . of households
60
50
40
Series1
30
20
10
0
no
yes
Respondents were asked whether they go to food retail to buy vegetables only , Response
clearly suggests that none of them go to food chain to buy vegetables only
Q7a) If no then rank (1-4) for which items you normally go for buying in these stores?
no. of household
vegetable
grocerry
fmcg
others
rank 1
rank2
rank3
rank4
rank
40
Above bar chart clearly depicts that household prefer to go to food retail to buy groceries
as their first preference, Secondly they like to buy Fmcg products as all these things are
little cheaper than market price and they too have a discount on it
Thirdly they rank Vegetables as they buy vegetables when they go to buy groceries or
occasionally go to purchase vegetable only
They also go to buy Medicines, mobile phones etc from Subhishka or food Bazaar.
Thus it clearly reflect that subhishka is more popular for Groceries and fmcg products
Q8) If you face any Bad experience regarding purchase from above places then still you
purchase from these places.?
no.of households
postpurchase behaviour
50
45
40
35
30
25
20
15
10
5
0
47
Series1
13
no
yes
Response collected from the respondents suggested that majority of them dont go to
same place to buy vegetables if they have any bad experience and rest will go to same
place as they have no other alternative left.
41
Channels of distributions
There are different channels of distribution where the consumers can purchase the
vegetables. Every channel has its own pros and cons and thus it depend upon the
consumers to choose from the best ones. Generally consumers buy vegetables from
multiple channels at their own purchasing factors like convenience, price etc.
Hawkers/ local vendorsThey sold vegetables door to door and are generally near the societies at large. They buy
the vegetables from the local mandis. The prices of the vegetables are generally high
while compare to other channels due to lot of intermediateries in the buying process, but
the convenience to consumer make it a favorite buy. Also it is seen that hawkers maintain
a good relationship with the consumers and thus it reduce the buying risk of consumers.
Problems
42
Problems
1. Lack of convenience of door to door shopping.
2. Consumers cant bargain
3. As these stores are generally far away so the vegetables have to purchase in bulk
4. These stores do not give free vegetables like Dhaniya and green chillies
5, there is only one machine for billing purpose and if it breaks up buyer have to wait for
too long
6. billing problem
7. vegetables arrive at these stores at 6.00 am and 3.30 pm in afternoon thus the stock
remain fresh for only limited period of time, and at evening the working woman cant
find the fresh stock.
8. long ques for billing
Advantages
1. Vegetables are quality checked.
2. No bargain so less hassles
3. Crowd is not a problem
4. Variety of vegetables under one roof.
5. Good ambience of Shopping
6. Accuracy in weights
43
Mother Diary:
Mother Dairy Delhi was set up in 1974 under the Operation Flood Programme. It is
now a subsidiary company of a wholly owned company of the National Dairy
Development Board (NDDB). The company markets an array of fresh and frozen fruit
and vegetable products under the brand name SAFAL through a chain of 295 owned Fruit
and Vegetable shops and more than 20,000 retail outlets in various parts of the country.
Problems:
Frozen vegetables:
1. Pricing of frozen foods are very high compared to market
2. Freshness of vegetables
3. Quality seems good but no facility of choosing
4. Limited variety
5. Quantity is fixed
Unfrozen vegetables:
1. Lack of convenience of door to door shopping.
2. Consumers cant bargain
3. Dont gave polybags
4. Dont give free vegetables like dhaniya etc.
Advantages:
1. Cheaper prices than hawkers
2. Availability of vegetables in non season too.
3. Variety of vegetables under one roof
4. Mother diary stores are in vicinity to every household.
44
Weekly Markets:
This type of market operates once in a week on a fixed day in a particular area. In these
markets there are lots of hawkers selling vegetables at a price lower than the market
price. Generally most of the household buy the vegetables from these markets in bulk
quantity as they are getting at cheaper rate.
Problems:
1. Vegetables to be purchased in bulk, lack of storage space
2. Weighing of vegetables is not done properly
3. Prices vary with time, price lowered at night
4. The place become very crowdy
5. Threat of theft
6. Need a helper to purchase vegetables in Bulk.
Advantages:
1. Lot of variety to choose from
2. Prices are lower than market price.
3. Convenience to purchase
45
price per kg
7
6
5
5.5
5
4
4
3
2
1
0
Subhishka Mother Diary Local vendor Thusday mkt ths, mkt after
( bef- 10.30.
10.30
4) Onion:
46
price per kg
price of onion
18
16
14
12
10
8
6
4
2
0
14.75
16
16
16
12
Series1
Subhishka
Mother
Diary
Local
vendor
3) Tomato
price per kg
price of tommato
16
14
12
10
8
6
4
2
0
13
14
15
14
12
Series1
Subhishka
Mother
Diary
Local
vendor
Thusday
mkt ( bef11.
ths, mkt
after 11
4) Reddish
47
price per kg
price of reddish
9
8
7
6
5
4
3
2
1
0
6.75
7.5
8
7
5
Series1
Subhishka
Mother
Diary
Local
vendor
Thusday
mkt ( bef11.
ths, mkt
after 11
5) Peas
price per kg
price of peas
16
14
12
10
8
6
4
2
0
12.5
13.5
15
14
10
Series1
Subhishka
Mother
Diary
Local
vendor
Thusday
mkt ( bef11.
ths, mkt
after 11
48
6) Bell pepper
price of bell pepper
28
30
price per kg
25
20
22
20
17
18
15
Series1
10
5
0
Subhishka
Mother
Diary
Local
vendor
Thusday
mkt ( bef11.
ths, mkt
after 11
Average price per kg of 6 vegetables were taken from Subhishka, Mother diary, Local
Vendor, weekly market ( before 10.30) and after 10.30
It has been found that prices after 10.30 in weekly markets are cheaper than any other
place as the vendor want to finish its inventory. After that price of Subhishka is cheaper
than Mother diary, local vendor, weekly Markets.
The prices of local vendor are highest in comparison to others.
49
Need recognition
Search
Evaluation
Purchase
Post purchase
50
Stage 3: Evaluation:
In evaluating a vegetable household generally look at the following factors in this
chronological order ( by survey)
Freshness
Price
Specific properties of vegetables
Availability at particular counter
Size
Normally buyer look for freshness in vegetable and then price is also a major factor. As
the consumer limits the quantity of vegetable if the price is too high.
Stage -4 Purchase:
To purchase a particular product he/ she can go to Local vendor, Mother diary, food
retail chain , weekly markets.
In choosing a particular store there are different factors which induce the household to go
at particular store ( which is covered earlier ).and it is found out that local vendor and
weekly markets are most prefersed ones due to their convenience and price respectively,
51
Conclusion
Food retail stores give a different experience to buy a vegetable as they provide a
ambience and variety of items under one place to the buyer which he cant get at any
other place. It has been found out in the study that people go to this place to buy groceries
and fmcg products more often than to buy vegetables. They prefer to buy vegetable either
from local vendor or at weekly markets.
Local vendor is preferred for the convenience, bargaining and free vegetables while
weekly market are preferred for price, and variety. No doubt Freshness is also a main
reason. A household normally lives near food retail outlet likes to visit the place or in
morning when the fresh vegetables arrive. Household also like to go to these chains to
find a particular veg. which they cant find at local vendor at particular period of time.as
the variety of veg. is more than local vendor.
Vegetable buying is a high involvement decision for a household and the decision is
influenced by many factors and motives. A household normally look at the freshness of
vegetable and thus made his decision to purchase a vegetable and a particular store
accordingly, but apart from freshness he look at prices and specific prop. Of vegetable
therefore he does not order the vegetables on phone from food retail chain which can be
more convenient than going to local vendor.
Family is the most influencing factor which made a buyer to buy a particular vegetable.
Culture also plays a very imp role as people generally likes to buy vegetable belonging to
their culture and to buy these veg, they dont mind going at particular distance it has been
found out that Food retail like subhishka does not offer much variety in States veg.
It is also been found out that people who go for morning walk prefer to purchase from
mother diary or food retail as the stock is fresh in morning and those who cant access to
these places prefer to buy from local vendors, working woman prefers to purchase from
weekly mkt or from local vendor as it saves time and the stock is not fresh in evening in
mother diary and subhishka.
People would like to go to food retail chain if it is convenient to buy at these stores, they
get a variety to choose from as many people complaint they dont get variety in
subhishka because most of the time the veg. is out of stock .
The future of food chains are bright because the demand of vegetables are more than the
supply by these outlets, and if the problems are solved ( stated earlier ) people will likely
to buy from these stores.
52
Recommendation
They should give free vegetables like Dhaniya, chillies etc to attract customers
They should stress on giving their phone nos. to people so that people can enquire
about daily prices of vegetables which can be comparable to others channels
They should increase the variety of the vegetables, must keep cultural vegetables
like south Indian, rajasthani etc
They should keep seasonal vegetables of their own brand name thus they can
easily give competition to Safal
They should increase the stock as people normally dont find it when they come
for shopping and they felt dissatisfied and resist coming again to Subhishka
There should be proper billing arrangement and if required should have two
billing machine so that people should not stay in que for long time.
They should give cut vegetables ( palak etc) as it save time of woman at home.
53
Bibliography
www.manage.gov.in
www.ibef.org
www.ficci.com
54
Appendix
***********************************************************************
*
This Questionnaire will be used only for academic purpose.
All the information will be kept fully confidential.
***********************************************************************
*
Name:
Address:
Sex:
Working Status:
1. How often do you go to buy vegetables?
Daily
Twice a week
weekly
others
2. Where do you prefer to buy vegetables?
Local vendors
Weekly markets
Mother diary
Food retail
3. On scale of 1-5 rank the evaluating factors which you take in buying Vegetables?
Price
Specific properties of veg.
Availability
Freshness
Size
55
4. Rank on scale of 1-5 the factors which influence you in buying vegetables?
Reference group
Family
Social class
Culture.
Attitude of buyer.
5. Rank the factors on scale of (1-5) which you consider while choosing a particular
place?
COMPARISON
Multiplexes
Local
Vendor
Mother
Diary
Weekly
Market
Food
Chain
Parameters
Price
Variety
Convenience
Ambience
freshness
relationship
bargaining
Free veg.
others
56
6. List five problem you faced in buying vegetables from particular place?
Mother Diary
Local vendor
Weekly Markets
YES
NO
7a) If no then rank (1-4) for which items you normally go for buying in these stores?
Vegetables
groceries
Fmcg products
Others
8) If you face any bad experience regarding purchase from above places then still you go
for same place?
YES
NO
9) In future will you buy from food retail like Subishka, Food bazaar etc?
57
YES
No
10) Any recommendation you want to give for to food Retail stores like Subishka etc?
58
59