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Factors Affecting the Buying Intention of Organic Tea Consumers of Bangladesh

Razia Sultana Sumi
Department of Marketing, Jagannath University, Dhaka-1100, Bangladesh

Golam Kabir*
Department of Mechanical, Automotive, Materials Engineering, University of Windsor, Windsor, ON N9B 3P4, Canada

Abstract/ Executive Summary:

In the modern era of globalization, consumers become aware and concerned about their health as well as natural resources and the environment. Technological improvement and economic growth are continuously exploiting the earth’s resources, resulting in an overwhelming burden on earth's ecology. Confirming a state of equilibrium between economic growth and safeguarding the environment becomes a challenge for business people and marketers. Though people worldwide are becoming interested in buying organic food, the concept of organic farming is relatively new in Bangladesh. The tea industry has started off with producing organic tea on a very limited scale. In this study, the researchers tried to examine the buying intention of organic tea among the consumers of Bangladesh. The study demonstrated that trust and perceived price significantly affect the buying intention of organic tea consumers along with product attributes, health consciousness, and environmental concern. Marketers may consider the stated factors to create an influence on the selection process of organic tea by consumers.

Keywords: Organic tea; Buying intention; Perceived value; Partial least squares; Path analysis

Location: Bangladesh

Start Date:

End Date:

Program Area: Socio-economic and Policy

Commodity: Tea, Organic products

Objectives:

In this study, the major aim of the research is to explore the factors that influence the buying intention of organic tea consumers. After analyzing previous literature on the behavioral patterns of organic food and organic tea consumers, eight constructs have been identified to measure the buying intention of organic tea consumers in the context of Bangladesh. The theoretical framework includes one dependent variable, buying intention; two mediating variables, perceived quality and perceived value; and five independent variables, health benefit, environmental concern, product attributes, trust, and perceived price.

Methodology:

4.1. Data Collection Primarily, because organic is a new concept in the market, exploratory research has been done to identify the variables that stimulate customers to buy organic tea products. In a group discussion session, 30 MBA students participated to find out the constructs that affect the buying decision of organic tea consumers. On the basis of insights into the group discussion and literature review, the authors conceptualized eight constructs to design the research framework. In the final questionnaire, 22 latent variables under eight constructs have been employed with the guidance of the proposed model. A Likert seven-scale is applied to measure all variables and to rate each construct (1 = “strongly disagree”, 7 = “strongly agree”). As organic tea is relatively new in the Bangladeshi market, the survey was conducted in two major urban cities where the population was highly affluent and educated, rather than a rural area. A sample was collected using the convenience sampling method and the data was gathered using a structured questionnaire. A mall-intercept interviewing method was used to collect the primary data. Respondents were selected randomly from six superstore chains. Eight graduate students were trained for two weeks to administer the interviewing session. Among 341 persons, 190 participants filled-out the questionnaire and 174 responses were selected as the final sample size. The effective sample recovery rate is 92%.

4.2. Data Analysis For this study, Partial Least Square Structural Equation Modeling (PLS-SEM) was applied to analyze the research model. This study is characterized by a relatively small sample size compared with the number of indicators and prediction-oriented research, which validates the use of Partial Least Squares (PLS), tests and measures the proposed research model. Furthermore, PLS (version 3, build 1126) has the ability to account for measurement errors for unobserved constructs and to examine the significance of the structural paths simultaneously. Structural Equation Modeling (SEM) is a popular model that simultaneously assesses the measurement model (the relationship between constructs and measurements) and the path model (the relationship between the constructs) to test theoretical relationships. In this study, a path analysis model was used to measure the significance and statistical acceptability of the proposed structural model.

Source of Information: J. Open Innov. Technol. Mark. Complex. 2018, 4, 24

Article Link (Online Journal):

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

From this study, the authors have found that all the constructs and sub-constructs support the reliability and validity of the measures. In addition, the study demonstrates that the product attributes health benefit issues, environmental concern, trust, and perceived price significantly influence the buying intention of the organic tea consumer. Product attributes have a high positive effect on the perceived quality and perceived value, which subsequently influences a consumer’s buying intention. Through the use of rigorous statistical methods, meaningful and distinct influential factors have been identified among urban organic tea consumers in Bangladesh. In Bangladesh, organic tea is a completely new concept and the limited awareness about this concept is mostly focused on its environmental and health benefits. Therefore, due to a lack of knowledge about organic food and availability, consumers have no option without nonorganic food. Proper motivation and engagement with healthy food consumption can raise a consumer’s intention of buying more organic tea in our country. Adequate marketing policies and an effective promotional campaign that articulates the nutritional value of both conventional food and organic food should be assimilated.

From the investigation, respondents showed a negative reaction to price, which affects the perceived value of organic tea consumers and validates the models of other research findings. Sometimes the price premium of organic products was greater than 10–20% of conventional products, which limits the market share of organic products. Therefore, the affordability of consumers and the costs of production of organic tea can be better indicators for setting and adjusting the price. Proper planning and a food budget may ensure the purchase of healthier and tastier food at an affordable price. Moreover, the packaging and labeling of organic tea confirms the quality and consumer trust also adds value to the products. However, many studies have found that consumers are willing to pay the price premium for organically produced items and fair-trade leveled local products. Hence, marketers can charge a higher price when consumer’s trust in certification and labeling is achieved.

People have become conscious about sustainable agriculture. To popularize organic farming in developing countries requires intensive education programs, training initiatives, and financial support for initial investments from both private and government level to ensure the farmers are supported during the conversion. To generate awareness, new promotional management approaches rather than criticism of conventional agriculture will help to minimize the negative reactions amongst conventional farmers [8] and encourage consumers to purchase organic products. Organic tea farms safeguard natural resources, avoid adverse effects to the environment (e.g., topsoil erosion and degradation, emissions of air and water pollutants), improve tea production and quality, and increase agricultural input and energy use efficiency.

The present study confirmed a model that predicts the willingness to buy organic tea among Bangladeshi consumers. In so doing, this study contributed to Zeithaml’s means-end model. In this study, health benefits, environmental concerns, and trust of organic tea retailers were added into the model to enhance the explanatory power of the means-end model in the context of Bangladeshi organic tea consumers. This study also validated the mediating effect of perceived quality and perceived value on the buying intention of consumers.

Knowledge Management: Journal