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BUSNIESS OPPORTUNITIES IN THE AGRO-FOOD INDUSTRY BASED ON THE CONSUMER BEHAVIOR ON FRESH PRODUCE. Siti Rahayu Hussin Fakulti Ekonomi & Pengurusan Universiti Putra Malaysia 22 nd August 2008 MAHA Walk-in Seminar. RESEARCH FINDINGS Product choice Product attributes Retail outlet choice

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busniess opportunities in the agro food industry based on the consumer behavior on fresh produce

BUSNIESS OPPORTUNITIES IN THE AGRO-FOOD INDUSTRY BASED ON THE CONSUMER BEHAVIOR ON FRESH PRODUCE

Siti Rahayu Hussin

Fakulti Ekonomi & Pengurusan

Universiti Putra Malaysia

22nd August 2008

MAHA Walk-in Seminar

presentation outline
RESEARCH FINDINGS

Product choice

Product attributes

Retail outlet choice

OPPROTUNITIES

Consumptions

Retailing

RECOMMENDATIONS

- Planters/producers

Retailers

Government agencies

Consumer education

PRESENTATION OUTLINE
the research
To investigate consumers’ patronage behaviour in terms of purchasing of fresh produce in Semenanjung Malaysia, Sabah and Sarawak. The research
the research1
Fresh produce – vegetables (leafy and non-leafy) and fruits.

Retail outlets – mobile outlets (pasar tani, pasar malam, etc), hypermarket, supermarket, department store, sundry shop.

Sample – urban areas, adult shoppers

The research
research findings
Product choice

Product attributes

Retail outlet choice

RESEARCH FINDINGS
research findings1

RESEARCH FINDINGS

1. Product choice

research findings2

RESEARCH FINDINGS

2. Product attributes

product attributes
(1) quality, (2) value-added, (3) country of origin and (4) price

Quality:

absence of defect, absence of blemishes, ripeness, freshness, absence of pesticides, absence of preservatives, nutritional value, and cleanliness.

Value-added:

pre-cut, ready to eat and ready to cook are not considered as important as cleaned, labelled and organically grown to many respondents.

Country of origin:

are also considered important by the respondents. Locally grown produce is an important attribute.

Price:

Reasonable price, availability of promotion and price bargaining as very important.

Product attributes
research findings3

RESEARCH FINDINGS

3. Retail outlet choice

store patronage behavior fruits
% consumers shopped at this outlet in past 2

months:

Wet market (16.9)

Mobile market (16.7)

Hypermarket (15.4)

Department store (13.1)

Street sales (12.4)

Sundry shop (13.6)

Supermarket (11.9)

Store patronage behavior (fruits)
store patronage behavior vegetables
% consumers shopped at this outlet in past 2

months:

Wet market (20)

Mobile market (18.6)

Hypermarket (17.3)

Sundry shop (16.7)

Department store (14.1)

Supermarket (13.3)

Store patronage behavior (vegetables)
slide40

continued

Retail Patronage Behaviour (Fruits) on type of outlet

opprotunities
CONSUMPTIONS/ PURCHASE BEHAVIOR

There is indication of moderate to high consumption of fresh produce (RM30 per month)

Persuade consumers to increase consumption: gift giving, health purpose, etc.

Product attributes such as quality, value-added, country of origin and price are all considered important for fresh produce shoppers in Malaysia.

There seems to be a preference for local produce.

Consumers aged 40 and above say that price bargaining are unimportant.

People with household income more than RM10,000 say that price bargaining is unimportant.

OPPROTUNITIES
opprotunities1
Capitalise on these attributes:

absence of defect, absence of blemishes, ripeness, freshness, absence of pesticides, absence of preservatives, nutritional value, cleanliness and reasonable price.

Growers may need to perform more functions such as:

Cleaning

Cutting

Peeling

Value-added may be the in-thing in the future (ready-to-cook, ready-to-eat, etc)

OPPROTUNITIES
opprotunities2
RETAILING

Consumers prefer to purchase fruits and vegetables from mobile outlet, wet market, hypermarket and department store.

Innovative retailing to increase exposure and frequency of consumption: e.g. van bergerak, fruit stall, etc.

For more frequent purchase, consumers tend to prefer more traditional retailers such as mobile outlets and wet market. For a less-frequent purchase, consumers are reported to prefer bigger retailers such as hypermarkets and department stores.

Certain type of consumers still prefer to purchase fresh produce from sundry shop, especially for daily purchase of fruits and vegetables.

OPPROTUNITIES
retailing
Product display

Product supply

Product price

Free sampling

Recipes

Cooking instructions

Benefits information

Packaging – loose, wrapped, basket, box, etc.

Retailing
recommendations
Planters/producers

- Improve production/supply and quality of produce

- Efficient packaging

Better presentation of local fruits

Retailers

- Identify which segment of the market and for what purpose consumers seek those retailers that suit their needs and wants.

- Positioning strategies require the identification of target customers and strategies that cater to the needs of that particular target market.

Government agencies

Grading system for selected fruits

Labelling requirement (nutritional fact, country of origin, date of harvest, etc.)

Quality control certification services

Government’s role in improving mobile outlets should be continued

Consumer education

- Educate public about local fruits - Consumer education starts at school and home

- Health campaign

RECOMMENDATIONS
recommendations1
Be customer-oriented

Use marketing strategy/marketing orientation

Start with customers

Pull strategy : consumer education, mobile outlet, organic fruits, gift giving/hamper

Push strategy : value-added – ready to cook, ready to eat, food away from home

Relationship marketing a way forward

Grab the opportunity! (slipper e.g)

RECOMMENDATIONS