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Buying behaviour of consumers for food products in an emerging

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Article  in  British Food Journal · February 2010

DOI: 10.1108/00070701011018806

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Buying
Buying behaviour of consumers behaviour of
for food products in an emerging consumers
economy
109
Jabir Ali and Sanjeev Kapoor
Centre for Food and Agribusiness Management,
Indian Institute of Management, Lucknow, India, and
Janakiraman Moorthy
Indian Institute of Management Calcutta, Kolkota, India

Abstract
Purpose – The purpose of this paper is to develop a marketing strategy for a modern food/grocery
market based on consumer preferences and behaviour.
Design/methodology/approach – A total of 101 households having sufficient purchasing power
were personally surveyed with a structured questionnaire. These households are spread across the
well-developed Gomtinagar area of Lucknow city. Simple statistical analysis such as descriptive
statistical analysis, frequency distribution, cross tabulation, analysis of variance, and factor analysis
to assess the consumers’ preferences for food and grocery products and market attributes were carried
out.
Findings – The preferences of the consumers clearly indicate their priority for cleanliness/freshness
of food products followed by price, quality, variety, packaging, and non-seasonal availability. The
consumers’ preference of marketplace largely depends on the convenience in purchasing at the
marketplace along with the availability of additional services, attraction for children, basic amenities
and affordability. Results suggest that most of the food and grocery items are purchased in loose form
from the nearby outlets. Fruits and vegetables are mostly purchased daily or twice a week due to their
perishable nature, whereas grocery items are less frequently purchased.
Research limitations/implications – This paper analyses the buying behaviour of the consumers
under survey with respect to food and grocery items. These consumers are in a relatively
advantageous position in terms of purchasing power and awareness of health and nutrition.
Practical implications – The results may help the food processors and outlet owners to understand
a diversified set of preferences for products and market attributes, so that they can make better
decisions in the emerging organized food and grocery retail environment.
Originality/value – The topic is relatively less researched in emerging markets especially where
organized retail is still in its early stages.
Keywords Consumer behaviour, Food products, Retailing, India
Paper type Research paper

1. Introduction
Food purchase behaviour of consumers in most emerging economies such as India has
significantly changed due to an increase in the per capita disposable income, global
British Food Journal
The authors would like to thank the Director, State Agricultural Marketing Board, Government Vol. 112 No. 2, 2010
of Uttar Pradesh for funding the project “Feasibility study of Apna Bazaar in Gomti Nagar, pp. 109-124
q Emerald Group Publishing Limited
Lucknow”. The authors are also grateful to the editor and two anonymous referees for their 0007-070X
valuable inputs and comments for improving this paper. DOI 10.1108/00070701011018806
BFJ interaction, information and communication technologies, urbanisation, education and
112,2 health awareness, movement of households towards higher income groups, changes in
lifestyle and family structure (Rao, 2000; Shetty, 2002; Deshingkar et al., 2003; Vepa,
2004; KPMG, 2005; Kaushik, 2005; Kaur and Singh, 2007; Pingali, 2007). Consumer
buying behaviour for food and grocery products has always been influenced by a
number of economic, cultural, psychological and lifestyle factors (Shaw et al., 1993;
110 Brokaw and Lakshman, 1995; Asp, 1999; Roux et al., 2000; Roslow et al., 2000;
Roininen, 2001; Choo et al., 2004; Ling et al., 2004; Ahlgren et al., 2004; Goyal and Singh,
2007; Nagla, 2007). In the recent decades, sustained economic growth and increasing
urbanisation are fuelling a rapid growth in the demand for high value food products
like fruits, vegetables, milk, meat, eggs and fish (Bhalla and Hazell, 1998; Kumar, 1998;
Bhalla et al., 1999; Kumar et al., 2003; Landes et al., 2004; Pingali and Khwaja, 2004; Rao
et al., 2006).
On an average, an urban household in Uttar Pradesh[1] spends about 47 per cent of
its consumption expenditure on food items, out of which, about 30 per cent is spent on
grocery items and about 16 per cent on fruits and vegetables (NSSO, 2006). Increase in
income, particularly of the lower and middle-income households, is having a significant
impact on the demand for food items, because these groups tend to spend a relatively
larger share of their income on food consumption. Middle income and urban consumers
also spend a greater part of their income on upgrading and diversifying their diet
towards high value products like fruits and vegetables, eating out more often and
eating more processed and convenience food items (Landes et al., 2004).
In addition, a growing consumer preference for shopping convenience is fostering
the growth of modern retailing in India, which in turn demands greater efficiency,
quality and safety standards in the food supply chain (Chengappa et al., 2005;
Mukherjee and Patel, 2005; Umali-Deininger and Sur, 2007). Consumers have now
become more discriminating in their food product choices and have started
emphasising more on convenience, freshness and quality of the products
(Quagrainie et al., 1998; Acebrón et al., 2000). With the emergence of the
supermarket and hypermarket culture, consumer preference for packaged food
products has increased significantly in the recent years (Stewart-Knox and Mitchell,
2003; Silayoi and Speece, 2004; Wells et al., 2007). The desire for convenience and an
increase in the number of working women are some of the important factors driving a
strong growth of packaged food products (Goyal and Singh, 2007). Besides, consumers
have now started preferring quality food intake and are becoming more conscious in
terms of nutritional diet, health and food safety issues (Ruth and Yeung, 2001; Rimal
et al., 2001).
With the evolution of food retail modernization and rapid changes in the buying
behaviour of consumers, the retail market for food and grocery is growing by leaps and
bounds. To capture the opportunities of a growing organized retail market in the
country, big corporate organizations are foraying into this segment. These
organizations are in the process of investing huge amounts for creating retail chains
throughout the country.
Given the above situation of a demand for modernization of the retail food segment,
there is a need to assess the various products and market attributes for designing an
appropriate food retail market structure.
2. Research objectives and hypotheses Buying
Food purchase patterns in developing economies like India are characterised by daily behaviour of
or frequent purchasing from nearby marketplaces called “mom and pop stores”
(Veeck and Veeck, 2000; Sabnavis, 2008). This paper analyses the buying behaviour
consumers
of consumers with respect to food and grocery[2] products. These consumers are
relatively in an advantageous position in terms of their purchasing power and
awareness of health and nutrition. Empirical evidence argues that socio-demographic 111
factors such as gender, age, educational status and income play an important role in
determining the food consumption pattern across the world (Roux et al., 2000; Roslow
et al., 2000; Turrell et al., 2002; Choo et al., 2004; Rao et al., 2005; Krystallis and
Chryssohoidis, 2005; Batte et al., 2007; Goyal and Singh, 2007; Bukenya and Wright,
2007). Several other empirical studies also show that store choice is recognized as a
cognitive process which is highly influenced by consumers’ socio-demographic
characteristics (Arnold et al., 1998; Arnold and Luthra, 2000; Sinha and Banerjee,
2004; Fox et al., 2004; van Waterschoot et al., 2008). In view of such evidence, this
study aims at identifying the factors which influence consumer choices for food and
grocery products and also analyses the nature of marketplace preferred by consumers
for purchasing food and grocery products. The result obtained from this analysis can
help in identifying a diversified set of preferences for products and market attributes
which in turn can help in better decision making by the retail chains in the emerging
organized food and grocery retail environment. The analysis of the buying behaviour
of relatively advantageous consumers has greater relevance for the emerging
organized retail organizations in the food and grocery segment in India, as consumers
belonging to this group are considered as potential early adapters of organized retail
chain culture. The specific hypotheses tested in this study are as follows (see
Figure 1):
H1. While purchasing grocery, fruits and vegetables, consumers give similar
emphasis to various purchase decisions such as frequency of purchase,
monthly expenditure, preferred marketplace, distance to the marketplace and
food packaging.
H2. The socio-demographic profile of consumers (gender, age, education and
income) significantly influences the purchase decisions for grocery, fruits and
vegetables.
H3. Consumers lay similar emphasis on various food product attributes (freshness
and cleanliness, product price, quality, variety, packaging, convenience and
non-seasonal availability) while purchasing food products.
H4. Consumers give similar importance to various market attributes (related to
products, market infrastructure, additional services, etc.) while selecting a
marketplace for food purchasing.
H5. The socio-demographic profile of consumers (gender, age, education and
income) significantly influences the underlying factors of product and market
attributes in food purchase decisions.
BFJ
112,2

112

Figure 1.
Research framework

3. Data and methods

3.1 Data collection and sample
Data used for this research paper were collected through the survey questionnaire
administered in the last quarter of 2005 in “Lucknow”[3], the capital city of the state of
Uttar Pradesh under the project “Feasibility Study of Apna Bazaar in Gomti Nagar,
Lucknow”. The project was sponsored by the State Agricultural Marketing Board,
Government of Uttar Pradesh. The Apna Bazaar Project was conceptualized and
established by the State Agricultural Marketing Board[4] as an integrated marketplace
for retailing food and grocery items- unlike other regulated markets, where only
wholesale trading of agricultural produces is being done.
A total of 101 households in a well developed residential area surrounding Apna
Bazaar were interviewed personally to know their buying patterns for food and
grocery items. The product categories under the study included fruits, vegetables and
grocery products such as processed and unprocessed rice, wheat flour, pulses, edible oil
and spices. The residential area around Apna Bazar was selected since the respondents
in this locality are considered to be progressive; health, hygiene and quality conscious
and have sufficient purchasing power to go for organized retail shopping. The sample
households were randomly selected and emphasis was laid on interviewing those who
actually shopped for their households. Visiting time for interviewing the potential
respondents was selected so as to suit their convenience. In about 25 per cent cases, the
survey questionnaires were personally distributed and the filled-in questionnaires
were collected on the next day.
3.2 Data collection instrument Buying
The survey questionnaire was structured with two parts. The first part included behaviour of
questions related to:
.
Consumers’ purchase behaviour in terms of frequency of purchase, monthly
consumers
expenditure, place of purchase, distance travelled to purchase the items and
packaged versus loose purchasing.
.
The individual perceptions of consumers on various attributes of fruits,
113
vegetables and grocery products separately in terms of convenience, quality,
variety and choice, price, seasonality, packaging and cleanliness on a Likert-type
scale to analyse the importance of various product attributes (1 ¼ not at all
important, 2 ¼ some what important, 3 ¼ important, 4 ¼ very important and
5 ¼ extremely important).
.
The individual perceptions of consumers on market attributes such as
availability of food and grocery at one place, provision of additional services,
attraction for children, availability of basic amenities, etc. on a Likert-type scale
(1 ¼ not at all important and 5 ¼ extremely important).

The second part of the questionnaire included socio-demographic information of the

respondents such as age, gender, family size, education level and household income.

3.3 Data analysis

The collected data were digitized in an SPSS spreadsheet and a simple statistical
analysis to assess the buying behaviour which included descriptive statistical analysis,
cross-tabulation and frequency distribution was carried out. Analysis of variance
(ANOVA) was used to assess whether socio-demographic factors play a significant role
in food purchase decisions. To assess the mean rank difference and the importance of
product and market attributes, the Friedman test was conducted. Factor analysis was
conducted to identify the underlying dimensions among a set of food product and
market attributes. The Principal Component Analysis was done using Varimax
rotation criterion. The Kaiser criterion was used to retain factors with eigen values
only greater than one.

4. Results and discussion

4.1 Consumers’ profile analysis
Table I shows the basic characteristics of the consumer households surveyed. Out of
the 101 respondents surveyed, 70 per cent were male. It is important to note that about
46 per cent of the respondents have two or less than two adult members in their
families whereas 73 per cent of the respondents have two or less than two children in
their families. Age composition of the sampled respondents indicate that the surveyed
group is matured enough to respond on various food consumption issues. Out of the
total surveyed consumers, more than 65 per cent of the respondents were between 20 to
40 years of age. Educational profile of the respondents shows that most of them have
graduate level or higher qualifications. Only 10 per cent of the respondents are from the
intermediate (higher secondary) level and below. Sample households falling between
the monthly income group of Rs 10,000-15,000 dominated, with a 40.6 per cent share.
BFJ
Characteristics Response
112,2
Sample size (number) 101
Gender (%)
Male 70.3
Female 29.7
114
Family composition (%)
# 2 adults 45.6
3 adults 28.7
. 3 adults 25.8
# 2 children 73.3
3 children 21.8
. 3 children 5.0
Age composition (%)
# 20 years 3.0
21-30 years 21.8
31-40 years 44.6
41-60 years 26.8
. 60 years 4.0
Educational background (%)
Intermediate and below 9.9
Graduate 37.6
Post graduate 38.6
Doctoral and professional 13.9
Table I. Monthly income (%)
Characteristics of the , Rs 10,000 34.6
sampled consumer Rs 10,000-Rs 15,000 40.6
households . Rs 15,000 24.8

4.2 Buying behaviour of surveyed households

Historically, Indian consumers have preferred fresh food over processed (Pysarchik
et al., 1999; Ling et al., 2004). In this study, the purchase behaviour of the consumers
was assessed based on frequency of purchase, monthly expenditure, preferred
marketplace, distance to market and food packaging. The survey results show that
vegetables are the most frequently purchased products with a mean value of 1.59 and a
mode value of 1 (Table II) which indicates that most of the consumers shop for
vegetables on a daily basis. Similarly, fruits are generally purchased twice a week with
a mean value of 2.29 and a mode value of 2. On the other hand, grocery products, which
are less perishable, are less frequently purchased. The analysis reveals that most of the
respondents buy grocery products on a monthly or fortnightly basis.
According to the recent survey on the Level and Pattern of Consumer Expenditure
by the National Sample Survey Organisation (NSS 61st Round), Ministry of Statistics
and Program Implementation, Government of India, urban consumers in Uttar Pradesh
spend, on an average, about 47.13 per cent of their consumption expenditure on food.
Out of the total amount spent on food, more than 30 per cent is spent on cereals and
pulses and about 16 per cent is spent on fruits and vegetables. The findings of this
 Buying
Purchase decisions Products n Mean Mode SD Friedman test
behaviour of
Frequency of purchasea Grocery 94 4.02 5 1.31 x 2 ¼ 114:78 consumers
Fruits 98 2.29 2 1.04 Sig: ¼ 0:000
Vegetables 100 1.59 1 0.84 df ¼ 2
Monthly expenditureb Grocery 91 3.18 3 1.07 x 2 ¼ 76:74
Fruits 94 2.18 2 0.79 Sig: ¼ 0:000 115
Vegetables 96 2.08 2 0.71 df ¼ 2
c
Preferred marketplace Grocery 93 2.35 2 0.97 x 2 ¼ 36:53
Fruits 95 1.79 1 1.07 Sig: ¼ 0:000
Vegetables 96 2.07 1 1.28 df ¼ 2
Preferred market distanced Grocery 96 1.89 1 0.92 x 2 ¼ 13:51
Fruits 97 1.60 1 0.72 Sig: ¼ 0:001
Vegetables 100 1.54 1 0.70 df ¼ 2
Preference on food packaginge Grocery 92 1.52 1 0.72 x 2 ¼ 15:23
Fruits 96 1.28 1 0.54 Sig: ¼ 0:000
Vegetables 97 1.24 1 0.45 df ¼ 2
Notes: aDaily – 1, twice a week – 2, Weekly – 3, Twice a month – 4, Monthly – 5; b , Rs 100 – 1,
Rs 100-500 – 2, Rs 500-1000 – 3, Rs 1000-2000 – 4, . Rs 2000 – 5; cRoadside shops – 1, nearby Table II.
vendor/shop – 2, Supermarket – 3, Wholesale market – 4; d , 1 km – 1, One to 3 km – 2, 3 to 5 km – Consumer’s response on
3, 5-10 km – 4, . 10 km – 5; eIn loose form – 1, Vendor packaged – 2, Branded (packaged) – 3 food purchase behaviour

study also indicate that grocery items dominate the monthly household expenditure
with an average of Rs 839 per month followed by fruits (Rs 431) and vegetables (Rs
371).
Table II indicates that most of the consumers prefer nearby marketplaces to meet
their food consumption requirements. Grocery food items are generally purchased
from nearby grocery shops situated in the residential localities, whereas fruits and
vegetables are purchased from roadside shops. With rapid changes in the preferences
of the consumer towards convenient purchasing, the supermarket culture is coming up
very fast. These supermarkets offer conveniently packaged food items with choose and
pick facilities. About 10 per cent of the respondents prefer supermarkets for grocery
food purchasing. Food purchasing is distance sensitive (Table II) and most of the
respondents desire for availability of food products within one kilometre radius.
Therefore, H1, which assumes that the consumer’s purchase decisions are similar for
grocery, fruits and vegetables, is rejected.
A comparative study of consumer responses on the five aspects of food purchase
behaviour with the demographic profile of the respondents was done by analyzing the
variance (ANOVA) to assess if there are any significant differences in the individual
responses for grocery, fruits and vegetables (Table III). Results indicate that out of the
five aspects, the responses of males and females differ significantly on the frequency of
purchase and preferred market distance for grocery items and monthly expenditure
and preference on packaging for vegetables. Males generally prefer to purchase
grocery once a month; while some of the female respondents prefer a weekly purchase.
On the other hand, male respondents may travel more distance for purchasing grocery
while females prefer a neighbourhood marketplace.
In case of monthly expenditure, males spend more on vegetables as compared to
female respondents; while in case of packaging, females are more inclined towards
BFJ
Purchase decisions Products Gender Age Education Income
112,2
Frequency of purchase Grocery 6.742 * * 0.692 1.13 0.318
Fruits 0.11 1.897 0.506 3.824 * *
Vegetables 0.67 2.598 * 0.961 5.731 * *
Monthly expenditure Grocery 0.561 1.043 0.453 1.153
116 Fruits 0.247 0.625 0.7 3.003 * *
Vegetables 4.161 * 0.613 2.872 * 4.283 * *
Preferred marketplace Grocery 1.492 0.849 0.732 0.39
Fruits 0.717 1.096 1.445 1.335
Vegetables 1.25 0.941 1.28 0.781
Preferred market distance Grocery 7.909 * * 2.057 * 2.869 * 1.085
Fruits 0.214 3.655 * * 1.253 1.412
Table III. Vegetables 1.063 0.981 0.968 1.358
Analysis of variance Preferences on food packaging Grocery 0.2 0.752 0.625 1.634
between food purchase Fruits 0.479 0.608 0.747 3.882 * *
behaviour and Vegetables 5.591 * 0.875 1.103 1.938
demographic
characteristics Notes: *Significant at the 0.05 level; * *Significant at the 0.01 level

purchasing vendor packaged vegetables. Consumers belonging to the young and

middle age groups of less than 40 years prefer frequent purchase of vegetables as
compared to consumers belonging to the older age groups. Likewise, consumers of the
young and middle age groups may travel more to purchase grocery and fruits as
compared to those belonging to the older age groups. Consumers of the higher income
groups purchase fruits and vegetables frequently and also spend more on these items.
These findings clearly indicate that H2 is only partially true and the income level of a
consumer is an important factor which affects most of the food purchase decisions.

4.3 Consumer response on product and market attributes

4.3.1 Importance of different product attributes. Product attributes, as perceived by
consumers, are critical factors in the food choice process and are considered to be a major
determinant for the success of many product marketing strategies (Batra and Sinha,
2000; Kupiec and Revell, 2001). Consumers’ preferences on various food product
attributes is a well researched area and empirical analysis show that consumers use a
variety of evaluation parameters while selecting the appropriate products to satisfy their
consumption needs (Ness and Gerhardy, 1994; Cardello, 1995; van der Pol and Ryan,
1996; Ahlgren et al., 2004; Chung et al., 2006). The literature on consumer behaviour
argues that the consumer perceives a product as a bundle of attributes like convenience,
variety and choice, product price, non-seasonal availability, packaging, cleanliness and
freshness. The buying decision or choices between the products largely depend on a
combination of these attributes (Juric and Worsley, 1998; Silayoi and Speece, 2004).
Consumers express significantly different views on various product attributes
(Friedman test, x 2 ¼ 121:46, a # 0.000). The mean value of the consumers’ responses
on various product attributes indicate that freshness/cleanliness is the most important
attribute for the consumers followed by price, quality, variety, packaging, convenience
and non-seasonal availability (Table IV). About 80 per cent of the respondents feel that
product attributes such as freshness, price, quality and variety are important, very
important or extremely important for them. Packaging and convenience are important
for approximately 70 per cent respondents. Seasonal availability is important for 65 per Buying
cent respondents. Mode values of responses indicate that assertiveness of the behaviour of
consumers on these product attributes is not very high. Thus, consumers express
different views on different product attributes and therefore, H3, which assumes that consumers
consumers lay similar emphasis on various product attributes, is rejected.
Based on factor analysis, four sets of components/factors, which explain 84.07 per
cent of variance (Table V), have emerged. The total variance shown by the first factor 117
is 32.030 per cent, and loads high on the quality related food product attributes. Factor
2 explains 19.476 per cent variation and loads high on the attributes related to product
packaging and storage of the products. Similarly, factor 3 shows a variation of 16.464
per cent and loads high on the attribute related to product price. The last component of
factor analysis shows a variation of 16.097 per cent and loads high on the product
attribute of convenience. This analysis clearly categorizes the product attributes based
on the consumer’s perspective, and it can be used by food processors and packagers for
making appropriate decisions in food product marketing.
4.3.2 Importance of different market attributes. In the modern retailing
environment, congruence between consumer perceptions on retail outlet attributes

Attributes n Mean Mode SD

Freshness and cleanliness 88 3.73 3 1.09

Product price 95 3.67 3 0.97
Quality 99 3.46 3 1.10
Variety 98 3.37 3 0.95
Packaging 96 3.10 3 1.04
Convenience 93 2.98 3 1.04 Table IV.
Non-seasonal availability 98 2.72 3 1.09 Consumers’ response on
various product
Note: *1 ¼ Not at all important; 5 ¼ extremely important attributes

Factors
Quality and Storage and Product price Convenience
Product attributes variety (P1) packaging (P2) (P3) (P4)

Freshness and cleanliness 0.864 0.136 0.184 0.016

Quality 0.841 0.294 0.067 0.148
Variety 0.755 0.063 0.359 0.326
Non-seasonal availability 0.120 0.840 20.056 0.344
Packaging 0.321 0.728 0.327 2 0.251
Product price 0.256 0.097 0.924 0.158
Convenience 0.191 0.099 0.149 0.890
Total variance explained
(%) 32.030 19.476 16.464 16.097
Cumulative variance
explained (%) 32.030 51.506 67.970 84.067 Table V.
Factor analysis – rotated
Notes: Extraction method – Principal Component Analysis; Rotation method – Varimax with Kaiser component matrix for
normalization product attributes
BFJ and the objectives of market positioning strategies results in customer loyalty towards
112,2 an outlet (Uusitalo, 2001; Devlin et al., 2003; Morschett et al., 2005). A consumer’s choice
of a retail outlet depends on a combination of functional and psychological attributes
(Devlin et al., 2003; Zhuang et al., 2006). Empirical researches on retail food market
attributes in both developed and developing countries show that consumers now prefer
one stop shops for all their household requirements to save their time and energy (Burt
118 and Gabbott, 1995; Goldman et al., 2002).
Consumer preferences for various facilities and attributes of the retail outlets have
been assessed through this questionnaire survey, results of which indicate that offering
quality and a variety of products at lower prices are the most preferred attributes of a
good marketplace (Table VI). This shows that Indian consumers are still price
conservative and adopt “cheap and best” strategy while purchasing a quality product.
Apart from this, consumers have also started recognizing the importance in having
various other services like availability of toilets, car parking, bank, telephone booth
and medical shops, etc. at the marketplace. Like the responses on product attributes,
the consumers gave significantly different responses on various market attributes
(Friedman test, x 2 ¼ 339:98, a # 0.000). Therefore, H4 cannot be supported.
Consumer responses on 17 market attributes were reduced to five sets of related
factors through principal component analysis, which shows a 62.72 per cent of
variance (Table VII). The first factor can be termed as the provision of convenience at a
marketplace, where consumers can get products of their choice with good quality at
approachable outlets in a given business hour. The total variance indicated by the first
factor is 16.28 per cent. The second factor indicates 15.49 per cent variation and loads
high on attributes related to additional services at the marketplace. Attraction for
children at the marketplace, which is the next factor, shows 11.85 per cent of variation.
Similarly, the fourth factor shows a variation of 10.5 per cent and loads high on
attributes related to basic amenities at the marketplace. The last factor comprises the

Attributes n Mean Mode SD

Quality of products 88 3.78 3 0.99

Approachability 90 3.61 3 1.12
Variety of products 96 3.42 3 1.00
Availability of toilets 94 3.32 3 1.05
Reasonable price 90 3.30 3 0.99
Low traffic 90 3.28 3 1.07
Medical shops 94 3.24 3 1.14
Bank (Branch/ATM) 91 3.23 3 1.09
All at one place 96 3.16 3 1.12
Sufficient parking 92 3.12 3 1.31
Dispensary 96 2.98 3 1.06
Hours of operation 86 2.92 3 1.01
Snack places 88 2.51 3 1.11
Hotel/restaurant 95 2.49 3 1.07
Post office 93 2.45 3 1.22
Table VI. Toy shops 94 2.29 2 1.10
Consumers’ response on Children’s entertainment 90 2.28 3 1.02
importance of market
attributes Note: 1 ¼ Not at all important; 5 ¼ extremely important
 Buying
Factors
Convenient Additional Basic behaviour of
market-place services Attraction for amenities Product availability consumers
Attributes (M1) (M2) children (M3) (M4) and affordability (M5)

Variety of
products 0.754 20.022 0.140 0.070 0.238 119
Quality of
products 0.742 20.056 0.124 0.390 0.122
Approachability 0.684 0.255 2 0.072 0.119 20.022
Hours of
operation 0.534 0.239 0.312 2 0.138 0.338
Post office 2 0.114 0.795 0.183 2 0.059 0.065
Dispensary 0.040 0.744 0.119 0.186 0.128
Medical shops 0.245 0.717 0.095 0.163 20.108
Bank (branch/
ATM) 0.518 0.559 0.242 0.046 20.119
Low traffic 0.278 0.530 2 0.280 0.238 0.142
Children’s
entertainment 0.274 0.015 0.737 2 0.167 20.090
Toy shops 2 0.076 0.162 0.723 0.027 0.205
Snack counter 0.178 0.080 0.585 0.204 0.037
Availability of
toilets 0.164 0.267 0.046 0.738 20.293
Sufficient parking 0.282 0.057 2 0.046 0.727 0.232
Hotel/restaurant 2 0.245 0.246 0.510 0.570 0.167
All at one place 0.073 20.040 0.087 0.042 0.781
Reasonable price 0.436 0.214 0.055 0.034 0.617
Total variance
explained (%) 16.278 15.494 11.849 10.501 8.598
Cumulative
variance
explained (%) 16.278 31.722 43.621 54.122 62.720 Table VII.
Factor analysis – rotated
Notes: Extraction method – Principal Component Analysis; Rotation method – Varimax with Kaiser component matrix for
normalization market attributes

Attributes Gender Age Education Income

Product attributes

Quality and variety (P1) 0.001 0.787 2.160 5.046 * *

Storage and packaging (P2) 1.595 0.606 0.191 1.100
Product price (P3) 0.110 0.145 0.736 2.759 *
Convenience (P4) 0.294 0.389 0.514 1.594
Market attributes
Convenient marketplace (M1) 1.102 1.059 1.453 2.070
Additional services (M2) 0.380 0.401 2.982 * 2.937 * Table VIII.
Attraction for children (M3) 0.971 0.690 0.854 0.562 Analysis of variance
Basic amenities (M4) 0.011 0.678 3.250 * * 2.476 * between product and
Product availability and affordability (M5) 0.167 1.903 2.477 * 1.016 market attributes and
demographic
Notes: *Significant at the 0.05 level; * *Significant at the 0.01 level characteristics
BFJ availability and affordability attributes of a marketplace. Based on consumers’
112,2 perspective, this analysis clearly categorizes the market attributes and can be used by
food retailing organizations for making appropriate decisions in designing an effective
retail market for food and grocery.
The relationship between the underlying factors of product and market attributes
and socio-demographic profiles of consumers have been analysed by using analysis of
120 variance (ANOVA). The aim of the analysis is to assess whether consumer responses
vary across product and market attributes (Table VIII). Results indicate that a higher
income and educational level of consumers influences their decisions on product and
market attributes while gender and age seems to have no significant impact. Therefore,
H5 is only partly supported.

5. Summary and conclusion

Food consumption patterns in India are rapidly changing from cereal-based food
products to high-value food products and slowly from fresh, unprocessed, unbranded
food products to processed, packaged and branded products. A strong economic
growth has brought with it a new set of consumers with sufficient disposable income,
who are more conscious of the latest trends in health and hygiene, particularly in the
fast growing cities. To reap the benefits of the changing buying behaviour of the
consumers and their capability for buying quality food and grocery items, modern
organized retail formats are growing at a phenomenal pace throughout the country.
This has induced big national and multi-national corporations to invest into organized
retailing.
In the emerging Indian retail environment, this study provides insights on
consumers’ preferences of food and grocery products in terms of product and market
characteristics with the help of primary survey data. Findings of the study clearly
indicate that vegetables and fruits are most frequently purchased from nearby markets
as compared to grocery products. High consumer ratings on the product attribute of
freshness/cleanliness along with price and quality suggests that food retailing needs to
be customized as per their requirements. Apart from this, the study also addresses
issues related to a diversified set of market characteristics for efficient management of
organized retailing of food and grocery products. Results of the factor analysis of
various market attributes clearly indicate that consumers prefer a convenient
marketplace with additional service facilities. Market attributes like entertainment for
children, basic amenities and affordability of the marketplace are also considered to be
important by the consumers. The study provides strategic inputs to the upcoming food
retail markets regarding the products that can be offered at a marketplace and the
required physical environment of the market.

Notes
1. It is India’s largest state by population and fifth-largest by area, located in the northern part
of the country.
2. Includes food items such as rice, wheat flour, pulses, edible oils, spices, pepper, sugar, tea
and coffee etc
3. Lucknow is the administrative and legislative capital of Uttar Pradesh. It is a vibrant city
with a population of 2.5 million, witnessing an economic boom and is among the top ten
 fastest growing non-major-metropolitan cities of India (http://en.wikipedia.org/wiki/ Buying
Lucknow).
behaviour of
4. Almost all states in India have a State Agricultural Marketing Board under the Agricultural
Produce Marketing (APM) Act, which gives state governments the sole authority to consumers
establish and manage wholesale markets, where all “notified” agricultural commodities,
grown in the defined command areas surrounding the market, are required by law to be sold
only through these markets, with the number of notified commodities varying by state and 121
market (Umali-Deininger and Sur, 2007). These regulated markets are solely for wholesale
purpose, where only registered traders can participate.

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Corresponding author
Jabir Ali can be contacted at: jabirali@iiml.ac.in

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