Dissertation Report 2

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Dissertation Report

On

STUDY ON IMPACT OF CONVENIENCE/PACKAGED

FOODS ON CONSUMER BUYING BEHAVIOUR.

In partial fulfillment of Master of Business Administration

UNDER THE ESTEEM GUIDANCE OF

Ms. GARIMA MALIK

Faculty ABS, AU

Noida

Presented By:Ashish Bangia

A0101906063

MBA (G) 2008

Date:

2nd May 2008

AMITY UNIVERSITY

-------- UTTAR PRADESH --------

AMITY BUSINESS SCHOOL AU

Sector 125, Noida, UP

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CERTIFICATE

Impact of convenience/packaged foods on Consumer Buying

Behaviour submitted by me for the Dissertation in ABS, AU is based

upon my own work carried out under the guidance of Ms. Garima Malik

and that neither this report nor any part of it has been copied from any

other report published anywhere public/elsewhere

This project report is prepared in partial fulfillment of MBA to beawarded by Amity University, Uttar Pradesh.

To the best of my knowledge, this piece of work is original and no part of

this report has been submitted by the student to any other

Institute/University earlier.

.....Countersign by Faculty Guide Candidate

Date: Date:

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ACKNOWLEDGEMENT

The Project Title Study on Impact of convenience/packaged foods on

Consumer Buying Behaviour has been conducted by me. I have

completed this project, based on the Primary research, under the guidance

of Ms. Garima Malik.

I owe enormous intellectual debt towards my guide Ms Garima Malik

who has augmented my knowledge in the field of Marketing and

Marketing Research. She has helped me learn about the process and

giving me a valuable insight into the convenience food and consumer

buying behaviour and pattern.

My increased spectrum of knowledge in this field is the result of her

constant supervision and direction that has helped me to absorb relevant

and high quality information.

I would like to thank Mr. Sanjeev Bansal for his guidance and enriching

my thoughts in this field from different perspectives.

I would like to thank all the respondents with out whose cooperation my

study would not have been possible.

Last but not the least, I feel indebted to all those persons and

organizations who have provided helped directly or indirectly in

successful completion of this study.

Date 2nd May 2008 Ashish BangiaA0101906063

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LIST OF TABLES

1. Global Trends in Food Processing

..17

2. Segments offering potential for Investment and growth

17

3. Key Players in RTE Category

27

4. Fresh Packed F&V

28

LIST OF FIGURES

1. Market Segmentation of Processed Food Industry

16

2. Indias Food Processing Industry

. 18

3. Segments of Indias food Processing Industry

. 19

4. Growth of Indian Retail

21

5. Total Retail Market Size in India

. 21

6. Organized Retail Market Size in India

. 22

7. Usage of Convenience food

. 37

8. Usage of types of Convenience Food

.. 38

9. Purchase of Convenience food

39

10. Usage of ready to eat food

. 4011. Usage of ready to cook food

41

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12. Average monthly expenditure on convenience food

.42

13. Reasons for using Convenience food

. 43

14. Frequency of purchase of RTE. 44

15. Frequency of purchase of RTC

. 45

16. Preference for convenience food

. 46

17. Reasons for non-preference of convenience food

47

18. Reasons for preference of convenience food

48

19. Preference for convenience food among diff age groups

. 49

20. Preference for convenience food among diff professions

50

21. Preference for convenience food among diff income groups

.. 51

22. Expenses incurred for convenience food

. 52

23. Single outlet preference

53

24. Factors responsible for outlet selection

54

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INTRODUCTION

1.1 CONSUMER BEHAVIOUR AN INTRODUCTION1

The most unique feature of the Indian market which differentiates it from the rest of

the world is the cultural diversity and variety found here. The lifestyle of people

1Biyani, Kishore and Baishya, Dipayan, It Happened in India The story of Pantaloons, BigBazaar, Central and the great Indian consumer, Published by Rupa & Co., 2007, pp 17.

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living here changes every hundreds of kilometers. It is the addition to the dimensions

of Indian consumer market.

The behaviour of consumers is influenced by a heap of emotions and thoughts. It is

very difficult to draw a strong reason for the difference between What the consumersSAY? and What the consumers ACTUALLY DO? Why there exists a difference

between these two it is hard to find out. Only the conclusions can be drawn on the

basis of assumptions.

Also, the youngest population profile is in India. There are a lot of young people in

different income segment and locations, which are influencing their parents spending

and spend their own money as well.

CONSUMER BUYING BEHAVIOR IS THE BUYING

BEHAVIOR OF THE ULTIMATE CONSUMER.

1.2 STAGES OF THE CONSUMER

BUYING PROCESS

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1.3 CATEGORIES OF CONSUMERS2

2Kotler, Philip Marketing Management Analysis, Planning, Implementation and Control,9th Edition, Published by Prentice-Hall India, 1998, pp 190

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Buyer A buyer is a person who approaches the seller and purchases the product or

service required. The buyer may or may not be a consumer of that particular product or

service.

Influencer The influencer is a person who influences the buying decision. He or

she is a person whose view or advice influences the decision. The influencer may be a

buyer or a consumer or a decision-maker.

Decision-maker The decision maker is the person who decides what to purchase,

when to purchase and how to purchase. He or she may be a buyer, influencer as well as a

consumer. Generally, for purchase of day to day items needed for cooking at home, the

housewives decide on their own. Here she acts as a decision-maker, buyer, influencer as

well as the consumer. Her decision may or may not be influenced by her past experience,

servants at home, preferences of family, advertisement, etc.

Consumer A consumer is the person who finally uses or consumes the goods orservices purchased.

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needs, mental needs and needs of our psychology and spirituality the system was

derived

The invasion of the Aryans who came from Europe or Asia Minor pushed the people

of Mohenjodaro and harrapa to the South part of India. The origination of Aryans isnot very clear and was to be found in Europe, Persia and India. The Ayurveda was

further developed by Aryans. There were many texts written in the Aryan Period.

The Growth of Vegetarianism

The Harappans probably ate mainly wheat

and rice and lentils, and occasionally

cows, pigs, sheep, goats, and chicken.

From Thailand rice and chicken came and

from West Asia wheat and sheep came.

The stews and soups were made of wheat

and also the chapatis were formed. The

Indian eating habits was not changed by

the arrival of the Aryans.

Hindus stopped eating beef in Gupta

period, around 650 AD as Hindus began

worshipping cows as a Mother Goddess.

Most people in India stopped eating pork

as well around 1100 AD in northern India, because it is forbidden by the Koran. The

vegetarism grew in the Hindus.

The yogurt, sauce and flatbread were being mostly eaten by the Indians. Or rice, with

yogurt and vegetables were eaten. At that time spicy pepper in India was grown full-

fledged.

2.2 Food Industry A Brief Overview

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Food industry is not a formally defined term; however, it is usually used in a broadly

inclusive way to cover all aspects of food production and sale. The Food Standards

Agency, a government body in the UK, describes it thus:

"...the whole food industry from farming and food production, packaging

and distribution, to retail and catering."4

The Economic Research Service of the USDA5 uses the termfood system to describe

the same thing:

"The U.S. food system is a complex network of farmers and the industries that

link to them. Those links include makers of farm equipment and chemicals as

well as firms that provide services to agribusinesses, such as providers oftransportation and financial services. The system also includes the food

marketing industries that link farms to consumers, and which include food and

fiber processors, wholesalers, retailers, and foodservice establishments.

INTRODUCTION

The food industry involves the commercial movement of food from field to fork.

After a long evolution the modern food industry has comea Traditionally, over

thousands of years, food production was centered around two activities:

1. Labor-intensive agricultural activities, the farming of grain,

produce and livestock;

4http://www.food.gov.uk/5http://www.ers.usda.gov/Browse/FoodSector/

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diets, up until the introduction of canning methods. These crude processing

techniques remained essentially the same until the advent of the industrial revolution.

Preserved food

Modern food processing technology in the 19th and 20th century was largely

developed to serve military needs. In 1809 Nicolas Appert invented a vacuum bottling

technique that would supply food for French troops, and this contributed to the

development of tinning and then canning by Peter Durand in 1810. Although initially

expensive and somewhat hazardous due to the lead used in cans, canned goods would

later become a staple around the world. Pasteurization, discovered by Louis Pasteur in

1862, was a significant advance in ensuring the micro-biological safety of food.

In the 20th century, World War II, the space race and the rising consumer society in

developed countries (including the United States) contributed to the growth of food

processing with such advances as spray drying, juice concentrates, freeze drying and

the introduction of artificial sweeteners, colorants, and preservatives such as sodium

benzoate and saccharine. The products such as dried instant soups, reconstituted fruits

and juices, and self cooking meals were developed in the late 20 th century.

The working class and mothers were targetted by the marketers at this point of time.

The convenience food usage was high on demand. The success in sales of juice

concentrates and Swanson's "TV dinners" were found in frozen vegetables. After the

post war, population favoured the processors and this appeal contributes to the

success of convenience foods today.7

2.4 Global Processed Food Industry8

7Levenstein, H, Paradox of Plenty, University of California, 2003, pp 106-1078Processed Food & Agribusiness, Opportunities for Investment in India, a KnowledgePaper, by KPMG & FICCI, 2007

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The shape of the global food industry is constantly changing and evolving thereby

reinforcing the key themes of health, convenience and value. The global processed

food industry is estimated to be valued around EUR 2.5 trillion and accounts for

three-fourth of the global food sales. Despite the large size of the industry, only 6

percent of processed foods are traded across borders compared to 16 percent of major

bulk agricultural commodities. The U.S., EU and Japan together account for over 60

percent of total retail processed food sales in the world.

Trade liberalization policies through multi-lateral and regional trade agreements have

led to a rapid growth in this field. In the Asian region Japan is the largest food

processing market, but India as well as China are likely to grow at a faster rate. Japan

and South Korea, are the leading meat importing countries in the world and

consumption of meat is high in these countries. The most technically advanced

processed food industry is of Australia in the world as it produces products of

international standards at comparatively lower prices. U.S. is called as the

breadbasket to the world. The additional revenues come from the foreign land for

more than one-third of U.S. Food & beverage (F&B) Manufacturers. Countries in the

Sub-Sahara African region, Latin America and parts of Asia continue to be on the

lower-end of technology prowess in food items are inclined to their staple diets,

whereas, those in Europe, North America, and Japan are on the higher-end of

technology, with a sharper shift towards convenience and diet foods.

Global Trends in Food Processing

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These trends have created immense opportunities for both manufacturers and retailers.

The consumer's requirement for healthy and convenient products must be addressed

and fulfilled. The global food market has become more competitive and all are

looking to grow beyond their own local market.9 Also consumer is willing to pay

more for the quality products.

2.5 Indian Processed Food Industry9Whats Hot around the Globe in F&B 2006, Survey by AC Nielsen

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With rapidly rising per capita income levels and renewed corporate interest in the

organised retail market, the Indian food industry looks set for a big leap. From an

estimated size of US$ 200 billion, this industry is likely to grow to over US$ 310

billion by 2015, estimates the Confederation of Indian Industry (CII)10.

India is endowed with a large production base for a variety of raw materials covering

food crops, commercial crops and fibres due to its varied agro-climatic conditions. In

fact, this has helped India become the largest producer of a host of agricultural crops.

After China, Indias the second largest producer of food. It is also the world's largest

producer of cereals and milk, second largest producer of rice, wheat, sugar, fruit and

vegetables and inland fish and third largest producer of cotton and seventh largest

producer of fish (which includes both inland and marine fish production).

Despite its raw material base, India accounts for only 1.5 per cent of the international

food trade. There is a huge potential existing for both investors and exporters in this

sector. 11

Food Processing

10http://www.ciionline.org/11Food Processing, a knowledge paper by IBEF, Oct 2007

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food exports have, in fact, increased from US$ 6.98 billion in 2002-03 to US$ 20.51

billion in 2006-07, recording a whopping 193.83 per cent growth rate.

To realize India's potential in this industry, the Government has set an investment

target of US$ 25.07 billion by 2015 to double India's share in global food trade from1.6 per cent to 3 per cent, increase processing of perishable food from 6 per cent to 20

per cent and value addition from 20 per cent to 35 per cent.

The food processing industry, which has been growing at 7 per cent, is likely to

register a growth rate of over 10 per cent in the near future, on the back of a step-up in

investments and increase in consumer demand.

Indian Food Brands go Abroad

While many foreign companies are coming into India lured by the huge expanding

domestic market, many Indian brands have begun finding prime shelf-space in the

retail chains of the US and Europe. These include Cobra Beer, Bikanervala Foods,

MTR Foods' ready-to-eat food stuff, ITC's Kitchens of India and Satnam Overseas'

Basmati rice.

Simultaneously, domestic players in the food industry are also acquiring companies

abroad. For example, Tata Tea has acquired two Polish tea brands Vitax and Flosana

from Premium Foods SA, and UB Group has acquired Glasgow-based Scotch giant

Whyte & Mackay.14

2.6 Food Retail in India

Indian retail is gradually inching its way toward becoming the next boom industry. Over time

it has emerged as one of the most dynamic and fast paced industries. Retail industry is

14 http://www.ibef.org/industry/foodindustry.aspx

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protests on opening new outlets in the backward states of India such as Uttar Pradesh,

Orissa, Bihar etc.

Retailing in India accounts for 10% of its GDP and around 8% of the employment. Food

retail in India accounts for around 65% of the total retail and is characterised by the sheer

dominance of a large number of small unorganized retailers. Organised food retailing is still

at its infancy stage, having a share of less than 1% of total food retail market in India. Indian

food retail market is estimated to be worth USD 210 billion with organised food retailing

being USD 1.5-2 billion.

Despite the fact that food is the largest category in the consumers spending basket, with a

share of around 50%, organized food retailing is faced with certain limiting factors like lack

of industry status, capital constraints, high tax rates, highly fragmented supply chain,

restrictive land laws and lack of infrastructure.

For long, Indian consumers have been deprived of quality food products, wide variety and

value added service at the retail front because of the highly fragmented nature of food

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retailing. Organised food retailing has the potential to bridge this gap. This represents a great

opportunity for the growth of organised food retail in India.

Organised food retail in India, which has been growing at a rate of 25%, is expected to

witness a growth rate of 30-35% in the coming 5 years. Indian food retail is witnessing aswing from being unorganised to organised due to factors like increased disposable incomes,

increase in double income nuclear families, burgeoning middle class, increased urbanization,

increased quality consciousness, availability of quality retail space and greater need for

convenience among consumers.

Food and grocery retail in India is highly unorganized with around 6.5 million mom & pop

stores and the presence of only a few national food retail chains. Most of the current leading

retail chains are present predominantly in particular regions, like Subhiksha, Food World,

Nilgiris and Margin Free which are concentrated in South India. Indian organized food retail

has been characterised by the presence of regional players.

Organized food retailing is a sunrise industry with a bright future, as is evident from the fact

that a large number of big corporates are making their entry into the sector with huge

investments. Large international retailers like Wal-Mart, Carrefour and Tesco are vying for a

share of the large Indian retail sector pie.

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produced at factories, packaged, transported by road, air, and sea, before reaching

your shelf. For example, right now you may munching on a set of cookies made in

Italy! Just check the packet or tin, you will be amazed.

'Ready To Use' goods is not simply restricted to biscuits and potato chips, from babyfood to health drinks made for adults, say protein shakes. These are the categories of

ready to use food. Even the cup noodles that one eats, all one have to do is pour a

measured quantity of warm water, wait for a few minutes, and the noodles are ready!

'Ready To Use' also comes under the category of

garments. It is called ready made garment store.

All is have to be done is go to a retail outlet, get

the size that fits and buy it. The trouble that one

take of buying garment material, going to a tailor,

giving your measurements, and waiting for the

dress may be avoided.

'Ready To Use' also refers to the world of furnitures. One has furnitures that need to

be assembled, and put to use. One need not to go to the furniture store to order for a

bed. All one has to do is, order for one, the packages are sent to it. People from the

furniture store will come to house, and assemble the furniture.

'Ready To Use' articles and packages have

made the world simpler. A lot of time and

energy can be saved. Imagine going from

one furniture store to another, and setting

up the bedroom. As opposed to this, 'Ready

To Use' articles are a boon for people who

do not have much time from work.

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Ready-to-eat food

A growing number of nuclear families, rising

household incomes, increased urbanisation and a

significant rise in the number of working women

have led to a rise in the demand for ready-to-eat

food17. The rising income levels and changing

consumer tastes can cause this segment to

increase rapidly in market size.

According to a study by Tata Strategic Management

Group18, the Indian RTE market is estimated to

grow to US$ 727.09 million by 2015 from the

current level of US$ 32.09 million. Some majorplayers in the ready to eatmarket are ITC Foods,

MTR Foods, Kohinoor, Amul, Rajbhog Foods,

Ethnic Kitchens and Tasty Bite.

17 http://www.garamchai.com/ReadyToEat.htm18 http://tsmg.com/ind_retail/

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Major Key Players in RTE Category19

19 Report on Food Industry in India, by Indo Italian Chamber of Commerce & Industry ,Nov 2006

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2.8 Fruits & Vegetable (F&V) Based processed food

Fresh packed F&V, primarily an export led business, is a large industry in India, and

is growing rapidly. India exported about 1.45 million tonnes (INR 16.6 bn) of fresh

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F&V in 2005-06220. Export of these products has been growing at a CAGR of over

13% during the last 5 years. However, these volumes are insignificant, at less than 1%

of total production. The proportion of graded, packed F&V has been increased. The

focus on specific varieties for different markets has increased in the past, exports

were primarily targeted at the Indian ethnic population while now, Indian exportscompete with other global suppliers across markets to cater to a broader spectrum of

world demand.

The Indian consumers preference for preparation of F&V based foods at home

continues, although there is gradual acceptance of processed foods. A continuation of

this trend is expected in the next ten years, which implies significantly higher growth

potential for fresh packed F&V as opposed to processed F&V.

The F&V based processed food sector is very small industry. Historically many F&V

based products were reserved for the small scale Industry by Government Legislation.

The limitations have now been lifted for most products. A significant proportion of

F&V units are still housed in the small scale sector. The single largest issue with the

processing sector is the lack of scale in most units, which in turn is linked to absence

of backward and forward linkages, low adherence to quality standards and inability to

invest in market development.

2.9Present Status of Packaged Food Industry - India

Strong double-digit growth for packaged food value sales

Packaged food retail value sales growth of 15% in 2007 was the fastest India had

witnessed over a nine-year period. India ranked second behind Indonesia as the fastest

growing packaged food market in Asia Pacific in 2007 as Indian consumers earned

more and also spent more on packaged food products in this year. The strong retail

volume growth that accompanied the value sales increase for most packaged food

products was a reflection of growing consumer confidence underpinned by a booming

economy and a growing desire for convenience.

Price increases but no complaints from consumers

20 Strengthening the India-Australia corridor in select Food & Agribusiness sectors, byRabo India Finance Ltd, June 2007

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In addition to robust retail volume sales of almost all packaged food products, retail

value growth was aided by increased average unit prices particularly of milk which

had a ripple effect across most other packaged food products. There was, however,

considerable variation in price increases, with staples such as fresh milk increasing by

almost 17% in 2007 while average prices of bakery products increased by just 2%.Rising affluence and increasing affordability amongst Indian consumers meant that

most manufacturers felt that the time was right to pass on the price increase to

consumers rather than to absorb it. Fortunately for manufacturers there was no major

consumer backlash following the price increase.

GCMMF leads and improves market share

Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) extended its market

leadership in packaged food in 2006. Thanks mainly to geographical expansion

particularly of sales of fresh milk over the 2002-2006 period, GCMMF saw its retail

value sales more than double over the five-year period. Among the top 10 packaged

food manufacturers in India, 2006 was an especially good year for dairy producers

such as GCMMF, Mother Dairy Fruit & Vegetable Ltd, Nestl India Ltd, Karnataka

Cooperative Milk Producers Federation Ltd and Tamil Nadu Cooperative Milk

Producers Federation Ltd all of which witnessed strong double-digit value sales

growth.

Independent grocers lose out as consumers turn to modern retail

formats

The acceleration of retail expansion by players such as Pantaloon Retail India Ltd and

the entry of new players such as Reliance Industries Ltd are resulting in changes inthe way packaged food products are sold in India. Independent grocers have been

slowly losing share of packaged food sales as modern retail formats such as

supermarkets/hypermarkets and convenience stores have been gaining at their

expense. This has led to most packaged food players having to revamp their

distribution strategies with some players setting up dedicated distribution operations

to specifically serve the new channels. That said, with close to nine million

independent grocers in India in 2007, this remains the largest and most important

channel for packaged food sales.

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Opportunities galore as forecast growth to remain robust

With India having the lowest per capita expenditure on packaged food in Asia Pacific,

at just over US$11 in 2007, there remain plenty of opportunities for the market to

grow and expand over the 2007-2012 forecast period. Packaged food sales in India areexpected to grow at a CAGR of just over 8% over the forecast period. Most product

sectors are forecast to enjoy robust growth, with ice cream leading the way with a

forecast CAGR of almost 18% in retail volume terms. Although more multinationals

are expected to enter the country, domestic players, given their strengths in sourcing

and regional distribution, are expected to continue to provide strong competition to

multinationals over the forecast period. That said, low per capita consumption

combined with growing affluence and affordability mean that there should be plenty

of opportunities for all players to grow.

OBJECTIVES

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OBJECTIVES OF THE PROJECT

1) Identification of convenience foods currently being used in

significant amount.

2) Identification of those groups of people among the population that

regularly use convenience foods and the amount in which these

foods are used.

3) Examination of possible reason for preference towards use of these

foods

4) Examination of possible reasons for preference towards a specific

type of outlet.

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5) Examining whether the convenience food if preferred over Home-

made food or not.

METHODOLOGY

1. RESEARCH DESIGN : DESCRIPTIVE

2. RESEARCH PLAN :

a. Data Source Primary Data

Secondary Data

b. Research Approach Survey Research

c. Research Instrument Questionnaire

d. Sampling Plan :

Sampling Non Probability Sampling

o Convenience Sampling

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o Judgment Sampling

o Quota Sampling

Sampling Unit 100

e. Contact Method Personal Interview

f. Region :

Faridabad

METHODOLOGY

1. RESEARCH DESIGN:

Research design is the layout of the research process. The research design selected

for the project is Descriptive in nature. Descriptive research pertains to describe particular

marketing problems and/or situations currently prevailing. Hence, the aim of the project here

is to determine the prevailing trends in the convenience/packaged food market. Therefore,

Descriptive Research Design is opted to study in depth the perception regarding the packaged

foods in the minds of the consumers.

2. RESEARCH PLAN:

Research plan lays out the plan for how to go about the process. It included the

following steps for project completion

A. Data Source :

a. Primary Data The information for the project was collected first hand by

conducting a survey regarding the consumer perception for the convenience/packaged

foods.

b. Secondary Data The details regarding the Indian food market and the consumer

behaviour was collected second hand with the help of books and internet.

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B. Research Approach :

Survey Approach A survey was conducted in the Faridabad region. For this

purpose a questionnaire containing 14 questions was prepared. The respondents were

surveyed in the markets of the region and intercepted in between.

C. Research Instrument:

For the purpose of obtaining the first hand information, a questionnaire was

prepared and the respondents were asked to fill up the questionnaire. The questionnaire

proved to be the most useful instrument besides observation too. Valuable information

was being collected on the basis of the questionnaire only.

D. Sampling Plan:

a) Non-Probability Sampling

i. Convenience Sampling The respondents were approached in the place where it

was near the residential areas and busy markets where crowds gather easily.

ii. Judgment Sampling - The respondents were selected on the basis of those who were

most easily approachable and had good prospects of giving true information.

b) Sampling Unit

i. Individuals Total 100 individuals were interviewed in the region. The females

were interviewed mostly.

Hence, total sample size of 100 was taken.

E. Contact Method:

The respondents were interviewed personally by intercepting them at various places

like market, houses, supermarkets, etc.

F. Region:

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a) Faridabad In Faridabad region, the following areas were covered under the

survey.

i. Sector 7 (Houses)

ii. Sector 7 (Market Area)

iii. Sector 9 (Market Area)iv. Sector 10 (Market Area)

DATA

ANALYSIS

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5.1 Usage of Convenience/packaged foods

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Usage of Convenience Food

100

0

0

20

40

60

80

100

120

Yes No

No.ofRes

podents

The respondents were asked whether they use the convenience/packaged food or not

and it was not a surprise that all the respondents were using the packaged foods.

There were some of the respondents who did say that they are not using the

convenience food at all so they havent been taken into account.

As the users responses will be considered and their opinion forms the basis of the

project hence the non-users are excluded from this.

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5.2 Usage of types of Convenience/Packaged food

Usage of types of Convenience Food

100

96

94

95

96

97

98

99

100

101

Ready to Eat Ready to Cook

Types of Convenience food

No.o

fRespondents

The respondents were then asked to respond which type of convenience food they use

either Ready to eat or Ready to cook.

100% of the respondents surveyed were using ready to eat food while only 96% of the

respondents said that they use ready to cook packaged food.

This clearly shows that the Ready to eat food is being preferred over the ready to cook

food by the respondents.

The 4% of the respondents not using the ready to cook food were among the lower

middle income group and said that due to expensiveness they dont use Ready to cook

food.

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5.3 Purchase of Convenience food

Purchase of Convenience Food

80

29

00

10

2030

40

50

60

70

80

90

Kirana Store Supermarkets Wholesaler

Types of Stores

No.ofRespondents

The respondents were then asked from where they usually buy the

convenience/packaged foods.

The 80 respondents out of 100 said that they buy the packaged foods from the Kirana

Stores while only 29 respondents said that they purchase from the supermarkets.

There are respondents who purchases convenience food from both the stores i.e.

Kirana store as well from the Supermarkets.

70% of the respondents buy exclusively from the Kirana Stores while only 20% of the

respondents purchase their convenience food from the Supermarkets only.

While only 10% of the total respondents buy from both the stores.

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5.4 Usage of Ready to Eat Convenience Food

Usage of Ready to E at Convenien

10 0 98 9792

82

67

4237

0

20

40

60

80

10 0

12 0

Brea

d

Biscuit

s

Butte

r/Che

ese

Wafer

s/Chip

s

Jams

/Sauc

ePic

kles

Hand

-Held

Food

Corn

-Flak

es

T yp es o f Read y t o E a t

No.ofRespondents

From the figure it is clear that:

1. Bread is the most commonly used Ready to Eat convenience food.

2. Biscuits are the second most ready to eat food used by the respondents

surveyed.3. The Butter/cheese has been in the third position in the usage followed

by Wafers/Chips and Jams/Sauces.

4. Corn-flakes being least used Ready to Eat product among the

respondents surveyed.

Bread and butter being the necessity are used by all the persons surveyed and corn

flakes are being used by the upper middle class group.

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5.6 Average Monthly Expenditure on Convenience food.

Avg Monthly Expenditure on Convenience foo

12

60

28

0 00

10

20

30

40

50

60

70

Below 100 100-500 500-1000 1000-1500 More than 1500

Amt (Rs)

No.ofRes

pondents

The respondents were asked that how much amount they spend on convenience food

monthly.

60% of the respondents spend between Rs 100 to Rs 500 monthly while only 12%

respondents spend less than Rs 100 on convenience food monthly.

The respondents spending between Rs 500-Rs1000 on convenience food on monthly

basis constitutes only 28%.

There were none respondent who spend more than Rs. 1000 on convenience food.

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The surprising reason was given by the parents that they buy the convenience food

because of their children. Children like it factor was responsible for the purchase of

the food by the parents.

The other reasons like dont have to store and hygiene factor were taken back stepsand were least taken care of before the purchase of packaged foods.

5.8 Frequency of Purchase of Ready to eat food

Frequency of Purchase

0

20

40

60

80

100

120

Biscuits Wafer/Chips Bread Butter Corn-Flakes Pickles Jams/Sauce

No.ofRespondents

Everyday Once a week Once a fortnight Once a month 2-3 times a month

The respondents were asked to tell the frequency at which they purchase the Ready to

eat food.

With no surprises at all, Biscuits and wafers are bought as impulse purchase and for

stock purposes as well.

While Butter being purchased almost once a fortnight by maximum no. of the

respondents.

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Other Ready to eat food items like Pickles and Jams are bought once a month as the

consumption period to these kinds of food items is long and spread across the time

period.

5.9 Frequency of Purchase of Ready to Cook Food Items

Frequency of Purcha

0

20

40

60

80

100

120

Instant Noo dle s Froze nVegetables

Ready M ix Idlis Soups Ready M ixCurreys

No.ofRespondents

Everyday Once a Week Once a Fortnight Once a Month 2-3 times a mont

The respondents were asked to inform about the frequency of purchase of Ready to

cook food items.

It is clearly been shown from the above figure that instant noodles being regularly

purchased by the respondents and clearly enjoys the highest amount of penetration

among the users.

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The other ready to cook food items which enjoys the good penetration among users is

Frozen Vegetables as these are being purchased regularly and these are also stored as

inventory for the emergency time and for unexpected guests as well.

Other ready to cook food items enjoys the penetration among the users but have lowconsumption value.

5.10 Preference for Convenience food

Preference for Convenience food

30%

70%

Yes

No

The respondents were asked whether they think that convenience food is better than

home made food.

Exactly 70% of the total respondents were in favour of the home made food as against

30% of the respondents.

There were different reasons to it as to why they prefer home made food or why they

prefer convenience food.

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The young people of age less than 35 yrs are more keen towards convenience food

and prefer them. It might be possible due to the fact that this age group is restless and

have no time to cook.

More and more young people are attracted towards the convenience food.

While the elder persons still prefer the home made food. They enjoy the cooking at

home which had been taught to them by their elders.

It is possible that in coming year the convenience food will be more and more

preferred by the consumers.

5.14 Preference for Convenience food among different professions

Preference for Convenience food among different

professions

26

2 2

0

5

10

15

20

25

30

Working House Wife Student

Profession

No.ofRespondent

The above graph clearly shows that the working women prefer the convenience food

over the home made food being followed by the students and house-wives.

The working women because of the fact that they lack time, so for that matter

convenience food is the best option they have.

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The convenience factor plays an important role followed by the emergency factor.

Also they dont have to worry about their children and husbands being hungry while

they are at office.

The convenience food is already a hit among the working females.

5.15 Preference for convenience food among different income group.

Preference for Convenience food among differen

income group

2

6

21

1

0

5

10

15

20

25

0-3 lacs 3-5 lacs 5-10 lacs above 10 lacs

Income (annually in Rs)

No.ofRespondents

Preference for convenience food is also been driven by the income factor as being

clearly depicts by the above graph.

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Of the total 30 respondents who prefer the convenience food over home made food

are from the middle and upper middle class.

Out of 30 respondents 21 respondents are from income group of between Rs. 5-10

lacs per annum.

2 of the 30 respondents were among the less than 3 lacs income as they were student

and the convenience factor and the factor of use and throw came into picture.

It is clearly been seen that upper middle class prefers the convenience food and still

middle class people has to adopt the convenience food.

5.16 Expenses incurred for convenience food

Expenses incurred for Convenience food

7

23

0 00

5

10

15

20

25

100-500 500-1000 1000-1500 more than 1500

Expenses (monthly)

No.ofRespondent

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77% of the respondents preferring the convenience food spend between Rs. 500

1000 monthly on convenience food.

Only 23% respondents spend less than Rs 500 monthly on convenience food and still

prefer them over home made food.

Not even a single respondent was found to be spending over Rs 1000 on monthly

basis on convenience food.

5.17 Single Outlet Preference

Single Outlet Preference

86%

14%

Yes

No

Majority of the respondents prefers to buy from a single outlet rather from multiple

outlets

86% of the total respondents buy their needs from single outlet.

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Only 14% prefers to buy from multiple outlets.

5.18 Factors responsible for Outlet Selection

57

Factors Res pon s ib le fo r Ou tle t Se l

0

10

20

30

40

50

60

70

80

90

OffersHome

Delivery/On

Phone

Reasonable

Price

Varietyo

f

Products

Qualityo

f

Products

Closeto

Home

Everything

Available

Long

OpeningHrs

Friendly&

Comfortable

Atmosphere

Good

Relation

withStore

Keeper

Scheme

s

Offered

No.OfRespondents

Not at all Im portantSom ewhat ImportantNeutra l Somew hat Impor tan tExtrem ely Im port


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The respondents were asked to give the factors which they think are the most

important in selecting a particular outlet.

The respondents said that the Reasonable price was the most important criteria for

selecting an outlet followed by closeness to home.

The other factor which has an importance in selecting an outlet was the availability of

the products under one roof. They required that they dont have to roam around to

other stores for the things which they dont find to first store.

They prefer the store where they can shop all their goods and products at a one go.

The quality and variety of the products take a little importance from the people and

the factors like delivery on phone and schemes offered were taken back seat and were

totally refused by the respondents by saying that they are not at all important for them

in selection criteria of an outlet.

LIMITATIONS58


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LIMITATIONS

1. The study is limited to Faridabad region only.

2. Most of the respondents were females and hence the view of other

gender was lacking.

3. The sample size is very small compared to the total population of

the region.

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4. The respondents may have not given all the correct facts &

figures and there is a possibility that they may have unrevealed some

important facts or they might have given misleading facts which were

not easy to detect.

CONCLUSION

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The RTE food market, which is currently worth rs. 128 crore, is expected to soar to rs.

2,900 crore by 2015. According to an analysis released by the Tata Strategic Mgmt.

Group, the factors contributing to this phenomenal growth would be changes like cold

chain development, economies of scale on the supply side, coupled with increasing

disposable incomes, diminishing culinary skills and the rising need for convenience

on the demand side.

The report highlights that the RTE market in the country has remained under

penetrated owing to factors like consumers penchant for freshness, low affordability

and the housewifes preference for home cooked food. The report also draws attention

to the perceive taste and nutrition gap and poor range availability for consumers.

According to the analysis, packaged food has grown at around 7% p.a. between 2000-

05, with RTE being the fastest growing category. The canned/preserved segment is

more popular, contributing to around 90% of the market and growing at a CAGR of

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63% between 2001-06. Interestingly, the chilled and dried ready meal segments are

almost non-existent.

Speaking on the outlook for the RTE market, TSMG chief executive officer Raju

Bhinge says, there is a huge untapped market opportunity arising due to rapiddemographic shifts in income, urbanization and the rising proportion of urban

working women. The industry needs to focus on broadening the market and

increasing penetration amongst Indian consumers.

The analysis also points to the fact that the players will have to significantly improve

their price competitiveness with respect to other options such as domestic help, eating

out and ordering in. besides price considerations, the product range offered will have

to be strengthened. At the moment the regional and non-vegetarian cuisine markets

are relatively under serviced with concentration on the vegetarian North Indian meals.

Tata Strategic Practices head for consumer & retail, Pankaj Gupta says, according to

our analysis, India provides an attractive opportunity. If consumers demands of

affordability, availability and acceptability are met; the RTE food market has the

potential growth size of rs. 2.900 crore by 2015 from its existing rs. 128 crore

Also, the convenience food is still being purchased by the Kirana Stores by most of

the people. Its the emergency which compels the consumer to buy the convenience

food today also and not the factors like hygiene or simple to prepare.

But, the preference for convenience food is rising among the various sections of the

society and they are now accepting the change. The more working couples, single

parents and high disposable income with time pressure all these contributes to the

growth of the rise in the convenience food industry.

Still, it has a long way to go as a major chunk of people in the society prefers home

made food than the convenience food. The expensive factor is still ruling in the minds

of the consumer and it is prohibiting the customers to purchase them.

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APPENDIX

BIBLIOGRAPHY

1) Biyani, Kishore and Baishya, Dipayan, It Happened in India The story of

Pantaloons, Big Bazaar, Central and the great Indian consumer, Published by Rupa

& Co., 2007, pp 17.

2) Kotler, Philip Marketing Management Analysis, Planning,

Implementation and Control, 9th Edition, Published by Prentice-Hall India, 1998,

pp 190, 193

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3) Levenstein, H, Paradox of Plenty, University of California, 2003, pp 106-7

4) Processed Food & Agribusiness, Opportunities for Investment in India, a

Knowledge Paper, by KPMG & FICCI, 2007

5) Whats Hot around the Globe in F&B 2006, Survey by AC Nielsen

6) Food Processing, a knowledge paper by IBEF, Oct 2007

7) Report on Food Industry in India, by Indo Italian Chamber of Commerce

& Industry , Nov 2006

8) Strengthening the India-Australia corridor in select Food & Agribusiness

sectors, by Rabo India Finance Ltd, June 2007

9) Food & Beverages Survey, by FICCI February 2006

10) Food Retail Formats in Asia, Understanding Format Success, a study

conducted by Retailing Research Council Asia by IBM

11) http://indianfood.indianetzone.com/1/history.htm

12) http://www.food.gov.uk/

13) http://www.ers.usda.gov/Browse/FoodSector/

14) http://en.wikipedia.org/wiki/Processed_food

15) http://www.ciionline.org/

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6. What is your average monthly expenditure on Convenience foods (in rupees)?

a. Below 100 b. 100-500 c. 500 1000 d. 1000-1500 e. More than 1500

7. For which of the following reasons you use the convenience foods?

a. Simple to prepare b .Saves time c. Children like it d. Tastes goode. Useful for unexpected guests f. Useful in emergency g. Hygiene factor

h. Dont have to store i. Others ______________________________

8. How frequent you purchase Ready to Eat convenience food?

Everyday Once a

Week

Once a

Fortnight

Once a

Month

2-3 times a

Month

Biscuits

Wafer/Chips

Bread

Butter

Corn-Flakes

Pickles

Jams/Sauce

9. How frequent you purchase Ready to Cook convenience food?

Everyday Once a

Week

Once a

Fortnight

Once a

Month

2-3 times a

Month

Instant NoodlesFrozen Vegetables

Ready-Mix Idlis

Soups

Ready-Mix Curreys

10. Do you think the convenience food is better than the home-made food? Y/N

11. If yes, then please give the reasons why you think so

a. Simple to prepare b. Saves time c. Tastes good d. Hygiene factor

e. Dont have to store f. Quality g. Variety h.Others__________

12. If no, then please give the reasons why you think so

a. High Fat contents b. Fat Quality may not be good c. High Salt contentd. Expensive e. Dont provide a full meal f. Others __________

13. Do you buy convenience foods from a single outlet? Y/N

14. How important you think the factors is to you in selecting the outlet?

Not at all

Important

Somewhat

Unimportant

Neutral Somewhat

Important

Extremely

ImportantOffers Home delivery/

On Phone

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Reasonable Price

Variety of Products

Quality of Products

Close to Home

Everything available

Long opening hours

Friendly & Comfortable

atmosphere

Good Relation with

Store Keeper

Schemes Offered

Name: _______________________________________ Age: ____________ Gender: Male/ FemaleOccupation: ___________________________________________ Marital Status: Married / SingleAnnual Income: a. below 3 lacs b. 3-5 lacs c. 5-10 lacs d. above 10 lacsPlace: __________________________ Contact No. : ___________________________

Name: _______________________________________ Age: ____________ Gender: Male/ Female

Occupation: ___________________________________________ Marital Status: Married / SingleAnnual Income: a. below 3 lacs b. 3-5 lacs c. 5-10 lacs d. above 10 lacsPlace: __________________________ Contact No. : ___________________________

Dissertation Report 2

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