Buying Behaviour

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The current issue and full text archive of this journal is available at www.emeraldinsight.com/0007-070X.htm

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

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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
The authors would like to thank the Director, State Agricultural Marketing Board, Government of Uttar Pradesh for funding the project “Feasibility study of Apna Bazaar in Gomti Nagar, Lucknow”. The authors are also grateful to the editor and two anonymous referees for their valuable inputs and comments for improving this paper.
British Food Journal Vol. 112 No. 2, 2010 pp. 109-124 q Emerald Group Publishing Limited 0007-070X DOI 10.1108/00070701011018806

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interaction, information and communication technologies, urbanisation, education and 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; 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; Acebron 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 Food purchase patterns in developing economies like India are characterised by daily or frequent purchasing from nearby marketplaces called “mom and pop stores” (Veeck and Veeck, 2000; Sabnavis, 2008). This paper analyses the buying behaviour 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 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.

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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 The survey questionnaire was structured with two parts. The first part included questions related to: . Consumers’ purchase behaviour in terms of frequency of purchase, monthly 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, 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.

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Characteristics Sample size (number) Gender (%) Male Female Family composition (%) # 2 adults 3 adults . 3 adults # 2 children 3 children . 3 children Age composition (%) # 20 years 21-30 years 31-40 years 41-60 years . 60 years Educational background (%) Intermediate and below Graduate Post graduate Doctoral and professional

Response 101 70.3 29.7 45.6 28.7 25.8 73.3 21.8 5.0 3.0 21.8 44.6 26.8 4.0 9.9 37.6 38.6 13.9 34.6 40.6 24.8

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Table I. Characteristics of the sampled consumer households

Monthly income (%) , Rs 10,000 Rs 10,000-Rs 15,000 . Rs 15,000

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

Purchase decisions Frequency of purchasea Monthly expenditureb Preferred marketplace
c

Products Grocery Fruits Vegetables Grocery Fruits Vegetables Grocery Fruits Vegetables Grocery Fruits Vegetables Grocery Fruits Vegetables

n 94 98 100 91 94 96 93 95 96 96 97 100 92 96 97

Mean 4.02 2.29 1.59 3.18 2.18 2.08 2.35 1.79 2.07 1.89 1.60 1.54 1.52 1.28 1.24

Mode 5 2 1 3 2 2 2 1 1 1 1 1 1 1 1

SD 1.31 1.04 0.84 1.07 0.79 0.71 0.97 1.07 1.28 0.92 0.72 0.70 0.72 0.54 0.45

Friedman test

Preferred market distanced Preference on food packaginge

x 2 ¼ 114:78 Sig: ¼ 0:000 df ¼ 2 x 2 ¼ 76:74 Sig: ¼ 0:000 df ¼ 2 x 2 ¼ 36:53 Sig: ¼ 0:000 df ¼ 2 x 2 ¼ 13:51 Sig: ¼ 0:001 df ¼ 2 x 2 ¼ 15:23 Sig: ¼ 0:000 df ¼ 2

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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 vendor/shop – 2, Supermarket – 3, Wholesale market – 4; d , 1 km – 1, One to 3 km – 2, 3 to 5 km – 3, 5-10 km – 4, . 10 km – 5; eIn loose form – 1, Vendor packaged – 2, Branded (packaged) – 3

Table II. Consumer’s response on 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

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Purchase decisions Frequency of purchase Monthly expenditure

Products Grocery Fruits Vegetables Grocery Fruits Vegetables Grocery Fruits Vegetables Grocery Fruits Vegetables Grocery Fruits Vegetables

Gender 6.742 * * 0.11 0.67 0.561 0.247 4.161 * 1.492 0.717 1.25 7.909 * * 0.214 1.063 0.2 0.479 5.591 *

Age 0.692 1.897 2.598 * 1.043 0.625 0.613 0.849 1.096 0.941 2.057 * 3.655 * * 0.981 0.752 0.608 0.875

Education 1.13 0.506 0.961 0.453 0.7 2.872 * 0.732 1.445 1.28 2.869 * 1.253 0.968 0.625 0.747 1.103

Income 0.318 3.824 * * 5.731 * * 1.153 3.003 * * 4.283 * * 0.39 1.335 0.781 1.085 1.412 1.358 1.634 3.882 * * 1.938

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Preferred marketplace Preferred market distance Table III. Analysis of variance between food purchase behaviour and demographic characteristics Preferences on food packaging

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 cent respondents. Mode values of responses indicate that assertiveness of the 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 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 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 Freshness and cleanliness Product price Quality Variety Packaging Convenience Non-seasonal availability n 88 95 99 98 96 93 98 Mean 3.73 3.67 3.46 3.37 3.10 2.98 2.72 Mode 3 3 3 3 3 3 3 SD 1.09 0.97 1.10 0.95 1.04 1.04 1.09

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Note: *1 ¼ Not at all important; 5 ¼ extremely important

Table IV. Consumers’ response on various product attributes

Product attributes Freshness and cleanliness Quality Variety Non-seasonal availability Packaging Product price Convenience Total variance explained (%) Cumulative variance explained (%)

Quality and variety (P1) 0.864 0.841 0.755 0.120 0.321 0.256 0.191 32.030 32.030

Factors Storage and packaging (P2) 0.136 0.294 0.063 0.840 0.728 0.097 0.099 19.476 51.506

Product price Convenience (P3) (P4) 0.184 0.067 0.359 20.056 0.327 0.924 0.149 16.464 67.970 0.016 0.148 0.326 0.344 2 0.251 0.158 0.890 16.097 84.067 Table V. Factor analysis – rotated component matrix for product attributes

Notes: Extraction method – Principal Component Analysis; Rotation method – Varimax with Kaiser normalization

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and the objectives of market positioning strategies results in customer loyalty towards 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 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 Quality of products Approachability Variety of products Availability of toilets Reasonable price Low traffic Medical shops Bank (Branch/ATM) All at one place Sufficient parking Dispensary Hours of operation Snack places Hotel/restaurant Post office Toy shops Children’s entertainment n 88 90 96 94 90 90 94 91 96 92 96 86 88 95 93 94 90 Mean 3.78 3.61 3.42 3.32 3.30 3.28 3.24 3.23 3.16 3.12 2.98 2.92 2.51 2.49 2.45 2.29 2.28 Mode 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 2 3 SD 0.99 1.12 1.00 1.05 0.99 1.07 1.14 1.09 1.12 1.31 1.06 1.01 1.11 1.07 1.22 1.10 1.02

Table VI. Consumers’ response on importance of market attributes

Note: 1 ¼ Not at all important; 5 ¼ extremely important

Factors Attributes Variety of products Quality of products Approachability Hours of operation Post office Dispensary Medical shops Bank (branch/ ATM) Low traffic Children’s entertainment Toy shops Snack counter Availability of toilets Sufficient parking Hotel/restaurant All at one place Reasonable price Total variance explained (%) Cumulative variance explained (%) Convenient market-place (M1) 0.754 0.742 0.684 0.534 2 0.114 0.040 0.245 0.518 0.278 0.274 2 0.076 0.178 0.164 0.282 2 0.245 0.073 0.436 16.278 16.278 Additional services (M2) 20.022 20.056 0.255 0.239 0.795 0.744 0.717 0.559 0.530 0.015 0.162 0.080 0.267 0.057 0.246 20.040 0.214 15.494 31.722 Basic Attraction for amenities Product availability (M4) and affordability (M5) children (M3) 0.140 0.124 2 0.072 0.312 0.183 0.119 0.095 0.242 2 0.280 0.737 0.723 0.585 0.046 2 0.046 0.510 0.087 0.055 11.849 43.621 0.070 0.390 0.119 2 0.138 2 0.059 0.186 0.163 0.046 0.238 2 0.167 0.027 0.204 0.738 0.727 0.570 0.042 0.034 10.501 54.122 0.238 0.122 20.022 0.338 0.065 0.128 20.108 20.119 0.142 20.090 0.205 0.037 20.293 0.232 0.167 0.781 0.617 8.598 62.720

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Notes: Extraction method – Principal Component Analysis; Rotation method – Varimax with Kaiser normalization

Table VII. Factor analysis – rotated component matrix for market attributes

Attributes Product attributes Quality and variety (P1) Storage and packaging (P2) Product price (P3) Convenience (P4) Market attributes Convenient marketplace (M1) Additional services (M2) Attraction for children (M3) Basic amenities (M4) Product availability and affordability (M5)

Gender 0.001 1.595 0.110 0.294 1.102 0.380 0.971 0.011 0.167

Age 0.787 0.606 0.145 0.389 1.059 0.401 0.690 0.678 1.903

Education 2.160 0.191 0.736 0.514 1.453 2.982 * 0.854 3.250 * * 2.477 *

Income 5.046 * * 1.100 2.759 * 1.594 2.070 2.937 * 0.562 2.476 * 1.016 Table VIII. Analysis of variance between product and market attributes and demographic characteristics

Notes: *Significant at the 0.05 level; * *Significant at the 0.01 level

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availability and affordability attributes of a marketplace. Based on consumers’ 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 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

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