SUMMER TRAINING REPORT

On

NEAR 2 NATURE

“ TO STUDY THE CONSUMER BUYING BEHAVIOUR

AND MARKETING MIX OF

ORGANIC FOOD IN DOMESTIC

MARKET “

Submitted in partial fulfillment of the requirements of the two year

Post Graduate Programme (PGP).

Submitted by
Ashish Kumar Singh Chauhan
Roll No: PG20095343
Batch: 2009-2011
IILM Institute for Higher Education
 DECLARATION FORM

I hereby declare that the Project work entitled,

“TO STUDY CONSUMER BUYING BEHAVIOUR AND MARKETING MIX

OF ORGANIC FOOD IN DOMESTIC MARKET” submitted by me for the

partial fulfillment of the Post Graduate Program (PGP) to IILM

Institute for Higher Education, is my own original work and has

not been submitted earlier either to IILM or to any other Institution

for the fulfilment of the requirement for any course of study. I also

declare that no chapter of this manuscript in whole or in part is

lifted and incorporated in this report from any earlier / other work

done by me or others.

Place: Sector-56, Gurgaon

Date : 10.07.2010

Name of Student: Ashish Kumar Singh Chauhan

Address: Plot No. 46, D402, Smriti Apt., Sec-56, Gurgaon
 ACKNOWLEDGEMENT

This report bears imprint of many people who have directly or

indirectly made a significant contribution towards my project. I
thank for kindness shown and contribution made by various
people in this endeavor.

I am very pleased to acknowledge the help and guidance which I

received from the members of Near 2 Nature.

I would like to thank my company mentor, Mr. Abhishek

Singla, Operations Manager to grant me an opportunity to
undertake my Management Research Project with this company.

I owe my sincere gratitude to Ms.Monica Mor , my faculty

guide, with whose support this project could not have been
possible for me.

I am also grateful to the respondents who filled my

questionnaires and helped me in gaining an insight of Near 2
Nature as a brand in the Indian market. Their enthusiastic
feedback has given my project a direction.

Last but not the least, I will always remain indebted to the
organization and the helpful suggestions and advice provided to
me by its members.
 EXECUTIVE SUMMARY

At IILM Business School, the PGP programme has been designed

keeping in mind the requirement of a company in the World at large.
We, as students of IILM, are required to undergo two months company
project study after completing the fourth trimester.

The objective of the training module is to help the students to understand

the business environment well and equip themselves with the work
culture of the companies in the present era.

I, Ashish Kumar Singh Chauhan, take the opportunity to introduce the

reader the outlines of my Management Research Project. I have
completed my Summer Internship from Near 2 Nature, Delhi.

My summer internship was divided into two halves: In the first half, I
had to analyze consumer behaviour towards Organic food products i.e.
what they perceive about organic food products. In the second half, I
was engaged in selling of Near 2 Nature products .This is followed by a
survey and its analysis and at the end the recommendations that could
make Near 2 Nature more effective in the Organic food market.

Project Objectives:

 To analyze the potential for organic products in the Indian domestic

market.
 To find out the awareness level about organic food in domestic
market.
 To identify the future scenario on the basis of collected facts and
services provided by the consumers.
Reporting:
I reported to Operations Manager (Mr. Abhishek Singla) who kept
guiding me during the SIP as and when required.

Learning:
I learnt a lot during my project. It helped me giving a basic idea of how
organic food company caters to the need of its customers. I learnt about
how the organic food company sells its products in the market and what
are the customer’s preferences in terms of the services provided by the
bank. I also learnt how to deal with the customers while engaged in
marketing and selling of the products and services.
SIP also helped me to get used to the corporate environment & also
helped me to improve my soft skills and business communication.

Achievements:
My evaluation regarding the products and services offered by various
organic food companies would help the organization- Near 2 Nature in
better understanding of their competitors in terms of the services
provided by them, presence of the organizations, industry segments
catered by the organizations, market share of different organizations etc.
 PART ‘A’
COMPANY STUDY

INDUSTRY SNAPSHOT
The global demand for organic food products is growing at a very
rapid rate. Ever since the environmentalists raised their concern
regarding harmful effect of increasing use of chemicals in farming,
the consumers are getting conscious and selective about edible
products. This increasing awareness has caused shifts in
consumers’ tastes and preferences which have led to the
domestic as well as global rise in demand for organic products.
The organic food industry in the world is worth US $ 35 billion with
a growth rate of 15 percent with most of the growth concentrated
mainly in U.S.A, U.K. and Japan (Willer, 2004). To supplement
this demand, farmers have taken to organic farming for getting
price premiums which resulted in around 3.5 million hectare land
across the globe  under organic farming .In India, the farmers
have followed the path for organic food production, but the share
of India in the world organic market is less than one percent. In
order to boost trade in Indian agricultural products and capture
significant share in global market, it is an imperative that India
focuses on organic products which give it competitive edge in
global market, namely organic cotton, spices, essential oils,
medicinal and aromatic plants and fresh fruits and vegetables.
Organic farming in irrigated and intensive farming areas holds
another kind of promise, a source of sustainable and value added
commercial farming.
An Overview of Current Organic food market in India
The organic farming is an old concept in India in terms of the
extensive farming carried out in the country. The organic food
market is worth USD 129.3 mn and shows huge potential for
growth in future. The increasing export market coupled with
government’s support has driven the market. 

The market overview section compares the global and domestic

organic food market. An analysis of the drivers explain the factors
for growth of the industry including the huge export market,
organized retail enhancing distribution network, government
initiatives and increasing health consciousness among
consumers. The key challenges identified encompass high prices
of organic food, lack of integrated supply chain and difficulties for
farmers, certification barriers. 
The competition section provides an overview of the competitive
landscape including brief profiles of key domestic producers and
promoters of organic food products. The key developments
section provides an insight on sector related developments in last
one year.

 The global organic food market grew by 9.7% in 2009 to

reach a value of $60 billion.

 In 2014, the global organic food market is forecast to have a

value of $96.5 billion, an increase of 60.7% since 2009.

 The fruit and vegetables segment generated 31.5% of the

global organic food market's overall revenues.
  Central strategy on organic foods has always slanted toward
the global market, leaving the critical mass of domestic
consumers out in the cold.

 Currently, about 70 per cent of organic agriculture items

produced in India being exported.

 Organic products fetch a 20-30 per cent higher price than

inorganic products in the world market.

According to the Indian Competence Centre for Organic

Agriculture, the global market for organically produced foods is
$26 billion and is estimated to increase to $102 billion by 2020.
As part of 10th Five Year Plan (2002-07), the government
earmarked Rs 100 crore (Rs 1 billion) for the promotion of
sustainable agriculture in the country, but the main components of
this initiative have benefited exports, from the establishing of
national organic standards under NPOP (National Programme for
Organic Production), putting in place a system of certification for
products, and establishing APEDA (Agricultural and Processed
Food Export Development Authority) as the nodal agency to
promote exports opportunities.
Domestic retail avenues for organic produce have traditionally
been the odd cottage emporium, fruit mart, bakery and
kirana store along with an upmarket provision store here and a
delicatessen there.
Today, however, marginal growth is slowly becoming evident in
the increase in organized producers, retailers and product
offerings in the market, where before the movement had been
driven entirely by the spirit of individual initiatives of the farmers,
the odd entrepreneur and non-governmental organizations.
When organic farmers and traders are operating in an anonymous
market, certification is developed to show and guarantee to
consumers that a product has been produced in consistency with
organic standards.
While certification has provided Indian-produced organic products
with inroads into foreign markets, domestic bound produce is
largely uncertified, owing to the fact that most producers are
either small or marginal farmers, small cooperatives or fair trade
companies.
Under current government policy, it takes approximately three
years for a farm in conversion to be certified as organic, and costs
are hefty for the small farmer.

Organic Food Consumption in India is on the Rise

Some people believe that organic food is only a “concept”

popular in the developed countries. They think that when it comes
to organic food, India only exports organic food and very little is
consumed. However, this is not true.

Though 50% of the organic food production in India is targeted

towards exports, there are many who look towards organic food
for domestic consumption.

ACNielsen, a leading market research firm, recently surveyed

about 21,000 regular Internet users in 38 countries to find their
preference for functional foods – foods that have additional health
benefits. The survey revealed that India was among the top ten
countries where health food, including organic food, was
demanded by the consumers.

The most important reason for buying organic food was the
concern for the health of children, with over 66 percent parents
preferring organic food to non organic food. Though organic food
is priced over 25 percent more than conventional food in India,
many parents are willing to pay this higher premium due to the
perceived health benefits of organic food.

The increase in organic food consumption in India is evident from

the fact that many organic food stores are spurring up in India.
Today (2006) every supermarket has an organic food store and
every large city in India has numerous organic food stores and
restaurants. This is a huge change considering that the first
organic food store in Mumbai was started in 1997.

However, the Indian organic food consumer needs education.

There are many consumers who are unaware of the difference
between natural and organic food. Many people purchase
products labeled as Natural thinking that they are Organic.
Further, consumers are not aware of the certification system.
Since certification is not compulsory for domestic retail in India,
many fake organic products are available in the market.

Who are the organic consumers?

What we consider as the “organic consumer” is that person who
is responsible for buying food for the household and who buys
organic food at least once or twice per month. So, if there are
people who buy randomly or less than once a month then they
are not considered regular organic consumers.
 
Values and behavior of organic consumers
What do organic consumers think, that is, what is in their minds
concerning organic products, is a determinant factor of consumer
preference for organic food. In spite of taking cognizance, a
change in attitude and thinking about organic food is prerequisite,
in order to feel confident and positive about this new direction.
 
An organic consumer has more positive beliefs concerning
organic products. For example, this product tastes better, is more
natural, is healthier-they believe that more than non-organic
consumers. They believe that the people who are important to
them, people who are close to them, also by organic products-
they believe that it is a good thing that they buy organic products.
The other aspect of what the organic consumer think, as
compared to non-organic consumers, is their moral norms
indicate they are doing a very good thing for the environment, the
right thing for society. This is something that differences them
from non-organic consumers. Non-organic purchases do not
associate those beliefs to buy organic products.
Consumers’ values to make a choice for organic food can be
seen in two terms-use values, such as utility from taste, health
and freshness, i.e., private good attributes which can only be
enjoyed by actually consuming the product. The other non-use
values are public good values related to improved environment
and animal welfare. The majority of all consumers-
acknowledges and value organic goods for their non-use values
(environmental or animal welfare attributes), as well as for their
use values (health, taste or freshness attributes). The group of
consumers having use values only is negligible. In the same way
that most people agree exercise- is important; they also agree
that a sustainable, clean environment is important.
Wier and Anderson (2003) studied consumers’ attitudes, values
and purchasing behavior for organic foods. They concluded that
organic buyers were more health concerned, more focused on
residues, animal welfare and environmental attributes less
focused on low prices and more often they preferred domestic
products.

 There is no question that consumers are changing the way they

buy. A variety of societal factors are driving consumers to
increasingly seek out unique and differentiated products that fit
their lifestyle. Consumers purchase of green or sustainable
organic products are not just motivated by the produces
themselves but by the values they represent. We can change
non-organic consumers minds to make them believe that organic
products are better in different ways-for the taste, health or the
environment and demonstrate that people who are important to
them, whether it’s people who are related or not, such as
celebrities, if they buy and consume organic product, then we
might be able to move these consumers into the organic market.

India can take advantage of the growing opportunities in this

sector making use of its varied agro-climatic conditions and
traditional organic resources and farming practices.  There are
certain challenges to be met before India takes on to the world
organic markets. The Indian produce has to create a competitive
niche in global markets. The challenges in international marketing
of organic food are standardization of products according to the
customers’ tastes and preferences, certification, consumer
education, branding and promotion. Production of organic
products also face challenges with regard to availability of right
and quality inputs, research and dissemination of appropriate
technologies, processing, certification, production information and
infrastructure support and also policies of the government need to
be revisited to fulfill its objectives to tap global organic markets.
Therefore, the study is based on the strategic analysis of Indian
organic product industry with respect to global markets.
Contract farming for organic crop production in India

Indian agriculture is progressing in all spheres to keep up with the

ever-increasing population. In the Tenth Five-Year Plan (2002-
07), the government envisaged at least 4% growth rate per
annum, so that food security is assured and employment
opportunities in agriculture are created. The National Agricultural
Policy also aimed to strengthen the national economic growth
through efficient marketing to accelerate foreign exports by
establishing Agri-Export Zones for various crops in major crop-
growing areas, where technical know-how and facilities for export
will be provided. Therefore, there is a shift from sustainable to
commercial agriculture. Farmers can increase their income from
crop production. Similarly, in several developed countries,
demand for organic food and fibre, and by-products is increasing
day-by-day. This change is mainly due to overuse or misuse of
chemicals, particularly synthetic insecticides, fungicides,
herbicides, fertilizers, plant growth regulators, etc. that resulted in
undesirable side effects not only in the agro-ecosystems, but
also on human health and life systems of beneficial fauna and
microorganisms. These recent trends in consumerism have
opened a new vista for agricultural production on large scale by
adopting contract farming, which can transform small farmers
into viable commercial producers by monitoring quality, quantity
and cost of crop production, and can link production with the
consumption. This change can help develop markets and bring
about changes in the present conventional agriculture which is
expected in India in near future. This note therefore discusses the
present situation and future strategies of community cultivation.
Need for contract farming in organic agriculture

The organic agriculture includes growing of crops by a set of

guidelines that prohibit the use of synthetic products/chemicals
such as fertilizers, pesticides, plant growth promoters and
livestock additives. Therefore, soil fertility and pest management
is achieved through cropping patterns (rotations, inter/mix-crops,
pest and disease- resistant genotypes), manure (green manuring,
organic manures, compost), biofertilizers, cultural practices
(weeding, planting, conventional tillage) and biopesticides,
including plant-derived products. At present, this system seems to
be an ideal and valid solution to produce food and fibre without
chemicals and to protect the environment. Further, consumers
are becoming conscious and critical about the quality of food and
by-products that affect their health though the toxicity depends,
to some extent, on the type of food consumed. India being one of
the signatories for the World Trade Organization, liberalization,
privatization and globalization has opened new grounds for
agricultural marketing. The National Programme for Organic
Production of the Commerce Ministry and the State Governments
are actively promoting investment in support of promising
ventures in organic agriculture.

Considering the present socio-economic status of Indian farmers,

contract farming seems to be an ideal option because this system
would have certain advantages over the present crop production
and marketing systems, such as:

1. Profit in produce sale is possible by capitalizing the scientific

research in post-harvest technologies.

2. Indian agriculture per se is becoming commercial due to global

demand for a variety of foods and fibre, and food products.
3. Any crop can be cultivated on a large area to obtain produce of
uniform quality by adopting appropriate technology. Crop
production is also possible on small land-holdings through
cooperative/ corporate farming to enhance productivity and avoid
admixture or inferior quality produce.

4. Technology transfer becomes easier due to large-scale

adoption.

5. Risk involved due to fluctuation in market price is minimized.

This point is relevant to the present strategy of farm economics as
the Minimum Support Price is generally declared at the end of
crop season and it often remains ambiguous.

6. Commercial and nationalized banks are coming forward to

finance contract farming through soft loans and are revising prime
lending rates.

7. Additional income from intercrops is certain due to crop

diversification. Consolidation of small and marginal lands can
make farming economically viable, resulting in higher (>30%) net
returns than traditional/conventional farming systems.

Challenges for Contract Organic Farming

(i) Organic farming on contract basis requires a long-term

approach as it is based on the trust of farmers, for which grass
root intervention is critical for its success.

(ii) If it is not profitable to both parties, the written agreement

becomes a useless effort. Thus, responsibilities of both parties
should be fulfilled. The agreements differ according to the
commodity produced by contracting farmers. Generally, farmers
may not take cognizance at the time of signing of the clauses that
might be exploitative in short or long term; such agreements can
jeopardize investments and interest.

(iii) Although 44% of the country’s GDP comes from retailing,

retail marketing of organic food is limited compared to other
countries, e.g. 85% in USA, 40% in Thailand, 35% in Brazil, 20%
in China and only 2% in India
.
(iv) Convincing farmers about the economic benefits of contract
farming through field demonstrations should be taken up urgently.
This may consist of educating farmers about new farming
techniques, marketing skills for organic food and fibre, seeking
cooperation from business communities and firms, informing
consumers about the ill-effects of chemicals, etc.

(v) Certification cost for organic produce is comparatively high

and needs to be reduced drastically.

(vi) Facilities for storing and verification of quality of agricultural

commodities at village level are lacking.

(vii) Participation of processing firms/ purchasers is limited, as

they are not aware of the long-term benefits and they also need
large areas, which is difficult in regions where small and
fragmented land-holdings are common.

(viii) Banks are ready to finance contract farming in organic

agriculture to only those farmers who are not defaulters.

(ix) Under unfavorable climatic conditions, the quality of farm

produce cannot be maintained or the whole crop may fail. Crop
insurance initiated by the Government needs to be implemented
on a large scale.
 HISTORICAL PROSPECTIVE

 In 1939, Lord North borne coined the term organic farming in

his book Look to the Land (1940), out of his conception of
"the farm as organism.

 This is different from the scientific use of the term "organic,"

to refer to a class of molecules that contain carbon,
especially those involved in the chemistry of life.

 It was with the advent of the ‘green revolution’ that the

natural way of growing crops started becoming unpopular
and economically less feasible.

 Organic food farming continued in small, mostly family-run,

farms or kitchen gardens where people grew food for their
own requirements.

 The produce was sold in farmer’s markets. Large scale

organic farming was begun by farmers and scientists, as a
mark of protest to the agriculture industrialization.

 Now, organic food is widely available and has become very

popular, with soaring sales.
 COMPANY PROFILE

FOUNDER- Mr. Vinod Goel

Few men in history made as dramatic a contribution to their

country’s economic fortunes as did the founder of B.S. associates
Mr. Vinod Goel. Fewer still have left behind a legacy that is more
enduring and timeless.

Near 2 nature has been established with the essence of purity

and belief that the right of every individual to EAT HEALTHY and
LIVE HEALTHY is accomplished.

As with all great pioneers, there is more than one unique way of
describing the true genius of Vinod Goel .The corporate visionary,
the unmatched strategist, the proud patriot, the leader of men, the
architect of India’s organic food markets.

Under Vinod Goel’s extraordinary vision and leadership, near 2

nature is one of the greatest growths in organic food industry in
India and want to become India’s largest private sector enterprise.
 ABOUT NEAR 2 NATURE

Near 2 nature means “Close to Nature”. Near 2 nature believe

and committed to thee values of excellence, purity, and Eco-
friendly & best quality organic food for all.

The company has a constant endeavor to serve the customers

with highest quality organic foods and bring them back to nature,
the Mother Nature which has taken care of us for al long time.

Organization is formed with a view in mind that “We will try to

bring to people the highest quality organically grown food at their
doorstep with full customer satisfaction and commitments made.

The fresh food from all kind of pesticides fertilizers & chemical
preservatives to gives you a healthy, longer & quality life.
CORPORATE OBJECTIVE
At Near2nature Company, we strongly believe that as life is
different at every stage, organic foods must offer health and brand
trust to organic foods. We are fully prepared and committed to
guide the consumers on organic foods through survey and people
awareness. It advised to competent the market and customers in
the best possible way.

 It is our aim to become one of the top organic food

companies in India and to become a cornerstone of B.S.
associates In India.

CORPORATE MISSION
“To be an ethical and innovative global leader in providing
genuine organic products and solutions for conscious and healthy
living.”

OBJECTIVE
We at near 2 nature need to create awareness among the people
regarding the benefits of organic foods and their advantages over
the conventional foods we are eating nowadays.

To bring people back to pre green revolution era food that is our
basics, which justify our saying of “BACK TO BASICS”.
 NEAR 2 NATURE PRODUCTS
Pulses
uradh whole
uradh chilka
uradh dhuli
moong whole
moong chilka
moong dhuli
chana dal
kabuli chana
arhar dal
pahdi moat
Lobiya
rajma red
kala chana

Spices
chilly powder
dhaniya powder
haldi powder
jeera whole
black peper
Elachi
meethi seed
meethi leaf
Laung
tej patta
Azwain

Pickle and Murabba

amla muaraaba
lemon sweet pickle
lemon salty pickle
mixed pickle
 Sweetner's
Bura
brown sugar
rose squash
bhel squash

Flour's
whole wheat atta
sugand basmati rice
mustard oil
Daliya
Besan
ragi flour
ghee
sunflower oil
tea leaves
amla candy

COMPETITORS LIST

Fabindia Overseas Ltd.

Address: New Delhi, Gurgaon

Sapthsathi organic agriculture project (Surendra Kumar
Tiwari)

Manufacturers of Organic Food Grains

Address: 414, 5th Floor Onam Plaza A.b. Road Old Palasiya, Indore,
Madhya Pradesh

Ishan herbotech international (Nidhi Maheshwari)

Manufacturers of Herbal Tea and all types of tea like Assam,

Green, Organic, Black, White, Organic Food.

Address: D-10, Export Promotion Industrial Park, Site-V, Kasna,

Greater Noida, Gautam Budh Nagar, Uttar Pradesh

Nblc stores (Arun Bagga)

Manufacturers of Fibre Biscuits, Herbs, Aloe Vera Juice, Roasted

Namkeen, Organic Foods.

Address: D-144 Shankar Rd. Mkt. New Rajinder Nr. New Delhi-60

Value plus (J.p.chauhan)

Manufacturer of Organic and Natural Food.

Address: G-92, Time Square, Vidhyadhar Nagar, JAIPUR,
Rajasthan

Jayvin organic foods (Mr. Nitin Bhad)

Manufacturers of Organic Food, Wheat, Raw Cotton, Maize,

Soya, Vegetable, Banana, Orange, Pomegranate, Mango, Sugar
and Jaggary.

Address: LG- 46, Orbit Mall, AB Road, Indore, Madhya Pradesh

A plus inc. (Manager)

Manufacturers of Straw Furniture, Terracotta Paintings, Wooden

Carving, Spices, Pulses, Organic Food, Tin Food and Pickle

Address: A-99, New Palam Vihar, Gurgaon, Haryana

Himalayan healthfood (Gutzeit)

Manufacturers of Organic Health Food.

Address: Main Road, Kullu, Himachal Pradesh

PART ‘B’
MARKET RESEARCH
Analysis and Findings
INTRODUCTION

Organic agriculture offers trade opportunities for farmers in the

developing and developed countries. This market of organic
products is expected to grow globally in the coming years and
high growth rates over the medium term (from 10-15 to 25-30%)
are expected.

The organic market expansion makes it possible for farmers to

reap the benefits of a trade with relatively high price premiums.
However, this market is not very well known to most farmers,
especially those living in the developing countries.
In India, a country with a huge number of small farmers who still
use traditional methods and do farming with few agricultural
inputs. An organic movement is now emerging in India on
different levels. So dissemination of information about the
opportunities and challenges for Indian organic products on the
domestic market.

Objectives of the study

1. To study the consumer buying behaviour for organic foods in

the Indian domestic market.

2. To analyze the potential for organic products in the Indian

domestic market.

3. To study the marketing mix of organic foods in India.

RESEARCH METHODOLOGY
Since it is basically a market research project along with some marketing
and selling of organic products, various market research methods were
used to accomplish its goals. I conducted a market survey to know about
the consumer behaviour towards organic foods in India.

The stepwise methodology that was used is:

1. Secondary Research: Company description was obtained through

websites, business magazines, and journals and from the organization
itself

2. Sampling:

Selecting the sample: Population that was taken as a sample included

randomly selected customers of organic foods.

Sampling Technique: Simple Random Sampling

Sample Size: 100 respondents (total)

3. Primary Research: Primary research was conducted through surveys

via:
a. Interaction with customers at Malls and other market places.
b. Interaction with customers at their homes.

Questionnaires were designed to conduct interviews.

4. Preparation and tabulation of data: After the data has been
collected, it was entered into Microsoft Excel and was prepared for
analysis.

5. Data Analysis: The data so collected was analyzed in Microsoft Excel

with the help of bar diagrams, pie charts, etc.

Finally, the information thus obtained from the survey was used to
discover the potential segment for generating new business for the
organization and thereby devise strategies to generate new business from
that potential segment.

QUESTIONNAIRE
Name: Mobile:

e-mail: Occupation:
Age: Below 20yrs 21yrs-50yrs 50yrs above
Monthly Household Income: Up to Rs.20,000 Rs.20,001-Rs.50,000 Rs.50,000 above

1. Have you heard about organic food?

Yes No
2. If YES, then what do you perceive/think about organic food?

Pesticides/Chemical free No Adulteration Eco-Friendly

More Nutritious Costly

3. Do you purchase organic food?

Yes No

4. What types of organic food do you purchase? (You can tick more than
one)

Produce Processed foods (cereal, etc.)

Meats, Eggs, poultry, seafood Vegetables

5. How long have you been interested in organic foods?
More than 3 years 1 to 3 years 6 to 12 Months

0 to 6 Months Never
6. How did you first hear about organic foods?

Advertisement Magazine Newspaper

Internet Friends

7. In your opinion, what are the most important motivations that will
persuade you to buy organic foods instead of non-organic foods?

1(Most Important) 2 3 4
5(Leastimportant)
Benefits

Packaging

Price

Taste/quality

Friends

Concern about health

8. Primary reasons you do not purchase organic foods.

1(Most important) 2 3 4 5(Less importat)

High price

Taste is not good

Low availability

Low trust

Poor appearance

9. How would you describe your overall opinion of organic food brands ?

Very favourable Somewhat favourable Neutral

Somewhat Unfavourable Very Unfavourable

10. Would you recommend organic foods to a friend or associate?

Definitely Probably Not sure

Probably not Definitely not

FINDINGS AND ANALYSIS

PART A: General Information

AGE GROUP

Above 50
15%

Between 21-50
85%

OCCUPATION

HOUSE-WIFE WORKING
51% 49%
PART B: Information about Organic food
Characteristics of organic food as a product
Organic food as a product is the most important marketing-mix
variable. Before organic food producers enter the organic product
market, they should be prepared to correspond best to the wishes of
their consumers by the design, purpose and function. What organic
food consumers are most interested in are the following items:
production program, product quality, packaging material, packing,
product labeling, and price setting. This is closely related to the
product image that implies everything a consumer creates about the
product as an image, atmosphere or a feeling. Orientation towards
consumers intensifies problems regarding relevant factors in the
design of the production program as a means to satisfy consumers in
a demanding and competitive battle on the market and achieve goals
in that way.

• Product
– High Quality Natural and Organic Food
– Offerings vary based on store size and tastes of local
clientele
– Private label products
– Emphasis on daily foods

Price as marketing-mix of organic food

Price makes the second element of marketing-mix, which brings
income, while other marketing-mix elements represent costs. The
product price must be in line with product’s basic characteristics
and features. Thus, it must closely correspond to product’s
quality, design, packaging, etc., exemplifying at the same time the
realized productivity.

• Price
– Goal is competitive price at highest quality
– Organic foods are 25 – 75% more costly to grow and
market
– Price and Quality are competing forces
– Near2Nature chooses to focus on Quality, therefore
prices are higher than conventional grocers
 • Place
– No standard store design. Layout customized for site
and product mix.
– Presentation
• Highly regarded food displays, cleanliness, wide
aisles

Promotion of organic food

Due to the easier and quicker access of potential consumers to
the relevant information on organic food entering the market, i.e.
in order to help customers decide on the purchase of certain
organic products, producers advertise their products in media.

• Promotion
– Primarily rely on word-of-mouth recommendations
– 0.5% of revenue spent on advertising
– Most marketing spend is for in-store signage and
events
– Store personnel is knowledgeable and personable
 Industry Analysis of Organic food

Porter’s 5 Forces – Near2Nature Market

Force
Forces Description strength
Threat of Easy switch to the conventional retailers.
Substitute Specialty stores built right in to their High
products strategies.
Largest food processors acquiring organic
Bargaining Power Medium
of Suppliers
food producers. Only 1% of farmland used to High
for organics.

Bargaining power For the most part, buyer can switch to other
High
Buyers high quality products

Intensity of Degree of commitment by the conventional

High
Competition retailers will determine the intensity.

Entrants are already there. Their intensity of

Threat of New Low –
Entrants
their pursuit of the natural/organic market is Medium
the question.

SWOT ANALYSIS
 Near2Nature Foods

STRENGTHS
 Highest Quality Organic Foods Seller
 Huge selection/variety
 Free Home delivery
 First Mover in organic products
 Eco-Friendly

The export of Indian organic products is progressing. The

Government support to organic agriculture, awareness for
healthy food harmful effects of pesticides and presence of their
residues. International and national certification bodies in India-
these four facts are the dominating strengths.

WEAKNESSES
 Price – up to 75% higher
 Locations – only in affluent areas
 Advertising Budget very low (WOM approach)
 Promotional Offers – no coupons
 Certification

Major weaknesses are on the level of information/awareness:

most farmers have only small holdings and quality consciousness
is low besides lack of marketing skills (e.g. disjointed sector for
the domestic market). Another weakness to be noted is that the
organic market is not consumer demand -based, but supply
driven. From this fact a lot of threats can be derived.

OPPORTUNITIES
  Expand private label selection – lower price for customers
 Advertise more, create coupons and promotions to get
people in the store
 Hype right now is to eat healthier and protect the
environment
 Rewards program – frequent buyer cards
 Back to Basics – buy more local products that people will
pay more for.

To quantify the potential of the organic products is not simple

because the fast development of the Indian society and economy.
For further progress, more information should be gathered on the
market opportunities. Nevertheless, the need assessment shows
that on the level of the opportunities, a considerable potential for
the organic market exists, even though the size of the potential
can not be quantified exactly.

THREATS
 Conventional Supermarkets
 Bad Economy
 Local Farmers Markets/Independent Retail Chains

Some of the major threats are really dangerous. The awareness

about pesticide residues is to be considered as strength.
However, a bigger threat is that all kind of products are offered
under declarations like “without pesticides”, “eco-friendly” or even
“organic”.

Future Challenges for Near 2 Nature

• Pricing – being able to compete against the
conventional grocery chains

• Getting more people in the store to buy organic food

• Convince new customers to shop at Near2Nature

rather than more convenient stores

PART ‘C’
CONCLUSION
And
RECOMMENDATIONS

RECOMMENDATIONS
The Indian organic market is a typical example for a market in the
pre-growth-phase. There will be soon some relevant players on
the domestic market. Those players (individual farmers, framer
groups, middleman, supermarkets, traders and exporters) will
certainly try to earn better income as quickly as possible from the
organic market. This fact has to be considered positively. In the
pre-growth-phase, there is already some awareness about food
quality and pesticides residues among consumers. The
expression “Organic” is still not protected and the awareness is
diffused. It will be a difficult task to find the right approach to
transform this improper awareness in the correct way among
Indian consumers. So it is a very important task at the beginning
itself to define what organic products are, how are they different
from conventional products and also to describe the USP (Unique
Selling Position) of organic products.

• Lower Price to Compete with Grocery Stores

– Add a customer rewards program for frequent buyers
– Coupons to customers

• Catering
– Offer catering to local businesses & events

• Expand Private Label Selection

– Lowers manufacturing costs, could offer discounts to
customer for using Near2Nature brand products

CONCLUSION
In the modern market economy, the system of organic agriculture,
especially the system of organic food production, becomes more
and more important factor of national and international economic
system development. The importance of organic food marketing
is conditioned by the fact that it enables producers for better
understanding of customers’ needs, serving the purpose of better
meeting their needs and it also enables consumers to realise
better organic products supply. Defining the main feature of
organic agriculture and its importance is the starting point for
conceptual establishment of organic agriculture.

A quality guarantee of organic food products directly influences

consumption intensity, absorption power of the market, packaging
material design, advertising messages, choice of the distribution
channel, and distinguishing organic from conventional products
according to their market characteristics makes the fundamental
factor of the product differentiation and diversification with the aim
of producing such organic food that would certainly find its way to
the consumer.

PART ‘D’
BIBLIOGRAPHY
 BIBLIOGRAPHY
Internet Sites:
 www.google.com

 www.economictimes.com

 www.near2nature.com

 www.thedailygreen.com

 www.dmoz.org/Business/Food_and_Related.../Organic/

 www.naturalnews.com