Purchasing Organic Products In Iran

Published Date: 02 Nov 2017

Edris Pirsaheb1, Bagher Abbaspour2, Sadraddin Eslami Mohammad3, Abdolrazagh Madahi3*

1PhD of marketing; Email: [email protected]

2Member of Faculty at Islamic Azad University (IAU); Kangan Branch- Iran; Email: [email protected]

3Faculty of Management and Human Resource Development, Universiti Teknologi Malaysia (UTM), 81310

Johor Bahru, Johor, Malaysia

*Corresponding Author: [email protected]

Nowadays, customers not only seek quality of products but also they want to obtain their desired values with showing the others their life style and way of thinking. They try to exhibit their picture by selecting their favorite brands. This study investigated the impact of demographic variables on purchase of Organic products. The findings indicated that, there is a significant relationship among age, level of education, marital status, job, ethnical and place of birth. However, the results also showed that there isn’t significant relationship between genders, family member and income on purchase organic products.

Key words: Market, purchase behavior, agricultural section, agricultural products and organic agricultural

1. INTRODUCTION

Creating a different characteristic can make a considerable competitive advantage for a product in Marketplace that is full of products which there are not physically difference between them. So, companies that focus more on meeting the customers’ needs are more successful in competitive marketplace. Therefore, to achieve success regardless of products type, companies should make value for customers than competitors. .

Scientists believe that there is a direct relationship between our health and the kind of food we eat. Environment, health and purity of products are an important issue in today's world. One of its important consequences can be referred to purchasing and using organic products. The healthy food and agricultural products have been a major concern of society in the recent decades. Such an increasing concern has formed a paradigm which is known as an organic movement. Production and sales of organic products have highly been growing, due to which new marketplaces in business have been generated, such that the European market of organic products has been having a considerable growth (Hamm et al., 2002).

The organic agriculture has been developed rapidly during past years and it has been applied in more than 120 countries in the world (Willer and Yussefi, 2007). Gordron et al. (2006) indicated that global income increased 43% from organic foods and beverages between 2002 and 2005. Moreover, Gordron et al. (2006) believed that organic foods obtain around 2% of global retail food market. In the 2003 organic industry (food and non-food) sold 10/8$ million to customers while, in 2004 organic industry reached to 12/7 $million. It shows a 20% increase only in one year. As a result, from 1997 organic products have increased steadily between 17% and 21% every year (Scheel, 2005; Organic Trade Association, 2004).

2. LITERATURE REVIEW

Organic market place has dramatically increased in 1980 decades. For example, UK marketplace share had increased from 9 billion to 80 billion EUR during 4years. Anne Davies et al. (1995). Moreover, market value of organic products was only 605 billion in the UK in 2000 (soil association, 2001).

The background of commercial approach to organic products in Turkey goes back to 1983 when the importing foreign companies entered into this country (Zarrin and Ouzlam, 2002). Although, because of increasing in domestic and foreign competition, in some countries such as Olive companies in Italy have faced with problems (Crescimanoo et al., 2002), but totally, organic industry products have been increased steadily and reached to 2% of global retail food market.

Moreover, the sales organic industry (food and non-food) reached to 8.10 billion in 2003, this figure increased to 20% in 2004. Annual growth in organic products was between 17 to 21 percent in 1997. When it comes to compare; this annual growth rate is 2 to 4 percent higher than the total sales in the United States (Scheel, 2005).

The world's largest organic market includes the United States, Germany and France respectively and the highest consumption pertaining to the funds or capital belongs to Denmark, Switzerland and Australia. (The World of Organic Agriculture, 2011) Finally, it must be mentioned that organic agriculture in the form of rural agriculture , in the last two decades, has achieved the point that its products are now available in supermarkets all of the world. Access (and promotion) of organic products in supermarkets has significantly affected the share of organic agriculture in countries (Sarah, 2006). Consumers’ concern about environment, food and security, essentially lead to purchasing organic products. Most of the evidence supports the increasing growth of consumers’ ecological behavior and the number of individuals who are willing to pay more for environmentally friendly products. (Athanasios, 2005).

The International Federation of Organic Agriculture defines organic products as follows: Organic Agriculture is a productive system that supports human health, ecosystem and soil and relies on ecological process, biodiversity and natural cycles and prefers the application of inputs with competitive preference. Organic Agriculture is combined with commerce, innovation, useful science for environment, promoting the related exhibitions and good quality of the life of those who are affected (The International Federation of Organic Agriculture). European organic food markets have grown dramatically over the past ten years (Hamm et al., 2002).

While, threatening health issues in the United States have been the concern of the consumers since 1960 (Klonsky et al., 1998) issues related to the support of environment have been emphasized in Europe since the mid-1980s (Greenan et al., 1997). However the history of the organic movement in Europe goes back to more than 50 years ago, it was only in 1970s when natural food stores were developed (ZMP, 2001). According to the published records, in the last years, organic agriculture has been getting developed in the most of the regions of the world such as developing countries and the executive approaches of productions, and supervision and issuing certificate have constantly improved and people, in the most societies specially in developed countries, are enjoying the benefits of healthier food and higher quality (Hamm et al., 2002).

It is notable that rural farmers, especially in developing countries, have received the appropriate benefit and exporting value of the products (Mackenzie, 1991). France was the first country that titled organic agriculture as a governmental label for fruits, vegetables and cereals and now Australia possess 84 percent of the world’s lands of agriculture. Germany, in order to increase the competition with countries such as the U.S, Europe and Japan, pays some subsidies changing the agriculture based on chemicals to organic agriculture. These subsides have led to much more growth in this way of agriculture, as a result German government, in order to reduce the effects of environmental agriculture and fulfill the consumers’ need of the healthy food, dedicated 300 to 500 mark (190 to 316 us dollars) per hectare to those who chose organic agriculture. Moreover, in 2004 European Union made effort to modify the organic agriculture conditions and develop the demand and transfer it from the rural to the main center of attention. (Latacz-Lohmann and Foster, 1997).

The key challenge for the marketers of organic products is to foster the perception of individuals toward green brands by adding values of strong sense along with individual benefits. Future marketing research about green products should develop the interpretation of benefits and behavioral motivations of environmental responsible buying behavior (Hartmann et al., 2006) Many studies have been conducted on consumer behavior related to organic products in most countries of the Europe Union and the United States in which the most effective factors have the tendency of focusing on demographic characteristics such as gender, age and income (Athanasios and George, 2005).

Most of the conducted researches show that the amount and rate of repeating purchase is higher in women than men, and age does not seem to have an important role. In spite of the high price of the organic products, it is not necessary for high income families to be more likely buying more organic products. (Govindasamy and Italia, 1999) A study found that married housewives women with at least one child have a tendency to pay more for environmentally friendly products.

They pay much attention to the security and good relationship with others and often consider ecological issues 19 while shopping. (Laroche et al., 2001) In addition, the findings show that 93% of respondents said that they purchase organic products due to the health and appropriateness for children’s diet (Hutchins and others, 1997). Gender has significant effects on repeating purchase of organic food as repeating purchase in men is more than women (23% against 20%) and, at the same time relatively higher proportion of women rather than men (70% vs. 58%) that are less likely to buy organic products. The model also indicates that at least 17% of the rural population purchase organic food. Men are willing to pay 16.4% more for organic food and women pay only 13.2% more (20% less than men). Women, however, tend to increase the rate of their purchases up to 13.1% but, men just have the tendency of increasing 11.6% (13% less than women). Moreover the urban population is willing to pay 23% more for organic food, but they tended to increase the consumption of organic foods to less than 7% of the consumption of rural population in the future. (Ruzica et al., 2009).

Although the findings of Davis et al. 1995 show little difference among gender groups, with 41% of men and 44 percent of women in relation with their desire to pay, but Laroche et al. (2001) claims most studies show that married women with children are more willing to pay for environmentally friendly products (Laroche et al., 2001). Women aged 30 to 45 years with children are more likely than men to buy organic products. This study shows that the main factor in purchasing organic food is the income level of consumers (mostly women). The second factor, such as the presence of children and age play a dominant role (Davis et al., 1995). In addition; many studies have shown that women and young people are more willing to pay for organic products (Henson., 1996; Benjamin Onyango et al., 2007) and price is also an important factor in evaluating the brand image and as the index of quality has been identified. (Lassar et al., 1995).

Finally, the factors influencing the formulated healthy brand image are made through matching the health stimulant in brand marketing mix, such kind of stimulant may consist of colors, signs or symbols in marketing mix but generally, branding of clean products is a difficult one and various factors should be considered to get successful in the branding strategy of a clean product. Factors influencing on formulated branding include external factors such as general regulatory and internal factors such as company branding strategy, brand type, type of product, types of communication message, process of brand management, and capacity of managers (Polymeros, 2010). Basically, it needs to be mentioned that clean brands are not only labels, but they are tools, cluster of meaning, attitudes and texture integrity to make sense (Stuart, 2007).

3. RESEARCH METHODOLOGY

Based on the research objectives; this study is an applied and quantitative research. This research considered gender, marital status, age, level of education, income, family members, job Status, ethnical and place of birth as independent variables. To analyze the data collection; the statistical methods of correlation and Tukey’s Test were used.

3.1. Research Questions

The major aim of this study was to investigate the effects of difference in the categories of demographic variables on the purchase of organic products in Iran.

The target population is consumers who use and purchase organic products from organic markets in Tehran, the capital of Iran. This study applied convenience sampling. It is difficult to access to the complete list of people using organic products. Thus, it is reasonable to use convenience sampling in this research.

3.2. Research Hypotheses

H1: There is a significant difference between men and women in purchasing organic products.

H2: There is a significant difference among age levels of respondents in purchasing organic products.

H3: There is a significant difference among levels of education in purchasing organic products.

H4: There is significant difference among marital status of respondents in purchasing organic products.

H5: There is a significant difference among family members of respondents in purchasing organic products.

H6: There is a significant difference among respondents’ income in purchasing organic products.

H7: There is a significant difference among respondents’ job in purchasing organic products.

H8: There is a significant difference between urban and rural populations in purchasing organic products.

H9: There is a significant difference among ethnical groups in purchasing organic products.

3.3. Data Collection

The required data were collected from the resources of library and the primary instrument of the survey is through questionnaire.

4. DATA ANALYSIS AND RESULTS

In this section, the proposed hypotheses are examined. But before examining the hypotheses, two questions regarding the appropriate supply channel and the source of being familiar, would be considered.

Table 1: Source of being Familiar with Organic Products

Source

Friends & relatives

Newspaper & Magazine

TV

Exhibitions & Stores

Other sources

No Response

Frequency

33

16

23

46

11

2

%

25.2

12.2

17.6

35.1

8.4

1.5

About the source of being familiar with organic food, it can be said that the majority of respondents have found it through exhibitions and stores about which there are only four active stores all over Tehran that belong to the municipality of Tehran and several exhibitions have been held by this organization. Therefore, there is a serious problem in this regard and the governmental authorities have not done well and more efforts are required to make further information in this respect.

The respondents answered about the most appropriate supply channel of organic product as below:

Table 2: Appropriate Supply Channel of Organic Products

Source

Chain stores

Supermarkets

Specialized organic shops

Local shops

No Response

Frequency

31

3

88

8

1

%

23.7

2.3

67.2

6.1

0.8

The respondents believe that the best supply channel of organic products is through specialized organic stores. As a result; in branding and positioning of organic product, it should be taken into consideration that supply channel and offering the products need to be specialized and designed in accordance with other characteristics of organic products and distributed in specialized organic stores and chain stores, not in the common and small stores.

The first hypothesis: there is a significant difference in purchasing organic products between men and women

All factors considered in purchasing of organic products, the percentage of sig is much greater than 5%, variance in both men and women are equal, therefore, it can be said that H0 hypotheses is confirmed. In other words, there is no significant difference between the gender of men and women and purchasing organic products.

The second hypothesis: there is a significant difference in purchasing organic products among age classes.

Considering that the accessibility and supply and demand have a smaller sig than 5 percent, age causes differences among accessibility and supply and demand factors and there is no difference among the rest of the factors. Thus, the H0 hypothesis is rejected and the opposite hypothesis is confirmed. The result of the Tukey test shows that only two groups have a greater average than group 3 and there is no significant difference among other groups.

Third hypothesis: there is a significant difference in purchasing organic products among levels of education.

Since only about brands, sig is greater than 5%, there are differences in brands among various educational groups. In other words, education leads to differ in brand but, it does not influence other factors, thus the H0 hypothesis is rejected and H1 hypothesis is confirmed, because there is difference in at least one factor. Tukey tests were not conducted as groups 1 and 8 had members less than 2 and had errors as well.

Fourth hypothesis: there is a significant difference in purchasing organic products between married and single individuals.

All the factors, except the two factors including being healthy ( sig= 0.033) and supply and demand (Sig = 0.008), showed a Sig with more than 5 percent which means there is a significant difference for being healthy and supply and demand of the organic products in terms of marital status, and there was no significant difference for the other factors. That causes H0 hypothesis to be rejected because; there are differences for at least two factors.

Since for being healthy and supply and demand of organic products, the scope of up and down both is positive, therefor the married individuals have allocated higher average for these two factors and marital status effects on them to accept.

Fifth hypothesis: there is a significant difference in purchasing organic products among levels of household’s numbers.

None of the factors had a significant level of 5%. Therefore, the number of households does not influence the factors and H0 hypothesis is confirmed.

Sixth hypothesis: there is a significant difference in purchasing organic products between different income classes.

All of the factors have a significant level of more than 5%. Thus, income level does not impact on the factors and H0 hypothesis is confirmed.

Seventh hypothesis: there is a significant difference in purchasing organic products between various occupations.

Since the sig. of price (sig=0.025), being healthy (sig=0.025) and brand (sig=0.027) is less than 5%, therefore, occupation makes differences in these factors and H0 hypothesis is rejected and because there is a difference in 3 factors, H1 hypothesis is confirmed. As the two groups had less than 2 members and had errors, Tukey tests were not conducted and had errors.

Eighth hypothesis: there is a significant difference in purchasing organic products between rural and urban population.

According to the standard factor which has a sig less than 5%, and birth place causes differences in this factor, H0 hypothesis is rejected and H1 hypothesis is confirmed. The result of the Tukey test shows that only group1 (birthplace: Tehran) has an average greater than group 3 (birthplace: city) and there is no significant difference among other groups.

Ninth hypothesis: there is a significant difference in purchasing organic products among different ethnics.

According to the sig of accessibility (sig=0.001) and being familiar (sig=0.005) which are less than 5%, ethnicity causes difference in these two factors. Thus, it is concluded that H0 hypothesis is rejected and H1 hypothesis is confirmed. The result of the Tukey test shows that group1 has an average greater than group 8 and so does group 2. There is no significant difference in other groups. However, it seems, due to the number of group 8 members which is only 5, ethnicity does not make too much difference in being familiar. The result, also, indicates that group 3 has a greater average than groups 1, 2 and 4. On the other hand, groups 2 and 3 have greater average than group 8 and there is no difference among other groups.

4.1. The comparison between the research findings and literature review

Although, in the present study and the research results of Gavindasami and Italia (1999) and Anne Davies et al.1995, various levels of income do not impact on purchasing organic products, but it is against the research’s results of Atanatius and Gorge (2005). Regarding gender variable, it can be said that in the present study gender has no impact on purchasing organic products and there is no significant difference between men and women regarding this which resembles to the research’s results of Anne et al. (1995), but it is against the studies conducted by Ružica et al. (2009), Anglo (2003), Laroche et al. (2001), Henson (1996), Benjamin et al. (2007), Etanasius and Gorge (2005).

Henson (1996), Benjamin et al. (2007), Anne et al. (1995) and Etanasius and Gorge (2005) stated that age affects the tendency of purchasing organic products and this result is similar to the results of the current study. Etanasius and Gorge (2005) considered education as an important factor to buy organic products which the present study obtained the same result, but it is against the results of Anne et al. (1995). Laroche et al. (2001) and Anne et al. (1995) claimed that marital status and having children have an impact on buying organic products which is equal to the marital status variable in this study, but no impact is found about having children variables therefore it contradicts with the present study.

5. CONCLUSION AND RECOMMENDATIONS

In this research, the impact of demographic variables on purchasing organic products was examined and the results were obtained, indicating that there is no significant difference in purchasing organic products between two genders of men and women; however, age causes differences in accessibility and supply and demand factors and creates no impacts on the other factors. In addition, education causes difference in brand factor, but no effect on other factors is found. According to marital status variable, there is a significant difference in being healthy and supply and demand of the organic products and not for other factors. And because, for being healthy and demand and supply, the scope of up and down both is positive, thus, the married individuals have allocated higher average for these two factors and marital status effects on them to accept.

Family size and income have no effect on the parameters studied, but occupation and birthplace make the difference and the results of the Tukey test shows that only one group (birthplace: Tehran) has a higher average than group 3 (birthplace: city) and there is no significant difference among the other groups and ethnicity further leads to differentiate between being healthy and familiar factors.

Finally, in order to select target markets and develop appropriate strategies for marketing of organic products, some recommendations can be made:

Developing stores of organic product in the country in order to improve people’s knowledge and further familiarity about these products.

The usage of valid organic certificate in the production of organic products targeting consumers trust

Developing general knowledge about the benefits of buying brand-driven and organic products.

Increasing public interest towards organic products by implementing persuading-encouraging policies. Supporting the development of community organization and environmental NGO towards growth of social concerns.

5.2. Limitations of Study

There were many limitations due to the nature of the topic. Researcher has challenged with the bellow limitations in the various stages of the present study:

The problem of access to the buyers: due to the small number of the organic products stores, accessing to the buyers was difficult.

Data collecting problems: unfortunately, the culture of the society causes some problems in data collecting. Due to certain sensitivities, the buyers refused to provide information easily.

Lack of resource: since the subject was a sort of pioneer, the most important limitation of the study was about data collection. Because there was less information about it and according to low distribution of the organic products in the country, the general knowledge is limited. Therefore the process of collecting data was encountered with some problems.

5.3. Recommendations for Further Research

Conducting additional research about other important indicators in purchasing organic products in Iran.

Conducting complementary research regarding the most appropriate strategies of marketing mix of organic products in Iran.

Conducting further research in this area after organic products after people become more familiar with the organic products.

Conducting researches about problems and development obstacles and organic product growth in the country.

Further explanation of examining the this subject according to the fact that it has been studied all over Tehran and some intercultural or subcultural studies are required to be done.