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 TEL  Vol.9 No.8 , December 2019
A Study on Consumer Perception Regarding Buying Fresh Produce in Organized Retail Stores in Bangalore, India: Do Demographics Matter?
Abstract: The present empirical research paper analyses the consumers’ buying pattern of fresh produce at organized retail stores from demographic perspective. The Indian retail sector is predominantly unorganized. However, organized retail units are fast emerging and becoming the preferred choice of consumers, especially in urban areas. The present research involved ample literature review pertaining to organized retailing of fresh produce, consumer perception regarding factors such as product attributes, price, discounts, promotion, parking, accessibility, ambience and the like and the role of various demographic attributes on consumer perception. The framework of analysis is two-fold; one—the impact of demographic attributes such as age, gender, income, education and marital status on purchase value and preference to visit organized retail stores and two—the association between consumers’ demographic attributes, and perception regarding organized retailing of fresh produce in 7 P’s services marketing mix framework. Statistical tools such as Mean scores, Standard Deviation, Chi-square and Anova were used for data analyses. Significant difference has been found across the demographic attributes considered for study with respect to purchase value, preference to visit organized retail stores for buying fresh produce, and consumer perception regarding almost all the attributes of services marketing mix.

1. Introduction

The Indian retail sector is predominantly unorganized. However, organized retail units are fast emerging and becoming the preferred choice of consumers, especially in urban areas. The organized retail sector implies presence of large retailers, greater enforcement of taxation mechanisms and better labour law monitoring system. Organised retailing of fresh produce in India took off in the post liberalization era. Due to change in consumer demographics, the increase in families’ income, urbanization, awareness and access of internet media has influenced the consumer behaviour to choose products from modern retail outlets [1]. The success of organized retail format, any format for that matter, significantly depends on consumers’ patronage. Having in-depth knowledge about consumers’ preferences and perceptions allows retailers to design their product and service offerings more appealing to the target segments. Consumers’ perception of product or service quality is influenced by the intrinsic attributes of the offering as well as by the extrinsic indicators and cues provided by the seller.

Though the share of fresh produce sold organized retail stores in India is quite marginal, as low as 12% [2], it is expected to swell up vigorously. The corporate giants like Reliance, Tatas, Birlas, Mahindra and Mahindra, Bharti, Future Group, RPG, Rahejas, ITC, Pepsi Co and the like had already established a traceable presence in modern retail sector. Grocery and food products account for about 65% of overall share in organized retail format. The US-based retail giant Walmart focuses on its fresh food business in India. Though the contribution from fresh fruits and vegetables is very low, the food accounts for 60% of Walmart India’s overall business in the country [3]. The retail market size grew from USD 490 billion in 2013 to about USD 792 billion in 2018, and was expected to reach about USD 1150 billion by 2021 [2] [4].

In recent decades, there has been extensive research carried out aiming at understanding consumer attitudes, perceptions and preference with respect to purchase of grocery and food products. It is imperative for marketers to gain understanding of how consumers think, feel and act in buying situations in order to offer right value to the customers. They need to adopt a holistic marketing orientation, thereby gaining a 360-degree view of not only their present day lives, but also the changes that occur during their life time. Age, gender, education and income are some of the prominent demographic factors employed in domestic and international segmentation. It is well established that the types of goods and services sought by individuals change as they age and pass through the various life cycle stages [5]. There is a need to find out the difference in retail purchase behaviour of people with different demographics and geographic locations, which particularly are important in the case of food and grocery segment. Caroline B. Webber [6] examined how low-income adults considered purchase of fresh produce for the family and found that there were concerned related certain areas such as store venue, internal store environment, product quality, product price and relationships with the stores.

2. Review of Literature

Massaglia et al. [7] studied Italian consumer preferences while buying fruit and vegetable considering the socio-demographic variables of individuals and found that consumers value the factors such as origin, seasonality and freshness while no importance was given to organic certification, variety and brand. Chakravarthi Koundinya [8] found that gender, educational qualifications, and income significantly influenced the actual online train ticket booking behavior; whereas, age and profession were found to be insignificant. Ragavan [9] found many factors that influence consumers’ preference to vegetables from modern retail outlets such as regular product availability and range, quality, price, weighing, billing and accessibility in the order of importance. Hugar & Vijay Kumar [10] found that factors such as gender and consumers’ education level have great impact on quantity and frequency of purchase. Sanjaya et al. [11] have observed the purchasing behavior for branded fine rice and found that the quality and image of the brand were significant factors for favoring it, and also claimed price was not the most significant factor for the well-off people. Manivannan and Raghunanthan [12] have done the researches on demographic factors affecting consumer behaviour in connection with departmental store buying. Aradhey [13] argued that though young professionals and families with dual incomes prefer to make monthly purchases from modern retail stores, they buy daily fresh food from convenience stores primarily for convenience and perceived freshness. Dhruv Grewal et al. [14] emphasized customer shopping experience to ensure survival in today’s economic climate and competitive retail environment. It represents a strategy that results in a win-win value exchange between the retailer and its customers. Chandan A. Chavadi and Shilpa S. Kokatnur [15] emphasised that promotions are to be implemented aggressively in order to increase sales.

Okey Peter Onyia and Stephen K Tagg [16] studied the influence of demographic factors such as age, gender, level of education, marital status, employment status, income level and area of residence on retail banking customers’ behaviour toward Internet Banking (IB) adoption in Nigeria and found that that gender, level of education, and employment status are the major influencers. Shailesh K. Kaushal and Sanjay Medhavi [17] purported that quality, time saving and price are the most important factors while buying high value products at shopping malls.

Sandrine Macé [18] investigated the impact of psychological pricing and found that the effects are largely context dependent. Cele C. Otnes et al. [19] emphasized the need for customer and employee interaction as the key atmospheric element of Customer Experience Management (CEM) that can shape customer satisfaction in the retail setting. Manju Malik [20] studied the consumer perception of service quality of organised retail stores with specific reference to product mix, price mix, physical evidence mix, promotion mix, people mix and after sales services, and found significant difference between perception and satisfaction levels of respondents, grouped by age and annual income.

Hashim, Afizah, Erlane K Ghani, Jamaliah [21] found that gender, income and age have significant impact on online shopping while marital status has less significant impact. Prasad and Sarma (2016) found that demographics did not impact online channel usage for food and grocery purchases. Nayyar and Gupta (2015) found gender has significant impact on online purchase. DVR Subramanya Sastry and B Madhusudhana Rao (2017) found that there is no difference between consumers’ income, gender and their preference for online security and pay on delivery while buying merchandise online. Krishnamurti, S., & Gupta, B. [22] analysed the impact of gender and marital status on consumer buying pattern of grocery. They found significant difference on both the parameters studied. Earlier studies on grocery shopping threw light on role of women in grocery shopping, their impulsiveness, tendency to stock food items, preference to buy discounted items, more information seeking from sales persons, consider shopping more as a social and leisure activity. Studies show that women tend to be more emotional while making buying decisions. Bagla Ramesh Kumar and Khan Jasmine [23] found significant difference between gender of consumer, and mode of ordering food online and dining preferences. Significant difference also found between age and level of satisfaction of customer ordering food online, while age has shown no difference with respect to price, feedback and timely delivery of food. Nithila Vincent [24] contend that there exist significant differences between shopping styles of males and females; males tend to be high on brand consciousness and loyal, and low on hedonic/recreational shopping behavior, while women tend to be low on brand consciousness and loyalty, but high on hedonic and recreational behavior. However, there is no difference across gender on perfectionist consumer novelty and consciousness, price sensitivity, impulsive nature and confused by over choice.

Garg, Ajay K.; Atwaru, Yakeen M. [25] examined the interplay between demographic attributes of consumers, shopping mall attributes and respondent variables such as frequency of visit, time spent, and the money spent during shopping and the findings revealed that most of the demographic variables had a statistically significant relationship with frequency of visit and money spent at the mall, while time spent was positively related to gender and marital status. Gender, age, educational level, and dwelling distance were the differentiating demographic factors towards hedonic mall factors (convenience and variety). Surajit Ghost Dastidar and Biplab Datta [26] studied the influence of the consumer‘s demographics on their exploratory tendencies and found that males are more risk taking and innovative than females and younger consumers are more prone to indulge in interpersonal communication about purchases.

Krishna C. V. [27] found significant association between demographic attributes of consumers such as occupation and social class have significant impact on their perception towards private label apparel. Income is a vital differentiator when it comes to buying expensive, status-enhancing items such as household appliances, consumer electronics, and luxury products. Hairong Li, Cheng Kuo, Maratha G. Rusell [28] found that education, convenience orientation, experience orientation, channel knowledge, perceived distribution utility, and perceived accessibility are robust predictors of online buying status. The effect of gender is among the most robust findings in the literature in comprehending consumer behavior. The main differences can be found in terms of shopping patterns, information processing, judgment, responses to advertising, and the products they tend to buy. Vincenzo Basile [29] found that consumers buy canned food products mostly in the supermarkets while fresh products, such as meat, fish, bread and fruit are purchased in convenience stores. Norazah [30] highlights that customers are willing to buy leafy vegetables those are not harmful to the environment. Leafy vegetable suppliers/sellers who communicate with their customers normally attempt to persuade the customers’ behaviour and consistently remind their customers about the key elements of its service offering. Communication is essential because it enables the business to determine the success or failure of marketing leafy vegetables in South Africa [31]. Eva Nkgome Mahlangu; Khathutshelo Mercy Makhitha [32] found that consumers buy merchandise at some branded supermarkets for gratification, value for money, good service, product quality, social engagement and brand hunting, and these preferences are affected by shoppers’ gender, age groups and monthly income.

3. Research Design

There has been ample literature available on consumer motivations, expectations and shopping orientations in the Indian context; however there is a need for studying the buyers’ experience while buying essentials like fresh produce in the urban areas where organized retail entities are rapidly emerging. The present research investigated the consumers’ perceptions regarding fresh produce purchased in organized retail stores in Bangalore, India, using convenience and shop intercept methods. Data were collected using structured questionnaire from consumers (N = 500) in the 7 P’s framework, consisting 7 elements of services marketing mix. Consumer perception regarding factors such as product attributes, price, promotion, people, process and physical evidence (total 42 items), and the perception regarding ethical practices (4 items) was captured along with respondents’ demographic data. The respondents for the study were picked using customer intercept method. The consumers who visited select modern retail outlets across prominent locations in Bangalore city for purchase of fresh produce were approached by the researchers for survey. The framework of analysis will be two-fold; one, the impact of demographic attributes such as age, gender, income, education and marital status has been assessed on select attributes of purchase behavior such as purchase value and preference to visit organized retail stores applying pearson chi-square test; and two, the association between consumers’ demographic attributes, and satisfaction pertaining to organized retailing of fresh produce in 7 P’s framework has been assessed using ANOVA test.

Specific research questions the researchers sought to address:

• What is the consumers’ perception regarding fresh produce available in organized retail outlets?

• Do the consumers differ in buying pattern of buying fresh produce by demographics?

• Do the consumers differ in their perception while buying fresh produce in organized outlets by demographics?

• Do the consumers differ in their perception regarding ethical practices adopted by organized retailers by demographics?

• If there are differences in consumers, what are the implications of the same for marketers?

To find answers for the research questions, the research objectives formulated as shown below:

• To study the consumers’ perception regarding fresh produce in organized retail stores.

• To study the level of association between consumers’ gender, age, education, occupation and marital status on their on the purchase value and preference to buy fresh produce in organized retail stores.

• To study the level of association between consumers’ gender, age, education, occupation and marital status on their perception.

• To draw suitable inferences and implications for marketers, and offer constructive suggestions.

4. Empirical Framework (Figure 1)

Figure 1. Variables studied in the research and framework of analysis. Source: Compiled by the researcher.

5. Results

5.1. Respondents’ Demographics

Majority of the respondents (77 percent) are females, nearly half of the respondents are in the age group of 31 years to 45 years, 40 percent of them buy products worth Rs 100 - 200 each time, followed by 25 percent buying between Rs 200 - 300 worth of products, about 42 percent prefer to buy products from organized outlets, which 34 percent do not prefer, while 21 percent remain neutral. Nearly half of the respondents are graduates, followed by 40 percent who studied up to Inter/PU/Diploma and the rest are Postgraduates and others. Occupation-wise, majority are employees (45 percent) followed by homemakers (30 percent). About 40 percent of respondents earn between Rs 20,000 to Rs 50,000 per month and 33 percent get less than 20,000 per month (Table 1).

5.2. Respondents Perception Regarding Purchase of Fresh Produce in Organised Retail Outlets

Respondents’ perception towards various attributes in organized retailing of fresh produce was studied and analysed in 7 Ps framework of service marketing mix (Table 2).

Among the product attributes, availability of seasonal fresh produce was perceived best with 3.52 mean score, whereas availability of fresh produce during festivals and special occasions was perceived low at 3.28. Price discounts do not seem to be very appealing; however, the consumers perceive high level of transparency in pricing. Out of 5 elements studied under placement mix, timings or working hours of organized retail stores was found to be most satisfactory with a mean score of 3.94 on a scale of 4. Among the promotional offers, lucky draws appear to be least appealing while redemption of coupons or payback points is perceived to be very effective. People employed in large retail stores are perceived to knowledgeable about product, price and the like, but do not seem to proactive in helping out the customers. Check-in and check-out process is considered to be less consumer friendly, while parking is a big issue when it comes to physical evidence. Organised retailers scored low on perceived environment friendly practices but the score was high on refraining from engaging child labour.

Table 3 provides summery of Chi-square test conducted to find the level of association between consumers’ demographics and a) their buying pattern, and b) their preference to buy fresh produce from organized retail stores. The data showed presence of significant difference among the consumers based respondents’ demographics with respect to buying at 5% significance level. Purchase value of the produce during each visit is influenced by gender, age, marital status, education, occupation and income at 99% confidence level (p = 0.000). Consumers’ preference to buy fresh produce from organized retail stores is found to be affected by age, marital status, education, occupation and income, but gender has no significant association (Table 4, Table 5, Tables A1-A6).

Table 1. Demographic characteristics of participants (N = 500).

Table 4 provides the summery of Anova test conducted to find the level of association between respondents’ demographics and their perception regarding services marketing mix consisting 42 items, clustered into 7 dimensions and perceived ethical practices consisting 4 items. The items that show significant association between the select variables are shown in the table.

6. Role of Demographics on Consumer Perception-Discussion

As portrayed in Table 3, ANOVA summary shows significant association between:

Table 2. Consumer satisfaction towards services marketing mix in organized retail stores.

Table 3. Role of demographics on buying pattern of customers.

*F value of Pearson chi-square test 5% sig. **Level of significance.

• Gender and perception-Women were found to be the most satisfied clout compared to male and shows that women are more discerning while buying fresh produce for the home. Female buyers pay more attention to attributes such as layout (e.g., cleaning spaces) and store atmosphere compared to male consumers; • the store location, the payment at cash desk, the assortment, the sales staff empathy and the value for money represent yet strategic levers for retailer for creating customer’s value [28].

• Age and perception-younger consumers being more satisfied with respect to product and price attributes, customers aged between 31 - 45 years are more satisfied as to aspects of physical evidence; whereas those over 45 years of age are more content with ethical practices. However, there is no significant association between age and overall perception towards organized retailing.

• Marital status and perception-the respondents who are single in status found the services of organized retail outlets more satisfactory than those who are living with spouse across all the parameters chosen for the study except price mix.

Table 4. Role of Demographics on consumer perception- Summary of Anova tests.

• Education and perception-The study found that the customers with different education levels are happy with some or other aspect of fresh produce vending by organized retailers. The customers studied up to Inter/PUC/ Diploma are more satisfied with respect to promotion and people mix; process mix is more appealing to the graduates, while the post graduates are more content with physical evidence mix and ethical practices, however “others” who largely have professional qualification felt that the product and price mix more appealing. However, no significant association was found between education and overall perception towards organized retailing.

• Occupation and perception-Student and employee respondents are more satisfied over the rest of the strata of the study with respect to product mix. While the employees are more contented towards price and overall organized retail mix, the promotional mix seems to appeal the students segment more. The homemakers are more excited with the process mix as well as physical evidence mix.

• Income and perception-Significant revelation of the study is the elite class are more satisfied with organized retailers’ product mix, price mix as well as place mix, and even the promotion mix and overall organized retail mix are causing more satisfaction to relatively higher-income category.

7. Reliability Test

To test the reliability of data, Chronbach alpha test is done (Table 5).

8. Implications of Study

This study will guide the organized retail sector to identify specific attributes influencing consumer satisfaction while buying fresh produce. The results prompt the category managers handling fresh produce to chalk out strategies to attract consumers from diverse demographic strata and provide matchless experience on a continuing basis. Demographic dimensions analysed in the study help the retailers to understand the dynamics and evolve sketch to reach out to the every needy and lucrative segment in the most effective manner.

Few suggestions are provided in the light of the study for more rewarding and enduring relationship between the retailers and the consumers. Better store

Table 5. Cronbach’s alpha scores.

management practices, and training and sensitisation of employees in the modern formats could further raise the footprints and build loyal customer base. Deeper penetration in a city like Bangalore makes distribution system more efficient. To serve the consumers better, the organized retailers should constantly strive to understand the needs of the consumers, provide good quality products at reasonable prices with good purchase experience. Grievance red dressal mechanisms in most of the organized retail stores need to be revamped to make the process more consumers friendly. More proactive customer relationship management practices do help in this regard. There needs to be more transparency and customer education regarding redemption of coupons, reward points on loyalty cards and terms of offers. Large players should explore all possible means to develop and make use of alternative sources of energy as growth in fresh produce availability should not lead to the deepened energy crisis. Reliability of the sales staff, attributable to the empathy of these subjects, can significantly influence the customer’s perception and the quality of the service provided. Grocery buying is one of the fundamental buying patterns of consumers and hence calls for increased emphasis by the marketers to understand the interplay between demographics of consumers and their buying patterns.

9. Limitations and Directions for Future Research

In view of the dynamic nature of organized retailing, especially when it is rapidly evolving in countries like India, and limited sample size and geographical location, generalization of findings is to be done with caution. The consumers who do not buy fresh produce from organized retail stores may have different perceptions. The limitations can be addressed in future by conducting more studies in other areas where the trend is picking up.

Annexure

Table A1. Gender vs. attributes of organized retailing.

*Significant at 0.05 level; Source: Primary data.

Table A2. Age group vs. attributes of organized retailing.

*Significant at 0.05 level; Source: Primary data.

Table A3. Marital status vs. attributes of organized retailing.

*Significant at 0.05 level; Source: Primary data.

Table A4. Education vs. attributes of organized retailing.

*Significant at 0.05 level; Source: Primary data.

Table A5. Occupation vs. attributes of organized retailing.

*Significant at 0.05 level; Source: Primary data.

Table A6. Income vs. attributes of organized retailing.

*Significant at 0.05 level; Source: Primary data.

Cite this paper: Rani, N. and Ramachandra, K. (2019) A Study on Consumer Perception Regarding Buying Fresh Produce in Organized Retail Stores in Bangalore, India: Do Demographics Matter?. Theoretical Economics Letters, 9, 2864-2884. doi: 10.4236/tel.2019.98179.
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