Journal of Business Management & Social Sciences Research (JBM&SSR)

Volume 3, No.12, December 2014

ISSN No: 2319-5614

Analysis Of Consumers Preference Towards Organic Food

Products Based On Product Price
MS. S.SUGANYA, Research Scholar, Bharathiar University, Coimbatore, Tamil Nadu, India
DR. S.ARAVINTH, Associate Professor, School of Management, Sri Krishna College of Technology, Coimbatore, Tamil
Nadu, India

Abstract
The growth of organic farming in India has helped consumers choose healthier food products over non organic food products. The total volume of organic food produced during the year 2013 2014 amounts to around 1.24 million MT of which
194,088 MT [1] were for exports. This translates to almost a million plus ton of organic food product for domestic consumption. The health benefit of organic food product is well known and this has increased the demand for organic products within the country. Though there is a strong demand for organic food products there is a considerable resistance to
organic food product due to price difference with respect to non organic products. This variation in price is playing a significant role in consumers preference towards organic food. This study aims at understand the significance of pricing, its
effects on consumer and the consumers reaction towards price rise.
Keywords: Organic, Food Products, Pricing, Consumer Awareness, Impact of Price.

Introduction
Organic food can simply be classified as food products
that have been produced without using any pesticides.
But a complex explanation would be those products that
have been produced using naturally available materials
in its entire life cycle. For example a liter of milk from a
cow that has consumed organic matter like grass that has
been grown using manure from the cow and has never
been exposed to manmade chemicals can be classified as
organic product but if the same has consumed grass that
has been grown using manmade fertilizer will be classified as non-organic product.
The reason for this classification is that once a product
has been branded as organic product then it is assumed
to have never been in-contact with manmade chemicals.
This classification is important because chemicals that
have been used for growing of plants are absorbed by the
plants and are in turn consumed by consumer either
through indirect means like the milk example described
above or directly through consumption of grass juice for
medical benefits. Organic food does not limit to vegetarian food only but also to non-vegetarian food such as
egg, chicken, etc. Organic food is the current hot topic
among consumers at supermarkets these days as the
awareness about organic products has increased many
fold and consumers are moving towards healthier lifestyle [2]. It can be inferred from reference [2] that people
are eager to buy organic product but there are a number
of problems facing the organic sector. Some of them are
out of scope of this article but has been listed here for
user understanding. A recent study by an NGO [3] has
identified that almost 46% of the farmers are not interested in taking up organic farming and the study has
identified that one of the reason for unsold stock of or-

www.borjournals.com

ganic product is Price expectation is to high in relation

to quality.
The pricing expectations of consumers needed to be
studied to fully understand what the consumer is willing
to pay for an organic food product? And is there any
relation between the availability of the product and the
usage of the same when there is a price difference between the organic and non-organic product. These questions prompted this author to conduct a detailed analysis
on these questions and this article details the findings of
the study. It is generally held belief that organic products
are of higher cost and people will buy organic product if
they feel that the price overweight the cost. But to what
extent the consumer is willing to pay more to buy an
organic product over non-organic product is not available and hence this research.
1. Pricing Of Organic Products
In order to fully understand the price difference between
organic and non-organic product several products of
same nature was selected.
Table 1: Price list of Organic and Non-Organic
products
Organic
/
Product Name
Price
Non-Organic
Hue-Organic Shampoo
Rs 416
Organic
(200 ml)
Dove Nourishing Oil
Rs 180
Non-Organic
Care Shampoo (200 ml)
Organic Soap-Sandal
Rs 199
Organic
Park Avenue Storm Soap Rs40
Non-Organic
Cow Ghee(500ml)
Rs 536
Organic
Sancheti Yashoda Brand
Rs345
Non-Organic
pure Gawa ghee (500ml)

The Author Blue Ocean Research Journals 2012

Open Access Journals
Blue Ocean Research Journals 73

Journal of Business Management & Social Sciences Research (JBM&SSR)

Volume 3, No.12, December 2014

From Table 1, it can be inferred from casual observation

that organic products cost more than their non-organic
counterparts. This price variation is not restricted to just
food items but also to non food products as listed in the
table 1. Prices for organic products were obtained from
organic garden [4] and for non organic products from
Amazon [5]. As stated in the report [3] if price is playing
an important role in selecting the product this price variation may hinder the adaption of these organic products
by the consumers.
Table 2: Price difference between organic and nonorganic products
Category
Price Variation
Shampoo
Rs236
Bath Soap
Rs159
Ghee
Rs191
Table 2 lists the price that customers need to pay more
in-order to buy organic products. In 2 out of 3 instance
the price difference is almost double that of the consumer might pay for non-organic product.

2. Selection Of Coimbatore City For

Analysis
In order to understand how price variation as shown in
table 2 affects the consumer decision on buying those
products customers data was collected from the city of
Coimbatore, India. The city of Coimbatore was selected
based on the authors research direction of identifying
the best marketing technique for effective sales of organic product for Coimbatore customers. Farming community makeup majority of the population of the. This coupled with rapid industrialization has created a perfect
blend of customer base that not only are health conscious
but also has diverse socio-economic background. This
perfect population provides a solid base for analyzing
and understands the general consumer behaviors and the
methods of marketing to sell them organic products.

3. Sample Size And Analysis Stages

From the city of Coimbatore a population size of 500
was selected for analysis. This analysis is conducted in
two iterations, in the initial stage the analysis will focus
on answering the primary question of do price affect
consumer decision? And if it does up to what extent it
affects? And finally does monthly income play any role
in decision making?
In the second stage a detailed analysis will be conducted
which will utilize the conclusions that has been derived
in this study and will try to answer the question like does
married people has any preference change compared to
non married persons? Does family with 2 or less children
has any change in preference towards organic products
compared with others families with 3 or more children

www.borjournals.com

ISSN No: 2319-5614

and what sort of impact does price has on them, these

among other questions will be analyzed in the second
part of the study. This article deals with the first stage of
analysis.

4. Questionnaire And Data Collection

In order to answer the questions that have been taken up
for analysis a questionnaire was designed to collect the
following details from the consumers. The questionnaire
was divided into two sections with first section entitled
general information focused on the consumers information and the second section dealing with the consumers preference towards organic food and their attitude
towards price difference.
5.1 General Information
General information section collected personal information like Age, Monthly Income and Education Qualification. This section is used as an anchor point for the
second section. This section is also used as a classifier
for grouping and analyzing the second section.
5.2 Consumer Preference Information
This section deals with the consumers preference towards organic food products and their reaction towards
price change and the general opinion about organic
products. The following list of questions was included in
the second section
a) Have you heard about organic food products?
b) Do you use organic food products?
c) If an organically grown alternative is available for
non-organic food product which one will you buy?
d) If that organic food is 5% costlier will you buy it?
e) If that organic food is 10% costlier will still you buy
it?
f) If that organic food is 20% costlier will still you buy
it?
g) If that organic food is 30% costlier will still you buy
it?
h) If that organic food is 50% costlier will still you buy
it?
i) If the organic product is costlier than non-organic
product will there be any change in daily usage of
it?

5. Data Analysis
In order to answer the questions, the data set that is described in section 5 was used to collect the data from
different consumers. From the collected data it has been
identified that the awareness level of general consumer
about organic food is very high as shown in the following figure.

The Author Blue Ocean Research Journals 2012

Open Access Journals
Blue Ocean Research Journals 74

Journal of Business Management & Social Sciences Research (JBM&SSR)

Volume 3, No.12, December 2014

ISSN No: 2319-5614

the benefits of the product around midway mark (2030%) mark were majority of the people have a negative
reaction towards the organic products due to price. The
following figure shows the income composition of the
sampled population and it can be inferred from the available data that the sampled population represents a majority of the available population. This is represented in the
figure 3.

Figure 1: General awareness and usage of organic

food.
From figure 1 it can be inferred that almost 96% of the
sampled population is aware of organic food but only
about 58% of them use organic food. The question of
why will be analyzed in the second stage of this analysis.
And also from this data it can be inferred that overwhelming majority of the people (90%) of them like to
buy organic food products but at the same time 10% of
the people do not have a positive reaction towards organic products that needs to further analyses as part of the
second stage. These same customers when asked will
they buy an organic product if there is a price difference
in the range of 5%, 10%, 20%, 30% 50% their response
is displayed in the following figure.

Figure 3: Income composition of sampled population

From the collected data it was evident that change in
income did not translate into any change in preference
for organic product in higher income group as displayed
in the following figure 4.

Figure 4: Positive reaction towards price change

Figure 2: Positive & Negative response towards price

difference in organic products.
From figure 2 it is clearly evident that a majority of the
people (94%) will still prefer to buy organic product if
the difference is 5%. But the cost seams to overweight

www.borjournals.com

There seems to be no change in customer attitude towards organic product when the price of the product
costs more than 30% over the non-organic product over
any given income range. The only observable difference
is when the price of the product varies from 5% to 10%
people in the income bracket of >50,000 seem to have a
rather drastic change in their preference towards the organic product. When the product costs 5% more the peo-

The Author Blue Ocean Research Journals 2012

Open Access Journals
Blue Ocean Research Journals 75

Journal of Business Management & Social Sciences Research (JBM&SSR)

Volume 3, No.12, December 2014

ple in the income bracket of >50,000 seams to buy the

product 75% of the time but when the same product is
10% costlier the buying rate drops to almost 25% and
stays the same for the rest of the changes in price. The
percentage of change in consumer response towards the
organic product is listed below.

Figure 5: % change in peoples response towards

price change in organic products.
As displayed in the figure above the percentage of
change in peoples preference happens drastically when
the price of the product varies from 20% to 30% and
from the previous mentioned figures it is evident only
16% of the people will buy products that are 50% costlier than their non-organic product. The price difference of
5% and 10% doesnt affect the consumers preference to
a greater extent for the people in the income brackets
other than >50,000. When this derived insight is applied
to the sampled products that have been identified in the
section two of this article almost all of them are cost
more than 50% and their change of sales are slim at best.
Table 3: % change in price of organic product
%
Product Name
Change
Hue-Organic Shampoo (200 ml)
131
Dove Nourishing Oil Care Shampoo
N/A
(200 ml)
Organic Soap-Sandal
398
Park Avenue Storm Soap

N/A

Cow Ghee(500ml)
Sancheti Yashoda Brand pure Gawa
ghee (500ml)

55

ISSN No: 2319-5614

sold 16% of the times and other products change of

sales are very slim at best. From the collected data it is
evident that almost 84% of the people will reject costlier
product if its costs 50% more.

6. Conclusion
Though people are aware of organic products and its
benefits there is a general mistrust about the product
among the general public. This coupled with the higher
price of the organic products hinder the possible sale of
the same. From this analysis it is evident that people do
prefer to buy organic product even if it costs more than
the non-organic product but there is a line at 20% costlier mark after which people tend to opt for non-organic
products over organic product. And from the sampled
products it has been observed that all of the sampled
products cost more than 50% than their non-organic
counterparts. This creates such a situation where in only
16% of the entire population is willing to purchase products that are costlier. This analysis brings forth a number
of interesting questions that along with original questions that were conceived will be taken up for analysis
in the second stage of the analysis with wider population
and sample base. One take away point that is evident
from this analysis is the peoples awareness towards
organic products has increased considerably and they are
willing to purchase the organic products if it is affordable and available.

7. References
[1] "organic
products",
[online]
2014,http://www.apeda.gov.in/apedawebsite/organic
/Organic_Products.htm,(Accessed:20/10/2014).
[2] Ms. S.Suganya, Dr. S.Aravinth, "Consumers awareness and attitude towards organic foods", Journal Of
International Academic Research For Multidisciplinary, Volume 1, Issue 12, pp.738-746 January 2014.
[3] Garibay, Salvador V. and Jyoti, Katke (2003),
"Market Opportunities and Challenges for Indian
Organic Products"[online], Organic eprints,
http://orgprints.org/2684 (Accessed: 20/11/14)
[4] "organicgarden", www.organicgarden.co.in, (Accessed: 30/11/2014)
[5] http://amazon.co.in,(Accessed: 30/11/2014)

N/A

From the table it is very clear that when these organic

products are offered along with non-organic products
other than the Cow Ghee which is 55% costlier, can be

www.borjournals.com

The Author Blue Ocean Research Journals 2012

Open Access Journals
Blue Ocean Research Journals 76