Consumer Attitudes and Purchase Intentions in Relation to Organic Foods

Research Proposal Consumer Attitudes and Purchase Intentions in Relation to Organic Foods in Peninsula Malaysia Abstract The aim of this study is to find out the three (3) significant variables forming the positive attitude towards the buying the organic food in Peninsula Malaysia, which eventually lead to the ultimate intention in buying the organically-produced food. The different variables are focused on demographic characteristics on household income, product attributes and lastly the perceived value to the customers. This study shows that the household income is seemingly appeared to be an important predictor among the targeted segmentation in consuming organic food. Organic food attributes such as pricing, availability and environmentally friendliness of such organic food may influence consumer buying decision. Lastly, the perceived value from the customers towards organic food on its health effects, sensory appeal, nutrition-worth and belief of perceived benefits, often play an important role in cultivating the intention towards buying organic food. Introduction and Background of the Study Over the last two decades, there has been a remarkable increase in demand for organic-produced food or products. Organic food is often seen and marketed as health-conscious food which contains fewer contaminants, more nutrients and most importantly having a positive effect on the environment. It is known that some of these attributes are difficult to quantify, with the contrary that some of researcher has proved that they may cause such potential harm during the organic production. The organic market back in 80’s, while remaining a niche sector, has grown to be able to grab a share from the total spending on food in some countries in the recent years. Organic fruit and vegetables are amongst the products which have been expanding in the rapid production. The demand for organically-produced meat and dairy products has undergone the same rapid progress, with a corresponding increase in the need for organically grown forage and feed crops. This has led to a fast growth in consumer demand whereby the organic food sales have managed to gain a significant market share in the conventional food industry. The market for organically produced crops and commodities has become more structured, looking at the increased number of countries which have adopted uniform standards for organic food production. The standardization has also applied in the organic certification and labelling. While both the production and the marketing of the organic cultivation of temperate crops have developed, there is a trend to be seen whereby the developing country’s farmers are actively involved in the organic farming. Problem Statement and Importance of the Research Organic agriculture industry, no doubt, has offers most of the developing countries a wide range of economic, environment, social and cultural benefits. Certifies organic products have now been growing fast and in the mist of entering the global market. Malaysia, on the other hand, is still in the starting spark-point in adapting the organic-food consumption while the developed countries such as North America and Europe have already gained the biggest market share in this newest industry. Due to expanding markets and attractive price premiums, Malaysia should invent and invest in organically-produced food, taking into consideration of various significant variables which may form the consumer behaviour towards organic food. We would like to highlight that the ultimate goal of this study is to understand consumer’s motivations behind organic food products purchases in order to enable organic producers to develop a more effective strategic marketing plan. The results could be used for the marketing planning of organic food products to enable proper marketing strategies, a proper sales channel and promotion to be targeted to these groups of consumers. Research Questions The present study aims to answer the following questions: †¢ What are demographic characteristics of organic food buyers? †¢ How do demographic characteristics affect consumer attitudes towards organic foods? †¢ How product attributes effect consumer attitudes towards organic foods? †¢ How consumer perceived values influence consumer attitudes towards organic foods? What is the relationship between consumers’ attitudes towards organic foods and their intentions to purchase? †¢ How can results of the study be applied by managers and marketers? Research Objectives Regarding to the significance of the growing market of organic foods in the world, and to the previous studies on consumer attitudes towards organic foods and its effects on purch ase intentions in several countries (e. g. Taiwan, Thailand, United Kingdom, United States and Denmark) we intend to carry out such similar studies in Peninsula Malaysia with objectives as the following: To report the descriptive analysis on the organic buyers’ demographic characteristics †¢ To identify the effects of demographic characteristics (specifically level of households income) on consumer attitudes towards organic foods †¢ To determine effects of product attributes on consumer attitudes towards organic foods †¢ To investigate the relation of consumer perceived values to consumer attitudes towards organic foods †¢ To determine the relationship between consumers’ attitudes towards organic foods and their intentions to purchase †¢ To clarify implications for managers and marketers Literature Review Demographics Based on findings from previous research, demographic characteristics were evaluated as one of the major predictors in gaining intention to purchase the organic food in Peninsula Malaysia. According to Robinson R. and Smith C. (2002), the demographic of consumers consist of various characteristics namely the gender, age, household income and education level. Each element has been contributed in forming the valued attitudes towards buying the organic products. Hence, the demographic characteristics, especially on household income is seemingly significant and being the focus in this research. This will eventually lead to the desired intention in buying such products for daily consumption. Level of Household Income Whilst referring to the studies done in the US, it is seemingly apparent that the demographic variables which herby refer as the income distribution, is significant predictors (Bartels & Reinders, 2009). The research on this particular subject has proven that income positively influenced buying behaviour which in turn may cause the perceived buying behaviour towards the organic food. A same result has shown in Germany as well (Bartels & Reinders, 2009). In Germany, demographic variables such as household income distribution have played an important role in developing significant effect on organic buying behaviour. However, the overall inevitability of the demographic characteristics was relatively different, taking into consideration of research carried in various Western countries. These findings verify the results of earlier studies by Clark & Goldsmith (2006) and Im et al. (2003) proven that the intellectual practice on using the demographic characteristics such as household income distribution and domain specific innovativeness will be seen as strategic tools for market segmentation. In the Western countries, research has identified that the demand and willingness in expenditure on organic goods often affiliated closely with various socioeconomic and demographic variables (Wier et al. , 2008). In addition, Menghi (1997) found that the majority households with middle and higher income levels showed a greater tendency in purchase and consuming organic foods. However, it is shown that almost all of these studies are based upon hypothesized future behaviour rather than observed behaviour in both Denmark and UK. Hence, studies have been carried out by researchers to further invent on the influences of demographic characteristics especially in household income in guiding the intention of buying the organic goods. Through the research it is revealed that higher disposable household income (approximated by total food expenditure) will lead to higher positive intention in purchasing the organic food. Consumers with a lower household income alongside with lower level of education are found to be least likely to have heard of organic agriculture (Roitner-Schobesberger et al. , 2008). On a contrary, those who have a higher income and hold an academic degree are more likely to be the target segmentation in purchasing organic products (Roitner-Schobesberger et al. , 2008). It is also mentioned that the correlation between the household income level is very much linked to the level of education as well. As mentioned by Robinson R. and Smith C. (2002), intended purchases of sustainably produced foods did not differ for demographic characteristics such as household annual income educational attainment. Through the research carried out by Ross NJ. et al. 2000), they have suggested that consumers with a higher earning incomes were more likely to have purchased locally produced food, mainly focus on the organic consumption by various segmentations. Their research and findings were supported earlier by Govindasamy R. and Italia J. (1998) whereby the same results applied. Groups with a higher household income tend to have purchased foods produced with reduced pesticides. In UK particularly, social group is employed as an indicator of income brackets (Wier et al. , 2008). Research has revealed that the tendency in urchase the organic goods seem to increase in accordance to the given social status. However, the highest organic budget shares are observed for middle class households whilst shares in the upper middle class being in fact lower. Quite captivatingly, a similar phenomenon is observed to be happened in Denmark as well. Organic Food Attributes Organic food attributes influence consumer buying decision. Several empirical studies have been performed on customer perceptions of organic food attributes and how they formed the consumer attitudes towards food. In the present research, among different product attributes, we have selected: price of organic food, environmentally friendliness of organic food and organic food availability. Price of Organic Food Organic foods are often of a price premium above conventional products. According to Roitner-Schobesberger et. al (2008) in Thailand the price difference between organic and non-labeled conventional vegetables in Bangkok varied between 50 percent and 170 percent and in some cases even 400 percent. However, in some countries such as Finland there were not significant premium prices for organic foods (Tarkiainen and Sundqvist, 2005). As Roitner-Schobesberger et. al (2008) pointed out that despite the price difference of organic and non-organic food, nearly 60% of the ‘organic buyers’ said that the price of organic products was not a problem. In addition, ‘non-organic buyers’ ranked some other items as a reason of not purchasing organic food rather than higher prices. Chryssohoidis & Krystallis (2005) claimed that while 100 percent of people would prefer organic to conventional products with the assumption of similar price, this percentages dropped by only 20 percent when the same question was posed regardless the higher price of organic food. In other words, higher price is an important obstacle for a limited percentage of consumers. Roitner-Schobesberger et. al (2008) found out that in Bangkok men were more likely to purchase organic foods than women and concluded that it might be due to the reason of men being willing to pay a higher price premium for organic products than women. Similarly, a study in Klang Valey, Malaysia showed that women werre more likely than men to agree that they would purchase more organic foods if they were less expensive (Ahmed, 2010). Additionally, heavy users were on average stage whereby they are willing to pay higher price premiums than medium and light users (Wier et. al, 2008). Environmentally friendliness of organic food Consumers are getting more conscious and concerned with the consumption of chemical substance used in farming and preserving environment is becoming a strong attitude among consumers. According to Tarkiainen and Sundqvist (2005), subjective norms’ effect on attitudes has been mainly found in behaviors, that involved some kind of ethical decision, and also buying organic food can be seen as ethical decision reflecting environmental concern. In addition, perceived quality is associated with environmentally friendly practices (Ness et. al, 2009). The perception of organic food products as environmentally friendly was a common intuition and has been examined in several studies (Ahmed, 2010; Honkanen et. al, 2006). It is believed that when the consumers have more concern about their health and environmental protection, they will be more likely to have a positive attitude to organic foods (Ness et. al, 2010). Honkanen et. al (2006) found that ecologically oriented consumers were more likely to form intentions to purchase and consume organic food. In other words, the more people are concerned about environment, the more positive attitude they have towards organic food. Organic Food Availability Lack of organic food availability and variety in store is considered as one of the barriers to consumer purchase. Fresh vegetables (which include fresh herbs) were considered the most widely available organic product group rather than other organic foods (Roitner-Schobesberger et. al, 2008). Chryssohoidis & Krystallis (2005) stated that limited availability was the main factor that hinders organic purchasing. Although according to Roitner-Schobesberger et. al (2008), in Thailand, majority of organic buyers were satisfied with availability of organic products. Most of them reported that they would like to buy more organic products, especially a wider range of vegetables. Value to the Customer In every product that consumer purchased and used, they in turn are expecting value from it. Value can be defined as a benefit that consumer is receiving by using a product. Benefits here mean sensory appeal of the product, taste, fun, freshness, quality and healthiness of the products. These are some main reasons that encouraged consumer to purchase the organic food. The value may vary from one consumer to another; however there will definitely be one value that effect the buying attitude which motivate the buying intention of consumers. Health Effect of Organic Food Several perceptions contributed to health attribute include the reason of being good for health, good for children, not containing pesticides, high in fiber, natural and nutritious and safer to eat (Roitner-Schobesberger, et. al, 2008; Saher et. al 2006; Lockie et. al, 2002; Ness et. al, 2009). The perceived potential hazards of modern agricultural practices such as the use of pesticides and their residues in food were perceived to be associated with long term and unknown effects on health (Miles and Frewer, 2001;Wilkins & Hillers, 1994; Williams & Hammit, 2001). Saher et. al (2006) revealed that there is very little scientific support for the common beliefs that organic food would be more healthy or nutritious than regular foods, but the belief that they have these properties remains quite strong in consumer’s mindset. The claim is debatable whether marketers can use the health claim for marketing purposes because most of the research concluded that there was no evidence that organic food was healthier or more nutritious than conventional food (Honkanen et. al, 2006). However, most studies in this area suggested that consumer’s perception of organic food as a healthy nutrition is one the most significant motives for buyers. Lockie et al. (2002) pointed out that health was the one aspect consumers are least willing to compromise. Roitner-Schobesberger et. al (2008) in Bangkok, Thailand, examined the motives behind organic food purchase and pointed out that the most important motive was the expected positive health effects. Similarly in Malaysia, organic buyers believed that organic food was healthier compared to conventional grown food (Ahmed, 2010). In Thailand, the health aspect was closely associated with the residues from synthetic chemicals used in agriculture (Roitner-Schobesberger et. al, 2008). In fact, organic products often have a lower level of pesticide residues (Baker et al. , 2002). Lockie et. al (2002) revealed that although price was an important factor, organic consumers consider health has appeared as a more significant factor for purchasing organic food in Australia. These organic food consumers also believed that industrial methods of food processing constitute a threat to customer’s health. Another research by Schifferstein & Oude Ophuis (1997) illustrated that well-being was rated among all other motives by organic food buyers. On the other hand, Tarkiainen and Sundqvist (2005) by examining specific organic products (bread and flour) claimed that health consciousness did not explained the general attitudes towards organic food, although they believed this results might be different by examining different organic products. Sensory Appeals Sensory appeals of organic food are part of the factors that provides value to customer. Sensory appeals include the taste, odor and also the texture of the organic product (Prescott et. al, 2002). Sometimes sensory appeals of the organic food need to be combined with the non-sensory factors such as organic food related expectations to create a value to customer which will affect their attitude towards buying organic food (Prescott et. al, 2002). Sensory factors are also influenced by cultures and background of consumers. For example, consumers from Western countries eat less spicy food compared to those from Asia. Spicy organic food might produce high value to consumers in Asian countries compared to Western. Intrinsic cues or sensory appeal that are associated with physical characteristics of the product such as taste, size, color, appearance, smell, feel and flavor were commonly used as indicators of quality on the organic food (Schifferstein et. al,1997). Quality is also value that consumers experiencing by consuming an organic food. Better sensory appeal of organic food will portray a better quality which will influence the attitude of purchasing an organic food and later increase the intention of buying the organic food. One of the most prominent sensory appeals that yield more value to consumer is taste. According to Roitner-Schobesbergeris et. al (2008), taste was the third important motives that consumers purchase organic food (Roitner-Schobesbergeris et. al, 2008). Others studies also emphasized that many organic food buyers believed that organic food products taste better than conventional food even if sensory evaluations have yielded inconsistent results (Fillion and Arazi,2002; McEachern and McClean,2002; Zhao et al. ,2007). Perceived Value One of the studies conducted in eight countries concluded that individual attitudes towards buying organic food are primarily based on the belief about the benefits (Thogersen, 2000). Benefits or value to consumers such as healthy, taste better and environment friendly supersede all the other factors such as belief about the cost. The same proven in one of the study conducted in Klang Valley. Most of the respondents reported that they choose to buy organic food products because they perceived organic food as very healthy, fresher and natural (Bayaah Ahmad et. ll, 2010). As such, value of organic food towards customers’ effect their attitudes towards buying which will motivates their intention of purchasing the organic product. Consumers also value organic food as nutritional food since it is produced using traditional method whereby the original nutrition from the food is preserved. Nutrition belief was one of the reasons that made people appeared to have different food styles and often express themselves as having food adventurousness or pickiness (Chen, 2007). Organic food adds value to consumers who has such belief and it will influence their intention of consuming it by affecting the buying behavior. Besides, Chen (2007) points out that an individual’s personal interests or traits act a part in establishing personal food choice criteria through the values held by the individual. These values comprise nutrition beliefs, weight control concerns, and so on. For instance, people seem to have different food-styles and often express themselves as having food adventurousness or pickiness. Another important motive to purchase organic food as reported by Roitner-Schobesbergeris et. al (2008) is the consumer’s search for new, trendy and attractive food products. Attitudes towards Organic food and Intention to purchase Basically, consumer attitudes are found to be the most important predictor of intention to buy (Honkanen et. al, 2006). Several studies have found that higher perceived product quality leads to more positive re-purchase intentions (Bou-Llusar et. al, 2001; Hult, & Kandemir 2004; Tarkiainen & Sundqvist, 2005). Chen (7007) highlighted that if the consumer’s attitude towards organic foods is positive, the consumer’s attitude to purchase organic food will be more likely to be positive. This is also consistent with another study performed by Honkanen et. al (2006) indicating that relation between attitude and intention is positive and quite strong, indicating that consumers with positive attitudes towards consumption of organic food are more likely to form intentions to consume such food, therefore converting positive attitudes to intentions. Methodology Theoretical Research Framework [pic] Figure1. Theoretical Research Framework Hypothesis Development: Hypothesis 1: There is a relationship between demographic characteristics of consumers and their attitudes towards organic foods. Hypothesis 2: There is a relationship between organic food attributes and consumer’s attitudes towards the organic food. Hypothesis 3: There is a positive relationship between values of organic food to customer with attitudes towards buying organic foods. Hypothesis 4: When the consumer’s attitude towards organic foods is positive, the consumer’s intentions to purchase organic foods will be more likely to be positive. Research Design The questionnaires are only designed in English; since the respondents are assumed to be relatively high educated they will be able to answer the questions without any difficulties. Furthermore it will help to keep the original meaning and understanding that respondents perceived to have towards the questions. Types of questions in questionnaires are mostly closed ended question and only two open ended question. This will only consume little time for the respondent to complete the questionnaire which will encourage them to participate in this study. There are three main categories in the prepared questionnaires. The questions in the first category are more towards understanding demographic details of the respondent such as on the age, income level, ethnicity, religion and educational level. This is useful to confirm the background of the organic food consumers. There are also questions on the product attributes which the respondents are asked to identify what are the main attributes that attract the purchase and also to determine whether this factor have a positive effect towards consumer attitude on organic food. Last part in the questionnaires is designed to understand the value of organic food to customers. All these questions are to test four hypotheses of this study. Data Collection The target population consists of organic food buyers in Peninsula Malaysia. In order to carry out the sampling Peninsula Malaysia is divided in to 3 major regions namely Northern, Central and Southern region. Northern region will be represented by Penang, Central region will be Klang Valley and Southern region of Peninsula Malaysia is represented by Johor Bahru. These three areas are chosen based on the economic development and availability of the organic products. From each region shopping complexes and supermarkets that provide organic products are identified. By using random sampling, three shopping complexes and supermarkets in urban areas are selected. Since target respondent with higher educational level and purchasing power are scattered around these urban areas, these will be perfect places to conduct this research. Those three supermarkets and shopping complexes are ensured to be far from each other so that the collected samples will be more accurate in representing the population in each region. Total sample size comprises of 540 individual respondents is collected using convenience sampling and respondents will be approached randomly. Since this study is conducted in large scale, convenient sampling will be more cost effective compared to other types of sampling. Furthermore conducting other types of sampling will be time consuming and the accuracy of the collected samples to represent the actual population will be questionable. In order to collect the data, 60 self-administered consumer questionnaire surveys are distributed in each shopping complexes which will result in 180 uestionnaires from each region. Considering the validity of the data, we are expecting a total of about 500 questionnaires to be usable in the later part of data analysis. Although there is no way of knowing if those included are representative of the overall population, the survey is still expected to give a first overview of relevant issues and to allow to derive insights into the perception of organ ic food buyers in Peninsula Malaysia. Data Analysis After data is collected, data will be edited and coded. Editing data is very essential part of data analysis especially when researches involve open ended questions. Editing is done immediately after data is collected so that the respondent can be contacted if any clarification needed. The edited data are identified through usage of different fond and colors. Coding is done before data processing is conducted. Since most of the data collected involve ordinal scale, coding becomes prudent. By doing this data accurately keyed in and avoid wrong interpretation of data. Base on the three sections in the questionnaire, data is also coded in three main groups. Data processing is done using a software program called SPSS version 17. First of all the edited and coded data is checked and scanned through. Wrongly entered and coded data will be identified using the software through methods like identification of the maximum value. Values like variance, standard deviation, mean and range are used to understand the effectiveness of the questions asked in the questionnaire and how respondents reacted to the questions. The reliability and validity test is done to check the credibility of the data. The reliability test also conducted to test the relationship of the variables through the reliability coefficient. 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