Final Report on Advertising Project

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PROJECT REPORT

ON

To Understand Consumers Behaviour towards

Ready-to-Eat food/Semi-processed food.

Submitted to MD University Rohtak in partial fulfillment of the requirements for

the award of degree of Master of Business Administration

2008-09

Submitted by:

Name :- Ajay Sharma

Class :- MBA(IB)-4th SEM

University Roll No./Enrollment No. :-

INSTITUTE OF LAW & MANAGEMENT STUDIES

982 ILMS ,SECTOR 40-GURGAON

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Acknowledgement

While presenting this project report, I give my sincere regards as well as gratitude to allthose who helped me in completing my project successfully by spending their valuabletime without which the project wont be able to complete. I am thankful to those who

encouraged me to complete the project by giving their assistance, motivating me andvehemence.

I would give sincere regards and thanks to my Faculty Mrs.PRATIBHA BHARDWAJfor giving her guidance during my whole project. She helped me in analyzing theconsumer behaviour.

This has helped me in preparing my report on TO UNDERSTAND CONSUMERBEHAVIOUR TOWARDS READY-TO-EAT FOOD/SEMI-PROCESSED FOODin a better way.

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Table of Content

Objective of the study:- ...................................................................................................11Literature Review.............................................................................................................12..........................................................................................................................................16Research Design:-.............................................................................................................17

Table 1: Common attitude of the respondents who purchase RTE..............................19Table 3-Correlation between variables and factors (who purchase RTE)...................21Table 4-Correlation between variables and factors (who dont purchase RTE)....... ..21Table 5- Factors............................................................................................................22Chart 1-Cluster analysis_1............................................................................................24I buy ready-to-eat food.................................................................................................25Table 6-Age..................................................................................................................25Chart 2-Age .................................................................................................................26Table 7-Gender.............................................................................................................27Chart 3-Gender.............................................................................................................27Table 8-Income Group..................................................................................................28Chart 4-Income Group .................................................................................................28Table 9-Marital Status..................................................................................................29Chart 5 Marital Status.................................................................................................29Table 10-No. of family members..................................................................................30Chart 6-No. of Family Members..................................................................................30Table 11-Residence......................................................................................................31Chart 7-Residence.........................................................................................................31Table 12-Occupation....................................................................................................32Chart 8-Occupation.......................................................................................................32Respondent who dont purchase RTE food..................................................................33

Chart 9-Cluster Analysis_2...........................................................................................33Table 13-Age................................................................................................................34Chart 10-Age................................................................................................................34Table-14 Gender...........................................................................................................35Chart 11-Gender...........................................................................................................35Table 15-Annual Income..............................................................................................36Chart 12-Annual Income..............................................................................................36Table 16-Marital Status................................................................................................37Chart 13-Marital Status.................................................................................................37Table 17-No. of family Members.................................................................................38Chart 14-No. of family Members.................................................................................38

Table 18-Residence......................................................................................................39Chart 15-Residence.......................................................................................................39Table 19-Occupation....................................................................................................40Chart 16-Occupation.....................................................................................................40Chart 17-Dendogram_1................................................................................................41Chart 18-Dendogram_2................................................................................................42Table 20-Dimensional Representation of Brands.........................................................44Chart 19-Perceptual map of Brand...............................................................................44

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Table 21-z-test for health and nutrition........................................................................46Table 22-z-test for time of preparation.........................................................................46Table 23-z-test for price................................................................................................48

Questionnaire............................................................................................................55

List of Tables


Table 1: Common attitude of the respondents who purchase RTE..............................19Table 3-Correlation between variables and factors (who purchase RTE)...................21Table 4-Correlation between variables and factors (who dont purchase RTE)....... ..21Table 5- Factors............................................................................................................22Chart 1-Cluster analysis_1............................................................................................24I buy ready-to-eat food.................................................................................................25Table 6-Age..................................................................................................................25Chart 2-Age .................................................................................................................26

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Table 7-Gender.............................................................................................................27Chart 3-Gender.............................................................................................................27Table 8-Income Group..................................................................................................28Chart 4-Income Group .................................................................................................28Table 9-Marital Status..................................................................................................29

Chart 5 Marital Status.................................................................................................29Table 10-No. of family members..................................................................................30Chart 6-No. of Family Members..................................................................................30Table 11-Residence......................................................................................................31Chart 7-Residence.........................................................................................................31Table 12-Occupation....................................................................................................32Chart 8-Occupation.......................................................................................................32Respondent who dont purchase RTE food..................................................................33Chart 9-Cluster Analysis_2...........................................................................................33Table 13-Age................................................................................................................34Chart 10-Age................................................................................................................34

Table-14 Gender...........................................................................................................35Chart 11-Gender...........................................................................................................35Table 15-Annual Income..............................................................................................36Chart 12-Annual Income..............................................................................................36Table 16-Marital Status................................................................................................37Chart 13-Marital Status.................................................................................................37Table 17-No. of family Members.................................................................................38Chart 14-No. of family Members.................................................................................38Table 18-Residence......................................................................................................39Chart 15-Residence.......................................................................................................39Table 19-Occupation....................................................................................................40

Chart 16-Occupation.....................................................................................................40Chart 17-Dendogram_1................................................................................................41Chart 18-Dendogram_2................................................................................................42Table 20-Dimensional Representation of Brands.........................................................44Chart 19-Perceptual map of Brand...............................................................................44Table 21-z-test for health and nutrition........................................................................46Table 22-z-test for time of preparation.........................................................................46Table 23-z-test for price................................................................................................48

Questionnaire............................................................................................................55

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List of Charts


Table 1: Common attitude of the respondents who purchase RTE..............................19Table 3-Correlation between variables and factors (who purchase RTE)...................21Table 4-Correlation between variables and factors (who dont purchase RTE)....... ..21Table 5- Factors............................................................................................................22Chart 1-Cluster analysis_1............................................................................................24I buy ready-to-eat food.................................................................................................25Table 6-Age..................................................................................................................25Chart 2-Age .................................................................................................................26Table 7-Gender.............................................................................................................27Chart 3-Gender.............................................................................................................27Table 8-Income Group..................................................................................................28Chart 4-Income Group .................................................................................................28Table 9-Marital Status..................................................................................................29Chart 5 Marital Status.................................................................................................29Table 10-No. of family members..................................................................................30Chart 6-No. of Family Members..................................................................................30Table 11-Residence......................................................................................................31Chart 7-Residence.........................................................................................................31Table 12-Occupation....................................................................................................32Chart 8-Occupation.......................................................................................................32Respondent who dont purchase RTE food..................................................................33

Chart 9-Cluster Analysis_2...........................................................................................33Table 13-Age................................................................................................................34Chart 10-Age................................................................................................................34Table-14 Gender...........................................................................................................35Chart 11-Gender...........................................................................................................35Table 15-Annual Income..............................................................................................36Chart 12-Annual Income..............................................................................................36Table 16-Marital Status................................................................................................37Chart 13-Marital Status.................................................................................................37Table 17-No. of family Members.................................................................................38Chart 14-No. of family Members.................................................................................38

Table 18-Residence......................................................................................................39Chart 15-Residence.......................................................................................................39Table 19-Occupation....................................................................................................40Chart 16-Occupation.....................................................................................................40Chart 17-Dendogram_1................................................................................................41Chart 18-Dendogram_2................................................................................................42Table 20-Dimensional Representation of Brands.........................................................44Chart 19-Perceptual map of Brand...............................................................................44

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Table 21-z-test for health and nutrition........................................................................46Table 22-z-test for time of preparation.........................................................................46Table 23-z-test for price................................................................................................48

Questionnaire............................................................................................................55

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Executive Summary

Project Outline:-

As day by day India is adopting the western culture. The young generation is movingtowards Pizza rather then Bajre ki roti. From last few years the trend shows that time ismoney. So, no one get time to cook food hours and hours every day. So, they go forrestaurant food, fast food and ready made food available in the market. But for this foodalso when you want to consume it, you have to go to market to purchase it.The marketer found this and the new concept of the Ready-to-eat come into the picture.You can purchase RTE food products and easily stored it in your home. For the

consumption the consumer has to put this product in boil water and the food is ready.Another benefit of this kind of food is anyone can prepare it whether the person knowcooking or not.

Objective of the study:-

My objective for this study is to understand consumer perception towards RTEfood/semi processed food product. I try to understand major factors affecting thepurchase decision of the consumer. And try to map the performance of the nationalbrand present in the market. I also tried to find out the segment for RTE food product.

Research Design:-

I followed Descriptive Research Method in Conclusive Research Design for thisproject as I am trying to understand the buying behavior of the consumer.

Through the secondary research I tried to find out the attributes of RTE product. To getinsight of the attributes of RTE product I visited some of the shopkeepers, retail stores.The attributes of the RTE product like ease of use, price, taste, nutritional value, shelflife and packaging. To know the consumer attitude towards RTE food product Iinterviewed some of the customer and try to find out the reasons for their purchase andtheir opinion about RTE food product. From this data I prepared a questionnaire. In

which I used attitudinal statement and likert scale.

For the sampling ---- cluster random sampling technique. The whole population isdivided in the cluster. Then, I assigned random number to each cluster. There from theselection of location, area and chunk for the survey.Sample size 150 from the 17 lakhs(approx.) population of GURGAON for the survey.

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Data Analysis:-

To analyze the data which we got from the primacy research we used the statistical toolslike mean, mode, median, factor analysis, cluster analysis, multidimensional scaling.

Through the mean, mode and median we try to find out common attitude of theconsumer towards each attitudinal statement.Factor analysis help us in finding out the major factors for the RTE food products.

Through the cluster analysis we try to find out the common characteristics of the

consumer of the RTE food products. This analysis also helps us in finding the

segment for the RTE food product.

MDS help us in mapping the national brands and their position in the mind of the

consumers.

Results:-

From our analysis we found that From the sample of 150 respondents only 27% of the respondents are using RTE

food product.

The major factors affecting the decision of the consumers are health and

nutrition, time of preparation and price.

57% of the consumers of the RTE food products are single, male, and belongs to

age group of 20-30.

50% of the consumer who consumed RTE food products are belongs to income

group below 100000 lakh.

Most preferred national brand for the consumer for two factors health and

nutrition and time of preparation is MTR.

Ashirwad and Kohinoor scored well for health and nutrition but not scored well

for time of preparation.

Gits is not preferred by the consumers for both the factors.

Recommendation:-

Marketers have to target young bachelor for the RTE food product.

Marketers have to make proposition for RTE food product such that target

segment found it healthy as well as less time consuming.

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Channel of distribution should be taken care so that RTE food product is easily

available in near by store.

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Objective of the study:-

To understand the consumers behavior towards Ready-to-Eat food /semi

processed food.

To understand major factors affecting the purchase decision of the

consumers.

To map different national brand present in the market.

To identify the segment for this kind of product.

.

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Literature Review

Our project is based on food items. The food items can be classified into:

Processed food, semi-processed food, ready-to-eat food and unprocessed food.

There are various brands in Ready-to-Eat food such as MTR, KOHINOOR,

ASHIRWAD, VETEE, EVERGREEN EXPORTS, ANIS EXPORT, SM FOODS

and GITS. Mostly the consumers prefer MTR brand as their preference. Our

product has several attributes such as price, ease of preparation, nutrition value,

time, shelf life and health.

Although being brands they are unable to position the product well in the market

because the consumers do not prefer packaged food. The consumers mostlyprefer either home-made food or food from restaurants as they think that the food

they consume should be nutritious.

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To study our project of understanding the consumers behavior towards Ready-

to-Eat we first studied consumer decision making process which means knowing

the perceptions of the consumers while purchasing the product. The consumer

buying process model is shown as under:-

CONSUMERBUYING PROCESS MODEL

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The consumer buying is for the rational consumer. But a marketer cannot exactly knowwhat is going on in the minds of the consumers which are very necessary for themarketer. The inside mind of the consumer can be known through the Black-boxtheory which is the theory of consciousness and states that the mind is fully

understood once the inputs and outputs are well defined, and generally couples thiswith a radical skepticism regarding the possibility of ever successfully describing

the underlying structure, mechanism, and dynamics of the mind.

The marketer cannot know the consumers mind so through this research we get tounderstand the consumers behavior towards these types of products. By knowing theconsumer behavior a marketer can know that how a product can be positioned in thetarget market. Positioning refers as the act of designing the companys offerings andimage to occupy a distinctive place in the mind of the consumers or the target

market.

Branding is helpful in positioning the product in the eyes of the consumers.

Branding refers to endowing products and services differentiating with others interms of name, sign, symbol, design or a combination of them.

Brand dimension is a research tool specially designed to analyze brand position in

the market. It investigates brand awareness, usage, competitive environment,

selection process, important qualities for the consumer and others brand

correspondent to them.

Segmentation is essentially the identification of subsets of buyers within a market

who share similar needs and who demonstrate similar buyer behavior.

Cluster sampling refers to divide the whole population into homogenous groupswhich is helpful in doing the survey for the marketer.

Factor analysis is a statistical data reduction technique used to explain variability

among observed random variables in terms of fewer unobserved random variables

called factors.

Cluster analysis is a class of statistical techniques that can be applied to data that

exhibit natural groupings. Cluster analysis sorts through the raw data and

groups them into clusters. A cluster is a group of relatively homogeneous cases or

observations. Objects in a cluster are similar to each other. They are also dissimilar

to objects outside the cluster, particularly objects in other clusters.

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The dishes with their brands are as follows:A. MTR: It provides the following dishes-

South Indian- Avial, Kesari Bhath, Khara Bhath, Pongal, Bisibele Bhath

and Pineapple SS Curry.

North Indian- Alu Mutter, Chana Masala, Dal Fry, Dal Makhani,

Navratan Kurma, Paneer Butter Masala, Paneer Makhani, Bhindi Masala,

Mix.Veg. Curry, Palak Paneer, Peas & Mushroom, Rajma Masala, Veg.

Pulao, Pav Bhaji

Main Course- Alu Mutter, Avial, Chana Masala, Dal Fry, Dal Makhani,

Navratan Kurma, Paneer Butter Masala, Paneer Makhani, Bhindi Masala,

Bisibele Bhath, Mix. Veg. Curry, Palak Paneer, Peas & Mushroom,

Pineapple SS Curry, Rajma Masala, Veg. Pulao

Snacks- Kesari Bhath, Khara Bhath, Pongal, Pav Bhaji,Poha

B. ASHIRWAD: It serves the following dishes to the consumers-

Chicken Chettinad, Chicken Darbari, Dal Bhukara, Mirch ka Salan,

Paneer Darbari, Rice Treat( Chinese fried rice), Rice Treat(Majubal

lemon rice), Punjabi Kadhi Pakora and many more.

Other brands also serve similar food items with varieties.

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Research Design:-

To know the factors that affects the decision of the consumer for there preferencetowards ready-to-eat / semi-processed food we visited small grocery shopkeeper and

some retail outlet too in Ahmedabad.We followed Descriptive Research Method in Conclusive Research Design for thisproject as we try to understand the buying behavior of the consumer.

Secondary Research

We collected some of the news item as well as visited web sight of the company who arein the business of the ready-to-eat food to get basic idea about the product and itsattributes and buying behavior of the consumer towards ready-to-eat and semi processedfood.

Construction of questionnaire

We conducted the interview of the shopkeeper to understand the attributes of the ready-to-eat food. To get the insight of the consumer and to understand their buying behaviourwe interviewed consumer. From this data we prepared a questionnaire of attitudinalstatement.

Sampling Procedure

We used cluster random sampling method to select the sample.For cluster random sampling first we divide the whole population of Ahmedbad in the

cluster as well as sub cluster. Then we assigned random number for each cluster. Werepeated this procedure again and then we randomly select the primary area, samplelocation and chunk for the sample.We had taken the sample size of 300 respondents from 56 lakhs population ofAhmedabad for our survey.

Primary Research

Since the research objective is directed towards the uncovering of consumer buyingbehavior hence primary research will be used for the purpose.

Scope of the Study

This study depend on the authenticity of the secondary data available and that of therespondents.

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Data Analysis:-

For the data analysis first we conducted the Factor Analysis to find out the majorattributes or major factor which affects the buying decision of the consumer. Then weconducted Cluster Analysis to find out the cluster with homogeneous purchase

behavior.Through the cluster analysis we try to find out the homogeneous group of the consumerwho give positive weight to both the factor which we found through factor analysis.To know which brand stands where for these two factors we have doneMultidimensional Scaling. Through the multidimensional scaling we try to find outwhich brand stands where in the mind of the consumer for the selected factors.We also find out the Mean, Mode and Median to know the common attitude of all therespondents for that particular attitudinal statement.We use Z-test to find out that the factors which we found is play important role in thepurchase decision of the consumer or not.

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Common Attitude of the consumer towards Ready-to-Eat food:-

Table 1: Common attitude of the respondents who purchase RTE

NO. Reason for purchasing RTE foodAttitude of theConsumer

1it saves my cooking time

Strongly Agree

2it is convenient to carry

Agree

3for a change

Agree

4

it doesn't require anyingredient to be added Agree

5 packaging is attractive Indifference

6it is easily available

Agree

7it can be easily stored

Agree

8

it is priced low ascompared to restaurant Indifference

9

it does not contain anypreservative & is fresh Indifference

10well established brand

Agree

11it can be prepared byanybody Agree

12

veg. food is unavailableabroad Indifference

13

Suggested by friend/relative/ shopkeeper Indifference

14we are a working couple

Indifference

Most of the respondents are strongly agree with the statements that RTE food productssave their cooking time.

Respondents dont want to give opinion about packaging and price.Most of the respondents agree with the statement related to ease of use.

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Table 2- Common attitude of the respondents who dont purchase RTE

NO. Reason for not purchasing RTE foodAttitude of theConsumer

1

I dont buy ready-to-eat food

because it is not fresh as itcontains preservatives Strongly Agree

2

often desired variety isunavailable Agree

3it is not tasty

Strongly Agree

4

not available in provisionstores Agree

5

eateries are available at shortdistance and they also providehome delivery Strongly Agree

6inadequate quantity for thepeople having heavy diet Agree

7low in nutrition

Strongly Agree

8it might be adulterated

Agree

9bad past experience

Strongly disagree

10it is expensive

Agree

Most of the respondents are strongly agree with the statement that RTE food productsare not healthy and nutritious, eateries are available at short distance and they alsoprovide home delivery and it is not tasty.Most of them dont have any past experience.Most of the respondents agree with the statement that desired variety is not available, itis not available in the provision stores, inadequate quantity, it is adulterated and it isexpensive.

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Factor Analysis:-

Table 3-Correlation between variables and factors (who purchase RTE)

I purchase RTE food

F1 F2 F3 F4 F5 F6

I purchase RTE as it saves mycooking time 0.410 -0.002 -0.371 0.638 -0.063 -0.223

it is convenient to carry 0.507 -0.213 0.156 0.102 -0.495 -0.407

for a change -0.090 -0.367 -0.174 -0.163 0.571 -0.467it doesn't require any ingredient to beadded 0.206 -0.179 -0.478 -0.434 -0.389 0.333

packaging is attractive 0.646 0.040 0.247 -0.119 -0.029 -0.039

it is easily available 0.443 0.371 0.003 -0.557 0.241 0.050

it can be easily stored 0.487 -0.148 0.116 -0.423 -0.068 -0.479it is priced low as compared to

restaurant 0.448 0.244 -0.634 -0.002 0.169 0.199it does not contain any preservative& is fresh 0.693 0.083 0.035 0.067 0.425 0.107

well established brand 0.333 -0.022 -0.520 0.119 -0.157 -0.169

it can be prepared by anybody -0.164 -0.695 -0.250 -0.116 0.028 0.215

veg. food is unavailable abroad 0.191 -0.808 0.082 0.013 0.160 0.149suggested by friend/ relative/shopkeeper 0.483 -0.131 0.340 -0.059 -0.237 0.320

we are a working couple 0.530 -0.115 0.283 0.400 0.235 0.319

Table 4-Correlation between variables and factors (who dont purchaseRTE)

I dont purchase RTE food

F1 F2 F3

I dont buy ready-to-eat food because it is not fresh as it containspreservatives 0.542 0.432 0.301

often desired variety is unavailable 0.413 -0.403 -0.433

it is not tasty 0.721 0.352 0.136

not available in provision stores 0.694 -0.315 -0.404eateries are available at short distance and they also provide

home delivery 0.495 0.207 -0.318inadequate quantity for the people having heavy diet 0.579 -0.334 -0.059

low in nutrition 0.608 0.329 0.335

it might be adulterated 0.355 -0.573 0.353

bad past experience -0.345 -0.444 0.443

it is expensive 0.486 -0.331 0.438

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Factors:-

Table 5- Factors

I Purchase Ready-to-eat food because (Health and Nutrition)

Factor-1it is convenient to carrypackaging is attractiveit does not contain any preservative & is freshwe are a working couple

Factor-2it can be prepared by anybodyveg. food is unavailable abroad

Factor-3it doesnt require any ingredient to be addedit is priced low as compared to restaurantwell established brand

Factor-4 (Ease/Time of preparation)I purchase RTE as it saves my cooking timewe are a working coupleit doesnt require any ingredient to be addedit is easily availableit can be easily stored

Factor-5for a changeit does not contain any preservative & is fresh

it is convenient to carry

Factor-6it is convenient to carryit can be easily stored

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I dont Purchase Ready-to-eat food becauseFactor-1 (Health and Nutrition)I dont buy ready-to-eat food because it is not fresh as it contains preservatives

it is not tasty

not available in provision storesinadequate quantity for the people having heavy dietlow in nutritionit is expensive

Factor-2

I dont buy ready-to-eat food because it is not fresh as it contains preservatives

often desired variety is unavailableit might be adulteratedbad past experience

Factor-3 (Choice) Price Factorbad past experienceit is expensiveoften desired variety is unavailablenot available in provision stores

Major Factor:-

From the factor analysis we identified the following factors which play important role inthe purchase decision of the consumer:

1. Health and Nutrition

2. Time of preparation

3. Price

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Cluster Analysis:-

Respondent who purchase RTE food

Observations (axes F1 and F4)

-3

-2

-1

0

1

2

3

-5 -4 -3 -2 -1 0 1 2 3 4

F1

F4

Chart 1-Cluster analysis_1

With the help of chart of the cluster we found out the respondents who gave more

weights to both the factors Health and Nutrition and Time of preparation. We found14 respondents who gave important to both the factors.

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After finding the group of people who gave important to both the factors we analyzedtheir demographic information to find out the characteristic of that particular cluster.

I buy ready-to-eat food

1. Age

Table 6-Age

Age

7%

50%

7%

36%

0%0% 1-BELOW 20

2-20 to 30

3-31 to 40

4-41 to 50

5-51 to 60

6-Above 60

BELOW 20 1

20 to 30 7

31 to 40 1

41 to 50 5

51 to 60 0

Above 60 0

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Chart 2-Age

In the above graph we can see that 50% of the respondent who gave important to boththe factors are belongs to the age group of 20 to 30.

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2. Gender

Table 7-Gender

Male 8

Female 6

Gender

1-Male

57%

2-Female

43% 1-Male

2-Female

Chart 3-Gender

In the above graph we can see that from 14 respondents 57% respondents are male.

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3. Income Group

Table 8-Income Group

Below 100000 7

100000-300000 4

300001-400000 3

Above 400000 0

Income Group

50%

29%

21%0%

1-Below 100000

2-100000-300000

3-300001-400000

4-Above 400000

Chart 4-Income Group

50% of the respondents form the 14 respondents are belongs to group below 100000income group.

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4. Marital Status

Table 9-Marital Status

1-Single 8

2-Married 6

Marital Status

57%

43%1-Single

2-Married

Chart 5 Marital Status

57% of respondents are single who gave important to both the factor health and nutritionand time of preparation.

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5. No.of family members

Table 10-No. of family members

No. of Family members

0%

43%

43%

14%

1-1 to 2

2-3 to 4

3-5 to 6

4-7 or more

Chart 6-No. of Family Members

43% of respondents have 3 to 4 family members. 43% of the respondents have 5 to 6family members.

1-1 to 2 0

2-3 to 4 6

3-5 to 6 6

4-7 or more 2

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6. Residence

Table 11-Residence

Residence

65%

21%

14%

1-Living in own house

2-Rented Appartment3-Shared Accomodation

Chart 7-Residence

65% of respondents who gave important to both the factors have their own house.Very less numbers of the respondents stay in shared accommodation.

1-Living in own house 9

2-Rented Appartment 3

3-Shared Accomodation 2

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7. Occupation

Table 12-Occupation

1-Service 2

2-Business 4

3-Student 8

4-Professional 0

5-Others 0

Occupation

14%

29%57%

0%0%1-Service

2-Business

3-Student

4-Professional

5-Others

Chart 8-Occupation

57% of the respondents are student who gave importance to both the factors.

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Respondent who dont purchase RTE food

Observations (axes F1 and F3)

-3

-2

-1

0

1

2

3

4

-7 -6 -5 -4 -3 -2 -1 0 1 2 3

F1

F3

Chart 9-Cluster Analysis_2

With the help of chart of the cluster we find out the respondents who gave more weightsto both the factors Health and Nutrition and Price. We found 14 respondents who gaveimportant to both the factors.

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I dont buy ready-to-eat

1.Age

Table 13-Age

1-BELOW 20 0

2-20 to 30 2

3-31 to 40 1

4-41 to 50 1

5-51 to 60 0

6-Above 60 1

Age

0%

40%

20%

20%

0%

20% 1-BELOW 20

2-20 to 30

3-31 to 40

4-41 to 50

5-51 to 60

6-Above 60

Chart 10-Age

40% of the respondents from 5 respondents belong to the age group of 20 to 30.

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2. Gender

Table-14 Gender

1-Male 1

2-Female 4

Gender

20%

80%

1-Male

2-Female

Chart 11-Gender

From the above chart we can see that 80% of the respondents are female who gaveweights to both the factors.

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3. Annual Income

Table 15-Annual Income

1-Below 100000 2

2-100000-300000 1

3-300001-400000 2

4-Above 400000 0

Annual Income

40%

20%

40%

0%

1-Below 100000

2-100000-300000

3-300001-400000

4-Above 400000

Chart 12-Annual Income

40% of the respondents belong to below 100000 income group and 40% of the

respondents belong to 300001 to 400000 income group.

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4. Marital Status

Table 16-Marital Status

1-Single 2

2-Married 3

Marital Status

40%

60%

1-Single

2-Married

Chart 13-Marital Status

60% of the respondents are married who gave importance to both the factors and notpurchase RTE food.

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5. No. of Family Members

Table 17-No. of family Members

1-1 to 2 0

2-3 to 4 2

3-5 to 6 2

4-7 or more 1

No. of Family Members

0%

40%

40%

20%

1-1 to 2

2-3 to 4

3-5 to 6

4-7 or more

Chart 14-No. of family Members

40% of them have 3 to 4 family members and 40% of them have 5 to 6 familymembers.

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6. Residence

Table 18-Residence

1-Living in own house 4

2-Rented Appartment 0

3-Shared Accomodation 1

Residence

80%

0%

20%

1-Living in own house

2-Rented Appartment

3-Shared Accomodation

Chart 15-Residence

80% of the respondents have their own house that dont purchase RTE food and gaveimportant to both the factors.

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7. Occupation

Table 19-Occupation

1-Service 2

2-Business 1

3-Student 2

4-Professional 0

5-Others 0

Occupation

40%

20%

40%

0%0%1-Service

2-Business

3-Student

4-Professional5-Others

Chart 16-Occupation

40% of the respondents are doing service and 40% of the respondents are students whogave important to both the factors.

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Dendrogram

Obs42

Obs4

Obs39

Obs22

Obs40

Obs26

Obs8

Obs43

Obs1

Obs64

Obs58

Obs57

Obs14

Obs41

Obs19

Obs30

Obs75

Obs20

Obs54

Obs24

Obs82

Obs80

Obs28

Obs79

Obs23

Obs81

Obs18

Obs69

Obs61

Obs17

Obs77

Obs62

Obs48

Obs52

Obs12

Obs68

Obs53

Obs50

Obs9

Obs45

Obs21

Obs59

Obs11

Obs5

Obs38

Obs63

Obs51

Obs65

Obs27

Obs44

Obs3

Obs46

Obs34

Obs10

Obs7

Obs49

Obs32

Obs15

Obs78

Obs29

Obs35

Obs47

Obs25

Obs70

Obs37

Obs33

Obs60

Obs16

Obs71

Obs76

Obs2

Obs36

Obs13

Obs74

Obs66

Obs56

Obs55

Obs31

Obs6

Obs67

Obs72

Obs73

0

1

2

3

4

5

6

7

8

9

10

Dissimilarity

Chart 17-Dendogram_1

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Dendrogram

3

4

5

6

7

8

9

10

Dissimilarity

Chart 18-Dendogram_2

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Cluster Analysis:-

After doing Cluster Analysis for the two factors Health and nutrition and time forpreparation we came to know following characteristic of the cluster who purchase RTEproducts

50% of them belong to age group 20 to 30 57% of them are male

50% of them are belong to below 100000 income group

57% of them are single

57% of them are student

Cluster Analysis for the two factors Health and nutrition and price we came to knowfollowing characteristic of the cluster who do not purchase RTE products

80% of them are female

60% of them are married

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Multi Dimensional Scaling:-

Result for a 2-dimensional representation space

Table 20-Dimensional Representation of Brands

Dim1 Dim2

MTR 0.279 0.236

Ashirwad 0.256 -0.041

Vetee -0.370 0.283

Kohinoor 0.199 -0.246

Gits -0.364 -0.232

Dim1:Time for prep Dim2:Health n Nutrition

Configuration (Kruskal's stress (1) = 0.129)

GitsKohinoor

Vetee

A shirwad

MT R

-0.3

-0.2

-0.1

0

0.1

0.2

0.3

-0.4 -0.3 -0.2 -0.1 0 0.1 0.2 0.3 0.4

Dim1

Dim2

Chart 19-Perceptual map of Brand

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Multi dimensional Scaling:-

When we do perceptual mapping for the two factors; Health and nutrition and Time ofpreparation we came to know that most of the consumer perceived

MTRas a good brand for both the factors

Vetee scored well for time of preparation but not scored well for Health andnutrition.

Ashirwad scored well for Health and nutrition but not scored well for time of

preparation

Kohinoor scored well for Health and nutrition but not scored well for time of

preparation

Gits scored negative for both the factors.

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Two-tail Z-test:-

Table 21-z-test for health and nutrition

Ho:-Health and nutrition play important role in purchase decision of the consumer.

Summary statistics:

Variable Observations

Obs. Withmissingdata

Obs.Withoutmissingdata Minimum Maximum Mean

Std.deviation

F1 82 0 82 -5.244 4.051 0.000 1.653

One-sample t-test / Two-tailed test:

95% confidence interval on the mean:

] -0.363 , 0.363 [

Difference 0.000t (Observed value) 0.000t (Critical value) -1.990DF 81p-value (Two-tailed) 1.000

alpha 0.05

Test interpretation:

H0: The difference between the means is not significantly different from 0.

Ha: The difference between the means is significantly different from 0.

Result:-Health and nutrition play important role in purchase decision of the

consumer.

It affects the behavior of the consumer.

Ho:-Time of preparation plays important role in the purchase decision of the

consumer.

Table 22-z-test for time of preparation

Summary statistics:



Obs. Withoutmissing data Minimum Maximum Mean

Std.deviation

F4 82 0 82 -3.089 2.845 0.000 1.161

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] -0.255 , 0.255 [

Difference 0.000t (Observedvalue) 0.000

t (Critical value) -1.990

DF 81p-value (Two-tailed) 1.000

alpha 0.05

Test interpretation:


Ha: The difference between the means is significantly different from 0.As the computed p-value is greater than the significance level alpha=0.05,one should accept the null hypothesis H0.

The risk to reject the null hypothesis H0 while it is true is 100.00%.

Result:-Time of preparation plays important role in the purchase decision of the

consumer.

It affects the behavior of the consumer.

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Ho:-Price plays important role in the purchase decision of the consumer.

Table 23-z-test for price

Summary statistics:



Obs.Withoutmissingdata Minimum Maximum Mean

Std.deviation

F3 217 0 217 -3.076 2.543 0.000 1.093



] -0.146 , 0.146 [

Difference 0.000t (Observed value) 0.000

t (Critical value) -1.971

DF 216

p-value (Two-tailed) 1.000

alpha 0.05


Ha: The difference between the means is significantly different from 0.As the computed p-value is greater than the significance level alpha=0.05,one should accept the null hypothesis H0.

The risk to reject the null hypothesis H0 while it is true is 100.00%.

Result:-Price plays important role in the purchase decision of the consumer.

It affects the purchase decision of the consumer.

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Tow-tail Z-test:-

With the help of two-tail z-test we got the result that,

Health and nutrition play important role in the purchase decision of the

consumer.

Time of preparation plays important role in the purchase decision of theconsumer.

Price plays important role in the purchase decision of the consumer.

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Results:-

From our analysis we found that

From the sample of 300 respondents only 27% of the respondents are usingRTE food product.

The major factors affecting the decision of the consumers are health and

nutrition, time of preparation and price.

57% of the consumers of the RTE food products are single, male, and

belongs to age group of 20-30.

50% of the consumer who consumed RTE food products are belongs to

income group below 100000 lakh.

Most preferred national brand for the consumer for two factors health and

nutrition and time of preparation is MTR.

Ashirwad and Kohinoor scored well for health and nutrition but not scored

well for time of preparation.

Gits is not preferred by the consumers for both the factors.

RTE food products are not competing with restaurant and eateries.

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Recommendation:-

Marketers have to target young bachelor for the RTE food product.

Marketers have to make proposition for RTE food product such that targetsegment found it healthy as well as less time consuming in preparation.

Channel of distribution should be taken care so that RTE food product is

easily available in near by store.

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Limitations of the study:-

Time is limited to conduct the project.

We dont have latest software for the analysis.

We taken in the consideration only the national brands.

We limit our study to main course meal only.

We limit our study to Gurgaon region only.

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Bibliography:-

Marketing Management By Philip Kotler, Kevin Lane Keller, Abraham Koshey andMithileshwar Jha

Marketing Research By Naresh K. Malhotra

Consumer Behavior By Leon G. Schiffman and Leslie Lazar Kanuk

Websites

http://antya.com/antsearch.php?s=ready-to-eat&tab=images

http://en.wikipedia.org/wiki/Marketing

http://www.garamchai.com/ReadyToEat.htm

http://www.google.co.in/search?hl=en&q=mtr&meta

http://www.kitchensofindia.com/recipes_main_search.asp

www.brandchannel.com

www.mtrfoods.com

www.marketingterms.com

www.marketingpower.com

53
http://antya.com/antsearch.php?s=ready-to-eat&tab=imageshttp://en.wikipedia.org/wiki/Marketinghttp://www.garamchai.com/ReadyToEat.htmhttp://www.google.co.in/search?hl=en&q=mtr&metahttp://www.kitchensofindia.com/recipes_main_search.asphttp://www.brandchannel.com/http://www.mtrfoods.com/http://www.marketingterms.com/http://www.marketingpower.com/http://antya.com/antsearch.php?s=ready-to-eat&tab=imageshttp://en.wikipedia.org/wiki/Marketinghttp://www.garamchai.com/ReadyToEat.htmhttp://www.google.co.in/search?hl=en&q=mtr&metahttp://www.kitchensofindia.com/recipes_main_search.asphttp://www.brandchannel.com/http://www.mtrfoods.com/http://www.marketingterms.com/http://www.marketingpower.com/


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References:-

1. Consumer Behavior by Leon G. Schiffman and Leslie Lazar Kanuk (eighth

edition): In this we referred the consumer decision making process from

PART IV Chapter-15, attitude of consumers towards any product from PARTII Chapter-8.

2. All the terms are being referred from the book Philip Kotler and Kevin Lane

Keller

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Annexure:-

Questionnaire

STUDY OF CONSUMER BEHAVIOR TOWARDS READY-TO-EAT FOODS

Dear Sir/Madam,

Myself AJAY SHARMA, a student ofILMS(Institute of law & mgt.studies)-Sec40, is

doing a survey on Consumers behavior towards ready-to-eat food/semi-processed

foods. The information given by you will be kept strictly confidential and used only for

academic purpose.

The objective of such a research is to understand a consumers attitude towards ready-to-

eat / semi-processed foods and what all factors he or she considers before purchasing

such products.

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Personal Details:-

1.Age (yrs.):-

Below 20 20 30

31 40 41 5051 -60 Above 60

2.Gender:-

Male Female

3.Annual income (Rs.):-

Below 100000 100000 300000300001- 400000 Above 400000

4.Marital Status:-

Single Married

5.No of Family Members:-

1-2 3-45-6 7 or more

Residence:-

Living in own house Rented Apartment Shared Accommodation

Occupation:-

Service Business Student Professional

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1) The Product is easy to use--------

STRONGLY AGREED PARTIALLY AGREED

NEUTRAL

STRONGLY DISAGREE PARTIALLY DISAGREE

2) Product can easily be stored-------


NEUTRALSTRONGLY DISAGREE PARTIALLY DISAGREE

3)Is it hygienic, as it contains a lot of preservatives---------



4) Is it tasty & nutritious-----------



5) It saves cooking time & can be prepared by anyone----------



6) You are using it for a change ---------- STRONGLY AGREED PARTIALLY AGREED


7) Is Product convenient to carry-------



8) The Product is well established brand-------

STRONGLY AGREED PARTIALLY AGREEDNEUTRALSTRONGLY DISAGREE PARTIALLY DISAGREE

9) The Person having a good diet, is it sufficient for him/her----------



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10) Is it Affordable/Cheap ----------



11) Low Price as compared to Restaurant ----------- STRONGLY AGREED PARTIALLY AGREED


12) The Product is Charging/taking a relevant price as per brand is

concerned-------



13) A low middle class man can afford it--------- STRONGLY AGREED PARTIALLY AGREED


14) The Product is easily available everywhere-----In malls, In small provisional

stores, at villages etc.--------------



15) Giving varieties as per states or area------- STRONGLY AGREED PARTIALLY AGREED


16) Fulfilling all the needs, as shown in Promos & advertisements------



17) Could a Celebrity(A film star or a sportsperson who is well known to us) bring

laurels to the Company or particular brand, or could enhance the sale of particularproduct.-------



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18) You go for a particular brand cause its branded or you are looking for its

taste or ingredients---------



19) Using cause of the suggestion of someone ,e.g-Shopkeeper/Friend/relative------



20)For selling their brand, the company is doing any kind of promotions.e.g,by

giving(1-1 free),free samples any other article with it.-----------



21) You are taking Product cauuse the Packaging is attractive, It attracts you-------



22) Packaging makes it fresh after a long time also even after expiry date also,with

in 15 days from date of expiry-----------



23) If used half pack, & again repacked; Can it be used again within 10 days-------



24) You are looking ingredients composition while purchasing it------



25) The Packaging used by the company for the brand is environmental friendly ornot------



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Rate the following brands on a scale of 1-5, where 5 means EXCELLENT

and 1 means POOR.

Brand

Name

Taste Price Packaging Shelf

Life

Ease

of Use

Availability Nutritional

Value

Quantity

per pack

Brand

MTR

Ashirwad

Vetee

Kohinoor

Gits

Thank You

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Articles on RTE food products:-

Ready-to-eat segment whets(eagerness) NRIappetiteRatna Bhushan

New Delhi , Nov. 23

MADE in India. Sold in Sainsbury, Selfridges, Walmart and Safeway.

It's fast becoming a reality. For, even as the Rs 25-crore ready-to-eat packaged foodsmarket faces challenges back home, the category is gathering momentum overseas.

From ITC's Kitchens of India and MTR Foods, to Tasty Bites Eatables and SatnamOverseas, everyone seems to be wanting a slice of the NRI's food pie.

ITC Foods has already had a test run of its Kitchens of India range of ready-to-servepackaged foods in Selfridges, UK. Mr Ravi Naware, Chief Executive, ITC Foods, said,"Retailing in the UK, other European countries and the US is very much on the agenda.Next year, we plan to begin retailing in supermarkets in the UK."

Or take the Rs 130-crore MTR Foods. "We plan to begin selling our ready-to-eat foodrange in Sainsbury, UK, within the next six months," said Mr Sadananda Maiya,Chairman & Managing Director, MTR Foods.

The company's presence on the global map - at roughly 8 per cent of its sales - iscurrently marked by exports to the US, Canada, UK, Germany, France and Japan, among

other countries. MTR has projected exports to account for 20 per cent of its sales in fiveyears.

The Pune-based Tasty Bite Eatables Ltd (TBEL) claims to be the largest-selling Indianfood brand in the `natural foods' category in the US. Mr Ravi Nigam, Executive Directorand President, TBEL, attributes the brand's performance in the US to "significant"investments on the distribution front. "We have decided to focus on our largest revenuegenerator the Ready-To-Serve (RTS) or retort packaging category," Mr Nigam added.

Tasty Bite's portfolio also includes ready-to-cook (RTC) curry pastes already popularin western markets.

Satnam Overseas Ltd, on the other hand, proposes to set up a rice mill in the UK. Thepurpose: to market its flagship brand, Kohinoor, at retail chains in Europe such asWalmart and Safeway to ensure timely supplies of products. Estimated investments inthe facility are Rs 20 crore, which will be routed through Satnam Overseas' UK-basedsubsidiary, Indo-European Foods.

The Rs 100-crore Bikanervala Foods Pvt Ltd plans to set up manufacturing units fortraditional Indian sweets and ethnic snack foods in Canada and Dubai, said Mr S.S.

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Aggarwal, the company's Managing Director. The first Bikanervala Indian fast foodoutlet-cum-sweet shop in the US is expected to take off in New Jersey in six to eightmonths.

Bikanervala's manufacturing facility in Canada a joint venture with a Toronto-basedNRI will involve an initial investment of about Rs 2.2 crore.According to MrAggarwal, setting up an overseas production base would help the company maintainfreshness and enhance product shelf life

Slices of India in a pack

The Financial Express, June 25, 2006

So, you want to experiment with non-local cuisine and don't have the time (or patience)for a three-course gourmet meal in a speciality restaurant? There's a simpler, and moredelectable solution at hand and you don't even have to venture too far from home. When

you go grocery shopping next time reach out for a readyto-eat pack for your dose ofpongal, jodhpuri halwa, mirch ka salan. Thanks to a change in lifestyle (nuclear families,working couples, more disposable income and less time to cook), more and more people,are opting for ready-to-eat food in a big way.

According to FICCIS Food and Beverage Survey, 2006, the ready-to-eat food sector isgrowing by 20% annually. And that's a substantial figure of growth in the Indian foodand beverage industry worth Rs 3,58 400 crore.

The sheer variety thats available on supermarket shelves and your local kirana stores ismindboggling. MTR, ITC, Tasty Bite, Currie Classic and Kohinoor offer customersseveral ready-to-eat options in regional category to choose from: so the choice is from

kharabath, palak paneer, baghare baigan,Kashmiri rajma, avial and even the evergreendal makhni. Costing as little as Rs 25 and going up to to Rs 150 (dal Bukhara), theready-to-eat packs are clearly here to stay.

Jostling for shelf-space with economically priced read-to-eat packs are ITCs premiumtins comprising: dal Bukhara, dal Dakshini, chicken Chettinad, mirch ka salan, Awadhibadam halwa . Actress Kareena Kapoor says, Earlier Id pick up dal Bukhara tinsfrom ITC Maurya Sheraton every time I visited Delhi, now I can get it here in Mumbai.Thats convenient for me and others who want it.

M Chellayan, director, the Nilgiri Dairy Farm (Nilgiris), says that with more disposable

income many middle and upper middle class people are going in for ready-to-eatdishes. From gourmet cuisine like Bohri biryani to delectable desserts: everythingyouve wanted to sample is now available in pouches or tins : all you need to do is justheat and eat.

The fare is wide: vegetarian and nonvegetarian, basic food and delectable desserts,south, western, eastern and north Indian cuisine. Moderate prices is a big plus for the

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sector. ITC who had earlier had only a premium range of curries and sweet dishes havelaunched an economy range: Aashirvad with affordably priced combo packs.

Traditionally Indians prefer fresh food served in homes/eateries and in the initial yearsthere were enough reservations about food packed in alumnimum pouches that stayed onshelves for days before consumption. That phase seems to be over and the ready-to-eatmarket today is worth Rs 70-80 crore (discounting the bigger ready-made marketcomprising juices, noodles etc which together put the market cost to Rs 1,000 crore.Upbeat about the growth potential, top producers MTR, Kohinoor, Tasty Bites, Indo-Nissin, Currie Classic, HLL, have stepped up production, and expanded their range ofproducts.

In fact, Tasty Bites (a wholly owned subsidiary of Preferred Brands International) a US-based food company which has been marketing its Tasty Bite line of ready-to-eat Indianfoods in the US since 1994) which closed shop after a poor response a decade ago, hasreopened business with renewed enthusiasm. With manufacturing capabilities in threecountries, Tasty Bite claims to be the largest selling brand of Indian food sold in the US

and is also available in 11 countries includ ing Japan, India, Singapore, Australia andNew Zealand. MTR who started the ready-to-eat segment way back in 1998 is set toproject Rs 500 crore sales over the next five years, riding on the wave of the ready-to-eatfoods market. The company, is majority owned by the Maiya family with 52% stake,whereas the remaining equity rests with the Singapore-based fund Magnus and J.P.Morgan.

Says MTR chairman and managing director P Sadanand Maiya: MTR productscurrently reach 1 lakh outlets across India. We have about 65% share in the ready-to-eatmarket. In north India, the market for us has grown 25%, while in south we have grown50% in the last one year. With restaurant costs escalating in the US, Japan and even

India (if you think premium restaurants and five-stars), gourmets have an easy option tobuy ready-made packs without spending a bomb or spending too much time gettingingredients to majke them. In 1998, the ready-to-eat food market was a paltry Rs 6 crore.But by the year 2008, it is expected to touch Rs 300 crore, so theres plenty of reason tocheer for us.

ITC Foods is all set to invest Rs 450 crore in the next three years (besides the estimatedRs 150 crore it has already put in) in the branded food market. As for the ready-to-eatfood market, ITC has created two distinct segments the upper end catered through theKitchens of India brand and the middle level market through the Aashirwad series.Aashirwad is available in 15,000 retail stores, while Kitchens of India is available at7,000 outlets.

If the current figures are an indication, looks like cut-heat-eat formula is all set toredefine the culinary palate of urban India.

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Cooking made convenientWant to try out a new dish on your family? Just snip away at covers to bring home thetastes of India

IT'S EIGHT in the evening, you're still in office, and some friends have invited

themselves over for dinner. What will you do? Rush home, don the apron and rustle up

something delectable? "Nah!" says Rohit, a self-confessed lover of cooking. The great

stuff he churns out in the kitchen has many of his bachelor friends lining up for home-

made food. What Rohit does now in moments of crisis is pick up ready-to-eat side dishes

straight off the super market shelf and team them up with pre-packed parathas and rotis.

For dessert, he chooses from any of the readymade ones on offer. His friends can't really

make out the difference.

If you're a regular super market shopper, chances are you would've noticed the number

of items on offer in this segment growing by the day. Thanks to change in mindset on

eating packed food and the fact that no preservatives are used to extend the shelf life,

more and more people, especially working couples, are taking to ready-to-eat food in a

big way.

And, the variety on offer is mindboggling. Five companies, MTR, ITC, Tasty Bite,

Currie Classic and Kohinoor, put together offer customers more than 25 options to

choose from. The list goes like this ... The modest Pongal (how does Madras lentil ricesound?), lemon rice and sambar rice share shelf space with their North Indian and

Pakistani cousins like Palace paneer, Daly Machine, Narrating Korma, China Masala (all

the way from Rawalpindi), Baghare Baigan (Hyderabad), Methi Mutter Malai (from

Agra, apparently concocted by Noor Jehan), Kashmiri Rajmah, Avial, Peas and

mushroom curry... Phew! And, this is just part of the list.

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Sulogena, a mother of two, says she buys these packed meals when the family wants to

eat "something else". "We loved the Pindi China of Aashirwad (an ITC brand)."

A staple offering of most companies is the ubiquitous Dal Makhni, a creamy mix of

various lentils, Indian spices and fragrant butter (Do I read like the menu card in a star

restaurant?). And, that is the fastest moving item in most stores.

These packs come in the range of Rs. 15 (for lemon rice and the like) to Rs. 40 (Palak

Paneer et al). The `Buy two get one free' scheme of ITC has caught on very well with

customers, store managers say.

In the premium segment are ITC's tinned offerings like Dal Bukhara (from Bill Clinton's

favourite restaurant at Maurya Sheraton, Delhi), Dal Dakshini and Chicken Chettinad.

M. Chellayan, Director, the Nilgiri Dairy Farm (Nilgiris), says that with more disposable

income on their hand, many middle and upper middle class people are going in for these

dishes. S. Prakash, Senior Manager of Alankar Supermarket, agrees. "We've had to

replenish our stock often," he says.

Though people are open to trying out new dishes, the fact that it is pre-cooked and

packed rankles some. But, one bite and they are hooked. "I opened a packet of MTR's

Bisibela bhath bravely, but wondered how it would taste. I refused to believe thatsomething cooked a month ago and packed, that too without any preservatives, would

still be fresh. But, one spoon was enough to make me a convert. I now buy packed

subzis when I am in the mood to eat something nice without going through the bother of

cooking," says Leena, who works in the field of medical transcription. SUBHA J

RAO

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Here's $20m, just don't make me cookBy Indrajit Basu

KOLKATA - It took a while to catch on, but as the country's 15-year-old globalization

process brings about rapid changes in the lifestyles of urban Indians, ready-to-eat food isfast becoming a compelling proposition. Over the past two years, the ready-to-eatpacked food market has grown from an almost insignificant number to become a US$20-million-revenue industry in 2004. Industry players say that, considering the current 35%growth rate, revenues in this sector can easily touch $50 million in the next three years.

Take the instance of Mumbai-based Ruma Banerjee, a 40-year-old market researchprofessional, who gets her ready-to-eat curry pastes or cooked packed meals from agrocery shop at the mall next to her office. "It's not that I do not like to cook, but with a70-hour work week, an equally busy husband and a 10-year-old child at home, we havelittle time for regular cooking," she says. For Shruti Rajam, 23, an insurance-industry

professional living alone in Chennai on her first job, time is not really a problem.Cooking is. Shruti never had to enter the kitchen in her life when she was with herparents. But now that she is on her own, stuffing her kitchen cabinet with ready-madefood seems to be the obvious option. "It's cool," she says, "I have become an expert atthis. Even my friends think I am a great cook."

Ruma and Shruti are part of a rapidly growing tribe of urban Indians who areincreasingly shunning the painstaking job of chopping, slicing, dicing and mixing theright ingredients, to simply picking up a pair of scissors and snipping open a pack of atwo-minute everyday Indian meal. Indeed, ready-made India curries that were unheardof even a few years back occupy the pride of place in Indian kitchens now. Brands such

asITC Aashirwad, Kitchens of India, MTR Food, Tasty Bites and Currie Classic are notonly gaining acceptance in double-income nuclear families all over India, but are alsospreading rapidly globally.

"Indian lifestyle is undergoing a massive socio-economic change, which is also beingreflected in food habits," says Ravi Naware, divisional chief executive of ITC Foods, awing of ITC Ltd, one of India's largest fast-moving consumer-goods company. "In urbanIndia, where time is more important than money, it's tough to return from office and putthe hours into cooking that a typical Indian meal demands. Also, young Indians have notpicked up the cooking skills from their parents, mostly because they are simply notinterested."

J Suresh, chief executive officer (CEO) and executive director of MTR Foods thatclaims to be the largest player in the segment with over 65% market share, adds thatready-made food is not considered extravagant expense anymore. "Many Indianhouseholds with little time and inclination to spend in the kitchen are adopting this as anecessity. Moreover, with disposable income going up as families become more double-income and salaries going up, people don't mind spending on something that will savethem the sweat in kitchen," he says.

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The quick-fix food concept is not really new in India, it has only picked up of late. It waslaunched over a decade ago in different forms but failed to take off primarily because ofa general preference for freshly cooked food. And also, as Naware says, "because retailoutlets in India lacked the adequate refrigeration facilities". With the availability of a

new technology called Retort - that packs cooked food in a four-layer package, which isthen heated to 120 degrees Celsius to kill all living organisms, thereby ensuringfreshness through its much longer shelf-life - the ready-to-eat food concept has becomefar more acceptable." Besides, says Suresh of MTR Foods, all ready-made food makershave adopted Hazard Analysis Control Point Certification from the British StandardLaboratory, which signifies that factories making such products follow strict food andsafety norms.

Nevertheless, all ready-made food makers say the primary driving force behind thegrowth of this sector is the changing Indian mindset toward food. Convenience is thenew buzzword. "There was a time when eating out was a luxury," says Amit Jatia,

managing director of McDonalds India. "Not any more. Likewise, an urban Indian nolonger hesitates to pick up a phone and order meal from a neighborhood restaurant orpick up a ready-to-eat meal from the next-door store." According to AC Neilsen ORGMARG, a top market research outfit, it is not just ready-to-eat food that is growing at ascorching pace, but "eating habits are changing rapidly and fast-food consumption isnow a part of everyday life...Almost a third of urban Indians now claim to opt for fastfood, even for breakfast. Dinner, however, remains the most-preferred occasion foreating fast food," says Sarang Panchal, executive director of AC Neilsen.

According to the findings of the latest online survey from AC Nielsen, urban Indians areamong the top 10 most-frequent consumers of fast food across the globe. The survey

finds that a huge 71% of urban Indians consume food from take-away restaurants once amonth. Some 37% of the adult Indian population does so at least once a week. Thismakes India one of the top 10 countries among the 28 surveyed in terms of frequency offast-food consumption.

"The incidence of fast food consumption in urban India is accelerating much faster thanmost people anticipated," says Panchal. "Contrary to the belief that a reliance ontraditional and home-made preparation may hinder the growth of fast food, changinglifestyle has altered the view toward out-of-home meals. A willingness to spend and,most importantly, the urban Indian acquiring a more global palate has catalyzedconsumption."

Among the international fast food chains and local operators, McDonald's is the mostpopular of all take-away options. Nonetheless, selling fast food and ready-made food isnot exactly easy, say the players, especially for foreign players, as Domino's Pizza IndiaCEO Arvind Nair discovered. Which is why, he says, "Imported fast food chains werequick to adapt to Indian tastes and even the regional variations. There are extensivevegetarian menus, for example, and emphasis on the kind of meats that Indians have noobjection to," says Nair.

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Indians' discerning taste buds is a big reason why industry experts like Naware andSuresh feel that foreign players would find little opportunity in this new fad "unless it isready to tie up with a local player". However, for foreign players, India could be a goodsourcing point for the overseas markets. "The growth of ready-made food and curry

pastes has also been scorching in overseas markets," says Naware. "The potential forexports are very good. We are experiencing explosive demand for ready-made Indianfood from overseas markets like the US, the UK, Canada and Europe. This demand isnot only generated by the non-resident Indian community but also by the localpopulations that are increasingly getting exposed to Indian cuisine through Indians livingthere, and also through their travels. I came across a projection recently that says by2020, no American will cook starting from basic ingredients all the way. They will eitheruse ready-to-cook or ready-to-eat food". India exported about $7 million worth ready-made Indian food in 2004, which is growing at around 20% a year.

According to industry insiders, the opportunity for foreign players in the country's fast

food segment is huge. Nair of Domino's Pizza says although Indians' penchant for spicyfood has resulted in an Indian-Chinese cuisine that is quite unknown in Sichuan provinceor Guanzhou, the snowballing retail revolution aimed at India's 300-million-strongmiddle class has created a natural habitat for imported fast food. "Down the road, I cansee not only pizzas and burgers and fizzy drink but also branded sushi, Vietnamese soup,Lebanese kebabs and Thai food-in-bowls to join our Mughlai and dosa," says Nair.

And according to Naware, yet another untapped segment that could be utilized byforeign players through their marketing prowess are the smaller towns and suburbs ofIndia. Despite its scorching growth, the concept of ready-to-eat and fast food are stillrestricted to the six larger Indian cities and a few smaller ones while a huge section of

the country's billion-plus population is still not exposed to it. "That has happenedbecause marketing ready-made and fast foods in the rest of India requires hugewherewithal that Indian companies do not have. This is where foreign players canexcel," says Naware.Indrajit Basu is a Kolkata-based equity-analyst-turned-journalist with more than 12years of experience in business/finance and technology journalism. Besides writing forAsia Times Online, he also writes for US-based publications, as well as IT companies.

(Copyright 2005 Asia Times Online Ltd. All rights reserved. Please contact us forinformation on sales, syndication andrepublishing.)
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