Module Code & Module Title

MN6P00NI Management Investigation and Dissertation

Assessment Weightage & Type

60% Individual Coursework

Year and Semester

2020-2021 Autumn

Student Name: Amrit Prasad Chaudhary

London Met ID: 18029519
College ID: NP01BA4A180018
Assignment Due Date: 2nd May, 2021
Assignment Submission Date: 2nd May, 2021
Word Count (Where Required): 6137

I confirm that I understand my coursework needs to be submitted online via Google Classroom under the relevant
module page before the deadline in order for my assignment to be accepted and marked. I am fully aware that late
submissions will be treated as non-submission and a mark of zero will be awarded.
Table of Contents
Tables of Figure ...................................................................................................................... 4
Abstract ........................................................................................................................................... 5
Chapter 1: Introduction .......................................................................................................... 6
Background...................................................................................................................................... 6
Statement of the problems .............................................................................................................. 6
Research Questions ......................................................................................................................... 7
Research Objectives ......................................................................................................................... 7
Significance of the Study .................................................................................................................. 7
Organization of Study ...................................................................................................................... 7
Chapter 2: Literature Review .................................................................................................. 8
Industry Profile ................................................................................................................................ 8
Theoretical Review .......................................................................................................................... 8
Empirical Review ............................................................................................................................. 9
Organic Food Drivers ........................................................................................................................................ 10
External Drivers ................................................................................................................................................ 10
Diagram of the Variables................................................................................................................ 11
Hypothesis ..................................................................................................................................... 11
Operationalization of variables ...................................................................................................... 12
Chapter 3: Research Methodology ........................................................................................ 13
Philosophical Foundation of Research ............................................................................................ 13
Research Design............................................................................................................................. 13
Population of Study ....................................................................................................................... 13
Sample Frame ................................................................................................................................ 13
Sampling Technique ....................................................................................................................... 13
Sample Size .................................................................................................................................... 14
Questionnaire Administration........................................................................................................ 14
Data Analysis Techniques............................................................................................................... 14
Ethical Consideration ..................................................................................................................... 15
Chapter 4: Data Analysis and Discussion ............................................................................... 16
Data Analysis ................................................................................................................................. 16
A. Demographic Profile of Respondent ...................................................................................................... 16
B. Descriptive Statistics ............................................................................................................................... 17
C. Reliability Analysis .................................................................................................................................. 18
D. Correlation............................................................................................................................................... 19
 Discussion ...................................................................................................................................... 20
Chapter 5: Conclusion and Recommendation ........................................................................ 22
Conclusion ..................................................................................................................................... 22
Recommendation .......................................................................................................................... 22
Limitation of Study ........................................................................................................................ 23
Future Direction ............................................................................................................................. 23
Bibliography ......................................................................................................................... 24
Appendix .............................................................................................................................. 26
SPSS output .......................................................................................................................... 29
Ethical Review ...................................................................................................................... 39
Table of Tables
Table 1: Demographic Profile of Respondents......................................................................... 16
Table 2: Descriptive Statistics .................................................................................................... 17
Table 3:Reliability of Variables ................................................................................................. 18
Table 4: Reliability of all Variables........................................................................................... 18
Table 5: Correlation of Variables .............................................................................................. 19

Tables of Figure
Figure 1: Conceptual Framework of Variables ....................................................................... 11
Abstract
The purpose of this paper is to examine the perceptions of Kathmandu valley Consumer on the
organic products that may affect their purchase behavior. The focus on this group principally
derives from the Kathmandu valley consumers’ importance for the contemporary firms. Issues
that lead them to purchase. Data from questionnaires answered by Kathmandu valley consumers’
have been statistically analyzed. This research will help organic producers to better understand the
consumer perception and make strategies related to the marketing and many more. Thus, this
research will provide details about the working-class people age group of 24-40 purchasing
behavior of Kathmandu valley for organic products.

This study examines the underlying factors influencing perception and purchasing behavior
towards organic products. Situated in Kathmandu, Nepal, we investigate consumers’ levels of
perception and behavior towards organically produced products. In particular, we focus on the
characteristics of organic product drivers and external drivers, in order to better understand
consumers’ perception and purchase behavior towards organic products and their place in the
marketplace. Our study will test the level of influence that each of these co-variants contributes
to perception and purchase behavior for organic products.
 Consumer Perception and Purchasing
Behavior towards Organic Products in
Kathmandu Valley
Chapter 1: Introduction
Background
Chemical contamination of the environment and food has become a major problem around the
world. Food and Agriculture Organization (FAO) proposed “The World Food Summit Plan of
Action (1999)” in recognition with the importance of developing alternative sustainable agriculture
such as organic farming. Organic farming is a holistic farming method that includes technical (soil,
agronomy, and weed and pest management), economic (input, production, and marketing), and
human health considerations (Doppler, et al., 2009). And according to data of 2011 of Organic
Trade Association, market of organic food has grown continuously over the last few decades,
which represents a multi-billion industry.

The market for organic products in Nepal is currently underdeveloped, but there is a good
opportunity for organic farming in Nepal's urban and semi-urban areas, as most of the country's
affluent consumers have clustered around cities, and cities are popular tourist destinations for high-
income groups, business houses, and tourists, who are considered to be the primary consumers of
organic products. The future of organics is dependent on the motivation of end users, but in
comparison to other countries, little is known about organic food consumers' attitudes, motives,
and values that drive their decision-making process. Therefore, it is critical to investigate the
fundamental factors that may affect consumer preferences and purchasing behavior for organic
products and develop marketing strategies to support rapid growth and development of the organic
market in developing countries like ours. People of all socioeconomic backgrounds are
increasingly concerned about their health and environmental safety in urban areas, which has
resulted in a rapid and increasing demand for organic food (Sharma, et al., 2016). With the rise in
organic farming, consumers of all income levels and age group are gradually eating organic goods
from a variety of sources.

Statement of the problems

This study determines various influencing factors which encourages people to purchase organic
products. The problem towards which this study is directed is the identification of growing trend
of using organic products and determine the consumer perception in making decision for
purchasing organic products inside Kathmandu valley.

The consumers from various economic segments are slowly influenced for consuming the organic
foods, the maximum amount of organic food consumption is still limited to the young students,
high income group and Well-educated group only. Therefore, is price only the factor or there are
many other factors which are affecting the consumer’s willingness to purchase the organic food?
The majority of consumers tend to ‘switch’ between organic and conventional product rather than
consuming a diet consisting mostly of organic food regularly. So, can we say health conscious is
only the reason for purchasing the organic foods? Even though highly advanced mechanisms and
mediums are being developed to share information, why do marketers lack effective marketing
activities and labeling activities for organic products despite they are better for the individual,
society and community as a whole?

Research Questions
Does Organic Product Drivers (Healthy, Tasty, Environmentally friendly, and Affordable) and
External drivers (Availability, Standardization, Appearance, and Branding and promotion) have
significant influence on consumer’s perception towards organic products? Do the organic products
producers have effective strategies and plans to promote their products and retain more customer
base?

Research Objectives
• To study the consumer perception and purchase behavior of organic Products for
suggesting marketing strategies in Kathmandu Valley.
• To identify the major factors influencing the consumers purchasing decision of organic
products in the Kathmandu Valley.

Significance of the Study

This study is not contributing to the advantage of the organic producers in formulating their
marketing strategies but also be able to increase the knowledge and research in the field of food
market in terms of its production types. Findings of this report is identifying satisfaction by finding
the factors that affects the consumer’s purchasing decisions and also help to analyze the perception
of Kathmandu valley’s working-class people in terms of food production.

Organization of Study
The report is divided into seven chapters. The first chapter will be about detail introduction of the
study including background statement of the problems, research questions, research objectives,
significance of the study, limitation and structure of the report. The second chapter is literature
review where different theories is explained along with empirical findings. Third chapter is
conceptual framework and the fourth chapter is about research method of the study. Chapter five
is about the result of the pilot study which includes a preliminary analysis of research questions.
Chapter six is about timeline and budget for the research and the last chapter includes conclusion.
References and other appendices will be presented at the end of the report.
Chapter 2: Literature Review
Industry Profile
Fresh food and beverage sales, as well as associated facilities, make up the organic food industry.
Organic food is produced using methods that foster ecological balance and biodiversity
conservation. There are no food additives or synthetic solvents in these foods. At a compound
annual growth rate (CAGR) of 9.7%, the global organic food market is projected to rise from
$201.77 billion in 2020 to $221.37 billion in 2021 (The Business Research Company, 2021).
Companies are resuming operations and adjusting to the new standard as they recover from the
COVID-19 effect, which had previously resulted in restrictive containment measures such as
social distancing, remote working, and the suspension of commercial activities, all of which
created operational challenges. At a CAGR of 14.5 percent, the organic food market is forecast
to hit $380.84 billion in 2025 (The Business Research Company, 2021). The market for organic
produce is growing even within developing countries, but it is faced with numerous challenges. It
needs to be expanded to provide opportunities for a higher income among famers without them
having to rely on the export market, which is often complex for smallholders.

Theoretical Review
The study was conducted with assurance that a pre-determined organic product drivers and
external drivers from the literature are also the key factor affecting consumer perception and
purchasing behavior in Kathmandu Valley. A research was carried out a research entitled
“Consumer’s perception and purchase intentions towards organic food products: exploring attitude
among academician” attempted to gain knowledge about consumer attitude towards organic food
products consumption and to see whether there is any potential for consumer to change their
behavior (Salleh, et al., 2010).

According to Magistris & Gracia (2008), product choice research is a complicated phenomenon
that reflects one of the most significant aspects of human behavior, with many cognitive and
behavioral variables that differ dramatically between individuals. According to the authors,
determining whether or not consumers intend to buy organic food products is a challenging task
because it is dependent on a number of factors that are beyond their control. (Magistris & Gracia,
2008) also stated that some of the studies on organic food products have analyzed the intention to
purchase organic products as Ajzen (1991) in the theory of planned behavior, stated intention is
the best predictor of behavior. The consumption of organic food items in Finland was studied using
the theory of expected action (TPB) (Tarkiainen & Sundqvist, 2005). Also using Ajzen's theory of
planned action, has investigated the determinants that affect consumers' intention to purchase
environmentally friendly products (TPB) (Kalafatis, et al., 1999).

A research was conducted on “Australian’s Organic food beliefs, demographics and values” and
concluded that the majority of the participants believed organic food to be healthier, tastier and
better for environment than the conventional food (Lea & Worsley, 2005). However, expense and
lack of availability were strong barriers to the purchasing of organic foods. More women are more
positive about organic food than men. Paul et. Al (2014), the results indicate that health,
availability and education from demographic factors positively influence the consumer’s attitude
towards purchasing organic food. (Padel & Foster , 2005), Vlahovic et. Al (2011), Chang et. Al
(2007), Truong Yap and Ineson (2012) identified the health consciousness as the major factor
influencing the purchasing decision of organic foods and most of the results showed the higher
cost of organic food as major barrier for regular purchase.

An effort was made to present consumers “willingness to pay a price premium for organic products
in Kathmandu Valley” (Lea & Worsley, 2005). In this report it was found that, both respondents
were willing to pay a price premium, according to the report, but the degree of acceptability
differed greatly. A total of 58 percent of customers were willing to pay a price premium of up to
6- 20%, while 13% were willing to pay a price premium of up to 50%. The average premium was
calculated to be about 30%. Organic food consumption was also on the rise, according to the
survey, but further product growth and advances in certification, manufacturing, labeling, and
packaging were required to boost demand even further. A research was conducted it was found
that found that organic product drivers and external drivers had direct effects on customer
confidence and risk perceptions, as well as indirect effects (via trust in the retailer and transaction
risk perceptions) on the intent to return to an organic food retailer (Wang & Tsai, 2014). Due to a
lack of successful promotion, labeling, standardization, and avaibility, consumer demand for
organic products is still underdeveloped in Nepal. Furthermore, the current organic market is
aimed at people with millennial age groups. As a result, the aim of this paper was to learn more
about consumer perception and behavior toward organic products in the Kathmandu valley. There
was a need to look at the bigger picture of organic goods, their awareness, behavior, and purchasing
decisions from the consumer's viewpoint for marketing purposes and to make effective strategies
to retain more consumers of organic products. To the best of the researcher's knowledge, the study
appears to review a number of previous studies, and by doing so, he was able to establish the
interlinkage between two key aspects - perception and the purchasing behavior of organic product
consumers in the Kathmandu valley, in order to help the markets to create effective marketing
plans and programs.

The analysis of the processes involved when individuals or groups choose, buy, use, or dispose of
goods, resources, ideas, or experiences to fulfill needs and desires is known as purchase behavior.
Before, during, and after a transaction, all exchanging issues can have an impact on the customer.
During the three-step consumption process, a customer is described as “An individual who
recognizes a need or desire, makes a purchase, and then disposes of the product” (Gracia & De
Magistris , 2007).

Empirical Review
Theory of Planned Behavior (Ajzen, 1991), was developed as an extension to the theory of
Reasoned Action (Fishbein and Ajzen 1975). TBP builds upon three variables, defined as attitude
towards the behavior, subjective norm, and perceived behavioral control. Attitude towards the
behavior (AB) is the first variable and it describes how the consumer views the behavior in
question. The second variable is subjective norms (SN), and it considers factors in the surroundings
of the consumer, such as the viewpoint of friends and family. Finally there is the perceived
behavioral control (PBC), which illustrates ease of completion of the behavior that the consumer
believes to have. The relative weight of factors within these variables is determined by the believed
outcome’s subjective value in direct correlation with the perceived probability of this outcome.
The factors of TPB are dependent of each other. The reason for this is that for example ease of
access in form of behavioral control, might also have a positive impact on the attitude of the
behavior and social norm, as well as behavioral intention.

Organic Food Drivers

Healthy
Consumers today are more conscious of and worried about their health and quality of life, and they
are inspired to improve or preserve their health and quality of life. These customers are more likely
to engage in healthier habits in order to avoid illness. Such people are usually conscious of, and
interested in, nutrition and physical fitness. (Uprety & Phuyal, 2016)

Tasty
They are nutritious and have a natural flavor since they are free of fertilizers and pesticides. As a
result, because consumers believe organic food has a wonderful flavor, it creates another obstacle
for them to buy as much organic food as they want. (Uprety & Phuyal, 2016)

Environmentally Friendly
According to numerous publications, ethical consumerism is a rising trend around the world, and
moral responsibility is a relevant purchasing incentive for a wide range of consumers.
Environmental issues were found to have a significant impact on consumer buying behavior in a
number of studies, showing the importance of environmental and animal welfare concerns. (Uprety
& Phuyal, 2016)

Affordable
Price is the major factors influencing consumers for willingness to buy organic products.
Consumers changes their willingness to buy organic products due to the high price labeled in the
products. (Sharma, et al., 2016)

External Drivers
Avaibility
The term "availability" refers to the locations where organic foods can be purchased by customers.
Natural foods are no longer limited to farmers' markets. They were sold in specialty shops,
department stores, agricultural farms, restaurants and hotels, as well as on the open market and by
personal sale. (Sharma, et al., 2016)

Standardization
Labeling, packaging, certifications, and approval from quality inspecting authorities at the local,
regional, national, and international levels are all examples of standardization. Consumers demand
highly standardized organic foods to ensure that they are not cheated out of their money. (Sharma,
et al., 2016)

Appearance
The exterior appearance of organic foods is referred to as appearance. Organic foods' attitude and
buying behavior are influenced by their form, scale, color, and other factors. Many buyers prefer
the food's natural appearance, while others prefer it to be altered by advertisers or dealers. (Sharma,
et al., 2016)
Branding and Promotion
Branding is the process of establishing a distinct name and logo for a product in the minds of
customers, primarily by advertising campaigns with a consistent theme. Consumer food and store
branding seeks to create a distinct and noticeable identity in the market that attracts and maintains
loyal organic customers. (Sharma, et al., 2016)

Diagram of the Variables

Organic Product Drivers

• Healthy
• Tasty
• Environmentally friendly
• Affordable

Consumers Perception and

Purchasing Behavior Towards
Organic Food Inside
Kathmandu Valley

External Drivers
• Avaibility
• Standardization
• Appearance
• Branding and consumer
promotion

Figure 1: Conceptual Framework of Variables

Hypothesis

H1: There is a significant relationship between organic product drivers (Health, Taste,
Environmentally Friendly, and Affordability) and consumer perception and purchasing behavior
towards organic product.

H2: there is a significant relationship between external drivers (Avaibility, Standardization,

Appearance, and Branding and Promotion) and consumer perception and purchasing behavior
towards organic product.
Operationalization of variables

Variables Instruments Descriptions Score Indicators

Ranges
Consumer Five-point Measures the consumer 1-5 High score
Perception Likert scale perception and purchasing means high
and questionnaire behavior towards organic level of
Purchasing product perception and
Behavior purchasing
behavior
Organic Five-point Measures the health, taste, 1-5 High score
Product Likert scale environmental and affordable means high
Drivers questionnaire affects the perception and level of
purchasing behavior of perception and
consumer for organic purchasing
product. behavior
External Five-point Measures the Avaibility, 1-5 High score
Product Likert scale standardization, Appearance, means high
Drivers questionnaire and branding and promotion level of
affects the perception and perception and
purchasing behavior for purchasing
organic product. behavior
Chapter 3: Research Methodology
Philosophical Foundation of Research
Every research works has their own philosophical basis that shapes the research process and
provides the validity to the journey of exploration. In the similar vein, this research study also
followed certain philosophical assumptions to shape and guide the research activities that
generates authenticated outcomes.

Since, this study assumed that the service quality factors and customer satisfaction are observable
phenomena (i.e. truth is independent to human interpretation) and can be directly measurable
through the predefined tools. So it followed the objectivist ontological dimension, with positivist
epistemological stand. In addition, for the methodology aspects, deductive approach with
quantitative methods was used to test the SERVQUAL model with regards to customer
satisfaction.

Research Design
Since this analysis consists of surveys and fact-finding inquiries relevant to customer
understanding and buying behavior against organic products, it employs an explanatory research
methodology based on the study's own predetermined objectives. It focuses on the numerical
analysis of data obtained from the questionnaire, which is presented objectively. This study uses a
survey design to investigate the relationship between independent variables (Organic Product
Drivers and External Drivers) and dependent variables (consumer perception and Purchasing
behavior). It includes questionnaire administration, sampling strategy construction, and analysis
of the results. The aim of this study is to identify and explain the characteristics of the variables of
interest. This analysis also precisely specifies these characteristics in order to determine the
frequencies of significant variables and determine whether or not they are related.

Population of Study
The researcher was looking for people who were buying organic goods in various parts of the
Kathmandu valley. People in the Kathmandu valley who used organic product made up the study
population. As a result, the unit of analysis and the target population for this study were ordinary
people living in various parts of Kathmandu Valley.

Sample Frame
The participants for this study were selected from Lalitpur, Bhaktapur and Kathmandu district
respectively. The participants included consumers who are using and buying organic products from
different stores inside Kathmandu valley. The participants were also selected by visiting organic
stores. The stores which are located in Jhamsikhel area, Budhanilkantha area, Sanepa area,
Maharjgunj area, Hattiban area, etc. were chosen for this study. Both male and female individuals
were equally informed and encouraged to have participation in this study.

Sampling Technique
Since convenience sampling is simple and easily available, this research uses non-probability,
convenience sampling method as this method is suitable for online and offline population. Another
reason for selecting this method is because organic consumers are mostly literate and young and
this method is feasible as our targeted population for this study are students. Since the
questionnaire is distributed through social media. Thus, anyone can get access to the questionnaire
and will be filling the form for this research which is why this research uses non-probability
convenience sampling.

Sample Size
Many literatures on this subject were checked, and although the exact standard sample size could
not be verified, the average sample size among the literatures reviewed was 120. As a result, the
convenience sampling approach was used to select a sample size of 120 respondents for this
analysis. The respondents were from inside the Kathmandu valley living in different areas and
purchasing organic products from different organic stores available inside the valley or as per their
convenience.

Data Collection Technique

The data was collected from primary sources through a valid and reliable questionnaire as this
method is more simple, effective and convenient. The sampling procedure that was followed in
this study is through online platform which is Google form as this procedure is helpful to collect
huge numbers of data. The form was specially distributed to young age group as the main target
population of this study. After the responses were collected, all the data were uploaded in the
spreadsheet and later it was transferred in the SPSS software for the data analysis. All the data
were codified in the Likert Scale from 1-5 where 1 means strongly disagree and 5 means strongly
agree

Questionnaire Administration
The participants were appropriately informed about this survey at first and were made familiar
with the steps to be followed for filling up questionnaire. The questionnaires were distributed to
the respondents and they were requested to fill up the questionnaire carefully as per their opinion.
The respondents were asked to read over the questionnaire properly and avoid filling up in
whatever way. They were also requested to ask if they had any confusion regarding questionnaire.
They were made clear about their queries in order to have effective fulfillment of questionnaire.
The questionnaire was subjected to be filled up in 10 minutes. The completed questionnaires were
collected after some time without leaving any influence of researcher on the respondents.

Data Analysis Techniques

This research study used IBM Statistical Package for Social Sciences (SPSS) Version 25 program
for data analysis. The collected data were coded, classified and input into SPSS for the process of
data analysis and interpretation in order to answer the proposed research questions and get a clear
picture of the research findings. The correlation, reliability and regression analysis were used along
with the descriptive statistics as this study examined the influence of convenience, quality, brand
awareness and source of production on consumer perception and purchasing behavior towards
packaged organic product. Under descriptive Statistics, mean and standard deviation were used for
checking the data average and spread of scores. Spearman Correlation was used for correlation
analysis in order to examine strength and direction of relationship between variables and
Cronbach’s Alpha was used to make consistent measurement of a set of scale or test items for
reliability analysis. Moreover, regression was used to forecast the relationships between
independent variables and dependent variables and explore the forms of these relationships.
Ethical Consideration
To maintain authenticity for the research paper, only reliable and trustworthy resources were
used in order to reach high reliability and validity of this dissertation. The data reliability was
checked using Cronbach Alpha, which helped to check the internal consistency of the data.
Validity of the data was maintained by including only genuine and interested respondents and
conducting analysis without any biasedness. The researcher remained neutral during the whole
study for all analysis and recommendation purposes, following all the ethical guidelines to
complete research paper.
Chapter 4: Data Analysis and Discussion

Data Analysis

A. Demographic Profile of Respondent

Table 1: Demographic Profile of Respondents

Variables Category Frequency Percentaage

(%)
Gender Female 54 45.0
Male 66 55.0
Age 18-24 82 68.3
25-30 20 16.7
31-35 11 9.2
36-40 7 5.8
Education No Formal Education 3 2.5
High School 24 20.0
Bachelor's Degree 67 55.8
Master's Degree 22 18.3
PHD 4 3.3
Monthly Income Less than 10000 61 50.8
10000-20000 13 10.8
20001-40000 16 13.3
40001-60000 19 15.8
Above 60000 11 9.2
Monthly Spending Less than 1000 46 38.3
1000-2000 35 29.2
2001-4000 20 16.7
4001-6000 14 11.7
Above 6000 5 4.2

Table 1 illustrates that out of 120 total respondents,54 % of the respondents were females and 45%
of the respondents were males. Majority of respondents were females as the females covered more
than half percentage of total respondents. Table 1 also shows that majority of the respondents (68.3
%) were from 18-24 years age group and minority of the respondents (5.8 %) were from 36-40
years age group. It is understood from Table 1 that out of 120 respondents, majority of the
respondents had bachelors level education which occupied 55.8 % of the total respondents. Only
2.5 % of the respondents belonged to the group of no formal education with lowest percentage.
Table 1 also illustrates that majority of the respondents which constitutes to 50% of the total 150
respondents falls under the monthly income group of less than Rs.10000 which is followed by 15.8
% of respondents belonging to Rs.40001-60000 monthly income group and 13.3 % belonging to
Rs.20001-40000 monthly income group respectively. Only 9.2 % of the total respondents earn
above Rs.60000 per month which is the lowest percentage among all. It is seen from above table
1 that majority of the respondents which constitutes to 38% of the total 120 respondents falls under
the monthly spending group of less than Rs.1000 which is followed by 29.2 % of respondents
belonging to Rs.1000-2000 monthly spending group and 16.7 % belonging to Rs.2001-4000
monthly spending group respectively. Only 4.2 % of the total respondents earn above Rs.6000 per
month which is the lowest percentage among all.

B. Descriptive Statistics

Table 2: Descriptive Statistics

Std.
Variables Minimum Maximum Mean Deviation Skewness Kurtosis Reliability
Consumer 1.40 5.00 3.5617 0.83828 -0.865 0.077 0.832
Perception
and
Purchasing
Behaviour
Organic 1.80 5.00 3.6433 0.72329 -0.686 -0.137 0.646
Product
Drivers
External 1.50 5.00 3.6104 0.95200 -0.614 -0.800 0.804
Drivers

Table 2 illustrates descriptive analysis for this study from which it can be observed that External
Drivers has the highest Standard Deviation of 0.83828. Similarly, consumer perception and
purchasing behavior is highly negatively skewed relative to others. External Drivers has lowest
value among all the variables. The Std. Deviation of External Drivers denotes that the values are
spread out over a wider range incomparision to other variables. Organic Product drivers has the
highest mean and Consumer perception and purchasing behavior has the lowest mean with lowest
minimum value. It indicates that, Consumer Perception and Purchasing Behavior has the smallest
value of a numeric variables. All the variables have 5 maximum values.
 C. Reliability Analysis

Table 3:Reliability of Variables

Variables Cornbach's Number of

Alpha Items
Consumer Perception 0.832 5
and Purchasing
Behaviour
Organic Product 0.646 5
Drivers
External Drivers 0.804 4

It is inferred from Table 3 that consumer perception and purchasing behavior and External drivers
has Cronbach’s alphas of 0.832 and 0.804 respectively, which are greater than 0.7 and it indicates
that, it has good reliability and shows that the questionnaire used can be regarded as reliable due
to higher level of internal consistency for the scale used which consistently reflects the construct
which it is measuring and implies that the items within the tools measure the same underlying
construct. Similarly, Cornbach’s Alpha of Organic Product Driver has 0.646 which is greater than
0.6 are acceptable and scales used in this variable consistently measures the constructs.

Table 4: Reliability of all Variables

Variables Cornbach’s Number of

Alpha Items
All variables .888 14

As per Table 4 ,the Cronbach’s alpha of 0.888 reflects good reliability as it is greater than 0.6 (
0.888 > 0.6) which shows that the questionnaire used can be regarded as reliable due to higher
level of internal consistency for the scale used which consistently reflects the construct which it is
measuring and implies that the items within the tools measure the same underlying construct.
 D. Correlation

Table 5: Correlation of Variables

Correlation Type Variables Consumer Organic Product External

Perception Drivers Drivers
and
Purchasing
Behaviour
Spearman's rho Consumer Correlation 1.000 .708** .486**
Perception Coefficient
and
Purchasing
Behaviour
Organic Correlation .708** 1.000 .477**
Product Coefficient
Drivers
External Correlation .486** .477** 1.000
Drivers Coefficient
N 120 120 120
**. Correlation is significant at the 0.01 level (2-tailed).

It is inferred from Table 8 that the diagonal consisting of coefficient of 1 illustrates the relationship
of each variable with itself. The correlation coefficient above 0.5 is considered to be higher
correlation. The correlation between consumer perception and purchasing behavior and organic
product drivers has the highest correlation with 0.708 which indicates that they have strong and
positive correlation with each other. Organic product drivers has higher chances of effect on
consumer perception and purchasing behavior as its correlation value is also above 0.5. Therefore,
change in organic product drivers will consequently lead to change in consumer perception and
purchasing behavior positively.

Similarly, external drivers has correlations of 0.486 which is positively correlated to consumer
perception and purchasing behavior. But their correlation values are less than 0.5 which denote
that they have low positive correlation with consumer perception and purchasing behavior. All of
these positively correlated variables have significant relationship with consumer perception and
purchasing behaviors as their p values are 0.01 which are also smaller than level of significance
0.05 (0.000<0.05).
Discussion
The study has concerned on how consumer perceived and purchased behavior towards organic
product in Kathmandu valley. The finding shows that, this study is valid, reliable, satisfactory and
acceptable. This study examined the perception and purchasing behavior of respondents towards
organic product towards organic product inside Kathmandu valley. The result obtained are
essential as to date, no many studies have been carried out in exploring consumer perception and
purchasing behavior towards organic product and the factors that influence people of Kathmandu
valley.

Overall, the demographic results show that, majority of young age group are purchasing organic
products, in which more than half of the respondent are male and remaining respondent are female.
More than half of respondent has monthly income less than 10,000 because majority of them were
students. Almost forty percentage of respondent spends less than ten percentage of their monthly
income for organic products. Similarly, in other studies also it is found that, young consumers
express more interest in organic products (Rimal, et al., 2005). The difference is due to the fact
that young people are more open with trendy products, but their purchase is limited with low
disposable income (Magnusson, et al., 2001). And more than half of respondents whose education
level is bachelor’s degree are making purchase of organic product.

First, the analytical result showed that consumer perception and purchasing behavior has higher
internal consistency and measure of scale reliability. Similarly, Consumer perception and
purchasing behavior and organic product driver (Healthy, Tasty, Environmentally friendly and
Affordability) has strong positive relationship between each other which indicates that, Organic
Product Drivers has significant relationship between each other. Hence, according to analyze of
this study, it accepts the hypothesis 1 (H1) as there is significant relationship between organic
product drivers and consumer perception and purchasing behavior towards organic product. The
past study also shows that, people who are health conscious, who cares for environment, who
prefers to eat healthy and tasty foods and who can afford are very likely to be very interested and
buy organic products. This analytical result is also consistent with (Sharma, et al., 2016), who
found that, Organic Products Drivers is a determing factor for consumer perception and purchasing
behavior towards organic products. Also found out that, consumer who are health conscious and
practices healthy life style show their preferences for organic food products (Magistris & Gracia,
2008) (Cicia, et al., 2002). It is found that, there is consistency among studies on consumer’s
behavior towards organic food products regarding the role of health-related factors as being of
main motives for organic products purchase. (Chen & Lobo, 2012) (Sirieix, et al., 2011). Similarly,
who are concern about the environmental issues and involved in green practices are more likely to
buy organic product because organic products are believed to be environmentally friendly (Voona,
et al., 2011). It is found that affordability is indicated as the primitive deterrent of consumer
perception and purchasing behavior towards organic product (O'Dnonvan & McCarthy, 2002)
(Suh, et al., 2012).

Second, external drivers (Avaibility, Standardization, Appearance and Branding and promotion)
and consumer perception and purchasing behavior has a moderate relationship between each other.
It indicates that, external driver affects the perception and buying behavior of consumer for organic
products. Other studies have also found that, external drivers (Avaibility, standardization,
Appearance and Branding and Promotion) has a significant role for buying behavior and consumer
perception towards organic products. As per this study, hypothesis 2 (H2) is also accepted as it
shows there is significant relationship between external drivers and consumer perception and
purchasing behavior. It is found that, Avaibility of organic product determining factor for purchase
of organic products and consumer perception. It is revealed in the study that, inconvenience of
purchasing is an obstacle encountered by consumers to buy organic food, but this factor is to found
to have moderate effect (Yin, et al., 2010). As consumers cannot recognize whether the foods are
conventionally or organically produced unless they are expected to promote organic product
purchase (Soler, et al., 2002). However, organic product mislabeling, ambiguous label and failure
of organic label in differentiating organic food from other alternatives such as eco-label or healthy
food may effect on consumer’s perception and organic purchase decisions (Yin, et al., 2010)
(Voona, et al., 2011) (Suh, et al., 2012). Appearance have also influence on consumer perception
and buying behavior towards organic products. (Lockie, et al., 2004) (Zakowska-Biemans, 2011).
Apart from consumers’ perception credence values, the behavior towards organic products may
come from the appearance and people pursing hedonism life style consider appearance to be an
important factor to buy organic products.

In summary, consumer’s perception and purchasing behavior for organic products depends on their
organic product drivers (Healthy, tasty, environmentally friendly, and affordability) and external
drivers (Appearance, Standardization, Branding and promotion and Avaibility) In addition,
purchase behavior towards organic food is determined by consumer’s trust in organic certification
and label, their experience with organic food and the availability of organic food in the area they
reside. Organic products’ purchasers tend to be young male and female young who are educated
and those practice healthy life style. It’s revealed from previous studies and our study that un
affordable price, lack of information and availability, and promotion are the main hindrances to
organic food purchase.
Chapter 5: Conclusion and Recommendation

Conclusion
This study examined the consumer perception and purchasing behavior towards organic products
in Kathmandu valley. It also analyzed the relationship between consumer perception and
purchasing behavior and different variables; Organic Product Drivers (Healthy, Tasty,
Environmentally Friendly and Affordable) and External Drivers (Appearance, Branding and
Promotion, Standardization, and Avaibility) are the most influencing factor among them. This
study uses different theories of attitude towards consumer’s perception and purchasing behavior
of organic product like Theory of Planned Behavior (TBP), Perceived Behavioral control (PBC),
Attitude Behavior (AB), etc. The reasons for the consumption of organic product seemed to be
varied. It is observed from this study that respondents have higher level of perception towards
organic products because of their higher level of satisfaction and regularity in consumption. The
consumer perceived and showed intention to purchase the organic products because they think
organic product as a healthy, tasty and environmentally friendly. They accepted organic product
as healthy, tasty and environmentally friendly. This research identified that consumption of
organic product is based on the reliability that the consumers will have in reference to organic
drivers at first which is followed external drivers as these factors are expected while purchasing
organic product. Health and taste were considered as the major player among other factors and
was also the highly responded variable which represents that there is higher health consciousness
among the respondents. It also had strong correlation with consumer perception and purchasing
behavior which shows that it has higher chances of effects on consumer perception and purchasing
behavior for organic products. Beside this, the Avaibility of products near respondent’s area and
the standardization of organic product of external drivers were also responsible for determining
perception and purchasing behavior of respondents in using organic product. The respondents
showed high level of dissatisfaction towards the affordability of organic product because there was
moderate significant influence of affordability on consumer perception and purchasing behavior.

Recommendation
This study has create interest and insights among the producers and marketers. It is recommended
that those producers and marketers should put more focus on maintaining taste of their products
for ensuring higher degree of healthy of Organic Product Drivers in order to develop consumer
satisfaction and make the respondent to purchase of orginc product by increasing branding and
promotion of organic products. They should also create brand loyalty among its consumers by
ensuring that the labeling of genuine organic product before they buy organic products. The
environment should not be disregarded by producers as environmental aspects plays a vital role to
make it healthy and tasty. The decrease in environmental aspect can lead to negative consumer
perception and purchasing behavior. Organic product producers should also plan to make it
available and affordable according to convenience and income of consumers which can lead to
increase the market and occupy huge market share.

This study also illustrated that the respondent does not purchase and consume organic products in
terms of standardization of products. Hence, it is recommended that product should be standard so
that consumers can be attracted and can be familiar with the different brand names. The branding
and standardization should get highly concerned towards providing better healthy and tasty organic
product can directly lead to good brand. Therefore, it is essential for producers to label and
standardize the products through labeling and standardize the products packaging.

Limitation of Study
a. The process of data collection is limited to only few places and do not cover all the places
of Kathmandu valley.
b. The collected data is based upon the opinion of respondents and are generally situational.
c. The selection of respondent is another limitation as it was based upon own convenience.
d. The study represented that about 30% of variation in consumer perception is caused by
other factors which are not included and have not been researched here.

Future Direction
a. The survey should be collected throughout all the cities of Nepal and should cover every
part of the city.
b. The selection of respondent should not be based upon their convince.
c. The researcher should examine all the variables that affects the consumer perception and
purchasing behavior towards organic product and should include in the research and
analyze them with valid reasons.
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Appendix
A. Research questions

• Demographic Factor

1. Gender
a. Female
b. Male
c. Prefer not to say
d. Other

2. Age
a. 18-24
b. 25-30
c. 31-35
d. 36-40

3. Education
a. No Formal Education
b. High School
c. Bachelor’s Degree
d. Master’s Degree
e. Above Master’s Degree
f. PHD

4. Job Profile
a. Part-Time /Student working
b. Full time working
c. Business owner
d. Self employed
e. Other

5. In past had you made at least single purchase of organic products inside Kathmandu valley?
a. Yes
b. No

6. Monthly Income
a. Less than 10000
b. 10000-20000
c. 20001-40000
d. 40001-60000
e. Above 60000
7. How much do you spend on a monthly basis to purchase organic products?
a. Less than 1000
b. 1000-2000
c. 2001-4000
d. 4001-6000
e. Above 6000

• Consumer Perception and Purchasing Behavior

1. You prefer to use organic products instead of using normal products.

a. Strongly Disagree = 1
b. Strongly Agree = 5

2. You also recommend your friends to use organic products.

a. strongly Disagree = 1
b. Strongly Agree = 5

3. It was satisfying to you in your past while purchasing organic products inside Kathmandu
valley?
a. Strongly Disagree = 5
b. Strongly Agree = 1

4. While I make purchase of organic products inside Kathmandu valley, those products were
as your expectation.
a. Strongly Disagree = 1
b. Strongly Agree = 5

5. Your future expectation for purchasing organic products inside Kathmandu valley will be
satisfactory.
a. Strongly Disagree = 1
b. Strongly Agree = 5

• Organic Product Drivers

1. Organic Products are healthy for me and my family

a. Strongly Disagree = 1
b. Strongly Agree = 5

2. Organic Products are more Environmental friendly

a. Strongly Disagree = 1
b. Strongly Agree = 5

3. Organic Products have more trustworthy impression

a. Strongly Disagree = 1
b. Strongly Agree = 5
4. Organic Products are more tasty than normal products
a. Strongly Disagree
b. Strongly Agree

5. Organic Products are not affordable

a. Strongly Disagree
b. Strongly Agree

• External Drivers

1. Organic Products not are widely available in the market

a. Strongly Disagree = 1
b. Strongly Agree = 5

2. Organic Products appearance are less appealing

a. Strongly Disagree = 1
b. Strongly Agree = 5

3. Organic Products lack branding and promotion

a. Strongly Disagree = 1
b. Strongly Agree = 5

4. Organic Products lack effective standardization

a. Strongly Disagree = 1
b. Strongly Agree = 5
SPSS output
1. Frequencies

Statistics

In past had
you made at How much
least single do you
purchase of spend on a
organic monthly
products basis to
inside purchase
Kathmandu Monthly organic
Gender Age Job Profile Education valley? Income products?
N Valid 120 120 120 120 120 120 120
Missing 0 0 0 0 0 0 0

Gender
Valid Cumulative
Frequency Percent Percent Percent
Valid Female 54 45.0 45.0 45.0

Male 66 55.0 55.0 100.0

Total 120 100.0 100.0

Education
Valid Cumulative
Frequency Percent Percent Percent
Valid No Formal 3 2.5 2.5 2.5
Education
High 24 20.0 20.0 22.5
School
Bachelor's 67 55.8 55.8 78.3
Degree
Master's 22 18.3 18.3 96.7
Degree
PHD 4 3.3 3.3 100.0
Total 120 100.0 100.0
 Age
Valid Cumulative
Frequency Percent Percent Percent
Valid 18-24 82 68.3 68.3 68.3
25-30 20 16.7 16.7 85.0

31-35 11 9.2 9.2 94.2

36-40 7 5.8 5.8 100.0
Total 120 100.0 100.0

In past had you made at least single purchase of organic products

inside Kathmandu valley?
Valid Cumulative
Frequency Percent Percent Percent
Valid Yes 120 100.0 100.0 100.0

Job Profile
Valid Cumulative
Frequency Percent Percent Percent
Valid Part- 84 70.0 70.0 70.0
Time/Student
working

Full time 9 7.5 7.5 77.5

working
Business 17 14.2 14.2 91.7
Owner
Self 10 8.3 8.3 100.0
employed
Total 120 100.0 100.0
 Monthly Income
Valid Cumulative
Frequency Percent Percent Percent
Valid Less than 61 50.8 50.8 50.8
10000

10000- 13 10.8 10.8 61.7

20000
20001- 16 13.3 13.3 75.0
40000
40001- 19 15.8 15.8 90.8
60000
Above 11 9.2 9.2 100.0
60000
Total 120 100.0 100.0

How much do you spend on a monthly basis to purchase organic

products?
Valid Cumulative
Frequency Percent Percent Percent
Valid Less than 46 38.3 38.3 38.3
1000
1000-2000 35 29.2 29.2 67.5
2001-4000 20 16.7 16.7 84.2
4001-6000 14 11.7 11.7 95.8
Above 5 4.2 4.2 100.0
6000
Total 120 100.0 100.0
 2. Reliability

a. Consumer perception and purchasing behavior

Case Processing Summary

N %
Cases Valid 120 100.0
Excludeda 0 0.0
Total 120 100.0
a. Listwise deletion based on all variables in the
procedure.

Reliability Statistics
Cronbach's
Alpha N of Items
0.832 5

Item-Total Statistics

Scale Scale Cronbach's

Mean if Variance if Corrected Alpha if
Item Item Item-Total Item
Deleted Deleted Correlation Deleted
You prefer 14.23 10.567 0.726 0.770
to use
organic
products
instead of
using
normal
products.

You also 14.21 11.713 0.550 0.825

recommend
your friends
to use
organic
products.
It was 14.42 11.892 0.680 0.787
satisfying
to you in
your past
while
purchasing
organic
products
inside
Kathmandu
valley?

While I 14.25 12.710 0.507 0.832

make
purchase of
organic
products
inside
Kathmandu
valley,
those
products
were as
your
expectation.

Your future 14.13 11.690 0.726 0.775

expectation
for
purchasing
organic
products
inside
Kathmandu
valley will
be
satisfactory.
 b. External Drivers

Case Processing Summary

N %
Cases Valid 120 100.0
Excludeda 0 0.0
Total 120 100.0
a. Listwise deletion based on all variables in the
procedure.

Reliability Statistics
Cronbach's
Alpha N of Items
0.804 4

Item-Total Statistics

Scale Scale Corrected Cronbach's

Mean if Variance Item-Total Alpha if
Item if Item Correlatio Item
Deleted Deleted n Deleted
Organic 10.87 8.066 0.694 0.715
Products not
are widely
available in the
market

Organic 10.99 9.504 0.523 0.797

Products
appearance are
less appealing

Organic 10.67 8.796 0.601 0.762

Products lack
branding and
promotion

Organic 10.80 8.397 0.657 0.734

Products lack
effective
standardization
 c. Organic Product Drivers

Case Processing Summary

N %
Cases Valid 120 100.0
Excludeda 0 0.0
Total 120 100.0
a. Listwise deletion based on all variables in the
procedure.

Reliability Statistics
Cronbach's
Alpha N of Items
0.646 5

Item-Total Statistics

Scale Scale Cronbach's

Mean if Variance if Corrected Alpha if
Item Item Item-Total Item
Deleted Deleted Correlation Deleted
Organic 14.4333 8.332 0.597 0.500
Products are
healthy for
me and my
family

Organic 14.2667 8.567 0.560 0.520

Products are
more
environmental
friendly

Organic 14.3917 7.803 0.566 0.503

Products have
more
trustworthy
impression

Organic 14.6250 8.102 0.591 0.497

Products are
more tasty
than normal
products.

rev OPD1 15.1500 12.750 -0.129 0.822

 3. Frequencies

Statistics
Consumer Perception and Purchasing Behaviour
N Valid 120
Missing 0
Mean 3.5617
Median 3.8000
Std. Deviation 0.83828
Skewness -0.865
Std. Error of Skewness 0.221

Statistics
Organic Product Drivers
N Valid 120
Missing 0
Mean 3.6433
Median 3.8000
Std. Deviation 0.72329
Skewness -0.686
Std. Error of Skewness 0.221

Statistics
External Drivers
N Valid 120
Missing 0
Mean 3.6104
Median 3.8750
Std. Deviation 0.95200
Skewness -0.614
Std. Error of Skewness 0.221
 4. Correlation

Correlations

Consumer
Perception
and Organic
Purchasing Product
Behaviour Drivers
Consumer Pearson 1 .839**
Perception Correlation
and
Sig. (2- 0.000
Purchasing
tailed)
Behaviour
N 120 120
**
Organic Pearson .839 1
Product Correlation
Drivers
Sig. (2- 0.000
tailed)
N 120 120
**. Correlation is significant at the 0.01 level (2-tailed).

Correlations

Consumer
Perception
and
Purchasing External
Behaviour Drivers
Consumer Pearson 1 .540**
Perception Correlation
and
Sig. (2- 0.000
Purchasing
tailed)
Behaviour
N 120 120
**
External Pearson .540 1
Drivers Correlation
Sig. (2- 0.000
tailed)
N 120 120
**. Correlation is significant at the 0.01 level (2-tailed).
 5. Correlations

Correlations

Consumer
Perception
and Organic
Purchasing Product External
Behaviour Drivers Drivers
Spearman's Consumer Correlation 1.000 .708** .486**
rho Perception Coefficient
and
Sig. (2- 0.000 0.000
Purchasing
tailed)
Behaviour
N 120 120 120
**
Organic Correlation .708 1.000 .477**
Product Coefficient
Drivers
Sig. (2- 0.000 0.000
tailed)
N 120 120 120
** **
External Correlation .486 .477 1.000
Drivers Coefficient
Sig. (2- 0.000 0.000
tailed)
N 120 120 120
**. Correlation is significant at the 0.01 level (2-tailed).

6. Descriptive Statistics

Descriptive Statistics
Std.
N Minimum Maximum Mean Deviation Skewness Kurtosis
Statistic Statistic Statistic Statistic Statistic Statistic Std. Error Statistic Std. Error
Consumer 120 1.40 5.00 3.5617 0.83828 -0.865 0.221 0.077 0.438
Perception
and
Purchasing
Behaviour

Organic 120 1.80 5.00 3.6433 0.72329 -0.686 0.221 -0.137 0.438
Product
Drivers

External 120 1.50 5.00 3.6104 0.95200 -0.614 0.221 -0.800 0.438
Drivers
Valid N 120
(listwise)
Ethical Review
This form should be completed by the member of staff responsible for the proposed activity (and,
in the case of student projects, in consultation with the student concerned).

The purpose of this paper is to examine the perceptions and purchasing behavior of Kathmandu
valley Consumer on the organic products that may affect their purchase behavior. The focus on
this group principally derives from the Kathmandu valley consumers’ importance for the
contemporary firms. Issues that lead them to purchase. Data from questionnaires answered by
Kathmandu valley consumers’ have been statistically analyzed. This research will help organic
producers to better understand the consumer perception and make strategies related to the
marketing and many more. Thus, this research will provide details about the working-class
people age group of 24-40 purchasing behavior of Kathmandu valley for organic products.

2. If the proposed activity is an undergraduate, postgraduate or short-course module, please give

the relevant Module course code:

MN6P00NI Management, Investigation and Dissertation

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honorary member of staff at London Metropolitan University):

Navraj Bhusal

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navraj.bhusal@islingtoncollege.edu.np

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the name and email address of the student involved (who must be a student enroled at London
Metropolitan University): Background information (please type in your responses in the boxes
provided)

Amrit Prasad Chaudhary

NP01ba4a180018@islingtoncollege.edu.np
Potential ethical concerns (delete Yes or No as appropriate)

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___________________________________ Date: ___2nd May, 2021