Marketing Management - Caselet on Organic Foods

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Marketing Management Caselet
Overall Understanding of the Case, 3 C’s Scenario and Analysis Of Complete Marketing Environment : Organic food refers to food items that are produced, processed and packaged without using chemicals. Organic food is increasingly becoming popular due to its perceived health benefits over conventional food. The industry is growing rapidly since the past five years and has caught the attention of farmers, manufacturers and, above all, consumers. The health benefits of organic food are more perceived than real. However, the public opinion that organic food is healthier than conventional food is quite strong and is the sole reason for about 30% growth in the organic food industry since the past 5-6 years In general, organic food consumers, manufacturers and farmers strongly believe in organic food having following benefits over non organic food:  Better health: Since organic food is not prepared using chemical fertilizers and pesticides, it does not contain any traces of these strong chemicals and might not affect the human body. Better taste: People strongly believe that organic food tastes better than non organic food. The prominent reason for this belief is that it is produced using organic means of production. Further organic food is often sold locally resulting in availability of fresh produce in the market. Environment safety: As harmful chemicals are not used in organic farming, there is minimal soil, air and water pollution; thus ensuring a safe world for future generations to live in. Animal welfare: Animal welfare is an important aspect of producing organic milk, organic meat, organic poultry, and organic fish. People feel happy that the animals are not confined to a miserable caged life while eating organic animal products.

Popular organic food items include organic tea, organic coffee, organic wine, organic meat, organic beef, organic milk, organic honey, organic vegetables, organic fruits, organic rice, organic corn, organic herbs, organic essential oils, organic coconut oil and organic olive oil. Indians prefer organic preserves, tea, honey, cashew butter and various flours. The organic concept is not limited to food items. Due to excessive usage of harmful chemicals in cosmetics, people are turning towards organic cosmetics, clothing etc. ACNielsen, survey suggests preference of consumers for functional foods – foods that have additional health benefits. India was among the top ten countries where health food, including organic food, was demanded by the consumers. Around the globe, Organic alternatives are purchased mainly for health reasons. Over two thirds of survey respondents think that organic foods are healthier for them and their children. This healthy perception is consistently strong across the Asia Pacific region. Online Indians top the list with 87 percent of consumers purchasing organic foods motivated by the perceived benefits they can derive for their children’s’ health. Health Benefit for kids is seen, hence even willing to pay more. Organic food market is still a developing market, especially in India. Most of the people who eat organic food don’t buy it regularly. Hence need to sell other health products too if one wishes to get a daily (or at least weekly) visit from their customers. Indian organic food consumer needs education.

There are many consumers who are unaware of the difference between natural and organic food. Many people purchase products labeled as Natural thinking that they are Organic. Organic food refers to food items that are produced, manufactured and handled using organic means. Natural food, on the other hand, generally refers to food items that are not altered chemically or synthesized in any form. These are derived from plants and animals. Thus a natural food item is not necessarily organic and vice versa. Further, consumers are not aware of the certification system. Since certification is not compulsory for domestic...
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