CHAPTER I INTRODUCTION

CHAPTER 1 INTRODUCTION
Twentieth century has been the witness of most technological agricultural changes leaving remarks on rural landscape and population. This technical revolution, which is continuing to be dominant method for food production, depends on on-farm and off- farm resource usage. Invention of machinery has put labour out off farm while variety of chemical fertilizers have increased yield without any concern of environmental measures for economical reasons. Sustainable food production became more and more vital after facing with social, ecological and economic impacts of industrialized agriculture. Societies find solution by demanding for lowinput, regional and seasonal products with the respect of environment, health and social welfare of the region. There have been organizations and policies have been established in developed countries production. Organic Agriculture as one solution to problems of industrialized agriculture based on holistic production management systems which aims creating integrated, humane, production systems. Consumers of industrialized countries have shown a great attention towards organic products starting from 90s. Food safety and quality issues have triggered the awareness of consumers and people start to be suspicious environmentally to take measures in food and economically sustainable agricultural towards conventional products. Moreover, todays educated society is showing great interest to their and childrens health and prefer foods with more nutritional values, less addictives and more coming from natural production methods. Furthermore, ethical movements are becoming widespread in developed countries towards animal health and welfare on farms and effect consumers choice when buying meat and milk products. Due to the lack of consumer researches in India and continuously changing trends among consumers, this study can help market actors and policy makers to follow up the update consumers buying behaviour and attitude. Additionally, it can be an evidence of how organic market changes on consumers in India.
2

INDUSTRY PROFILE
Worldwide Organic Agriculture Agriculture has changed in a more mechanical and yield orientated way in the twentieth century after the World War II. Chemical adherence and intensive farming techniques have cause food safety and environment problems. As a result, countries start to search for new methods in agriculture and organic farming has got the challenge to develop all over the world. Today nearly 120 countries in the world are practicing organic farming and number of farms and agricultural land are increasing day by day. According to the 2007 SOEL- FIBL survey on organic agriculture; 31 million hectares are organically grown under the management of 633'891 farms. This figures respect to the 0.7 percent of all agricultural land worldwide. Continental rating starts with Oceania (39 percent) and then come Europe (23 percent) and Latin America (19 percent). On the other hand, Europe has the highest density of the organically managed land and largest number of organic farms as total in the world. In the last three years, North America and Europe have increased their organic areas almost half a million hectares and most of the other countries followed this trend; however China, Chile and Australia were not as successful as others. (Willer and Yussefi, 2007) From 2002 to 2005 universally organic food and beverages sales have increased by 43 percent to 25.5 billion Euro and estimating sales are nearly 30.9 billion Euro in 2006. (Willer and Yussefi, 2007) Developed countries such as; US, Europe, Japan, Canada and Australia have extend their production due to the demand from domestic consumers while developing countries organic farming is depended on export. Leading markets in todays world; Europe and North America have such a huge demand that other regions are providing supply. (Babadogan and Koc, 2005) Consumers awareness, health and environment sensitive actions are some highlights in developed countries causing a market demand. (Rehber and Turhan, 2002) Developing countries provide wide range of organic products and most of them started to export. Products that cannot be provided by European, American or Japanese organic farming are advantage for developing countries to take part in these markets. Tee, coffee, cocoa, tropical goods, spices are some product groups that western consumers are willing to buy organically. However, there are some difficulties for importer countries like guarantying organic origin due to
3

the facts that; lack of expert knowledge in production and certification. Depending on obstacles, USA and EU are opening certification bodies in developing countries all over Latin America, Asia and Africa. High certification costs related to level of standards and varieties are barriers for exporters. Moreover, local governments in most developed countries are setting high standards, which cause more constraints for exporter countries. Although, market and product information and finance are barriers for developing countries in organic agriculture sector, building cooperatives can be one good solution for better world market. Indian organic food market India has emerged as one of the largest potential markets for organic food consumption globally, owing to the fact that organic foods or products are healthy, contain no chemicals or preservatives, and are completely natural. With growing awareness towards healthy food, surging income levels, and shifts in consumer behavior, the countrys nascent organic food market is fast transforming into the worlds fastest growing organic food market. In addition, increasing export market coupled with governments support has driven the market that will further boost the demand for organic food products in the country. According to our new research report, Indian Organic Food Market Analysis, organic food is invariably catching up pace among the Indian retailers, especially with the niche retailers owing to wide awakening among Indian consumers towards leading a healthy life. We anticipate that the sector will post significant growth during 2011-2013, invariably growing at a CAGR of 15%. Presently, surmounted growth is being witnessed from new demand pockets, arising from the Tier-I and Tier-II cities, thus, signaling huge acceptance among the masses. Our report has studied the Indian organic food market from various perspectives. It entails a detailed analysis of the market in terms of state-wise developments. We have also included the current and future government initiatives in every state along with the ongoing developments in the Indian organic food market. Our research also foresees immense opportunities for various international and domestic players in this segment. The report, Indian Organic Food Market Analysis, is an outcome of widespread research and objective analysis of organic food market potentials in India. It provides extensive
4

information and rational analysis on emerging market trends and drivers along with regulatory initiatives, which are collectively uplifting the industry outlook of India. Additionally, the report also provides insights on organic export market, consumer behavior analysis, and industry roadblocks along with a brief overview of the prominent industry players to provide a balanced research outlook of the industry. Overall, our report presents a comprehensive and complete and analysis of the Indian Organic food industry, which will prove decisive for intending clients. Organic products are grown under a system of agriculture without the use of chemical fertilizers and pesticides with an environmentally and socially responsible approach. This is a method of farming that works at grass root level preserving the reproductive and regenerative capacity of the soil, good plant nutrition, and sound soil management, produces nutritious food rich in vitality which has resistance to diseases. India is bestowed with lot of potential to produce all varieties of organic products due to its various agro climatic regions. In several parts of the country, the inherited tradition of organic farming is an added advantage. This holds promise for the organic producers to tap the market which is growing steadily in the domestic market related to the export market. Currently, India ranks 33rd in terms of total land under organic cultivation and 88th position for agriculture land under organic crops to total farming area. The cultivated land under certification is around 4.43 million (2010-11). The Government of India has implemented the National Programme for Organic Production (NPOP). The national programme involves the accreditation programme for certification bodies, norms for organic production, promotion of organic farming etc. The NPOP standards for production and accreditation system have been recognized by European Commission and Switzerland as equivalent to their country standards. Similarly, USDA has recognized NPOP conformity assessment procedures of accreditation as equivalent to that of US. With these recognitions, Indian organic products duly certified by the accredited certification bodies of India are accepted by the importing countries. Production India produced around 3.88 million MT of certified organic products which includes all varieties of food products namely Basmati rice, Pulses, Honey, Tea, Spices, Coffee, Oil Seeds, Fruits,
5

Processed food, Cereals, Herbal medicines and there value added products. The production is not limited to the edible sector but also produces organic cotton fiber, garments, cosmetics, functional food products, body care products, etc. Exports India exported 86 items last year (2010-11) with the total volume of 69837 MT. The export realization was around 157.22 million US $ registering a 33% growth over the previous year. Organic products are mainly exported to EU, US, Australia, Canada, Japan, Switzerland, South Africa and Middle East. Oil Crops (except Sesame) leads among the products exported (17966 MT).

COMPANY PROFILE
Over a period of 25 years, Suguna has gone from strength to strength and has become a Rs. 4200 crore company that makes it Indias No. 1 broiler producer. Along the way, Sugunas pioneering efforts in contract farming helped create thousands of rural entrepreneurs who share the growth successfully. "Poultry Integration" introduced and pioneered by Suguna in the country has energized the livelihoods of farmers in rural India. Suguna ranks among the top ten poultry companies worldwide. With operations in 11 states across India, it offers a range of poultry products and services. The fully integrated operations cover broiler and layer farming, hatcheries, feed mills, processing plants, vaccines and exports. Suguna markets live broiler chicken, value added eggs and frozen chicken. With the intent to provide consumers with fresh, clean and hygienic packed chicken, Suguna has set up a chain of modern retail outlets. Today, the companys brand Suguna Chicken is a household name in India. With itsSuguna Daily Fressh outlets, Suguna Home Bites, Suguna Anytime processed chicken and four varieties of specialty Suguna value added eggs, Suguna is the undisputed leader in poultry products. Suguna Home Bites being the latest in its product range is a new category of home meal replacements (HMR). History Chairman Mr. B.Soundararajan and Managing Director Mr. G.B.Sundararajansaw potential in growing the Indian Poultry Industry through integration, which later came to be known as Contract Farming. This led Suguna Poultry to pioneer contract farming in India. In 1986, Mr. B.Soundararajan and Mr. G.B.Sundararajan set up a poultry farm with 200 layer birds at Udumalpet. During 1989 - 90, when chicken prices crashed because of an oversupply of birds in the local market, Suguna saw an opportunity for business growth by helping the poultry farmers who had bought feed and medicines on credit and could not clear their dues. To help them recover their money, these visionaries began to provide feed and health support to

indebted farmers in return for the end product - eggs. The success of this exercise gave birth to the Suguna Integration Model. The poultry integration model has set a win-win situation for both the farmer and the integrator. Farmers are provided with day-old chicks, feed and health support. Performance is monitored on a daily basis with Suguna field staff visiting the farms to check on the health of the birds, feed intake, growth and mortality levels. In six weeks time, the birds are weighed and are ready to be sold by Suguna. Farmers are paid a handsome growing charge for the birds at the end of this period. Thus, Suguna takes this success model to the next level vision of energising rural India benefiting the country, farmer and the company. A constant and relentless drive has taken the company's growth and expansion which covers over 15,000 farmers from 8,000 villages in 11 Indian states. Impressed by the model and its success, Suguna receives invitations from many state governments to set up its operations. Many investors and delegates from across borders visit Sugunas facilities to study this model and later adopt in their own countries. With mastery and success in contract farming, Suguna has shaped the poultry industry to its current position in India. People Suguna's largest and most valuable asset today are its people - 15,000 farmers, 25,000 channel partners and 4,800 employees who are integral to the Suguna family. Every member of the Suguna family works towards the vision of energizing rural India. A multifaceted and talented workforce who brings cutting edge perspectives to practice, Suguna believes in the potential of its people, be it farmers, traders, veterinarians, management, finance, agricultural or engineering professionals. Every individual is focussed on modernizing the industry to ensure Suguna becomes a world leader in the poultry industry. Sugunas employees are proud of the fact that they are part of an organization that has benefited thousands of farmers and has created employment opportunities for many more people.

Suguna has also provided employment and assured income to thousands of farmers with its contract farming. Farmers receive assistance at every step, ensuring that they are at zero risk with regards to price fluctuations and market conditions. With incentive programs, farmers are constantly encouraged to perform better. Today over 15,000 empowered farmers and 10 lakh prosperous rural households reflect Sugunas commitment to improve the social and economic status of rural India. Over 25,000 traders, suppliers and franchisees are Suguna's channel partners that are present across the country. A systematic and transparent chain of transactions and a well organized forward integration has ensured a steady and comfortable supply of products throughout the year. This has provided a perfect opportunity for partners to grow with Suguna. With complete support and co-ordination from every member of the family, Suguna today is a bustling Rs. 4200 crore enterprise, rewriting the futures of countless farmers and entrepreneurs. Health and nutrition Suguna's belief in transforming the poultry industry in India has led to high standards in endproducts. By following good management practices throughout the entire chain of processing chicken and eggs, health and nutrition is guaranteed. At Suguna, there is a relentless emphasis on creating nutrition rich chicken and eggs. By ensuring the birds, the feed and quality are on par with international standards. Suguna ensures the birds are carefully selected and bred in a healthy environment and fed with the most nutritious feed - rich in Maize and Soya, produced at Suguna's own feed mills. The birds are grown in hygienic, environmentally controlled ultra-modern bio-secured farms. Biosecurity is maintained at every stage of production till the products reach the shop shelves. Feed is the most important factor that provides health and nutrition benefits in the end products. Suguna takes special care in formulation and nourishment of birds with the right feed throughout its lifecycle. Sugunas competent, experienced, and highly qualified professionals, including poultry nutritionists and veterinarians carry out feed formulation. The farmers are

guided through good management practices to maintain health and nutrition aspects in the end products. Suguna offers nutritious, hygienic and affordable broiler chicken and high quality value added eggs. Sugunas Home Bites - range of ready-to-eat chicken products are 100% natural and contain no preservatives. Suguna Anytime, the range of frozen chicken provides you farm freshness throughout its shelf life. Suguna Daily Fressh retails healthy, tasty chicken in a hygienic environment. With Suguna, you can be sure of the highest quality of health and nutrition in all your meals. International partner Quality and Consistency - these have been the prime factors behind our growth all the way since 1984. At Suguna, quality is a way of life and is applied to everything we do. Quality of relationships we build, quality of people we associate ourselves with, the quality in which we do business, and the quality of ideas we invest in. It is this belief that encourages us to develop and deliver the best. This belief has further translated into quality international partnerships with some of the worlds finest institutions. Aviagen is the world's leading poultry breeding company in the Broiler market. Suguna partners with Aviagen for its best-in-line product - Ross 308 grandparent and parent stock chicks. This breed is renowned for its maximum performance and livability. Lohmann Tierzucht GmbH is the world leader in primary breeding of Layer farming. Suguna has selected Lohmann LSL Lite range of birds. These birds are selected for their high output of saleable eggs, low cost of feed that made them a huge success in India. International Finance Corporation (IFC) is the private sector arm of the World Bank Group. Sugunas partnership with IFC has resulted in a Rs. 110 crores investment towards expansion and developing international competencies. This being IFCs first investment in the Indian poultry sector, is a perfect match of IFCs focus to enhance rural productivity and Sugunas vision of Energizing Rural India.

10

Values Suguna believes in creating value for its stakeholders in everything that it does. Be it farmers, customers, traders, employees, suppliers, partners or other institutions, Suguna ensures value addition in every transaction and investment. Suguna makes a difference through processes, technology and people. Quality and innovation are core values at Suguna. And Suguna creates value in several ways, benefiting countless number of people, particularly farmers, traders, customers and employees. Pioneering efforts by Suguna in contract farming has changed the landscape of the Indian poultry industry, and has transformed the lives of lakhs of farmers and people across Rural India. Through poultry integration, Suguna provides livelihood and assured income to thousands of farmers and also provides indirect employment, assuring a better future to lakhs of rural households. Sugunas success lies in building strong and loyal relationships with the farmers who are more than simply an extension of our value chain. We see them as partners, and we believe strongly in our vision of Energising Rural India. Through the success of contract farming, Suguna has built up a strong and innovative business model which cannot be replicated easily. Seeing the impact of Sugunas initiatives on rural development, Chief Ministers of other States such as Andhra Pradesh, West Bengal, Punjab and Jharkand have approached Suguna to set up operations in their states. Suguna successfully reduced middlemen in the poultry chain from 14 to 4. Farmers deal only with the company, and get assured returns. Suguna provides them all the inputs and in return, the farmers get a fixed growing charge which can be increased through optimizing production cost. Suguna also bears the production and market risks, thereby protecting the livelihoods of farmers. Regardless of the market price, the farmers still get the assured growing charge, and incentives. Suguna provides a lot of project guidance and assistance with getting finance, and provide farmers with continuous technical training in scientific poultry management practices. In some
11

areas, farmers approach Suguna with only land, and we help them to put up a poultry farm, and then place our chicks and train the farmers to manage the birds. Our line supervisors visit the farms every day to monitor the birds and to troubleshoot problems. To service this massive base of 15000 farms, Suguna has invested in highly sophisticated technology and infrastructure. With state of the art hatcheries, and an advanced R&D Centre, feedmills, veterinarians, scientists, and professionals, farmers are assured of the best quality chicks, feed and professional care. Importantly, Sugunas scientists and employees train the farmers in GMP (Good Management Practices) too. Through all these, Suguna brings tremendous value to the farmers who may otherwise be unable to have access to all these on their own. The success of the contract farming model has encouraged Suguna to carry such innovative approaches to other areas in backward integration, such as corn farming where Suguna practices Contact Farming. Experts from our corn division encourage farmers to grow corn, explain the benefits and the know-how, and educate them in scientific farming methods to help increase their yield. Suguna offers a buy back guarantee, so that the farmer gets a better price for his crop. This way, Suguna procures 4 lakh tons of maize p.a. from farmers in Karnataka alone, which equals to approximately 2.5 lakh cultivated acres, directly benefiting at least 50,000 farmers. Through this direct procurement, Suguna also assures farmers fair prices and enormous savings by way of transparent transactions and quick payments. Suguna also indirectly adds value to rural farmers and suppliers in other ways, such as purchasing supplies and providing direct and indirect employment. Suguna purchases raw materials worth more than Rs.1000 crores per year. Suguna has a strong SCM (Supply-Chain Management) Division which constantly focuses on setting up direct contact with small and medium manufacturers. It works with them to bring their standard on par with international quality standards, and then sources raw materials from them. This focus ensures manufacturers get better prices for their materials and Suguna gets better quality. Suguna has a multifaceted and talented workforce that brings puts cutting-edge perspectives to practice. This 4,800-strong employee base grows and prospers along with Suguna through
12

endless opportunities for learning and self-development that play major role in shaping the careers and lives of many people. Sugunas vast infrastructure provides employment to skilled and unskilled workers and professionals from urban, semi-urban and rural areas. Sugunas strong belief in promoting employees from within the organisation, has ensured good career succession plans and growth opportunities for people with basic educational qualifications who have developed their skills and knowledge on the job. Today, several people in the middle and senior management have risen from within the ranks. Suguna also encourages employees children through special educational initiatives in the form of awards and incentives. Suguna celebrates 25 years of good health and great taste. Sugunas focus on creating nutritionenriched products brings to the society, healthy and wholesome chicken adhering to international standards, and yet, affordably priced. Not only just this, Suguna has also launched value added products that include value added eggs, hygienic chicken retail stores, frozen chicken and ready to eat heat n eat home meal replacements. All backed by the Suguna promise of quality and purity. The stringent quality controls means that every single product manufactured by Suguna adheres to international standards assuring you 100% healthy and hygienic chicken products. A strategic forward integration into retail and foods through value added products means quality products that reach the consumer's table with the added convenience of easy preparation and less cooking time. Giving the consumer better value for money. Social responsibilities Ever since inception, Suguna has made social responsibility initiatives a major part of its core values. The social responsibility initiatives today reflect conscious efforts to transform the economic and social development of rural India. Energising rural India has been the vision that accompanied Suguna's growth. Every business activity undertaken has been and will always be linked to this vision. Sugunas employees share this vision and contribute towards it actively. Another focus of Suguna has been re-planting lakhs of trees across the country to increase the green cover and help in soil restoration. Suguna

13

has donated over 32 lakh saplings to governmental, non-governmental, and voluntary organisations, schools, colleges and general public. Taking forward the core values, a host of initiatives have been put into action. From instituting rewards to school toppers as part of educational programs, to providing aid for government schools and hospitals, Suguna is undertaking a wide range of socio-economic, environmental, educational and health initiatives. Improving the quality of life of employees, their families, as well as the local community and society at large is a promise that Suguna aims to fulfil in the long run. Since health is an important issue, Suguna believes in initiatives such as conducting motivational programs for children in orphanages, eye check-up camps, blood donation camps, and artificial limb donation. Brands Being a pioneer in the poultry industry in India, most of the initiatives are designed keeping you in mind. Suguna leaves no stone unturned to identify your needs and concerns about quality poultry meat. With significant investment of resources, Suguna ensures everyone right from farmers and suppliers to employees are well trained to maintain the highest of quality and hygiene factors. With a vision to build great brands that are well accepted and appreciated, Suguna is constantly bringing you innovative products. Sugunas efforts are well synchronized to offer you meaningful products that provide complete value, convenience and satisfaction. Product range: Quick bite with Suguna Home Bites, choicest of chicken portions with Suguna Anytime, Value Added Eggs catering to the various needs of the health conscious consumer and Suguna Daily Fressh, a chain of retail outlets that are pleasing in ambience, and are hygienic and convenient for the contemporary consumer. Of course, theres always your favorite Suguna Chicken Younger, Tender, Better. Go ahead, spend some time to know our brands and treat yourself to a delicious and healthy meal.
14

Suguna Chicken - Younger, Tender, Better. Suguna Chicken, known for its finest quality and taste is already a favorite among many Indian households. Reared from the finest breed of carefully selected chicks, Suguna is the leader in the Indian broiler chicken market. Sugunas innovation and efforts to maintain consistency, highest quality and hygiene standards are well appreciated by the many that savor the taste of its good chicken. A well controlled process ensures you get nothing but the freshest of chicken straight from the farms. Grown in natural conditions with nutrition rich feed, you can be assured that every bite is tender and juicy. This superior quality chicken is now available at affordable prices. Through a nationwide network of over 25,000 retail outlets. The next time you are out shopping, look out for the Suguna Chicken sign in any of your neighborhood chicken stores. And always ask your retailer for Suguna chicken. Enter the retail revolution. Experience a whole new way of shopping for chicken. Suguna Daily Fressh, a chain of high-quality stores caters to all your needs for chicken and more. Suguna Daily Fressh brings you spacious and pleasing outlets complete with modern amenities with a variety of chicken products and more at a location near you. At Suguna Daily Fressh enjoy the experience of selecting from a range of fresh chilled chicken for your convenience thats available in 8 types of portions in desired quantities. Relish Suguna Home Bites, a new range of ready to heat-and-eat home meal replacement. Shop for Suguna value added farm fresh eggs, cut and cleaned fresh chilled mutton, frozen fish and prawns. Suguna Home Bites is a range of ready-to-eat home meal replacements from Suguna. Prepared from tender, juicy and tasty Suguna Chicken, these delicious treats give you the authentic taste of chicken dishes with the superior nutrition of healthy chicken. All the recipes are created by our expert chefs, giving every dish a homely taste while maintaining its authentic flavors. The contents are carefully packed in an air-sealed package that
15

keeps the contents fresh and the taste pure. Suguna Home Bites can be prepared in an instant in the comfort of your kitchen. Suguna Home Bites are an amazing combination of convenience, taste and variety and they mean no fuss, no mess. With a wide variety of dishes to choose from, there is something for everybody in the Suguna Home Bites menu. Be it snacks, starters or complete meal replacements our range has it all. Just heat the contents for a few minutes and serve it hot. Rest assured youll enjoy every bite. Suguna Home Bites is available at all leading super markets and departmental stores in cities across the country, including the Suguna Daily Fressh outlets. With today's fast paced lifestyle taking over most homes in India, putting together a wholesome meal for your family is never easy. We all feel the need for hygienic and good quality products that can be conveniently bought and stored. Suguna Anytime - Food for Good Health! is the answer to your needs. Processed to international quality standards, Suguna Anytime frozen chicken is the ultimate choice for the modern day families. Savour the delicacies from a comprehensive range of frozen portioned chicken, sausages, and salami. Suguna Anytime is available at all leading supermarkets and departmental stores in cities across the country and at Suguna Daily Fressh outlets. Suguna Anytime chicken products are available in convenient tray packs for retail sale. Quick frozen to retain freshness, Suguna Anytime brings you good health and great taste of farm fresh chicken at your convenience. Egg is one of the most nutritious food money can buy. Eggs provide significant amounts of vitamins and minerals, and are also an excellent source of high-quality proteins. For the first time in India, Suguna Foods Limited, Indias largest poultry enterprise presents a range of premium quality Suguna Value Added Eggs, enriched with special nutrients like Omega 3 fatty acids, Selenium, Vitamins and minerals that not only provide nutritional value but specific functional benefits to the consumer. Suguna offers four varieties of value added speciality eggs, each fortified with specific vitamins, and nutrients to help maintain a balanced diet and healthy lifestyle for people of all age groups and health conditions.

16

Mothers Delight Refined Soyabean Oil enriched with purity and premium taste is a healthy cooking oil. It has a balanced amount of Linoleic and Linoleic fatty acids which helps in absorbing nutrients and growth of cells. Mothers Delight preserves the inherent goodness and properties of Soyabean to give consumer light, tasty and healthy Refined oil. It is a rich source of Vitamin E and antioxidants that provides better immunity. It has omega-3 and omega-6 essential fatty acids which are good for health. The product is manufactured and packed under hygiene conditions at Soya Division, Unit- Hinganghat, Distt. Wardha, (Mah) which is certified by ISO - 9001-2008. Mothers Delight is an AGMARK Product which is certified for Quality by Govt. of India. Suguna Organix, farm and garden products division, we believe that the full benefits of recycling can only be attained if the resulting product is used in an ecologically beneficial manner. This concept of closed loop recycling is central to organix division. It has been the ethos of Suguna Organix to produce the highest quality, nutrient rich compost and value added allied product lines for the farming community, consistently match the varied needs of our customers with zero or minimal environmental front print. We use a completely natural process free from synthetic additives to produce all our products. The result of this is an entirely natural range of products, infused with essential crop nutrients. We use a completely natural process free from synthetic additives to produce all our products. The result of this is an entirely natural range of products, infused with essential crop nutrients. Our compost-based soil products include a variety of grower and professional landscape blends for all soil environments and every growing conditions. Composts are crafted for farming application, container growers, bedding plant producers, tree growers, home gardeners, horticulturalists, golf courses, landscape contractors, and a variety of other growing applications. We are building up a loyal customer base, with similar environmental ideas and an increasing awareness of the dual benefits of incorporating sustainable products into their projects. We do advice with each customer to insure proper application of the product(s) so to achieve best
17

results. In conjunction with agricultural universities, soil research associations and marketing companies, we are committed to continuously increase our range of products and developing sustainable markets for all products.

Swarna Bhoomi Active Compost Swarna Bhoomi Premium Compost Multi-purpose Garden Compost Suguna Lush TruLawn

Suguna Foods Limited (Suguna) is a fully integrated poultry processor committed to the poultry industry. Our mission is to provide highest quality product with an unequaled commitment to service. Suguna is the India's No 1 Broiler producing company for more than two decades and forays into manufacturing of finest quality poultry equipments. We have carried out extensive research to deliver the best Poultry equipments at an affordable price. Our poultry equipments has the following advantages:

Less wear and tear. Longer Life. Minimal wastage of feed and water. It is mixed with rat repellent and hence rat don't eat the product.

As we have PAN India presence you can reach us anytime,anywhere and we assure remarkable service to our customers. Chick Drinker

The product is developed with finest quality for longer life. The chick drinker helps the new born chicks to drink water with ease.

18

The transparent cone helps to check water level easily. The drinker can be easily stacked. It also comes with a stand to maintain required height. The capacity of drinker is to store 3 liters of water. For better chick performance we recommend one drinker per 50 chicks.

Broiler Drinker

Auto drinker can be used for chicks from third day to maturity. The drinker has only two way water flow and hence it reduces salt formation and water contamination.

This helps to produce good quality chicks. It ensures less cleaning area when compared with other drinkers. The drinker has less assembling parts. The drinker is treated with U-V stabilized and hence there will be no discoloration nor fading.

It is mixed with rat repellent and hence rat don't eat the product. It can hold more water and provided with ballast for stability. Can be used for feeding up to 50 chicks.

Auto Feeder

The auto feeder is designed in such a way for easy handling. The feeder has slots with number reference to help farmers to adjust the slots according to the age of the birds.

The week wise slot can be easily identified with the help of arrow given on hanger rod.
19

This helps to reduce feed wastage. The grill has been designed with blunt edges to avoid injuries to the birds while feeding. The feeder is U-V stabilized and hence no discoloration. It is mixed with rat repellent and hence rat doesnt eat the product. The lock nut thread at bottom pan stick prevents slipping. Can be used for feeding up to 50 chicks.

PROBLEM STATEMENT
Organic food is growing rapidly worldwide and especially in the Indian continent. The people become healthier conscious. On the other hand fast food and especially in chicken, broilers are consumer more. This research is carried out with the intention of to what extend the people take efforts in consuming organic chicken and their acceptance level towards goodness of consuming organic chicken.

20

OBJECTIVE OF THE STUDY

To study the factors affects consumer attitude towards organic products. To identify the factors influence the consumer buying patterns. To identify the consumer choices on different organic products. To identify the relation between demographic details of the consumers and their perceptions.

21

CHAPTER II LITERATURE SURVEY

22

CHAPTER 2 LITERATURE REVIEW

Consumer behaviour is a complex pattern and sophisticated understanding for marketing researches, but simply defined; study of psychological, social and physical actions when people buy, use and dispose products, services, ideas and practices. (Solomon, 2006; Blackwell et al., 2001; Peter and Olson, 2008) Basic idea behind the consumer research was questioning of buying reasons, however researchers have to go deeper and also ask people how and in which circumstances purchase and consume. (Blackwell et al., 2001) Consumer behaviour consists of ideas, feelings, experiences and actions of consumers with additional environmental factors like ads, prices and commends. Furthermore, consumer behaviour is a dynamic process, because of the continuous changes in ideas, perceptions and activities of consumers as an individual or in a group. (Olson and Peter, 2008) Consumers response to different types of marketing strategies is the major question to be answered. (Figure 3.1) Stimulus-respond model is often used to explain this query as shown in the following figure. Buyers black box is the vital point that companies and other actors in the market have to discover from various researches. (Armstrong and Kotler, 2007). According to Peter and Olson, consumers should be analysed by looking into three objects; affect and cognition, behaviour, environment and their relations between each other. (Figure 3.2) Every single element can affect other elements or it can be a reason to realise. So, all elements should be considered when deciding for marketing strategy. (Peter and Olson, 2008). Affect represents persons emotions concerning a product like admiring or hating, while cognition can be explained as mental activities such as learning, interpreting and evaluating. When people are exposed to stimuli, they have the image of objects, situations, people or experiences in mind. Every individual has own way of understanding, perceiving and explaining of the surroundings in his own environment. In some degree these specialities can be common depending on common attitude and beliefs. Affect and cognition are connected to each other

23

intensively however they are originated totally in different ways as feelings and thoughts. (Peter and Olson, 2008; Chisnall, 1995) Due to the various explanations of consumer behaviour, Peter and Olson defined this term as overt consumer behaviour that means consumers activities which can be analysed by quantitative and qualitative methods. Successes of marketing strategies pass through not only changing of this behaviour of the consumers but also affect and cognition. Although a person likes a product, it can be possible that s/he does not purchase it. (Peter and Olson, 2008) Consumer environment is the surroundings and out side effects. All consumers are exposed to social pressure, culture, family, personal influence and situation effects. (Blackwell et al., 2001). Internal factors affecting consumer behaviour Demographics and personal choices Demographics is especially an interest of marketers as it is important to see how population is changing in numbers, and distribution of genders, age, economic situation, birth rates and etc. For example, recent increase of women economical activity put them in the first place for companies as women purchase much more than men. (Blackwell, 2001) Furthermore, distribution of wealth is in focus as it has importance to determine buying power and market potential of the targeted consumers. (Solomon, 2006). Family structure, marriage and divorce rates of the countries have also effects on consumption habits like couples with children buy much more health concern food than singles which can prefer junky food. Also, children have effects on changing buying decisions of the parents when they are shopping in a supermarket, therefore advertisements are more relevant to children in some countries with young population. (Solomon et al., 2002). Another important factor is the personality that separates a single consumer from the whole society. Personality is described as consistent responses to stimuli. Having a certain personal values in many ways could be a marketing tool to connect some people with definite products and brands. (Chisnall, 1995) According to a marketing research, people who prefer strong coffee

24

seem to be more social and aggressive than the consumers who prefer light and milky coffee segments. Due to this fact some coffee companies redesigned their cafes. (Solomon, 2006). Lifestyle of a person is a further key for buying habits and this attribute is important to be measured to know how consumers spend money, time and in which way a person is showing of own values and choices to consumption. (Solomon, 2006) Lifestyle can be more adaptable to new circumstances than personality. If a person changes his job, that also affects his purchasing power and as buying behaviour. (Armstrong and Kotler, 2007). Consumer attitude Attitude is mentioned and used by the society so often with various meanings. Simply, attitude has been defined by Allport a mental and neural state of readiness, organised through experience, exerting a directive or dynamic influence upon the individuals response to all objects and situations with which is related. Attitude is shaped selectively to compromise consumers needs and could be changed by external effects like; joining a new community, gaining more knowledge and environment of a person. (Chisnall, 1995). Attitude has a significant effect on purchasing a brand and choosing the place for shopping. Also, attitude measurement is necessary for finding out how marketing strategies and advertisements are influencing people. Moreover, new products emerge in the market or existing products future demand can be predicted by measuring consumers attitude. (Blackwell et al., 2001) Due to the various marketing strategies to increase consumer portfolio in the market, many companies conduct large scale consumer attitude surveys to catch changes over time. There have been examples in the past about how the big companies end up with failure due to their lack of interest in societys attitude changes toward their product or service while the new brands tract their consumers after handling sophisticated attitude researches. (Peter and Olson, 2008)To sum up, attitude is not the exact forerunners that say which consumption behaviour will be in the future, but they can show the way what buyers are likely to do in a defined situation. (Chisnall, 1995).

25

Consumer motivations Marketers are aiming to satisfy the consumers needs that rise in certain time or period. When there is a need, people seek solutions to diminish or sift. (Solomon, 2006) Peoples needs and motivations are intensively connected to each other which is shown by the following figure. Motivations start up behaviour and direct to a goal or a specific action. A motivated persons involvement to an activity is obviously more than the unmotivated. Psychologists have examined motivation and its importance in human behaviour in several ways and the most common ideas were propounded by Abraham Maslow and Sigmund Freud. (Armstrong and Kotler, 2007) Maslow has developed a theory that classifies the needs as lower and higher wishes. External factors affecting consumer behaviour Culture and Subculture Culture is one of the main external factors that have a big effect on consumer behaviour, ideas and wishes. As mentioned in the learning and knowledge section, behaviour is almost a learnt process and culture has power on our behaviour as we all grown up in a certain group of society with peculiar cultural properties. (Armstrong and Kotler, 2007) Culture is the circulation of the values, norms and traditions among the society between the generations. A product introduced to a market that carries cultural specialties is expected to be well perceived from that targeted society. Furthermore, a product can point out the on going changes in the culture although it does not belong to objected population. For example, American convenience, pre-cooked or frozen products are marketed in some cultures that targets the changes in the household lifestyle like both parents are working or decrease of housewife in the population. (Solomon et al., 2002) When consumers buy a product, they expect it to perform to compromise their needs. But these needs are differentiating between cultures. For instance, Miele, a German company for electrical machines have introduced a washing machine with high performance and lasting for a decade. They obtained a good sale results in Europe and Asia with the high selling price. But when they try to enter the North American market, they could not find such big consumer. This is all related
26

to American culture. As the society is mobile and continuously changing the houses, they do not want to spend too much on this machine category instead they prefer rather cheaper and less efficient one. (Blackwell et al., 2001). Another big trend in developed countries is the change of eating habits. Most of the societies start to choose more healthy diets especially with balanced nutritional meals. This health awareness movement has boomed natural and organic foods on the shelves of the supermarkets. (Peter and Olson, 2008). Cultures can be also divided into various groups called subculture. These people belonging to the same subculture have more common values, religion and mostly coming from same region and ethnicity. (Armstrong and Kotler, 2007) Age groups can be a subculture in the society. For example while some brands are targeted to teen-age groups the others can be offered to matured market like health care products, home decoration, travel and so on. (Blackwell et al., 2001) Race groups in a society can show diverse consumption habits. For example, black or African American subculture is largest minority community in the US and companies are developing strategies to get these groups. For example, a doll company had introduced to the market black girl dolls with different hair style, skin colour and face characteristic to show that all black women have different appearance. (Peter and Olson, 2008). Family and Group Influence A group is a cumulative of people that have something common and distinctive relations between each other. The most common and natural group in the society is the family that mostly act together with certain aims. Marriage mostly establishing a new place to live and people need to buy several of new products and services and also forming a family is one of the important factors to change buying and consumption behaviour of an individual. (Chisnall, 1995) Family members have different roles like initiator, influencer, decider, buyer and user. The impacts of family members on different assortments of products are changing depending on family size, structure and hierarchy in buying decision process. Moreover, women are targeted in developed societies as their income and responsibilities are increasing day by day and result of togetherness in housework affects buying behaviour of men. (Blackwell et al., 2001)
27

The other group of people can be formed by sharing the same profession, beliefs and hobbies. (Chisnall, 1995) Reference group consists of one or more people and this group is taken as a reference when evaluating peoples values and attitudes. Reference groups not only affect peoples values but also they can change buying behaviour such as; products that are consumed, placed to shop and brands that are used. As an example sport brands like; Converse, Nike and Puma use famous players in their ads to attract more consumers that admire these people. (Olson and Peter, 2008). For a better understanding of reference group effect on consumer behaviour, first marketer should analyse the group features and find out why people are dedicated to these groups. Thereafter, brand managers and producers should know well the leaders of these reference groups and they need to consider their ideas and behaviour while concluding. It is known that, leaders are affecting group members with their ideology and distinctive abilities. (Armstrong and Kotler, 2007). General attitude and behaviour of organic consumers Worldwide studies on consumers show diverse results depending on the country, region and the year of the research. While some nations are more familiar to organic food consumption and even accepted as a part of their lifestyle, others especially developing countries involved in newly. Studies mostly focused on describing organic consumers and also their motives and barriers. Moreover there are studies regarding to non-users of organic food and trying to dissolve and understand the reasons of not consuming. Today, income and price differences are no longer the only barriers and also green movement is no longer the only motive in the sector. Important thing is, marketers and companies have to be aware of that organic consumption is rapidly expanding among the people from every socio-group and ideology and new individual needs are rising. These factors bring new demand on the market. Organic consumer identity Various researchers aimed to distinguish organic consumers by looking at the demographics like age, sex, income, presence of children and education. Classifications can diverse depending on the writers. Most studies use terms of regular and occasional buyers (Hofmann, 2006; Zanoli et al., 2004; Davies et al., 1995; Zanoli and Naspetti 2002) while other uses terms; unaware
28

consumers, unaware non-buyers, buyers of organic food. (Hofmann, 2006) Fotopoulos and Krystallis separate Greek organic consumers into four groups such as; explorers who are highly exploratory and married older female buyers; greens who are environmental conscious, educated and belonging young middle age groups; motivated people are in young middle age groups very motivated towards organic idea; price sensitive are young, low educated and married female. (Fotopoulos and Krystallis, 2002) Gender Many surveys find out that women are more disposed organic foods than men. (Radman, 2005; Hofmann, 2006; Fotopoulos and Krystallis, 2002; Zanoli et al., 2004; Davies et al., 1995) A consumer study showed that females feel more responsible for the health of the family than males. So this led women to buy more organic products while men mostly purchase due to taste. (Hofmann, 2006) Another study found out women think more about that organic food has better taste and quality. (Radman, 2005). Age Some studies cannot find obvious difference between age groups. (Davies et al., 1995; Radman, 2005; Zanoli et al., 2004) On the other hand, there are studies that correlation can be shown (Latacz and Foster, 1997) For instance; in UK it is declared that regular organic consumers are older and especially 45-54 years old people who prefer more vegetables than other age groups. However, the same study found that younger people spend more money on organics. Another UK survey showed youngest and oldest showed less interest and people reaching to 30 have and have no children show high interest. (Padel and Foster, 2005) European study stated that organic buyers are generally younger than 45 years old. (Wier and Calverley, 2002) Finnish researchers declared that age groups of over 65 have the lowest tendencies and then this is followed by 50-65 years old people. According to the same study young people show the same negative attitude likewise. 35-49 is the most interested group in Finland. Furthermore, Italians found that 25-40 is the most interested group and also added that till 60 years old can be considered in the purchaser group. (Zanoli et al., 2004)

29

Presence of children Children in the household seem to have positive effect on organic food consumption. (Davies et al., 1995) Fricke and Alvensleben (1997) claim families with children focus on health more than other others. This statement can be powered by a Swiss study which is declaring that; couples and families with babies and small children are more interested in consuming organic products. Moreover a Finnish study declared the positive attitude of families with children towards consumption. (Zanoli et al., 2004) On the other hand a UK study described regular consumers as having fewer children than others. (Padel and Foster, 2005) Moreover, Wier and Calverley (2002) stated that families with teenagers have lower intention to buy. Education Regular consumers in most of the countries are found to be high educated than occasional and non buyers. (Radman, 2005; Wier and Calverley, 2002; Zanoli et al., 2004) Regular organic consumers have more information about products. In addition, there is positive relation between product knowledge and buying frequency. Moreover, high educated consumers are found to have better product knowledge. (Zanoli et al., 2004) However, sometimes labelling and brands in the organic market can be problem for consumers in Europe. According to Soil Association survey results nearly half of the UK consumers are seeking for organic name on the label and not searching for brands when buying a product. On the other hand, other European consumers especially Germans have confusion with different labels from private associations. Government had introduced national logo in 2001 to overcome this label barrier in Germany, after that positive effect had shown in the market. (Wier and Calverley, 2002; Padel and Foster, 2005) Income Studies have different results on income variable. Some researchers claim that income has positive effect on organic food consumption (Davies et al., 1995; Wier and Calverley, 2002; Latacz and Foster, 1997; Padel and Foster, 2005; Zanoli et al., 2004) Another claim is, people who grown up and live in urban consume more than rural people. (Radman, 2005) Danish studies also agree on; organic consumers mostly live in big cities and urban area with higher socio-economical status. (Zanoli et al., 2004).
30

CHAPTER III METHODOLOGY

31

CHAPTER 3 RESEARCH METHODOLOGY

3.1 Research type Descriptive research

3.2 Source of data Primary data was collected through survey of customers using organic products in Coimbatore city. Secondary data was collected from previous research by various authors on this topic, retail biz magazine and articles and reports on the internet. 3.3 Research tool Structured questionnaire

3.4 Sample design Sample size: 300 samples Sampling technique: Convenient sampling.

3.5 Instrument design First two questions of the questionnaires are for identifying the shopping behaviour and frequency of the organic consumers. One of the next two questions regarded to the first purchase time and the other one measure the knowledge and opinion about image of organic products in a five point scale form from strongly agree to strongly disagree and sixth point is used for dont know answer. The following multi optional two questions are figuring out which shopping places are visited mostly and what can be the choice in the future.

32

In the next section there are two set of attitude measurement questions are directed to the respondents in again five point likert scale form from strongly agree till strongly disagree and one point added for dont know answer. The following two multiple choice questions are given to understand product group choices of product consumption 3.6 Data Analysis The researcher has used inferential statistics (through SPSS 17) in order to draw a conclusion. Result of the study has been put in tables and graphs for easy understanding of the findings of the research. 3.7 Statistical tools Reliability test, ANOVA test, Independent Sample T test, frequency analysis and Correlation.

33

CHAPTER IV ANALYSIS AND INTERPRETATION

34

CHAPTER 4

ANALYSIS AND INTERPRETATION

4.1 Frequency analysis Table 1: Gender wise classification Options Male Female Total Figure 1: Gender wise classification Frequency 157 143 300 Percent 52.3 47.7 100

Inference Above table shows that 52.3% of the respondents are males and 47.7% of the respondents are females.
35

Table 2: Age wise classification Options Below 20 20-30 years 30-40 years 40-50 years Above 50 years Total Figure 2: Age wise classification Frequency 12 90 94 94 10 300 Percent 4 30 31.3 31.3 3.3 100

Inference Table 2 shows that 4% of the respondents are below 20 years old, 30% of the respondents are between 20-30 years old, 31.33% of the respondents are between 30-40 years old. 3.33% of the respondents are above 50 years old.
36

Table 3: Occupation wise classification Options Business Employed Student Total Frequency 20 90 190 300 Percent 6.7 30 63.3 100

Figure 3: Occupation wise classification

Inference Table 3 shows that 6.7% of the respondents are doing business, 30% of the respondents are private employees and 63.3% of the respondents are students.

37

Table 4: Monthly income wise classification Options Below Rs.20000 Rs.20000-40000 Rs.40000-60000 Rs.60000-80000 Above Rs.80000 Total Frequency 25 99 89 72 15 300 Percent 8.3 33 29.7 24 5 100

Figure 4: Monthly income wise classification

Inference Table 4 shows that 8.3% of the respondents are getting less than 20000 rupees as their monthly income. 33% of the respondents earn 20000-40000 rupees as their monthly income. 29.7% respondents earn 40000-60000 rupees, 24% of the respondents earn 60000-80000 rupees and only 5% of the respondents earn more than 80000 rupees as their monthly income.

38

Table 5: Family members wise classification Options Children (1 to 14 years) Youngsters (14 to 40 years) Middle aged (40 to 60 years) Aged above 60 years Total Frequency 158 53 14 75 300 Percent 52.7 17.7 4.7 25 100

Figure 5: Family members wise classification

Inference Table 5 shows that 52.7% of the respondents having children between 1 to 14 years old, 17.7% of the respondents have youngsters between 14 to 40 years old, 4.7% of the respondents have middle aged people between 40 to 60 years old and 25% of the respondents have above 60 years old people.

39

Table 6: Frequency of consuming chickens Options Daily Weekly once Monthly once Occasionally Rarely Total Frequency 8 74 82 85 51 300 Percent 2.7 24.7 27.3 28.3 17 100

Figure 6: Frequency of consuming chickens

Inference Table 6 shows that 2.7% of the respondents consuming chicken every day, 24.7% of the respondents consuming chicken weekly once, 27.3% of the respondents consume monthly once and 28.3% of the respondents consume chickens occasionally and 17% of the respondents consume chickens rarely.
40

Table 7: Place of purchase made Options Nearby chicken stall Branded chicken stall Total Figure 7: Place of purchase made Frequency 186 114 300 Percent 62 38 100

Inference Table 7 shows that many respondents (62%) made their purchase on nearby chicken stalls and 38% of the respondents made their purchase on branded chicken stalls.
41

Table 8: Level of purchase made Options Up to 1 Kg 1-5 Kg 5-10 Kg Above 10 Kg Total Figure 8: Level of purchase made Frequency 70 104 107 19 300 Percent 23.3 34.7 35.7 6.3 100

Inference

42

Table 8 infers that 23.3% of the respondents buy up to one Kg chickens frequently, 34.7% of the respondents buy 1-5 Kg chickens frequently, 35.7% of the respondents buy 5-10 Kg chickens and 6.3% of the respondents buy more than 10 Kg chickens frequently. Table 9: Product preference Options Broiler Organic Both Total Figure 9: product preference Frequency 193 82 25 300 Percent 64.3 27.3 8.3 100

Inference
43

Table 9 shows that 64.3% of the respondents prefer broiler chickens, 27.3% of the respondents prefer organic chickens. Only 8.3% of the respondents prefer both broiler and organic chickens. 4.2 Reliability test Table 10: Reliability test Cronbach's Alpha 0.717 Inference Table shows Cronbach's alpha is 0.717, which indicates a high level of internal consistency for scale with this specific sample. N of Items 22

44

4.3 Weighted average Table 11: Weighted average for description about organic products Factors Weight Healthy High Nutritional Value Organic Chicken are grown in harmony with nature Free from Chemicals Grown with environment friendly technique Free from Genetically modified organisms Costlier Strongly Disagree Neutral disagree 1 2 3 45 39 49 22 32 34 58 88 66 60 76 83 95 69 54 48 54 46 38 38 37 Agree 4 61 52 46 73 78 57 66 Strongly agree 5 52 95 91 83 69 76 70 Total weight 2.96 2.67 2.77 2.60 2.77 2.85 2.93 Rank

1 6 4 7 5 3 2

Inference Table 11 infers that Healthy is the top ranked description about organic products with the mean value of 2.96, product is costlier is the second ranked description with the mean value of 2.93, Free from Genetically modified organisms is the third ranked description with the mean value of 2.85, Organic Chicken are grown in harmony with nature and Environment friendly technique is the fourth ranked and fifth ranked variable with the mean value of 2.77 and High
45

Nutritional Value and Free from Chemicals are the last ranked description with mean value of 2.67 and 2.60. Table 12: Weighted average for reasons to buy organic chicken Factors Weight Healthy for me and my family They have high safety level of guarantee and control Environment is less polluted Taste good Fresher than the broiler chicken High Quality Support local people those who grow organic chicken Support organic movement Saving resources for next generation It has positive image It is fashion to consume Inference Table 12 shows that High safety level of guarantee and control is the top ranked variable to influence to buy organic chicken with the mean value of 2.88. Positive image is the second top reason for purchase organic chickens, Healthy for me and my family is the third ranked variable with mean value of 2.85. Environment is less polluted is the fourth ranked variable and Saving resources for next generation is the fifth ranked variable. Supporting local people who grow organic chicken is the sixth ranked variable. Fresher than the broiler chicken are the next ranked variables that influence to buy organic chickens. Fashion to consume is the Strongly Disagree Neutral disagree 1 2 3 58 45 26 25 40 25 16 20 32 53 40 72 77 98 66 76 46 106 74 86 64 67 24 46 31 36 33 38 27 43 25 33 34 Agree 4 58 62 90 74 63 81 84 63 85 90 68 Strongly Total Rank agree weight 5 88 70 55 100 88 110 67 100 72 60 91 2.85 2.88 2.83 2.48 2.72 2.32 2.73 2.50 2.74 2.87 2.66 3 1 4 10 7 11 6 9 5 2 8

46

next ranked variable with the mean value of 3.15. Support organic movement, Taste good and High Quality are the last ranked variables with the mean value of 2.50, 2.48 and 2.32. Table 13: Weighted average for the expectation about organic chickens Factors Weight More cheap prices More accessibility in the market More recognizable label and shops are established. More information in the media Strongly disagree 1 43 46 36 29 Disagree 2 58 81 97 71 Neutral 3 23 20 43 41 Agree 4 67 59 50 61 Strongly agree 5 109 94 74 98 Total weigh t 2.53 2.75 2.90 2.57 Rank

4 2 1 3

Inference Table 13 shows that More recognizable label and shops are established are the top ranked consumer expectations with the mean value of 2.90. More accessibility in the market is the second ranked factor with the mean value of 2.75. More information in the media is the third
47

ranked expectation with the mean value of 2.57. More cheap prices is the final ranked expectation that consumer expected from organic chicken manufactures. 4.4 Correlation analysis Table 14: Correlation between Product descriptions, reasons for buying and expectation. Correlations Pearson Correlation Product description Sig. (2-tailed) N Pearson Correlation Reasons for buying Sig. (2-tailed) N Pearson Correlation Expectations Sig. (2-tailed) N ** Correlation is significant at the 0.01 level (2-tailed). 300 .598** .000 300 .500** .000 300 300 .330** .000 300 300 1 1 2 .598** .000 300 1 3 .500** .000 300 .330** .000 300 1

Inference From the above table it is identified that there is positive correlation between product descriptions with reasons for buying expectations.

48

4.5 ANOVA Test Table 15: ANOVA between Age and consumer expectations on organic chickens H0: Age of the consumers does not vary with consumer expectations. Sum of More cheap prices Between Groups Within Groups Total More accessibility Between Groups Within Groups in the market Total More Between Groups Within Groups recognizable label Total and shops More information Between Groups Within Groups in the media Total ** Null hypothesis rejected. Inference Table 16 shows that significance of F value is greater than 0.05 for expectations like cheap price, market accessibility and information in the media, Hence null hypothesis is accepted, age do not vary with above mentioned consumer expectations. Significance of F value is less than 0.05, for more recognized label and shops, hence null hypothesis is rejected. Ages do vary with consumer expectation like using more recognized label and shop established. Table 16: ANOVA between Occupations and consumer expectations on organic chickens H0: Occupation of the consumers does not vary with consumer expectations. Sum of
49

df 4 295 299 4 295 299 4 295 299 4 295 299

Mean Square 1.744 2.236 3.809 2.259 17.163 1.748 1.553 1.963

F .780 1.686 9.821

Sig. .539 .153 .000**

Squares 6.976 659.754 666.730 15.237 666.510 681.747 68.653 515.544 584.197 6.212 579.174 585.387

.791

.532

df

Mean

Sig.

More cheap prices More accessibility in the market More recognizable label and shops More information in the media

Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total

Squares 2.419 664.311 666.730 13.244 668.503 681.747 32.895 551.301 584.197 7.518 577.869 585.387

2 297 299 2 297 299 2 297 299 2 297 299

Square 1.210 2.237 6.622 2.251 16.448 1.856 3.759 1.946

.541 2.942

.583 .054

8.861

.000**

1.932

.147

** Null hypothesis rejected. Inference Table 16 shows that significance of F value is greater than 0.05 for expectations like cheap price, market accessibility and information in the media, Hence null hypothesis is accepted, occupation do not vary with above mentioned consumer expectations. Significance of F value is less than 0.05, for more recognized label and shops, hence null hypothesis is rejected. Occupation does vary with consumer expectation like using more recognized label and shop established.

Table 17: ANOVA between income and consumer expectations on organic chickens H0: Monthly income of the consumers does not vary with consumer expectations. Sum of More cheap prices Between Groups Within Groups Total Squares 25.474 641.256 666.730
50

df 4 295 299

Mean Square 6.368 2.174

F 2.930

Sig. .021**

More accessibility Between Groups Within Groups in the market Total More Between Groups Within Groups recognizable label Total and shops More information Between Groups Within Groups in the media Total ** Null hypothesis rejected.

16.404 665.342 681.747 66.170 518.027 584.197 16.976 568.411 585.387

4 295 299 4 295 299 4 295 299

4.101 2.255 16.543 1.756 4.244 1.927

1.818 9.420

.125 .000**

2.203

.069

Inference Table 17 shows that significance of F value is greater than 0.05 for expectations market accessibility and information in the media, Hence null hypothesis is accepted, income do not vary with above mentioned consumer expectations. Significance of F value is less than 0.05, for cheap prices and more recognized label and shops, hence null hypothesis is rejected. Monthly income does vary with consumer expectation like using more recognized label and shop established and cheap prices.

51

4.6 Independent sample T test Table 18: T test between gender and consumer expectations on organic chickens H0: Gender of the consumers does not vary with consumer expectations.
Levene's Test for Equality of Variances F Sig. t df Sig. (2tailed) More cheap prices Equal variances assumed Equal variances not More accessibility in the market assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances 1.17 0.28 18.00 0.00 0.45 0.50 16.06 0.00 0.33 0.32 -1.20 -1.20 0.98 0.99 -3.10 52 298.00 276.10 298.00 293.64 298.00 296.14 298.00 0.75 0.75 0.23 0.23 0.33 0.33 0.00** t-test for Equality of Means Mean Difference 0.06 0.06 -0.21 -0.21 0.16 0.16 -0.49 Std. Error Difference 0.17 0.17 0.17 0.17 0.16 0.16 0.16 95% Confidence Interval of the Difference Lower Upper -0.28 0.40 -0.29 -0.55 -0.55 -0.16 -0.16 -0.81 0.40 0.13 0.13 0.48 0.47 -0.18

More recognizable label and shops are established. More information in

the media

assumed Equal variances not assumed

-3.09

289.34

0.00

-0.49

0.16

-0.81

-0.18

** Null hypothesis rejected. Inference Table 18 shows that significance of F value is greater than 0.05 for more cheap prices, more accessibility in the market and more recognizable label and shops are established. Hence null hypothesis is accepted, Gender of the consumers does not vary with more cheap prices, more accessibility in the market and more recognizable label and shops are established. Significance of F value is less than 0.05 for more information in the media, hence null hypothesis is rejected. Gender does vary with more information in the media.

53

CHAPTER V FINDINGS AND SUGGESTIONS

54

CHAPTER 5 5.1 SUMMARY OF FINDINGS Frequency analysis Most of the respondents (52.3%) are males and 47.7% of the respondents are females. 30% of the respondents are between 20-30 years old, 31.33% of the respondents are between 30-40 years old. 3.33% of the respondents are above 50 years old and 30% of the respondents are private employees and 63.3% of the respondents are students. 33% of the respondents earn 20000-40000 rupees as their monthly income. 29.7% respondents earn 40000-60000 rupees, 24% of the respondents earn 60000-80000 rupees and only 5% of the respondents earn more than 80000 rupees as their monthly income. 52.7% of the respondents having children between 1 to 14 years old, 17.7% of the respondents have youngsters between 14 to 40 years old, 4.7% of the respondents have middle aged people between 40 to 60 years old and 25% of the respondents have above 60 years old people. 24.7% of the respondents consuming chicken weekly once, 27.3% of the respondents consume monthly once and 28.3% of the respondents consume chickens occasionally and 17% of the respondents consume chickens rarely. Many respondents (62%) made their purchase on nearby chicken stalls and 38% of the respondents made their purchase on branded chicken stalls. 23.3% of the respondents buy up to one Kg chickens frequently, 34.7% of the respondents buy 1-5 Kg chickens frequently, 35.7% of the respondents buy 5-10 Kg chickens and 6.3% of the respondents buy more than 10 Kg chickens frequently. 64.3% of the respondents prefer broiler chickens, 27.3% of the respondents prefer organic chickens. Only 8.3% of the respondents prefer both broiler and organic chickens. Reliability analysis Reliability test shows that Cronbach's alpha is 0.717, which indicates a high level of internal consistency for scale with this specific sample.
55

Weighted average Healthy is the top ranked description about organic products with the mean value of 2.96, High safety level of guarantee and control is the top ranked variable to influence to buy organic chicken with the mean value of 2.88. More recognizable label and shops are established are the top ranked consumer expectations with the mean value of 2.90. Correlation analysis It is identified that there is positive correlation between product descriptions with reasons for buying expectations. ANOVA Test ANOVA shows ages do vary with consumer expectation like using more recognized label and shop established. Occupation does vary with consumer expectation like using more recognized label and shop established. Monthly income does vary with consumer expectation like using more recognized label and shop established and cheap prices. Independent Sample T Test Gender does vary with consumer expectation like using information on media.

56

5.2 SUGGESTIONS
1. This study suggests the company can reduce the cost of their products and the margin of the retailers should be increased. 2. In the same way, whenever any new retail shop is introduced for the consumer there should be at least a print advertisement if T.V. advertisement is not possible. 3. Other incentives should also be given to the retailers like glow sign boards and other accessories etc. 4. There is a general perception among the consumers that organic chicken are expensive than other broilers, efforts must be made to overcome this perception by trade shows and publicity. 5. Proper training should be given to the retailers; this will help retailers to create awareness among the consumers.

57

5.3 CONCLUSION
Development in organic food is repaid increasing in India. Suguna is the pioneer in supplying organic foods, particularly in organic chickens. This study reveals that lack of consumer awareness and less number of retail shops is the main reason that affects the buying behavior. This study suggested that establishing more number of retail shops, creating more promotional activities like wall hoardings, TV commercials, sign boards and also training program for retailers for enhance the awareness among consumers regarding suguna organic chickens.

58

APPENDIX

59

ANNEXTURE - I
CONSUMER ATTITUDE AND BEHAVIOUR TOWARDS ORGANIC CHICKEN IN COIMBATORE I am doing Master of Business Administration (MBA) from

Kalasalingam University has undertaken a project work for understanding the customer behaviour towards Organic Chicken for my Academic purpose. Kindly spare few of your time in filling up this questionnaire. These details will be kept confidential. Name Gender Age : : Male : below 20 40 50 years Occupation : Business ( ( ( ( ) ) ) ) Female ( ) ) ) ) student ( ) 30 40 years ( )

20 30 years ( above 50 years ( employed (

others .. Family Income (Monthly) : below Rs. 20000 ( ) ) Rs.20000 40000 ( ( ) Rs. 40000 )

60000 (

Rs 60000 80000

) Above Rs. 80000 (

How many members are there in your family? Children (1 to 14 years) ( 60 years)( ) ) youngsters(14 to 40 years) ( ) ) Middle aged(40

Aged above 60 years (

How frequently you consume chicken at home? Daily ( ) Weekly once ( ) Monthly once ( ) Occasionally ( ) Rarely ( )

60

From where do you buy chicken? Nearby Chicken stall ( ) Branded Chicken Stall ( )

How much chicken do you buy for a week? Up to 1 kg. ( ) 1- 5 kg. ( ) 5 10 kg. ( ) above 10 kg. ( )

Which kind of chicken do you buy? Broiler ( ) Organic ( ) Both ( )

How would you describe organic products? (5 =Strongly Agree, 4 = Agree 3 = Neutral 2 = Disagree 1 = Strongly Disagree ) Sl.No. Variables 1. Healthy 2. High Nutritional Value 3. Organic Chicken are grown in harmony with nature 4. Free from Chemicals 5. Grown with environment friendly technique 6. Free from Genetically modified organisams 7. Costlier I buy Organic Chicken, because. Sl.No. Variables 1. Healthy for me and my family 2. They have high safety level of guarantee and control 3. Environment is less polluted 4. Taste good 5. Fresher than the broiler chicken 6. High Quality 7. Support local people those who grow organic chicken 8. Support organic movement 9. Saving resources for next generation 10. It has positive image 11. It is fashion to consume I would like to buy Organic Chicken, if Sl.No. Variables
61

(5 =Strongly Agree, 4 = Agree 3 = Neutral 2 = Disagree 1 = Strongly Disagree ) 5 4 3 2 1

(5 =Strongly Agree, 4 = Agree 3 = Neutral 2 = Disagree 1 = Strongly Disagree ) 5 4 3 2 1

1. 2. 3. 4.

More cheap prices More accessibility in the market More recognizable label and shops are established. More information in the media

REFERENCE
Aksoy, U. 2002. Turkey. Report on Organic Agriculture in the Mediterranean Area Mediterranean Organic Agriculture Network, Options Mditerranennes, Series B: N40, CIHEAM- IAMB, Bari. Al-Bitar (Ed.). p. 147 - 159. v. Alvensleben, R. 1997. Ecological Aspects of Food Demand: The Case of Organic Food in Germany, AIR-CAT 4th Plenary Meeting: "Health, Ecological and Safety

62

Aspects in Food Choice" Volume 4, No1, 1998, p. 68 79. 1 June 2007, available at: http://www.uni-kiel.de/agrarmarketing/Lehrstuhl/econ.pdf Armstrong, G., Kotler, P. 2007. Marketing: an introduction, Pearson Prentice Hall, New Jersey, p. 127-148 Babadogan, G. and Koc, D. 2005. Organik Tarm rnleri D Pazar Aratrmas. IGEME, Turkey Backer, S. 2004. Mapping the values driving organic food choice Germany vs the UK. British Food Journal. Vol. 38, No. 8, p. 995-1012. Blackwell, R. D., Miniard, P. W., Engel, J. F. 2001. Consumer Behavior. 9th edition. Harcourt College Publishers, USA BLE, 2006. At a glance information about the Bio-Siegel. Federal Agency for Agriculture and Food (BLE), Bonn, Germany. 1 June 2007, available at: http://www.oekolandbau.de/fileadmin/redaktion/bestellformular/pdf/BMVEL_Verbr au._engl_flyer.pdf Bolten, J., Kennerknecht R. and Spiller, A. 2006. Perspectives of small retailers in the organic market: Customer satisfaction and customer enthusiasm. Paper presented at 98. Seminar of the European Association of Agricultural Economists EAAE, Crete, 29 June 2 July 2006. 1 June 2007, available at: http://orgprints.org/10198/ Chisnall, P. M. 1995. Consumer Behaviour. 3rd edition. McGraw-Hill Book Company, England Davies, A., Titterington, A. J., Cochrane, C. 1995. Who buys organic food? A profile of the purchasers of organic food in Northern Ireland. British Food Journal. Vol. 97, No. 10, p.17-23 Fotopoulos, C. and Krystallis, A. 2002. Purchasing motives and profile of the Greek organic consumer: a countrywide survey. British Food Journal. Vol. 104, No. 9, p.730765
63

Haccius, M. and Immo L., 2000. Organic Agriculture in Germany, Stiftung kologie & Landbau (SL), Bad Drkheim, Germany. 15 June 2007, available at: http://www.organic-europe.net

Hamm, U., and Gronefeld, F., 2004. The European Market for Organic Food: Revised and Updated Analysis. Organic Marketing Initiatives and Rural Development: Volume 5, Aberystwyth, UK

Harper, G. C. and Makatouni, A. 2002. Consumer perception of organic food production and farm animal welfare. British Food Journal, Vol. 104, No. 3/4/5, p. 287-299

Hill, H. and Lynchehaun, F. 2002. Organic milk: attitudes and consumption patterns. British Food Journal, Vol. 104, No. 7, p. 526-542

Hofmann, S. 2006. The market for organic food from the perspective of consumers and market actors Analysis of supply chain and demand. Dissertation, Landwirtschaftlich Grtnerischen Fakultt, Humboldt Universitt zu Berlin, Germany

Kenanolu, Z. and Karahan, . 2002. Policy implementations for organic agriculture in Turkey. British Food Journal, Vol. 104, No. 3/4/5, p. 300-318

McEachern, M. G. and Willock, J. 2004. Producers and consumers of organic meat - A focus on attitudes and motivations. British Food Journal. Vol. 106, No. 7, p. 534- 552

Michelsen, J., Hamm, U., Wynen, E. and Roth, E. 1999. The European market for organic products: Growth and development. University of Hohenheim, Stuttgart, Germany.

Padel, S. 2004. Main Findings of the Delphi Survey on the market for organic food In: O. Schmid, J. Sanders, P. Midmore (Ed.), Organic Marketing Initiatives and Rural Development. Vol.7, University of Wales Aberystwyth, UK, p.24-25

Padel, S. and Foster, C. 2005. Exploring the gap between attitudes and behaviour. British Food Journal. Vol. 107, No. 8, p. 606-625

64

Peter, J. P. and Olson, J. C. 2008. Consumer Behavior and Marketing Strategy, 8th International edition, McGraw-Hill Companies Inc, New York

Radman, M. 2005. Consumer consumption and perception of organic products in Croatia. British Food Journal. Vol. 107, No. 4, p. 263-273

Solomon, M., Bamossy, G., Askegaard, S. 2002. Consumer Behaviour A European Perspective. 2nd Edition. Pearson Prentice Hall, New Jersey, USA

Squires, L., Juric, B. and Cornwell, T. B. 2001. Level of market development and intensity of organic food consumption: cross-cultural study of Danish and New Zealand consumers. Journal of Consumer Marketing, Vol. 18, No. 5, p.392- 409

Tuson, J., Lampkin N. 2004. Evaluation of European Organic Farming PoliciesDevelopment of Indicators Employing the Means Framework 1st EISfOM European Seminar, Berlin, Germany

Wier, M. and Calverley, C. 2002. Market potential for organic foods in Europe. British Food Journal, Vol. 104, No. 1, p. 45-62

Willer, H. 2007. Organic Agricultural Land and Farms in Europe, FIBL Survey 2007, 1 May 2007, available at: http://www.organiceurope.net/country_reports/germany/default.asp

Willer, H. and Yussefi, M. 2007. The World of Organic Agriculture. Statistics and Emerging trends. IFOAM & FiBL. 1 May 2007, available at: http://www.orgprints.org/10506

Zanoli, R. (ed), Baehr, M., Botschen, M., Laberenz, H., Naspetti, S., Thelen, E., 2004. The European Consumer and Organic Food. Organic Marketing Initiatives and Rural Development: Vol. 4, Aberystwyth, UK.

65

66