Organic Consumers’ View on Brand Equity: Effects of Brand Awareness, Perceived Quality Brand Loyalty, Brand Association, and Brand Image
INDUMATHI .N
Department of Commerce , B.S.Abdur Rahman Crescent Institute of Science & Technology GST Road, Vandalur University, Chennai 600 048, Tamilnadu ,[email protected]
DR.D.AYUBKHAN DAWOOD
Dean, SSSH, B.S.Abdur Rahman Crescent Institute of Science & Technology GST Road, Vandalur, Chennai 600 048, [email protected]
………...
ABSTRACT
This paper investigates the determinants that influence purchase decision towards branded organic food product in Chennai city. The focus on organic customers is understandable in this study. Hence 454 respondents of organic food products in Chennai city are selected as by purposive sampling method. The primary data are collected directly from the respondents through a structured questionnaire. Secondary data are collected from journals and websites.
Statistical tools like percentages analysis, descriptive analysis, one-way ANOVA, Regression analysis, structural equation modeling (SEM) are used to analyse data.The results discovered that five elements of brand equity have maximum impact on consumer buying behaviour.
though, results also explained that the highest impact on consumer purchasing behaviour refers to "brand awareness, perceived quality, brand loyalty and brand assets" significantly predicts the purchase decision, Perceived quality followed by brand loyalty of branded organic food products.Our result indicate that demographic variables age, family size and education influences better in making purchase decision which reflect that organic customers have a positive attitude towards branded organic food product.
Keywords: Organic Product, Brand Equity, Brand Awareness, Brand Loyalty, Purchase Decision.
INTRODUCTION
India has the second largest population in the world and it is a potential market. In olden days food products were cultivated without any chemical based fertilizers or chemical based
pesticides; but due to food scarcity and improvement in industrialization, mass food cultivation started with the help of chemical based fertilizers and pesticides. Non organic products cause damage to the environment as well as human health compared to chemical free organic food. Interest in organic produced products is rising all over the world giving importance to conventional agriculture practices, food protection, human healthiness concerns, animal benefit considerations and concerns environment and protection. Organic food product’s demand is increasing in India as the people become more educated about health and wellness issues, leading to better realization in food choices. Demand for organic product is up in Chennai. So, nowadays, people have started analyzing about food products and their effects due to increase of health and environmental issues. Consumers’ buying interestis changing due to education, awareness and health consciousness. People who are concerned about their health has started buying organic food products; also the environmentalists. Organic and non- organic products are available in the market. There are many chances that a non-organic product may be sold as an organic product in the local market. So the consumers become brand conscious to avoid the risk of buying a non-organic product instead of organic product.
Marketing avenues have increased and there are more organic outlets. Awareness has improved among farmers too and they want to try organic cultivation. So, the number of suppliers has also gone up, especially in the last three years. The cultivators and the traders have to make the people believe about their product and then only they can be successful in the competitive market. Due to the liberalization, the market attracts many vendors to compete. Also organic certification is essential to sell under a brand name. People believe the certification as a basic requirement before trying the particular organic product. Marketers have the responsibility of differentiating their brand among other products in terms of cultivation method, certification, quality etc. Brand name has become the main asset for the business. Brand name is the face of the seller which is directly related in buying preference.
Today, in a competitive market, survival of the company is about the market share that they own. Brand name of their product is very important. In order to be successful proper branding plans have to be done. It helps the seller to withstand in the market, gain more revenue and win the customers.
Brand name is associated with the product’s quality, which helps the consumers to choose among the available choices. Building brand name in people’s mind is very important in order to have success in the competitive world is one of the essential parts of business system. But it is misinterpreted many times. Sometimes, branding is considered as simply an
advertising activity. And many managers and marketers believe that branding is about the administration of product image, which is an extra obligation that can be separated from the primary business of item the executives. Additionally, Branding is which helps to win the competitive market. Brands also stake about tradition that exist in the family that is passed on to others. Branding is not just a set of activities which help in building brand image, it is a strategy.
The study of consumer buying behaviour is extremely important in different angles. Organic food business India is likely to treble in four years by 2020. Mainly, consumers’ behaviour will cause the increase fortune of any company. Consumers will have their preferences in purchasing products. Products are selected based on their preference. Additionally, by understanding the reasons of consumers to buy the products; the company can prepare marketing strategies to fulfill the customer needs.
REVIEW OF LITERATURE
Padmathy .J, R. Saraswathy (2016) the interest for organic items in Indian has been developing altogether for as long as five years. Buyers will pay more for organic products.
Customers have diverse purchasing practices and these practices are always showing signs of change because of the accessibility of best options to consider.The study explores the connection between factors that influence consumer’s purchase behavior for organic items and distinguishes the value levels customers like to pay for organic items in the region. They used regression and chi-square analyzes. Convenience sampling technique was used. The discoveries of the examination uncover that there is huge connection between the factors which influences buyers' purchasing behavior for organic items. Importantly, the components influencing the customers' purchasing behavior have significant ramifications on acquiring decisions. Organic marketers can therefore realize, discover and propose marketing mix strategies to identify the preferences of the market segment for organic products.
NargesDelafrooz et al (2015) investigated the variables influencing the green brand equity of electronic items in Guilan Province. They utilized descriptive survey for information gathering and utilized the random cluster sampling method. CFA and SEM were utilized to analyze data. The outcome demonstrated that there was a noteworthy relationship among brand-perceived quality, green brand image and brand value, yet not with the green brand- perceived value.
Anantha Raj A. Arokiasamy (2012) portrayed the impacts of marketing mix blend on brand
loyalty in the Malaysian hypermarkets segment. The researcher embraced five autonomous factors which are price, store image, advertising, distribution intensity and price promotion while analyzing the connection between 5 IVs and Malaysian hypermarkets' image loyalty.
An aggregate of 300 poll reviews were disseminated to clients at 3 hypermarkets around Klang Valley in Malaysia. The researcher utilized a descriptive and explanatory study by methods for descriptive and inferential analysis. He found that price, store image, distribution intensity and price promotion are found to exert a significant positive influence on Malaysian hypermarkets’ brand loyalty.
Sathyendra Kumar AD et.al (2015) stated that availability of organic input and output is critical to improve the organic farming in the country. In India development of efficient organic marketing system is necessary .They tried to understand the consumer perception about organic product and marketing in Mysore city. Marketing of organic product was meager and demand for organic product had increased. The concluded that major reasons are organic producers are less; adequate market facility is not there on limited of shops, lack of awareness, and so on. They suggested that farmers and government should give importance to organic marketing to improve farming.
Dr. U. Vani, S. lakshmi, (2015) view on organic farming.They use nature as the best good example for agriculture and think about soil as a living framework. Ministry of Commerce and Ministry of Agriculture in India were advancing organic cultivating in a major manner.
They found that on the off chance that the nutritive estimation of the Organic Products is mulled over, at that point the costs stamped are certainly worth paying.Several diabetic, hypertension (high BP), cardiovascular, skin, malignant growth and gastric patients have demonstrated great improvement in well being.
STUDY GOAL AND OBJECTIVES
The motivation behind the examination intends to research the influence of brand equity on consumer purchase decision in term of organic foods in Chennai city. The main objective of this research is to identify the impact of Brand equity on consumer’s purchase of branded organic food products.
RESEARCH METHODOLOGY
The purposive sampling is an non probability techniques is used for selecting the respondent
consumers’ organic products. A total of 454 questionnaire surveys were distributed to customers and Data were collected from the consumers who come to buy an organic product in the store and organic consumer in the neighborhood area in Chennai city.
HYPOTHESIS OF THE STUDY
There is no significant influence of demographic variables on consumers’ purchase decision towards organic food products.
There is no significant impact of Brand equity (dimensions) on consumers’ purchase decision of organic food product
ANALYSIS AND INTERPRETATION
Influence of Respondent’s Demographic Variables on Purchase Decision:
test the significant influence of respondent’s demographic variables (age, gender, education, family size, marital status, family type, occupation and monthly family income) on Purchase decision towards Organic food products in Chennai, one way ANOVA is connected to discover the impact of respondent's statistic factors on Purchase decision.
The null hypotheses are framed as below:
H0 1: There is no significant influence of respondent’s (i) age (ii) gender (iii) education(iv) Family size (v) Marital status (vi) family type (vii) occupation (viii) monthly income on Purchase decision towards Branded organic food products.
Table 1
Demographic variable'sInfluence on Purchase decision
Variables Category N Mean S D F-value
Age
Below 20 years 49 3.76 0.676
9.151**
(p< .001)
21-30 years 92 3.85 0.883
31-40 years 188 4.05 0.691
41-50 years 84 4.09 0.711
Above 50 years 41 4.21 0.845
Gender
Male 273 4.03 0.979 1.230
(p=.268)
Female 181 3.98 0.754
Education
Illiterate 49 3.94 0.797
2.818*
(p=.039) Up to school level 81 3.95 0.92
Graduate 184 4.07 0.767
Post graduate 140 4.04 0.631
Family size
Up to 3 members 152 3.85 0.759
17.826**
(p< .001) 4 and 5 members 270 4.06 0.711
6 and above 32 4.29 1.198
Marital Status
Single 174 4.02 0.964 0.177
(p=.674)
Married 280 4.00 0.873
Family Type
Nuclear 354 3.96 0.762 11.115**
(p< .001)
Joint 100 4.14 0.771
Occupation
Government employee 20 4.21 0.695
6.552**
(p< .001) Private employee 238 3.96 0.883
Business/Self employed 48 4.15 1.146
Home maker 100 3.91 0.847
Student 48 4.22 0.914
Up to Rs.15,000 70 4.02 1.014 Rs.15,001-30,000 156 4.01 1.073
Monthly family income
Rs.30,001-45,000 60 4.11 1.162 1.311 (p=.265) Rs. 45,001-60,000 72 3.98 1.038
Above Rs.60,000 96 3.94 0.841
*Significant at 5% level **Significant at 1% level Age
F value 9.151 in the table 1 demonstrates that significant at 1% level, thus the null hypothesis H0 is rejected. It shows that there is huge impact of age on purchase decision towards organic food products. Further, the mean values in the table 1 demonstrates that the respondents in age gathering of over 50 years scored high mean estimation of 4.21 and the lowest mean was scored by the respondents of underneath 20 years age gathering (3.76). Subsequently the respondents of over 50 years can choose better purchase decision and the respondents of under 20 years age are lacking in purchase decision about the Organic food products.
Gender
F value 1.230 in the table 1 shows that not significant at 5% level, hence the null hypothesis H0 is accepted. It specifies that there is no significant influence of gender on purchase decision towards organic food products.
Education
F value 2.818 in the table 1 shows it is significant at 5% level hence the null hypothesis H0 is rejected. It shows that there is significant influence of education on purchase decision towards organic food products. Further, the mean value in the table 1shows that the Graduates have attained higher mean value of 4.07 and the smallest mean was attained by the respondents without education (3.94). Hence the graduates are making better purchase decision about Organic food products and the respondents without education are lacking in making purchase decision about the Organic food products.
Family size
F value 17.826 in the table 1 is significant at 1% level, hence the null hypothesis H0 is rejected. It point out that there is significant influence of family size on purchase decision towards organic food products. Further, the mean values in the table 1 indicates that the
respondents with the family size of more than six members have scored higher mean value of 4.29 and the lowest mean value was scored by the respondents with the family size of 3 members is 3.85.This explain that respondents with six and more members family are making better purchase decision about Organic food products and the respondents with 3 members family are little lacking in building Purchase decision.
Marital status
The acquired 'F' value 0.177 and that is not significant at 5% level hence the null hypothesis H0 is accepted. It point out that there is no significant influence of marital status on purchase decision towards organic food products.
Family type
'F' value 11.115 and it is significant at 1% level hence the null hypothesis H0 is rejected. It shows that there is significant influence of family type on purchase decision towards organic food products. Further, the mean values in the table 1 indicates that the respondents living in joint family have scored higher mean 4.14 and the smallest mean was scored by the respondents in nuclear family 3.96. Hence respondents living in joint family are able to make better purchase decision about Organic food products than the respondents in nuclear family.
Occupation
'F' value is 6.552 and shows that significant at 5% level hence null hypothesis H0 is rejected.
It specify that there is significant influence of occupation on purchase decision towards organic food products. Further, the mean table 1shows that the students have attained higher mean value of 4.22 and the lowest mean was scored by the homemaker 3.91. Hence the students are able to make better purchase decision about Organic food products and the home makers lacking in doing the same.
Monthly family income
'F' value is 1.311 and it is insignificant at 5% level the null hypothesis H0 is accepted. It shows that there is no significant influence of monthly family income on purchase decision towards organic food products in Chennai.
Impact of Dimensions of Brand Equity on Purchase Decision
In this section, the impact of dimensions of brand equity on Purchase decision is identified.
Here Brand awareness, Perceived quality, Brand loyalty, Brand association and Brand assets
are taken as independent variables and Purchase decision is dependent variable. The answers are exhibited in the table 2.
Null Hypothesis H0 2: There is no significant impact of dimensions of Brand equity on purchase decision of Organic food products.
Table 2
Regression analysis for impact of dimensions of brand equity on Purchase decision
Variables R2 beta F-statistics t- value
(constant) 0.599 0.501 6.142**
Brand awareness 0.333 4.528**
Adjusted R2 Perceived quality
Brand loyalty
0.752
0.512 33.181**
8.589**
6.949**
Brand association 0.596 0.084 0.760
Brand assets 0.159 3.079**
** Significant at 1% level
F-value 33.181 in the table shows that the regression model is significant at 1% level hence the null hypothesis H0 is rejected. The coefficient of determination 0.599 shows 59.9% of variability. One unit improvement in Brand awareness, Perceived quality, Brand loyalty and Brand assets enhances Purchase decision on Organic food products by 0.333, 0.752, 0.512 and 0.159 units respectively. This illustrates that perceived quality of organic food products is the vital reason for making decisions about purchase of organic food products. Brand association is not predicting the purchase decision. The regression equation is:
Purchase decision of Organic food products = 0.501 + 0.333 (Brand awareness) + 0.752 (Perceived quality) + 0.512 (Brand loyalty) + 0.159 (Brand assets)
Hence the dimensions: Brand awareness, Perceived quality, Brand loyalty and Brand assets
significantly predicts the purchase decision, Perceived quality followed by brand loyalty of organic food products.
MODEL FOR PURCHASE DECISION OF ORGANIC FOOD PRODUCTS
Structural equation modeling (SEM) is a statistical technique for testing and estimating causal relations using a combination of statistical data and qualitative causal assumptions.
A model was developed for purchase decision of Organic food products using AMOS v.21.
Brand awareness, Perceived quality, Brand loyalty, Brand association, Brand assets and Purchase decision are observed variables and Brand equity is taken as unobserved variable.
Brand awareness, Perceived quality, Brand loyalty, Brand association and Brand assets are exogenous (independent) variables and Purchase decision act as endogenous (dependent) Variable. e1, e2, e3, e4, e5 and e6 are error terms of independent and dependent variables.
The following figure 1 shows the model for purchase decision of organic food products.
Figure 1: Model for Purchase decision of Organic food products
Table 3, "the model fit Chi-square 2/ dof = 1.521 and the model’s p-value is 0.119 which is insignificant at 5% level, which shows that the null hypothesis H0 11is accepted.The goodness of fit index (GFI) is 0.915 and its adjusted goodness of fit index (AGFI) is 0.904 shows good model fit."
Table 3 Model fit summary
X2 Dof X2/dof p-value GFI AGFI RMSEA ECVI
18.251 12 1.521 0.119 0.915 0.904 0.097 0.098
The Root Mean Square Error of Approximation (RMSEA) is 0.091, a littler worth shows better model and Expected Cross Validation Index (ECVI) is 0.098 are inside as far as possible implying the model is of better fit.
CONCLUSION
The research work is contributed to the society on the consumer perception on brand equity of organic food products. The research is exploring the knowledge of consumer purchase behavior of organic food products. The result from this study contributes the organic food products marketers. According to the objective the questioner was framed, survey has been carried out and the data were analyzed. People are aware of branded organic product and it can lead to a healthier life and ready to pay extra. Consumers are more concern about quality of the product rather than availability, proximity of shop. In demographic variables age, family size and education influences better in making purchase decision. Customers are buying organic products for the high quality and also concern about avoiding environment pollution. The results discovered that four elements of brand equity have highest impact on consumer buying behaviour. though the answers also explained the maximum impact onconsumer purchasing behaviour refers to"Brand awareness, Perceived quality, Brand loyalty and Brand assets" significantly predicts the purchase decision, Perceived quality followed by brand loyalty of branded organic food products.
LIMITATIONS AND FUTURE DIRECTIONS
Finally, this study focused only on branded organic food consumers. Further study on comparison of branded and non branded organic products can be conducted to discover the actual circumstances. Also, customer perception of non branded organic product and marketing mix can be studied. a lot of organic products are offered in the market, a study can be possible to analyse quality, price and satisfaction level by comparing the equivalent alternative items. This study gives an idea about the customer based brand equity among organic food products by considering five elements of brand equity. Further research is possible and useful for different context of brand equity that is financial perspective and brand extension.
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