Consumer Behavior towards Organic Fruits and Vegetables
Consumers are predicted to make purchases on the basis of anticipated utility or satisfaction. Actual, or realized, utility does not enter into the derivation of a consumer's demand function, so the resulting derived demand curve for any consumer simply expresses that consumers willingness to make purchases on the basis of anticipated satisfaction (1992).
The demand for organic food has increased over the past few years. The increase in demand for organic foods reflects a general trend in consumer desire for quality products that are perceived to be healthful, nutritious, and safe. Food grown under organic production systems with little or no chemical use is more preferred by some consumers. Surveys indicate that consumers prefer organically produced food because of taste, appearance, absence of pesticide residues, and personal health reasons ( 1996). Some consumers also are concerned about farm labor and environmental issues: farm worker safety, soil and water quality, and wildlife habitat (1992;1990; 1992).
The availability of organic foods expanded in the 1990's, partially spurred by the growth of high-quality and natural-product supermarkets. Mainstream supermarkets also introduced or increased organic product lines in response to retail competition and consumer demand. It is no longer unusual for large-scale supermarkets in metropolitan areas to carry some fresh and/or processed organic products.
Evidence has shown this increase in demand for organic products. Demand for organic foods in the United States, Europe, and elsewhere are growing rapidly, yet market shares remained quite small. In the United States, organic food sales have grown during the 1990s at an annual average of 24% with an estimated market share at retail of 1% to 1.5% in 1996 (1997). In Denmark, where government subsidies and industry promotion have lowered price premiums for organic products, market share has grown to 3% to 4% of the retail food market (1996). By contrast, organics account for only 0.3% of retail food value in France (Foreign Agricultural Service). Although reliable estimates for Canada, Japan, and Australia do not exist, organic market shares in these countries appear to be quite small.
The array of organic products is now available in the retail channels. Growth and consolidation of natural foods supermarket chains have led to more retail sales of organic products. Traditional supermarkets have countered in some locales by promoting organic products to compete with natural foods supermarkets. At the same time, the array of organic products has expanded well beyond fresh produce to include baby foods, dairy products, meats, and prepared convenience items.
Consumers' concerns about use of pesticide chemicals in food production have made food safety a priority issue on the public agenda. Several studies have focused specifically on consumer attitudes toward chemical residues and how the uses of pesticide chemicals affect consumer purchase decisions. For example, in a 1986 survey of Pennsylvania households 71.1 percent of respondents expressed concern about eating fruits and vegetables sprayed or dusted with pesticides (1987). By comparison, 41.5 percent of Pennsylvania respondents expressed a similar concern in 1965 ( 1968). Following the Alar scare in 1989, public concern about the potentially adverse effects of pesticides or their residues on human health rose to an unprecedented level. (1992) reported that 45 percent of their respondents indicated that they believe the use of pesticides for food supply is "somewhat" or "very" unsafe even when they are used properly. They suggest that consumers continue to feel and express uneasiness about the safety of using pesticides for production of foods. Consumers' demand for safer foods will translate into market behavior and alter demand for food products in the marketplace.
In a survey of supermarket shoppers, Ott (1990) reported that two out of every three shoppers were willing to pay 5 percent to 10 percent more for fresh produce that is certified free of pesticide residues. Similarly, (1994) found that more than half of the respondents indicated a preference to buy organically grown fresh fruits and vegetables and would be willing to pay more for produce that was certified pesticide residue-free.
Market-watchers have noted that organic foods have been selling in Hong Kong since the early 1990s. However, in Hong Kong, organic food is a new market sector, and certainly not a well-documented. The government of Hong Kong keeps no statistics on organics. In fact, even industry veterans concede that the Hong Kong organic market's size is impossible to estimate.
The term "organic foods" is virtually synonymous with "health foods" in Hong Kong, so it's important to emphasize the overall nutritional value and health food image of organic products.
Hong Kong’s production of organic products is limited to vegetables such as lettuce, melon, beans, carrots, beets, etc. The concept of organic food is relatively new in Hong Kong. Organic products are currently sold only in a few new stores in commercial areas and in places with a middle/high income clientele. Many organic products are only available in some core stores with potential patrons of organic products. Hong Kong does not have any laws or regulations pertaining specifically to organic foods.
The demand of these organic products like fruits and vegetables are also affect by the cultural differences. The cultural context can be defined as the totality of the customs, arts, sciences, religions, politics, and economics that distinguishes one society from another, and that influences the individual consumer's behavior. Generally, cultural knowledge includes implicit theories about the world we live in that are largely shared by the members of our society. Culture sometimes guides consumer judgments and behaviors.
Let take for example the Anglo and Asian American students at a California university with an ethnically diverse population which were asked to view advertisements for Welch's grape juice (2006). After viewing the students are asked for their reactions.
Half of the ads were "promotional" in their appeal. That is, they focused on the benefits that could be gained by drinking the juice such as “Welch's grape juice can lead to higher energy levels, is great-tasting as well as energizing, and is fun to drink." The other ads had "preventive" appeals: They highlighted problems that could be avoided by drinking Welch's, for example, "Welch's grape juice can reduce the risk of some cancers and heart disease, helps keep arteries clear so that blood can flow freely, and is healthy to drink."
Asian American participants heavily favored the preventive messages; Anglo Americans had the opposite reaction, rating the promotional messages as more effective. Americans, who value achievement, accomplishment, and independent thinking, would focus on the positive consequences of their purchasing decisions. On the other hand, Chinese, who tend to value protection and security, and have more interdependent ways of viewing the world, were expected to concentrate on the negative consequences of their actions or decisions.
Similarly, with the organic fruits and vegetables, culture also affects the level of demand of the said product depending on what the particular group believes and also on their knowledge on the product.
In addition, personal influence also affects the consumer behavior. These includes demographic such as age, gender, race and others. Preferences of younger age differ from those of older. Personal influence is also defined as marketing communications which involves direct contact or face-to-face exchange of messages. Personal influence is important in a wide range of decision making situations. (1944) concluded that the most important factor in one’s decision is the personal influence exerted by friends, family and work associates. These different group influences the buying behavior of the individual in the way that one would compare his own preferences from the preferences of others. Word of mouth usually works well in convincing someone especially when you know the person talking about the product. Having to see it in your own eyes makes promotions more effective. Thus, more personalized promotions is more effective.
Moreover, opinion leaders also influence decision making of consumer. Opinion leaders, according to (1955), are those in particular segments that are perceived to be experts in some particular domains. Usually they are the ones who are most influential in the decision making of the consumer because the person is perceived to be expert and know what is right.
(1955) have more recently analyzed the importance of personal influence to consumer purchasing decisions and they concluded, “Personal contact again has considerably greater effectiveness than any other media.” Personal sources of information are important in influencing change in decision than such impersonal sources as radio and magazines.
Many reasons are cited for the importance of personal influence in the decision making process. Generally, families and friends are important referents to each other since in most cases people who interact have similar values, and a common level of discourse. Not only is information communicated but also the degree and intensity of feeling or conviction is communicated.
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