A Study of changing Indian food market structure

Abstract

As development and progress speed up in India and the country’s political economy moves towards an arrangement more compatible with globalized capitalism, the food market, too, has expanded dramatically. With changing lifestyles of the young Indian Population, the Food market has expanded drastically with number of foreign players introducing a range of new food items to the Indian market. One of the most essential features when launching a product in the market is the analysis of the market structure definition. Traditional market structure definitions include grouping products based on product attributes or consumer demographics. However, in this study, we have taken up a new situation oriented approach to categorizing the products in a market and hence, redefine the market structure on the basis of how a consumer views it in terms of what job the consumer is getting done by buying a product. A new technique to elucidate the situation based categorization called “Situation-of- Usage” has been devised by using a special case of Analytical Hierarchical Processing (AHP). Product categories where the food habits and the number of new products from the foreign entrants have been significantly high have been narrowed for the study of the product market structure. Ten products in three categories namely Snacks, Cold Beverages and Frozen Desserts have been chosen and 10 respondents for each category have been tested upon using the new technique. The results have been used to cluster the products based on the situations using Cluster Analysis and hence, factors have been identified corresponding to the grouped situations. This helps in analyzing the features of every situation and also, yields a hierarchy of solutions in different orders. The analysis of the results yields insights into how the consumer categorizes the products based on situations and hence, enables marketers to clearly define their market structure, identify competition appropriately according to products falling under same category of situation and also, to assess gaps, if any in the market and create a blue ocean strategy. Also, the application of full time Analytical Hierarchical Processing (AHP) method for decision making has been explained taking a sample case manually and the implications of the same have been illustrated. In this regard, future improvements to this study have been recommended.