EXECUTIVE SUMMARY A) RESEARCH QUESTION AND OBJECTIVE This report provides a comprehensive evaluation of empirical study comparing organic and conventionally grown alternatives. The emphasis is on key organic consumer demand and marketing issues, including: I. II. The implications of an economic definition of organic grown food for consumer demand. Attributes that shoppers consider most when comparing organic with conventional grown products. III. IV. Level and characteristics of consumer knowledge and awareness about organic food. Assessment methods and characteristics of organic consumer attitude and preferences.

B) APPLIED QUESTIONS How knowledgeable and informed are consumers about organic food? Overall, although there is some knowledge and awareness about organic products, consumers are not consistent in their interpretation is what is organic. Second, while consumers typically understand the broad issue about organic foods, many tend not to understand the complexities and niceties of organic farming practices and organic food quality attributes. Uncertainty regarding the true attributes of organic, and skepticism about organic labels, and product misrepresentation, may hold some consumers back from purchasing organic. What is the single most important factor that drives demand for organic products? Concern for human health and safety, which is a key factor that influences consumer preference for organic food, is consistent with observed deterioration in human health over time and, therefore, motivates consumers to buy organic food as insurance and/or investment in health.

What are the key economic issues and consideration and affect organic food purchase? The proportion of consumers who are willing to pay a price premium for organic food decreases with premium level. On the other hand, premium tends to increase with preferred attributes. In addition, demand tends to depend more on the price differential with respect to conventionally grown products, than on actual price. In contrast to sensitivity of demand to change to change in price, income elasticity of demand for organic food is generally small.

Introduction Interest in organically produced food is increasing throughout the world in response to concerns about conventional agricultural practices, food safety and human health, concerns animal welfare considerations and concern about the environment. These concerns, along with observed organic consumer behavior has led, in part, to emergence of various groups of organic consumers, namely environmentalists, food phobic, health eaters, humanists, welfare enthusiasts, and hedonists. The future of organic agriculture will, to a large extent, depend on consumer demand. Thus, a consumer-oriented approach to understanding organic agriculture is important not only in its own right, but also in terms of response to shifting market dynamics. From a marketing perspective, it is important to understand human conception of consumer decision-making regarding organically produced foods, and how consumption can be promoted. Product development and marketing strategies are also affected by consumer beliefs, attitudes and responses. Thus, a clear understanding of consumer attitude and the motivations underlying action in responding to organically grown products is important.

What is Organic? The Role of Economics The most common definitions of an organically produced food emphasize the technology of production practices and principles used, and/or the ‘organic philosophy’ Thus, while some definitions highlight dimensions such as ‘biological’ or ‘natural production system’ and ‘green’ or ‘environmental friendliness’ others emphasize the limited use of artificial chemical in organic production or its general philosophy. Organic products compete with conventional alternatives in the market. Although many organic products command a higher price compared to their conventional alternatives, some consumers continue to substitute organic for conventional products. This model also addresses how the characteristics of goods can be substituted when relative prices change. A price premium paid for the characteristics of organic foods suggests that consumers place a higher value on such attributes compared to conventionally-produced

sensory.alternatives. for example.g. Increases in the supply of organic products will. or for consumers who have an "external orientation" and tend to respond to the social benefits or impacts of increased organic production. An assessment of key findings from the study is provided in this section. Such consumers believe that conventional production systems can generate off-site effects. Study assessed whether there are differences between organic and conventional foods from the perspective of both the producer (or supply-side) and the consumer (or demand-side). producer price. demand-side study investigated the differences in terms of biophysical and chemical (e. Other consumers choose to reward producers who such consumers perceive to be using. a good which does not possess all the characteristics a consumer desires cannot be a dominant good no matter how low its price. Supply-side evaluations have generally focused on yield. ceteris paribus. lower price premiums. nutritive. most consumers purchase organic products because of a perception that these products have unique (and in some cases superior) attributes compared to conventionally grown alternatives. and profitability comparisons. According to study. On the other hand. and Profitability Comparison A supply side assessment of the differences between organic and conventional products is important especially for environmentalists and humanists (see Table I). with negative impacts on society. and food safety) characteristics.. In contrast. The economic comparisons of the performance of organic versus conventional production . as well as consumer preferences and retail prices. Producer Price. thereby affecting consumer demand and profitability of the organic industry. a major reason why some consumers do not purchase organic foods is linked to a perception that such foods are not better than their conventionally produced alternatives. Comparison of Organic and Conventionally-Produced Food Although the attributes associated with organic foods may be difficult to identify by visual inspection alone. environmentally friendly production methods. while a good that has characteristics not possessed by any other good cannot be inefficient no matter how high the price. A) Production.

at a given time period. appearance tends to be less important among consumers with a high preference for organic and pesticide-free products Product taste (i. Although shoppers generally link produce quality with its appearance. There are several noneconomic attributes that shoppers consider when comparing organic produce with conventionally grown alternatives. not even after repeated purchase and consumption. requires consumer knowledge and awareness about competing products.g. B) Nutritive Sensory and Food Safely Comparison Nutritive. consumers (unlike producers who are aware that their products are organic) may not know whether a product is produced using organic or conventional methods. This. If an individual cannot clearly differentiate between two alternative products. Personal responsibilities include making informed consumer choices. and the willingness to pay a price premium (Figure 1). Thus. freshness and shelf life are other characteristics that shoppers consider in their purchase decisions. Overall. organic production systems generate lower yields compared to conventionally grown alternatives. freshness and storage life play in consumer decisions. There is contrasting empirical evidence on the role that taste. in favour of the cheaper product. a price premium on the organic product can confuse and/or affect the individual's purchasing focus on marketable outputs (e. Knowledge and awareness have other direct and indirect effects on attitudes toward consumer products. In general. Because organic products are credence goods. sensory and food safety attributes influence consumer choice between organic versus conventionally produced foods.. . flavor). in turn. unless they are told so. awareness and knowledge about organically produced foods are critical in the consumer purchase decisions. Consumer Awareness and Knowledge about Organic Food The environmental ethic emphasis on individual responsibility (for personal health) and social action (on environmental quality and animal welfare). yield) or other related quality attributes.


perceptions about the appeal and inherent characteristics of organic may translate into actual demand. motivations. Consumer Attitudes and Perceptions Consumer actions regarding organic food stem from attitudes that. in turn. Consumer knowledge and awareness will continue to be important in the organic food market in two respects. knowledge and awareness about organic products can affect attitudes and perceptions about the product and. Beliefs and perceptions are highly subjective notions. Although particular attitudes are often assumed to lead to specific behaviors. and/or the product characteristics under consideration. such respondents typically compare their attitudes toward the methods of producing the goods. The consumer preference for a particular product is based on attitudes toward available alternatives. buying decisions. in part. Although in reality such perceptions mayor may not be true. if consumers are asked to indicate their preference regarding organically versus conventionally produced food. are linked to a complex set of ideas. and experiences. First. In summary. It is important to note that knowledge and awareness about organic products may not necessarily translate into direct purchase because of barriers that could limit the ability of consumers to transform such knowledge and perceived demand into actual demand. ultimately. Thus. stemming from reported cases of mislabeling and misrepresentation of conventionally produced food as organic.Although consumers typically understand the general issues associated with organic farming. from reported cases of mislabeling and fraud are assuaged. because they reflect opinions about the objective state of the world. there is still a segment of the potential market that is not yet informed about organic foods. This is partly because many potential organic consumers. . the individual who holds the perception thinks that it is true. many tend not to understand the complexities and niceties of organic farming practices. If the skepticism about organic products stemming. and the associated quality attributes outlined in Table 2. before stating their preferences.

the empirical evidence supports the hypothesis that product quality characteristics affect consumers' preferences for organic food. lack of knowledge and product availability were the major reasons preventing nonbuyers from purchasing organic food. Willingness’-To-Pay for Organic Products The willingness-to-pay (WTP) for particular food attributes is linked to an observation that consumers make trade-offs for improved attributes associated with consuming particular products. economic value. food safety and environmental considerations. freshness.A general perception that conventional agricultural systems. several other product characteristics such as nutritive value. The magnitude of the price mark-up is also important because it helps in assessing the value consumers place on particular product attributes. is an important search attribute for hedonists (see Table 1). tend to have long-term health implications and adverse effects on the environment has led some consumers to shift from conventional to organically produced alternatives. appearance. Apart from health. therefore. compared to organic production. In addition. organic product purchase decisions tend to be influenced more by product quality and other inherent characteristics. with the most important including nutritional value. colour and other sensory characteristics influence consumer preferences. than by price premium. The study reported that price premium. In general. A WTP also reflects an observation that individual preferences are unique. Given that yields are generally lower for organic production than for conventional production. ripeness. consumer willingness-to-pay a price premium for organic products is an important determinant of organic farm profitability and long-term financial sustainability. Consumer Preference for Organic Food Consumer preference for organic food is based on a general perception that organic products have more desirable characteristics than conventionally grown alternatives. freshness. and general appearance (especially of fruits and vegetables). taste. flavour or taste. In . A price premium on organic produce can signal differences in product attributes and characteristics and.

Price elasticity of demand for organic products is a related aspect of consumer willingness-topay. premiums tend to increase with (combinations of) preferred attributes.. the proportion of respondents willing to pay a price premium decreases as the premium increases. among young consumers. In addition. most consumers are not willing to pay a price premium higher than 10-20%. partly because price premiums negatively affect consumer purchases. younger consumers tend to have a lower purchasing power than older consumers. more than 55 years) tend to make preventative health decisions. In general. . Thus. consistent with the law of demand.addition. partly because of perceived health vulnerability and an awareness that they are generally at higher health risk than younger individuals. willingness to pay may not necessarily translate into actual demand for a product. Organic produce retailers tend to be quite sensitive to consumers' price elasticity of demand. In general. Older consumers (i. Overall. environmentalists may be willing to pay price premiums to support local organic producers.e. Study reported that younger consumers are more likely to purchase organic products attributed this to their preference for chemical free products and interest in environmental quality.

It is also world’s largest producers and exporters of certified organic basmati rice under fair trade label. It is world’s largest producers and exporters of certified organic basmati rice. Is one of the largest exporters of basmati rice from India. KEY INFORMATION YEAR OF ESTABLISHMENT TOTAL MILL AREA TOTAL TURNOVER MAJOR PRODUCT TOTAL RICE SALES VOLUME WORKFORCE 1995 50 ACRE (20 H.) 10 MILLION USD BASMATI RICE 183762 MT SKILLED-325 UNSKILLED-275 TOTAL-600 .COMPANY PROFILE SUNSTAR OVERSEAS LTD.

. to receive benefits from the wholesomeness of wheat it is important to choose wheat product made from organic whole wheat flour than those that are refined and stripped of their natural goodness. features a host of important nutrients. fiber and other minerals like selenium. Organic wheat is more nutritious than refined white flour. iron.PRODUCTS A) ORGANIC WHEAT FLOUR:-organic wheat is the most important cereal crop in the world and ubiquitous in the food culture. Whole wheat is a good source of calcium. in its natural unrefined state. Therefore. containing the macronutrients of wheat bran’s especially fibers and proteins. Organic wheat.

B.Nutritional factsAmount per 100 gms. Calories-340 % daily value Total fat Saturated fat Total carbohydrates Dietary fibers Calcium Iron 3% 2% 24% 49% 3% 22% B) SPICES1) LAL MIRCH- Chilies are excellent source of Vitamin A. . help to clear the lungs and stimulate digestive system. C and E. Chilies are good for slimming down as it burns the calorie easily. Chilies stimulate the appetite.

It is an excellent antibiotic.2) Coriander powder(dhaniya)Coriander seeds are good source of phytonutrients and flavaonoids. aids digestion of protein and promotes proper metabolism in the body. It purifies the blood. It is beneficial for people who feels tired after consuming meals or who experience gas and bloating. both an integral part of a good immune system. . It control stomach ache. 4) Turmeric powder(haldi)Turmeric powder is considered as digestive bitter and a carminative. 3) Cumin seeds(jeera)Cumin is rich source of iron and minerals. Coriander is considered as a source of dietary fiber. magnesium and manganese. It promotes appetite. iron. It is a very good cure for acidity and heartburn.

C) Pulses. some of the products are: Red gram(arhar)  Bengal gram(black chana)  White chickpeas(kabuli chana)  Green beans split(moong chilka)  Green gram skinless(moong dhuli)  Green gram(moong whole)  Moath beans  Black gram split(urad chilka) . high in dietary fibers and rich in protein.Pulses are low in fat and cholesterol. making them excellent heart healthy food choices with establish heart benefits.

follow particular diet sets Humanists (and welfare enthusiasts) Concerned with ‘factory farming’ methods Hedonists Believe that a price premium on a product signals a better product . for various (medical or other) reasons. who. and relationship with consumer behavior Organic consumer group* Key characteristics Environmentalists Concerned about environmental quality Food phobic Concerned about chemical residues in food Healthy eaters Consumers.Table 1: Categories of organic consumers.

Table 2: Some quality attributes of (organic and conventionally produced) food products Quality attributes Food safety attributes Examples Food borne pathogens Heavy metals Pesticide residues Food additives Naturally occurring toxins Veterinary residues Nutrition attributes Fat Calories Fibre Sodium Vitamins Minerals Value attributes Purity Compositional integrity Size Appearance Taste .

Convenience of preparation Package attributes Package materials Labelling Other information provided Production process attributes Animal welfare Genetic modification Environmental impact Pesticide use Worker safety .

Gruff et al (1993):. ease of preparation(68%). where it is grown. health and nutrition. quality.Canadian consumers rank taste (93%).taste(38%).The most important factor determining consumer food safety preference was extent of product damage.Consumers of organic food appreciates the quality of organic food and perceived them to be better in taste. preparation time (66%). availability(16%). Hay (1989):. flavor. Huang et al (1993):. healthiness. certification.and price (62%) as key consideration.Consumers who usually buy organic food were more concerned about food safety than price. environmental effect. and less so with environmental stewardship.Older buyers. Freshness and nutritional attributes were the most important consideration in purchasing organic. Demerit (2002):. food poisoning and pesticides. environment(26%).The main health and safety concerned were linked to fat levels.Organic consumers were more concerned about pesticides residues and nutritional values. and family(11%) as factors that influenced organic choices. price(16%). food safety(30%). female and married consumers were more likely to choose stores offering pesticides free products.Psychographic characteristics were more important to organic consumers than socio-economic factors. . Cunningham (2002):. safety. Goldman and Clancy (1991):. Byrne et al (1994):. appearance(12%). Buzby and Skees (1994):.Respondent rated health/nutrition (66%).Key factors affecting consumer’s preferences were freshness. price. nutrition and health (89%).60% of buyers were females. Huang (1996):.REVIEW OF LITERATURE Baker and Crosbie (1993):. nutrition. appearance. and brand.

healthy for me. seedless.Organic food buyers were more concerned with pesticides residues. high quality.and did not trust conventional food. looks sweet.Positive attitude towards environmental issues were found to be positively correlated to the buying of organic foods and the frequency of purchases. Wolf (2002):. Grunet and Juhl (1995):.The main reasons for buying organic products were linked to human health and environment. free of insects.Organic product attributes were more important for organic than non-organic consumer. Veeman and Adamovicz (2000) food buyers were more health conscious. . Taste was the main food quality attribute that affected consumer preference. Hack (1993):. reasonably priced.Consumer rated fat and pesticides residues as the most important factors affecting health.The most common reasons for choosing organic produce was concern for the environment and health issues. The Packers (2001):. sale priced.Jolly et al (1989):-Food safety and nutrition were rated as very important for 75-80% of respondents. high in nutrition. good value.Attributes that are desirable to included fresh looking. Wilkins and Hillers (1994):.Sixty-five percent of respondents were concerned about chemical residues on fresh produce. and preservative than non-buyers.Concern for pesticides residues is a significant factor affecting preference for organic food. fresh tasting. Ekelund (1990):. additives. Fricke and von Alvensleben (1997):. Davies et al (1995):. Swanson and Lewis (1983):. Availability and were the main factors influencing actual purchase.The motivation for buying organic was the absence of contamination or health reasons. and free of pesticides. Hansen and Sorensen (1993):. order of importance. Torjusen et al (1999) method and values.Health is the main reason for purchase of organic olive.environmental friendliness and a better taste were the most important factors that affect organic food demand. with the environment and animal welfare as other attributes. O’Donovan and McCarthy (2002):.Food quality is more important than cost was the main reason for not buying organic.93% of respondent reported buying organic produce because of health reasons and/or because it is better for children. Schifferstein and Oudeophuis (1997):.Further growth in the demand for organic food is expected.among non-buyers.compared to 48% of respondant from france.and environment as the main reasons for purchasing organic products.while 67% indicated they purchace organic because environmental consideration.followed by quality characteristics such as colour.62% of respondant reported they buy organic because it is healthier. Less than 30% reported it is better for the environment.45% buy organic because of health concern.however aspects of food that were more important to 70% of the consumers were quality characteristics.50% of Norwegian respondant reported that organic food is healthier.Hutchins and Greenhalgh (1997):.and 9% indicated that they buy organic because of environmental concerns. . Von Alvensleben and Altman (1987):.absence of chemicals.Food safety was most important for consumers of meat. Sylvander (1993):-Consumer ranked.taste and flavor. Kyriakopoulos et al (1997):. Oystein et al (2001):.nutrition. Makatouni (2002):.Preference for organic is influenced mainly by health values.purchase of organic meat also believed it is superior in terms of quality. Dent and McGregor (1994):. Sandalidou et a l(2002):.Food quality.

Consumers were willing to pay a 37% of price premium for organic hoticultureal product.About 76% belived that organic food is safer than conventional alternatives. 5% of respondants indicated that they would pay more than double the price of regular fresh grapefruit for a saferone.Consumers paid21% price premium for organic baby food.Huang and Ott (1997):.Wandel and Bugge (1996):. Hay (1989):.followed by taste and nutritional value.and another 7% willing to pay 20% price premium for organic produce.Consumers willing to pay a price premium of not more than 25% of organic products. Abay and Miran (1997):. Misra.while 9% of respondants believed that foods labeled organic were truly organic.6% willing to pay 11-15% price premium.Food safety was ranked as the most important factor by 99% of respondant.Respondants at food cooperative were willing to pay a 100% price premium for organic food in general.Majority of respondants were willing to pay between 15 and 69 cent above than 50 cents purchase price of grapefruit for a lower pesticide residue.Majority of respondents ranked freshness first.taste and perceived nutritional value.compared to 95% for environmental concerns.Organic vegetables were preferred because of freshness.33% of respondant willing to pay 6-10% price premium. Wang et al (1997):. . Cunningham (2002):. Mahesh et al (1997):.68% of consumers willing to pay 10% price premium for organic products in general. Buzby and Skees (1994):. Aguirre (2001):-100% of organic consumers indicated they buy organic because of health concerns. Jolly (1991):. Goldman and Clancy (1991):. Harris (1997):.

fruits and vegetables. Canavari et al (2002):. Wolf (2002):. Ekelund (1990):. and another 26% willing to pay 50% price premium for organic vegetables. . especially for organic cereals. Hutchins and Greenlagh (1997):.66% of respondents willing to pay 10-15% price premium for pesticides free fresh produce.55% or respondent willing to pay 25% price premium.Ott (1991):.Consumers willing to pay 30% price premium.85% of respondents willing to pay a price premium for organic apples.30% of respondents willing to pay 50% price premium for organic grapes.

RESEARCH METHODOLOGY Research methodology deals with the various methods of research. The purpose of the research methodology is to describe the research procedure used in the research. Attributes that shoppers consider most when comparing organic with conventional grown products. . VII. VI. VIII. Research methodology overall includes the research design. H0: Price reduction will not favorably affect the acceptance of organic food H1: Price reduction will favorably affect the acceptance of organic food. data collection method and analysis procedure which are used to explore the insight information form the research problem.2OBJECTIVE OF THE STUDY PRIMARY OBJECTIVE The primary objective of the study was to find out the scope of marketing and sales of organic product. HYPOTHESIS RESEARCH QUESTION RQ: will the reduction in the prices favorably affect the acceptance of organic food. The implications of an economic definition of organic grown food for consumer demand. Research Methodology helps in carrying out the project report by analyzing the various research findings collected through the data collection methods. SECONDARY OBJECTIVES The other objectives of our study were: V. Assessment methods and characteristics of organic consumer attitude and preferences. 3. Level and characteristics of consumer knowledge and awareness about organic food.

SAMPLING DESIGN A sample design is a definite plan for obtaining a sample for a given population. The objective of this study is to answer the who. . which guides research in collecting and analysis the data. Sampling is used to collect the primary data. CONCLUSIVE RESEARCH DESIGN I used conclusive research design because it helps in studying the research problem in the conclusive form. educational level. SAMPLING UNIT . age. what. when. Sample Design consists of the following factors. z-test will be used because my sample size is 150. Here in my project I have used the two type of research design: DESCRIPTIVE RESEARCH DESIGN Descriptive research design because is used in knowing the characteristics of certain groups such as sex. RESEARCH DESIGN Research design is an important and the vital part of the research. this helps in choosing the possible cause of action from various alternatives to make a rational design. Research design provides an excellent framework for the research plan of action. The function of the Research design is to ensure that the required data is in accordance. A sample is only a portion in the universe. occupation or income. 1. research design is a blue print for the research study. Hence this type of research is being used in this research project. where and how of the subject under investigation. The objective of sampling is to get maximum information about the parent population with minimum effort.For hypothesis testing. making projections of certain thing or determining the relationship between 2 or more variables. Other cases when descriptive study could be taken up are when he is interested in knowing the proportion of people in a given population who have behaved in a particular manner.

The Sampling unit was taken randomly from retails stores of preet vihar and maharani bagh area. following software are used:   M S Excel 2007 SPSS 16. RESEARCH TOOLS To analyze the data following research tools are used:    ANOVA ( F. SAMPLING TECHNIQUES The sampling technique applied in this project is mainly Probability (convenience) sampling.Test) One-Sample Kolmogorov-Smirnov Test ( Z. 3.0 .Test) Pearson Correlation SOFTWARE USED To analyze the data. SAMPLE SIZE The sample size for the survey conducted is:  150 customers who have visited in the stores. 2.

All data sources can be classified into two data: 1.  Few customers denied sharing the information because they thought we are sales agent.  Some of customers were very casual while responding to the Questionnaire DATA COLLECTION The success of any project or market survey depends heavily on the data collection and analysis. PRIMARY DATA 2.LIMITATIONS  Few of the customers were not interested to share the information. It is necessary that the data collected is a reliable data in order to achieve the research objective. I had to wait for longer time to get the information. SECONDARY DATA .  During the survey.

which have helped in data gathering.1. which have been already collected or published for the purpose other than specific research need at hand. The secondary data sources here in this project are: a) MAGAZINES b) WEBSITES c) BOOKS . SECONDARY DATA.Primary data is the data which are fresh and collected for the first time. There are various Primary data collection techniques. This data is simply used up by the researcher for his purpose of collected the data and its use is now not the same. PRIMARY DATA.Secondary data are those data. and are original in character. The primary data collection techniques used in the project is as follows: a) PERSONAL INTERVIEW METHOD b) SURVEY METHOD c) QUESTIONNAIRE METHOD d) OBSERVATION METHOD 2. It consists of the actual information.

. pertaining to the subject. Internet magazine and Brochures were used for further collection of information.DATA COLLECTION PROCEDURE: The questionnaire prepared under the guidance of my guide was filled by customers visited in different stores. Personal interviews were conducted with some customers to know about the consumption pattern of food items in their families.

3%(119) .0 Valid Percent 15.2 to 3 times.3%(23) Customers shopping for food items in a month more than 3 times.7 4.RESULT AND DISCUSSIONS Q.4.1.0 20.0 Cumulative Percent 15.3 .3 100. 79.7 100.7 79.3 16.7%(7) only once and there is only 1 customer who shopping for food items occasionally.7 4.3 100.0 Note: 15. Frequency of shopping for food items in a month Frequency of shopping for food items Frequency Valid MORE THAN 3 TIMES OCCASSIONALY ONLYONCE 2 TO 3 TIMES Total 23 1 7 119 150 Percent 15.7 79.3 . .

0 Valid Percent 88.2.0 Note: 88.7 %( 133) customers are ready to pay extra price for better quality and 11.Q. Ready to pay extra price for better quality Ready to pay extra price for better quality Frequency Valid YES NO Total 133 17 150 Percent 88.7 11.0 Cumulative Percent 88.3 100. .7 11.3 %( 17) customers are not ready to pay extra price for better quality.7 100.3 100.

out of 131. First preference is given to price by 6 customers. .125 customers are ready to pay extra price for better quality and 6 customers are not ready to pay extra price. Both is being considered by 13 customers.Q. 8 customers are ready to pay extra price and 5 customers are not ready to pay extra price for better quality.3. nobody is ready to pay extra price for better quality.Relationship between first preference and Ready to pay extra price for better quality Relationship between first preference and Ready to pay extra price for better quality Count Ready to pay more Yes First Preference Quality Price Both Total 125 0 8 133 No 6 6 5 17 Total 131 6 13 150 Note: First preference is given to quality by 131 customers.

0 96.7%(16) customers are fully satisfied.7%(4) customers are unsatisfied and 1.14%(21) customers are less satisfied.7 71.2.7 71.7 1.7 1.3 100.0 Percent 10. .3 14.7 82.0 Note: 10.71.0 98.0 2.3 100.0 2.3%(2) companies are neutral.3 14.0 Valid Percent 10. Are they satisfied with present products available in the market Satisfactory Level Cumulative Frequency Valid FULLY SATISFIED SATISFIED LESS SATISFIED UNSATISFIED NEUTRAL Total 16 107 21 4 2 150 Percent 10.4.3%(107) customers are satisfied with .Q.7 100.

3 2.0 100.5.0 86.28.0 28.0 56.0 Percent 2.7 98.3 2.7 11.56%(84) customers think range of products are good .3%(17) companies think range of products are poor and only 2%(3) companies think range of products are very poor.7 11.0 58.0 56.7%(43) customers think range of products are average. What they think about our range of products About our range of products Cumulative Frequency Valid VERY GOOD GOOD AVERAGE POOR VERY POOR Total 3 84 43 17 3 150 Percent 2.Q. 11.0 28.0 100.0 Valid Percent 2.0 Note: 2%(3) customers think range of products are very good . .0 100.

6.Q. Relationship between satisfactory level and their thinking about range of products Relationship between satisfactory level and their thinking about range of products Count ABOUTPRODUCT VERY GOOD SATISFACTORYLE FULLY VEL SATISFIED 1 6 AVERAG GOOD E POOR VERY POOR Total 4 5 0 16 SATISFIED LESS SATISFIED UNSATISFIED NEUTRAL Total 2 57 34 11 3 107 0 15 5 1 0 21 0 0 4 2 0 0 0 0 0 0 4 2 3 84 43 17 3 150 .

our products are very good. 6 think products are good. So total 84 customers’ rate our products are good and 43 think our products are average and 3 think our products are very good.6 think products are average and 1 think products are poor. 11 customers rate our products are poor and 3 rate our product is very poor.Note: 16 customers are fully satisfied. 2 out of them think. our products are good.2 customers are neutral and both think products are good.107 customers are satisfied with our range of products.our products are good. 34 think products are average. . 1 out of them think.15 out of them think. our products are very good. 21 customers are Less satisfied. 57 think products are good.4 customers are unsatisfied. all 4 think . 4 think products are average and 5 customers rate our product poor.

95% Confidence Interval Lower Bound Upper Bound a.HYPOTHESIS TESTING 1.413 . . Test distribution is Normal.524 .000 .112 (Significance level. Deviation 85. Z -Test One-Sample Kolmogorov-Smirnov Test (Z Test) PRICEPREFER ENCE N Normal Parameters a 150 Mean Std.524 6. Z cal= 6.020 Most Extreme Differences Absolute Positive Negative Kolmogorov-Smirnov Z Asymp. It means reduction in prices will increase the acceptance of our products.356 -. (2-tailed) Sig.8800 .000 .5%) Z cal > Z tab So we can say that the null hypothesis that Price reduction will not favorably affect the acceptance of our products is rejected i.32605 .e.413 Z tab= 0.000 . Sig. alternate hypothesis will be accepted. (2-tailed) Monte Carlo Sig.

243 F table with 1 and 148 degree of freedom at 5% level of significance is 3.237 F 5.2. Since F cal > F tab.e. we reject the null hypothesis i. price reduction will not favorably affect the acceptance of dairy creamer.245 35.243 Sig. It means price reduction will favorably affect the acceptance of our products.129 36.245 .373 df 1 148 149 Mean Square 1.023 F cal= 5. . F-Test ANOVA Sum of Squares Between Groups Within Groups Total 1. .84.

part of which stems from reported cases of mislabeling and product misrepresentation. more importantly. Such perceptions mayor may not be true. food safety and environmental stewardship. Correct (incorrect) responses imply knowledge and awareness (lack of knowledge) about organic foods and products. appearance. eliciting consumer preference for organically-grown (versus conventional) products is based on comparison of consumer attitudes toward the production systems used and. Beliefs and perceptions about organic are highly subjective notions that reflect opinions about the objective state of the world. along with several other product characteristics such as nutritive value. Consumer preferences are based on attitudes toward alternative products. and partly because of non-uniform organic standards and certification.Summary and Conclusions A consumer-based approach to understanding organic agriculture is important not only in its own right. but also in terms of responses to changes in market dynamics. Consumer preference for organic food is based on a general perception that organic has more desirable characteristics than conventionally-grown alternatives. and other sensory characteristics influence consumer preferences. may hold some consumers back from purchasing organic. and does not capture some important aspects of knowledge. This study provides an understanding of consumer preferences and attitudes toward organically-grown foods. Human health. This notion of consumer knowledge and awareness has some limitations. taste. Consequently. Consumer knowledge about organic agriculture reflect a conceptual belief that is true and justified. and tend to use research methods that rely on correctness to answers to survey questions. yet the consumers who hold them think they are true. Although the literature suggests some consumer knowledge and awareness. the perceived and actual product characteristic. Some skepticism about the true attributes of organic and organic labels. . freshness. consumers are not consistent in their interpretation of what is organic.

but also an observation that individual consumer preferences are unique. the proportion of respondents willing to pay a price premium decreases as the premium increases.Consumer willingness-to-pay for organic versus conventionally-grown foods reflect not only an observation that individuals make trade-offs between attributes associated with consuming alternative products. A willingness to pay a price premium for organic products is important for financial sustainability of the sector. In general. .

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