How can customer behavior be changed in order to increase sales of organic products

University essay from KTH/Industriell ekonomi och organisation (Inst.)

Abstract: During the last few years, awareness of environmental- and health related problems have grown dramatically. An area that has a contributed to these concerns are the food industry. It has affected the demand of greener products such as organic food, which aims to be healthier and better for the environment. Although there are different views on the exact benefits of organic food, it is considered to have a general positive effect on its surroundings. However, organic food has been costly, both for farmers and consumers, which has created an imbalance in supply and demand for organic products. Even if the sales of organic food has increased, the consumption is not enough for prices to decrease. It has also been found that people claim to buy that they buy organic to a higher extent than they actually do. Therefore this thesis focus on understanding how sales of organic food can be increased further, by identifying existing customer values and brand knowledge about organic products, in order to use the findings to improve problem areas and change buying behavior. The result is based on several research methods, although the greatest part comes from empirical tests examine the research questions derived from earlier research and interviews. The tests main focus was to investigate perceptions about price sensitivity, the effect of place and promotion, and finally the effect of clarifying the concept of organic food through arguments on the packages. The main conclusion is that the greatest opportunity to change consumer behavior towards buying more organic products is held by the retailers. The majority of all decisions are made in store, which is why the greatest change to influence consumer behavior is located there. Down- and upstream activities are recommended depending on the customer’s readiness to change purchase behaviors into new once. However, further studies of the arguments actual impact on sales are proposed to be further studied, and has been left out due to the limited scope of the tests and the possibility to measure it. Also, further research on to what extent the customer is willing to let the retail chains take decisions for them is proposed. 

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