PREFERENCES TOWARDS ORGANIC AND FUNCTIONAL YOGHURT IN REPUBLIC OF SRPSKA

Abstract

This article presents the results of the research of preferences towards organic and functional yoghurt, conducted in Republic of Srpska, from January to May, 2014 (n=200). Generally, respondents do not consider whether yoghurt being or not being organic or functional as very important. They partially prefer functional yoghurt, but prefer yoghurt made from conventionally produced milk. For both, organic and functional food, consumers were divided into two segments -- the first which considered yoghurt being organic (or functional) among three the most important attributes of a product and the second segments comprising of all other respondents. Hereby, 8% of respondents belonged to the first segment for organic and 20% for functional yoghurt. Compared to second segments, consumers belonging to the first segment for organic yoghurt statistically significantly differ from others by valuating food importance for health more, while for functional yoghurt by assessing own physical health worse.

Headnote

Summary

This article presents the results of the research of preferences towards organic and functional yoghurt, conducted in Republic of Srpska, from January to May, 2014 (n=200). Generally, respondents do not consider whether yoghurt being or not being organic or functional as very important. They partially prefer functional yoghurts, but prefer yoghurts made from conventionally produced milk. For both, organic and functional food, consumers were divided into two segments - the first which considered yoghurt being organic (or functional) among three the most important attributes of a product and the second segments comprising of all other respondents. Hereby, 8% of respondents belonged to the first segment for organic and 20% for functional yoghurt. Compared to second segments, consumers belonging to the first segment for organic yoghurt statistically significantly differ from others by valuating food importance for health more, while for functional yoghurt by assessing own physical health worse.

Key words: organic food, functional food, market segmentation, marketing management, Republic of Srpska

JEL: Q13, M31

Introduction

Organic and functional food have in common main motive of their consumption, dynamic market development, dependence of future market development upon consumers acceptance of these food, but sometimes also the description of profile of consumers buying them.

Health can be considered as one of the main motives for buying both organic (Magnusson et al., 2003; Hughner et al., 2007) and functional food (Urala, Lähteenmäki, 2003; Urala, Lähteenmäki, 2004; Verbeke, 2006; Ares, Gambaro, 2007). Having in mind its increasing significance during purchasing decision process related to food, there is also, as expected, dynamic growth of these markets (Dimitri, Oberholtzer, 2009; Menrad, 2003; Frewer et al., 2003).

However, it should be noticed that, as already stated, future market development is dependent on increasing consumers' acceptance of organic (Hughner et al., 2007) and functional food (Frewer et al., 2003). This question gains even greater importance when having in mind that descriptions of profiles (an important step within marketing management process) of organic and functional food consumers are often similar, which will be described in more detail in this paper.

Republic of Srpska can be considered as market in early stages of development, both for organic and functional food. The research conducted at the level of Bosnia and Herzegovina until now, point out functional food market being dominated by brands from other Western Balkans countries (Stojanovic et al., 2010), while organic food market having insufficient supply and lack of regulation (Willer, Lernoud, 2014).

This paper will present the results of the research of preferences towards organic and functional yoghurt in Republic of Srpska. Besides, consumers were divided into two segments - the first which considered yoghurt being organic (or functional) among three the most important attributes of a product and the second segments comprising of all other respondents. Relative sizes of segments preferring organic or functional food are established, characteristics of respondents belonging to these segments are researched and compared to other respondents as well as to each other. The chosen product is yoghurt since being successfully exposed to different innovations (such as fruit yoghurt), while the chosen population is 18 to 30 years old since being important as future market. Market of Republic of Srpska being in early stages of development and scarcely researched until now was of the interest for researching some of the mentioned similarities in relation to organic and functional food.

Theoretical background, literature review and hypotheses development

The theoretical background of this paper are steps within marketing management process (Kotler, 2007). Namely, after marketing research to these steps belong strategic marketing (including market segmentation, targeting and positioning) and tactical marketing (including creating marketing mix, its implementation and control).

Profiling consumers (about which are also noticed similarities among organic and functional food consumers) belongs to market segmentation. These similarities, which will be illustrated regarding gender, age, education and income, can present an obstacle within marketing management process of organic and functional food suppliers and can together with other similarities increase competitiveness among them.

There can be found researches pointing out that women are being more in favour of concept of organic food (Koivisto Hursti, Magnusson, 2003; Lockie et al., 2004; Arbindra et al., 2005; Padel, Foster, 2005, Dokic et al., 2014). At the same time, there are researches suggesting women accept functional food more than men (Childs, Poryzees, 1998; Ares et al., 2009; Urala et al., 2003).

Some researches emphasize older people being organic food consumers (Sandalidou et al., 2002). There are also researches pointing out older consumers are more accepting functional food in terms of being more ready to compromise on liking the product and perceived healthiness (Ares et al., 2008; Verbeke, 2006).

A number of researches describe organic food consumers as more educated (Zepeda, Li, 2007; Cicia et al., 2002; Sandalidou et al., 2002; Loureiro, Hine, 2002; Dokic et al., 2014). At the same time there are researches finding positive connections among consumers' education and certain functional food acceptance (Childs, Poryzees, 1998; De Jong et al., 2003).

Finally, in some researches positive influence of higher income on acceptance of organic food is emphasized (Loureiro, Hine, 2002; Sandalidou et al., 2002; Arbindra et al., 2005; Gracia, de Magistris, 2007; Stolz et al., 2011; Dokic et al., 2014). In addition, there is also established positive relation among consumers' income and positive beliefs about functional food (Childs, Poryzees, 1998).

Described similarities should not suggest that they are always occurring when describing organic and functional food consumers' profile. Furthermore, not that there are discrepancies among profile of organic and functional food consumers, but also among different descriptions of organic food consumers' profile, as well as among different descriptions of functional food consumers' profile. However, when such similarities do occur, problems mentioned regarding marketing management process can be significant.

Having in mind literature review and the level of researched market development, following hypotheses have been proposed:

H1: At the general level, consumers prefer more yoghurt made from organic milk than from conventionally produced milk.

H2: At the general level, consumers prefer more functional yoghurts than yoghurts that are not functional.

H3: Consumers expressing preferences towards yoghurts including functional yoghurts consider more important yoghurt to be functional than consumers expressing preferences towards yoghurts including organic yoghurts consider important yoghurt to be organic.

H4: Consumers who consider yoghurt being organic among three the most important attributes of a product statistically significantly differ from other consumers by some of profile characteristics.

H5: Consumers who consider yoghurt being functional among three the most important attributes of a product statistically significantly differ from other consumers by some of profile characteristics.

H6: Characteristics by which consumers who consider yoghurt being organic among three the most important attributes of a product statistically significantly differ from other consumers are not the same as characteristics by which consumers who consider yoghurt being functional among three the most important attributes of a product statistically significantly differ from other consumers.

Questionnaire

There were two parts of the questionnaire. The first was related to segments' potential characteristics. These questions were defined based on literature, interviews with representatives of food industry and organic food producers, as well as on the potential significance of management implications. Besides gender, age, educational / working status, marital status, presence of children in family, it included questions regarding the different health-related aspect - frequency of having sports activities (never, rarely, once in several weeks, at least once a week, actively), the perceived assessment of physical health (1 to 5), level of agreement regarding confirmation of importance for health (1 to 5 Likert scale), and the presence of a sick family member for whom it is believed that proper diet could have prevented the disease.

In the second part of the questionnaire were given cards with chosen organic or functional yoghurt attribute levels' combinations to be evaluated by consumers. Respondents expressed their preferences toward each of the cards by rating them from 1 to 9. The attributes and attribute levels of yoghurt were defined by using the focus group method with students. Besides, representatives of food industry were consulted. These attributes and attribute levels can be seen in Tables 1 and 2. Having in mind the number of defined attribute levels and their combinations, it was theoretically possible to create 576 combinations (cards) for organic and 864 for functional yoghurt. Nevertheless, following Kuzmanovic (2008) an orthogonal design with 34 cards was obtained.

One respondent was filling in only one version of the questionnaire - regarding organic or regarding functional food. It took up to 30 minutes for the respondents to fill in the questionnaire.

Subjects

There were 200 respondents interviewed in several larger towns of Republic of Srpska, from January to May, 2014. Chain referral sampling was used. Structured interviews by means of personal communication with respondents with the use of questionnaire were conducted. The respondents were 18 to 30 years old.

Within the sample of 100 respondents that filled in the questionnaires relating to yoghurts including organic, there were 48.0% of males and 52.0% of females. The average age of respondents was 24.46 years (standard deviation 3.664). 56.0% of the total number of respondents are students, 29.0% are employed, and 15.0% are unemployed; 5.0% of the total number of respondents are married and 95.0% single; 8.0% have children, and 92.0% do not.

Within the sample of 100 respondents that filled in the questionnaires relating to yoghurts including functional, there were 50.0% of males and 50.0% of females. The average age of respondents was 23.07 years (standard deviation 4.269). 48.0% of the total number of respondents are students, 36.0% are employed, and 16.0% are unemployed; 2.0% of the total number of respondents are married and have children, while 98.0% are single and do not have children.

Data analysis

Data analysis was performed by using MS Office Excel and SPSS.

Market segmentation was conducted based on consumer preferences identified by conjoint analysis. Ratings-based conjoint analysis was used (subject=id had been used in syntax in conducting conjoint analysis). The respondents were then divided into two segments - the segment which values the organic (in the second case functional yoghurt - both probiotic and with added calcium) as the first, the second or the third most important attribute of a product (named as the first segment in the text of this paper) and the segment that values any other attribute as the first, the second or the third most important most important or prefers conventional yoghurt or yoghurt that is not functional (named as the second segment in the text of this paper).

Analysis was conducted for investigating whether consumers from these two segments were statistically significantly different regarding chosen characteristics. Pearson Chi-Square test was used regarding gender, educational / working status, marital status, presence of children in family and the presence of a sick family member for whom it is believed that proper diet could have prevented the disease. Independent samples T-test was used considering age, the perceived assessment of physical health and level of agreement regarding confirmation of importance for health. Mann-Whitney U test was used regarding respondents' frequency of having sports activities.

Results

The results of conjoint analysis for organic and functional yoghurt are given in Tables 1 and 2.

The respondents find packaging volume as the most important attribute of yoghurt (25.426%), whereas they prefer yoghurt of 0.2 litre volume the most. The second and the third most important attributes are added flavours (18.658%) and milk fat content (18.255%). Hereby, respondents are opened to one innovation (fruit yoghurt), but not to the other (yoghurt with cereals), so it can be suggested that such openness is influenced by the taste. At the same time, they prefer yoghurt with 1.5% milk fat content the most, then with 0% and finally with 2.8%. The fourth by importance is the attribute related to packaging (10.566%), whereas consumers prefer cardboard as packaging material. The attribute of the greatest interest for this research - related to milk production is only 9.272% important. Hereby, respondents prefer yoghurt made of conventionally produced milk rather than of organic milk. There are only two attributes of yoghurt less important than previous - viscosity (9.148%) and taste (8.675%). However, their level of importance is very close to one of the attribute related to milk production. In addition it can be stressed that consumers prefer thinner yoghurts with mild taste.

Although partially changed in order, three of the most important attributes by significance remain for the sample expressing preferences towards yoghurt, including functional - added flavour (23.799%), milk fat content (17.577%) and packaging volume (15.008%). However, the preference towards certain levels of these attributes changed in this sample. Hereby, respondents prefer mostly yoghurt with no additional flavours and then fruit yoghurt. Besides, the level of their preference towards yoghurt rises as rises its milk fat content. They also prefer yoghurts of 0.5 litres the most. The fourth by importance is the attribute related to taste (12.505%), whereas consumers prefer mild taste of yoghurt. The attribute of the greatest interest for this research - related to functional characteristics is only 11.759% important. Hereby, respondents prefer yoghurt with added calcium, then with no functional characteristics and finally probiotic. Following attribute of yoghurt is of the similar importance - viscosity (11.603%), whereas consumers prefer thinner yoghurt. Finally, the least important is packaging material (7.751%), where consumers prefer yoghurt in cardboard packaging material.

When respondents rating preferences toward yoghurts, including organic, were divided into two segments - the first which considered yoghurt being organic among three the most important attributes of a product and the second segments comprising of all other respondents, 8% of respondents belonged to the first segment and 92% to the second segment. Similarly, when respondents rating preferences toward yoghurts, including functional, were divided into two segments - the first which considered yoghurt being functional (both probiotic and with added calcium) among three the most important attributes of a product and the second segments comprising of all other respondents, 20% of respondents belonged to the first segment and 80% to the second segment. Descriptive statistics regarding two segments' characteristics for organic and functional yoghurts are given in Tables 3 and 4, respectively.

When considering results for the respondents rating yoghurts, including organic, the results of Pearson Chi-Square test for gender are: χ^sup 2^(df=1)=2.540, p=0.111>0.05; for occupation are: χ^sup 2^(df=1)=0.309, p=0.857>0.05; for marital status are: χ^sup 2^(df=1)=0.458, p=0.499>0.05; for parenthood are: χ^sup 2^(df=1)=0.239, p=0.625>0.05; and for share of persons who believe that proper diet could have prevented the disease of a close person: χ^sup 2^(df=1)=0.725, p=0.395>0.05. The results of the Independent samples T-test, again for respondents rating yoghurts, including organic, for age are: t(df=98)= -0.570, p=0.570>0.05; for perceived assessment of physical health are: t(df=98)=-0.562, p=0.575>0.05; and for valuating food importance for health are: t(df=98)=-4.324, p=0.000<0.05. The results of Mann-Whitney U test regarding frequency of having sports activities for the respondents rating yoghurts, including organic, are: Z= -1.487, p=0.137>0.05.

When considering results for the respondents rating yoghurts, including functional, the results of Pearson Chi-Square test for gender are: χ^sup 2^(df=1)=2.250, p=0.134>0.05; for occupation are: χ^sup 2^(df=1)=1.172, p=0.557>0.05; for marital status are: χ^sup 2^(df=1)=0.510, p=0.475>0.05; for parenthood are: χ^sup 2^(df=1)=0.510, p=0.475>0.05; and for share of persons who believe that proper diet could have prevented the disease of a close person: χ^sup 2^(df=1)=1.099, p=0.295>0.05.

The results of the Independent samples T-test, again for respondents rating yoghurts, including functional, for age are: t(df=98)=0.268, p=0.789>0.05; for perceived assessment of physical health are: t(df=98)= -2.025, p=0.046<0.05; and for valuating food importance for health are: t(df=98)=0.886, p=0.378>0.05.

The results of Mann-Whitney U test regarding frequency of having sports activities for the respondents rating yoghurts, including functional, are: Z= -0.115, p=0.908>0.05.

Discussion and conclusions

When looking at the results of the research at general level, it can be concluded that output of conjoint analysis suggests that first hypothesis is not confirmed, i.e. that at this level consumers actually prefer more yoghurt made from conventionally produced milk than from organic milk. Considering results at the same level, it can be concluded that the second hypothesis referring to consumers preferring more functional yoghurts than yoghurts that are not functional is partially confirmed since they prefer mostly yoghurt with added calcium, then yoghurt with no functional characteristics and finally probiotic, also belonging to functional yoghurts. These results can be understood in the context of organic and functional food market of Republic of Srpska being in early stages of development, but also in the context that these food markets are generally considered as niche-markets.

The results relating to the third hypothesis support further previous conclusion. Although this hypothesis is confirmed, i.e. consumers expressing preferences towards yoghurts including functional yoghurts consider more important yoghurt to be functional than consumers expressing preferences towards yoghurts including organic yoghurts consider important yoghurt to be organic, the level of significance of the attribute for yoghurt being organic and functional is rather low. When it comes to functional yoghurt, the attribute related to functional characteristics is only 11.759% important, taking fifth position (out of seven attributes). Similarly, considering organic yoghurt, the attribute related to milk production is only 9.272% important, also taking fifth position (out of seven attributes). If one has in mind previously mentioned, that when analysing preferences towards levels of these attributes consumers prefer conventional over organic yoghurt and yoghurt with added calcium more than yoghurt with no functional characteristics and then probiotic, broader picture of this developing market emerges and confirmation of the essence of this hypothesis that functional food market is at some extent more developed can be accepted.

Within this paper is performed market segmentation in order to search for market segments dominantly preferring organic and functional yoghurt. As already explained, two segments were identified in both cases - the first which considered yoghurt being organic (or functional) among three the most important attributes of a product and the second segments comprising of all other respondents. Relative size of the first segments - 8% of respondents belonging to it for organic and 20% for functional yoghurt - further support that functional food market is more developed.

When the segments especially preferring organic or functional yoghurt (reasonably to be targeted in early stages of market development in order to increase their consumption further) are compared one by one to other respondents rating preferences toward yoghurts including organic and functional, the fourth and the fifth hypothesis are confirmed. Namely, both, consumers who consider yoghurt being organic among three the most important attributes of a product, as well as consumers who consider yoghurt being functional among three the most important attributes of it, statistically significantly differ from other consumers by some of profile characteristics. Hereby, consumers belonging to the first segment for organic yoghurt statistically significantly differ from others by valuating food importance for health more, while for functional yoghurt by assessing own physical health worse. This is also confirmation of the sixth hypothesis since characteristics by which consumers who consider yoghurt being organic among three the most important attributes of a product statistically significantly differ from other consumers are not the same as characteristics by which consumers who consider yoghurt being functional among three the most important attributes of a product statistically significantly differ from other consumers. However, when analysing these differences, one should bear in mind the number of respondents belonging to segments especially preferring organic or functional yoghurt.

Generally, the results confirm the existence of differences among organic and functional food consumer profile at market in early stages of its development. As these markets potentially grow, that is also dependent on supply side, generic promotion, state regulation etc. similar researches could be conducted. Future researches could also focus on different food category, as well as on research of broader sample and including additional variables, such as actual food consumption, when disposable at this market.

Sidebar

PREFERENCIJE PREMA ORGANSKOM I FUNKCIONALNOM JOGURTU U REPUBLICI SRPSKOJ

Apstrakt

Rad predstavlja rezultate istrazivanja preferencija prema organskom i funkcionalnom jogurtu, sprovedenog u Republici Srpskoj, od januara do maja 2014. (n = 200). Generalno, ispitanici ne smatraju posebno vaznim da li je jogurt organski ili nije, odnosno funkcionalni ili nije. Potrosaci delimicno preferiraju funkcionalne jogurte, ali i jogurte od konvencionalno proizvedenog mleka. Ispitanici su i za organsku i za funkcionalnu hranu bili podeljeni u dva segmenta - prve, koji vrednuju to da je jogurt organski (u drugom slucaju, funkcionalni) meDu tri najvaznija atributa proizvoda, i druge segmente koji obuhvataju sve ostale ispitanike. Pri tome, 8% ispitanika pripada prvom segmentu za organski, a 20% za funkcionalni jogurt. U odnosu na drugi segment, potrosaci koji pripadaju prvom segmentu za organski jogurt statisticki se znacajno razlikuju po vecem vrednovanju vaznosti hrane za zdravlje, dok potrosaci koji pripadaju prvom segmentu za funkcionalni jogurt po losijoj proceni sopstvenog fizickog zdravlja.

Kljucne reci: organska hrana, funkcionalna hrana, segmentacija trzista, marketing menadzment, Republika Srpska

References

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