Factors influencing marketing

CONVENIENCE AND HEALTH FOODS 3 (1+2)

Lesson 16 : Special Needs And Problems In Marketing Of Processed Foods

Factors influencing marketing

Some of the factors that pose problems for marketing of processed foods are

  1. Negative disposition of the consumer:

    • Traditionally and culturally, the Indian consumer is not favorably disposed towards processed foods.
    • He needs to be educated and made aware of inherent qualities of processed foods to change his negative attitude to positive one.
    • An average house wife thinks that homemade food is the best, with a prejudice towards processed food. Hence a prime task would be to impart correct knowledge and educate the consumer.

  2. High price of processed foods and economic considerations

    • High price of processed foods in India is a barrier for marketing of convenience foods. Special packing of products needed for shelf life extension are beyond the reach of common consumer.
    • In India the cost of convenience foods is five times higher than that in Western countries, the Indian consumer income does not permit him to buy convenience foods.

  3. Not too favourable government policies

    • High taxation of processed foods keeps most potential consumers away.
    • The average consumer compares the prices of processed foods to that of raw materials, little realizing the value addition.
    • The central and state governments levy a series of taxes, these have made processed foods costly.

  4. Inadequate marketing and distribution system

    • The infra structure and net work required for marketing and distribution of processed foods is yet to be developed well in smaller cities and towns.
    • The “bazaar” concept of stores is unique to India, Unlike in West where departmental stores are very common.
    • The vastness of the country with its natural barriers coupled with under developed transport system hampers the physical movement of goods and easy distribution.

  5. The traditional market system

    • The processed food industry has to cater to serve on all India basis. It has to cater to a large number of outlets spread all over the country.
    • This 3 tier system of distribution increases the price of goods by 30-35 % . it contributes to the high price of convenience foods.
    • Products such as frozen ones cannot be transported across the country, since refrigerated trucks are not available, inadequately available or very costly.

Quality problems with respect to ingredients and packing

Processed food industry in India is not yet quality conscious and foods produced are not standardized.

Limited product range

Many of the traditional items like sweets, chips, cater to the regional needs , most of them are manufactured by small scale sectors.

It requires high level of investment and involves modern technologies.

Lack of food habit data

  1. The development of a market for food products and its right positioning means undertaking a systematic survey. The food habits, supply sources, technology requirements survey is needed.
  2. If the survey is not done properly, the entrepreneur ends up producing something that has no market.

Competition between companies Vs smaller units

  1. It is difficult to complete with established national brands, since these companies can afford expenditure.
  2. The smaller units find it difficult to compete with them.
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Last modified: Friday, 13 January 2012, 6:17 AM