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CHAPTER - 3

OBJECTIVES AND RESEARCH METHODOLOGY

3.1 Objectives of the study

The main objective of the research was to explore the market opportunities, challenges

and future prospects for organic agricultural products. The study aims to achieve the

objective by studying the following sub-objectives:

i. To examine the product-wise trend, pricing structure and distribution system for

organic agricultural products;

ii. To explore the factors influencing production and marketing of organic

agricultural products in the domestic market;

iii. To identify and analyze the consumers concern about organic agricultural

products;

iv. To analyze the market potential for organic agricultural products in the

domestic market.

3.2 Hypothesis

1. The distribution of retail market of organic products is dominated by

supermarkets and specialty stores.

2. Farmers perceive converting from conventional to organic production is

expensive and time consuming.

3. A suitable distribution channel for ensured availability of organic products

along with supportive government policy will contribute in the promotion of

domestic organic market.

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4. Organic agricultural products are perceived highly priced as compare to

nutritious value and purchased occasionally.

5. Common differentiating sociologic characteristic of purchaser is their family

status not their income group.

6. Consumer awareness about health and safety of the product and demand for

organic agricultural products are positively correlated.

3.3 Research Methodology

Research methodology is the systematic method/process dealing with enunciating or

identifying a problem, collecting facts or data, analysing the data and reaching at a

certain conclusion either in the form of solutions towards the problem concerned or

certain generalization for some theoretical formulation (Hasounch, 2003). It also

comprise of a number of alternative approaches and interrelated and frequently

overlapping procedures and practices. Since there are many aspects of research

methodology, the line of action has to be chosen from a variety of alternatives. The

choice of suitable method can be arrived at through the assessment of objectives and

comparison of various alternatives. Research methodology used in the present study

was as under:

First step of the present research was the literature based study to give out the current

situation of organic farming and consumers in general. The specific literature research

on India was carried out to figure out the recent situation and consumers‟ preferences in

the country. Besides, literature on worldwide studies conducted in this regard was also

looked upon. Second step was a quantitative data collection. Quantitative methods were

chosen in this research as the results were quantified and statistically analysed to make
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a general overview. The following Figure 3.1 gives the exact classification of a

marketing research data:

Figure 3.1: Classification of marketing research data

Marketing
Research Data

Secondary
Primary Data
Data

Qualitative Quantitative
Data Data

Descriptive
Casual Data
Data

Experimental
Survey Data
Data

Observational
and other Data

Source: Malhotra, 2004, p.137

In the present research, an approach which covers a larger group is needed so as to

represent the entire population. Hence, quantitative research method is used. As the

study about market opportunities, challenges and future prospects of organic

agricultural products was explored at three levels i.e. producers/farmers,

processors/traders/exporters, and consumers of organic products, therefore, the study is

exploratory-cum-descriptive in nature.
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Survey method was chosen for which self-designed questionnaires were circulated to

the respondents. Three questionnaires were prepared each for producers/farmers,

processors/traders/exporters and consumers. Survey was targeted to producers/farmers,

processors/traders/exporters and consumers of organic products only and no results

from the non-organic producers/farmers or processors/traders/exporters or consumers

were included in the data. Survey method is chosen as it has application, coding,

analysing and interpretation of the data are rather simple. As the respondents were

limited to choose from a set of alternatives, the results are reliable. But of course there

are some disadvantages like in all marketing techniques. For instance, in attitude

measuring questions, respondents can give unconscious answers. But generally, survey

method is the most common marketing technique for scientists and marketers in

anyway (Malhotra, 2004).

3.4. Research Design

Research design is a blue print of any research work. It covers strategic issues

concerning to research process. The vital decision relating to sampling design, data

collection methods and statistical tools to be applied in the study are decided.

3.5 Sampling

Since the present study had focused on the opportunities, challenges and future

prospects of organic agricultural products, therefore the population of the study was the

producers/farmers, processors/traders/exporters, and the consumers of organic products.

The study is based on three surveys. The producers from three districts of Haryana viz.

Karnal, Kurukshetra and Kaithal were approached due to geo-climatic conditions

suitable to organic agriculture. The processors/traders/exporters were from various

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parts of the country. Customers were mainly targeted from Panchkula and Chandigarh.

The selection of Panchkula city for potential consumers has been decided on the basis

of highest literacy rate in Haryana and the other city i.e. Chandigarh has been selected

as its adjoining city having highest literacy rate. Targeted (only organic consumers) but

random sampling is applied. As the questionnaire was targeted to organic consumers

only, people who were contacted were asked first if they had bought/consumed organic

products in the past and after the positive reply, questionnaire was delivered. In the

same way only, the producers/farmers and processors/traders/exporters were contacted.

To determine the characteristics of the Indian domestic organic agriculture market,

primary research and secondary research was carried out. The primary research

involved gathering data from producers/farmers, traders/processors/exporters, and

consumers of organic products. Self-designed questionnaires (manual and electronic)

were used to collect the information. The non-probability convenience sampling was

used for drawing samples from the universe.

3.6 Data Collection

The analysis and interpretation hinges on the data collected from representative sample.

Different types of data collection methods such as observations, experiments, and

survey are applied. In the present study primary as well as secondary data had been

collected for the analysis of the study. To collect the primary data, respondents/

consumers of organic products were contacted in the organic fair organised by

Chandigarh Administration. This place was chosen to reach more all types of

consumers of organic products. As it was weekend also, fulltime working people and

families with children were easily found. Most of the questionnaires were delivered in
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the fair and collected between 10-20 minutes. Only small respondent groups were

contacted face to face. The questionnaires were also got filled in some multiple/

superstores such as Fabindia, Empire Store, etc. On the other hand, an internet based e-

questionnaire form was also used. Internet based research was the easiest and cost-

effective way for data collection. Again targeted group was selected and an e-

questionnaire was sent through email only to the people who consume organic

products.

Before they completed the surveys, respondents were informed both verbally and

through a small paragraph introduced before the questionnaire that the information

provided by them would be used to provide data to support this research work. They

were assured that their inputs would remain anonymous.

3.7 Questionnaire design

All the three questionnaires were prepared in English language after discussing with the

supervisor of the thesis. The details about design of the questionnaires are given below:

3.7.1 Questionnaire design for Consumers of Organic Products

The questionnaire was planned in two parts. The first part (Questions 1-10) contained

questions regarding the first purchase time, frequency with which they purchased

organic food products, which shopping places are visited mostly, and about the status

of the organic products purchased i.e. whether they purchased certified organic

products only or also purchased private labelled/self-claimed/non-certified organic

products also? The next question was to measure one‟s knowledge and opinion about

the image of organic products in a six point Likert-scale form from strongly agree to
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strongly disagree and sixth point has been used for don‟t know answer. Next was again

a question related to behaviour of individual as to how much more they are willing to

pay for organic products?

This was followed by a label knowledge question and this question is measuring

whether Indian consumers know well about the labels on the products or just buying

randomly. Two logos were prepared (Table 3.1). First one represents the national

governmental logo and second one is the imaginary logo that is prepared by the

researcher. Design of the second logo is taken from web research and belongs to a

private organisation which deals in organic food business.

Table 3.1: Label question in the survey

Labels Do you know it? Does it represent organic

products?
Yes Yes

No No

No idea

Yes Yes

No No

No idea

In the next, there are two sets of attitude measurement questions. In the first,

respondents were asked to rank a series of statements on a six-point Likert-scale of 0

through 5, where 1 equalled strongly disagree, 3 represented a neutral position, 5 equalled

strongly agree and 0 is for don‟t know answer. Questions were organised into 10 different

question sets comprised of four questions each.

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The only deviations from this model included the question set dealing with food safety

which comprised a different scale where 1 equalled extremely unconcerned, 3 remained

neutral, 5 equalled extremely concerned, and 0 remained for don‟t know answer. In

addition, rather than asking respondents to rank a statement they were asked to respond

to a question. For example, this included “To what extent are you concerned about food

safety?” Each of the four questions asked respondents how concerned they were about

a particular food safety issue. The additional deviation was the two question sets testing

„economic’ and „value’, which were comprised of three questions rather than four as in

other question sets in this survey. Both of these deviations were the result of marketing

scale research which suggested guidelines for these types of questions and had been

proven valid in other previous survey designs (Bruner, 2005). A brief description of

each of the ten is as follows:

Variable Types of Questions # of

Name questions
in set
Health: How health conscious people are and whether they believe 4
they have control over their own health.
Effort: How much effort are people willing to put to purchase 4
organic products when the same conventional products are
available at their local grocery store?
Quality: Do people perceive the quality of organic products as being 4
higher than conventional products?
Status: Do consumers associate status or an affluent lifestyle with 4
organic products?
Price: Do customers think organic products are expensive, and how 4
does the price premium affect their purchasing decisions?
Trust: Do consumers trust organic labelling along with organic 4
producers and the supermarkets that sell organic products?
Intent: Measures purchasing intentions and whether consumers plan 4
to continue purchasing organic products, or change the
volume purchased.
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Safety: How concerned are respondents over the safety of 4

conventional products, and what is currently available at
supermarkets?
Economic: What is respondent‟s economic outlook? Has the economic 3
conditions affected their attitudes?
Value: Do customers see organic products as a value and thereby an 3
entrenched part of their life?

The next attitude measurement question set contained 13 statements which are again on

a six-point Likert-scale to study about the factors that can be helpful in creating more

demand of organic products in the market. This is followed by a multiple choice

question to understand product group choices of today and future consumption. A range

of 14 options was provided and respondents could select all that applied (vegetables, fruits,

meat, dairy, cereals, breads, pulses, baby products, dried fruits, beverages, oil, sugar products,

herbs and spices, and textile products).

The second part was designed to collect some demographical information about

respondents for statistical analysis. In this part, respondents were asked to answer

gender, age, highest educational level, employment status, number of people living in

the household, presence of children, number of earning members, and income

questions. Income was an optional question but mostly answered by the respondents.

Summary of the questions is given in the Table 3.2.

Table 3.2: Variables in the questionnaire for Consumers

Question Variables Type of Level of

Number question measurement
Q1 First purchase of organic products Behavioural Ordinal

Q2 Buying frequency of organic Behavioural Ordinal

products
Q3 Place of shopping Behavioural Nominal,
multi-optional
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Q4 Conditions of buying organic Behavioural Ordinal

products
Q5 Image of organic products Attitudinal Likert-scale 6
statements with
6 point scale
Q6 Willingness to pay more for organic Behavioural Ordinal
products
Q7 Label knowledge Attitudinal Nominal

Q8 Purchasing intention/opinion about Attitudinal Likert-scale 38

organic products statements on
10 variables
with 6 point
scale
Q9 Conditions to buy more Attitudinal Likert-scale 13
statements with
6 point scale
Q10 Product groups choice of today and Behavioural Nominal,
future multi-optional
Q11 Gender Classification Nominal

Q12 Age Classification Ordinal

Q13 Educational level Classification Ordinal

Q14 Employment status Classification Nominal

Q15 Number of people in the household Classification Nominal

Q16 Number of earning members in Classification Nominal

household
Q17 Number of children in the household Classification Nominal

Q18 Income Classification Ordinal

3.7.2 Questionnaire design for Farmers/Producers of Organic Products:

This questionnaire started with collection of some demographic information about the

farmers viz. age and highest educational level. Then, some behavioural multiple choice

questions were given about the arrangement of inputs, inspiration for conversion from

conventional to organic farming, and to whom the producer is selling its produce?
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Next were three questions to be answered in yes or no as to whether the farmers were

doing organic farming under contract farming, do they recommend organic farming to

other farmers, and do they had any plan to increase area under organic farming? The

questionnaire ended with an attitudinal question (20 statements) about their opinion on

various aspects of organic farming in a six point Likert-scale form from strongly agree

to strongly disagree and sixth point used for don‟t know answer. Summary of the

questions are given in the Table 3.3.

Table 3.3: Variables in the questionnaire for Farmers/Producers

Question Variables Type of Level of

Number question measurement
Q1 Age Classification Ordinal

Q2 Educational Level Classification Ordinal

Q3 Arrangements of inputs Behavioural Nominal

Q4 Who inspired for conversion from Behavioural Nominal,

conventional to organic farming multi-optional
Q5 Two whom selling organic products Behavioural Nominal,
multi-optional
Q6 Are they doing organic farming Attitudinal Ordinal
under contract farming
Q7 Recommendation of organic farming Behavioural Ordinal
to other farmers
Q8 Plan of increasing area under organic Behavioural Ordinal
farming
Q9 Opinion on various aspects about Attitudinal Likert-scale 20
organic products statements with
6 point scale

3.7.3 Questionnaire design for Processors/Traders/Exporters

This questionnaire was mainly designed to re-confirm the answers given by the

questionnaires for consumers and farmers. This questionnaire started with the

demographical information such as age and educational information about the

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processor/trader/exporter and then there was a question about the organic product

groups demanded by the consumers in a six point scale form from very frequently

demanded to never demanded and sixth point used for don‟t deal answer.

This was followed by a questions regarding the type of organic products in which they

deal i.e. certified, non-certified or both. This questionnaire ended with a question

containing 32 independent-statements for their opinion on various aspects related to

consumers and traders or exporters, again in a six point Liker-scale form. Summary of

the questions are given in the Table 3.4.

Table 3.4: Variables in the questionnaire for Processors/Traders/Exporters

Question Variables Type of Level of

Number question measurement
Q1 Age Classification Ordinal

Q2 Educational Level Classification Ordinal

Q3 Demand of Product Groups Attitudinal Likert-scale 13

product groups
with 6 point
scale
Q4 Type of organic products in which Behavioural Nominal
dealing
Q5 Opinion on various aspects related to Attitudinal Likert-scale 32
consumers and traders/exporters statements with
about organic products 6 point scale

3.8 Conducting the results

The results of the surveys are coded and collected in excel sheets by the researcher.

After collecting and coding, data was ready for statistical analyses. For analyses, SPSS

16 statistical package for Windows was used. Firstly variables were taken from excel

sheets and then series of analysis were applied. Non-parametric statistical tools such as
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chi-square test and factor analysis along with frequency counts and percentages, pie

charts, line and bar graphs have been used to analyze, interpret and illustrate the data.

As the concern about health consciousness and the products safety is increasing,

therefore the present study answers reasons for the growth of organic farming, identify

the switching barriers from conventional to organic farming and also identify

challenges outlined by the farmers, traders, and the consumers in the growth of organic

products‟ market.

3.9 Limitation of the Study

Due to time and money constraint, it was not possible to study the whole universe for

the purpose of this study.