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© 2023 IJRAR November 2023, Volume 10, Issue 4 www.ijrar.org (E-ISSN 2348-1269, P- ISSN 2349-5138)
IJRAR23D1909
International Journal of Research and Analytical Reviews (IJRAR)
266
Is retail marketing a viable route for marketing? -
Vegetable farmers' perspectives
ANUSHA VELAMURI *1 and S.R. PADMA2
1Research Scholar, Department of Agricultural Extension and Rural Sociology, Agriculture College and
Research Institute, Tamil Nadu Agricultural University, Coimbatore
2Assistant Professor (Agricultural Extension), Directorate of Open and Distance Learning, Tamil Nadu
Agricultural University, Coimbatore
Abstract
With traditional vegetable marketing constrained, retail marketing is a complementary way to addressing
price variations and transportation costs. However, before significantly enhancing the retail marketing system
for vegetables, essential stakeholders, vegetable growers, must be consulted. Thereby an ex-post facto study was
formulated to study the opinion of vegetable farmers on retail marketing and ascertain its relationship with a
profile of the respondents. A sample of 150 respondents following a multi-stage sampling were contacted using
a pre-tested interview schedule. The results were tabulated using mean and standard deviation to proceed further
into performing the chi-square test. The majority of vegetable farmers have a favorable opinion believing retail
marketing would reduce their marketing costs (78.00%) and increase returns (74.00%). The respondents agreed
that it was suitable for their location (55.33) and all kinds of farmers (52.00%). Still, they raised their concerns
about rules and regulations (80.6%) and dependency on the retail agency (49.33%). Variables like vegetable
growers' education, landholding, the area under vegetable cultivation, market intelligence, market orientation,
and decision-making ability, credit orientation positively influence their opinion formation toward retail
marketing. The results of this research act as a road map for extension officers and retail agencies in strengthening
retail marketing as a viable marketing channel.
Keywords: Chi-square test, Opinion, Peri-urban, Retail marketing, Vegetable growers
Introduction
Even when India becomes and continues to be a global leader in vegetable production, it still faces
resource limits. In the production end, the luscious and fresh vegetables are prone to pests and diseases, and to
tackle this, farmers use chemicals and, most times, indiscriminately (Mengistie et al., 2015). This leads to a
double loss situation where the consumers' health is affected by the consumption of chemical residues and
making the produce not amicable for exports, and all this at the price of an increase in the cost of cultivation.
Now speaking of the marketing end, the kind of marketing channel the farmer chooses depicts the price spread
and producers' share of the rupee. In traditional marketing procedures, farmers sell the produce to a commission
agent/auctioneer, who in turn sells to wholesalers or retailers and reaches the consumers through retail outlets
(Ahmad et al., 2017), forming a long chain of intermediaries (Shah & Ansari, 2020).
© 2023 IJRAR November 2023, Volume 10, Issue 4 www.ijrar.org (E-ISSN 2348-1269, P- ISSN 2349-5138)
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The domestic markets for these perishable products are volatile, making the fluctuations in the prices of
vegetables (Kumar et al. 2018; Rai et al. 2019) a significant complaint by vegetable farmers. Therefore, once
considered a stable, continuous income source, vegetable production activity is becoming questionable.
Solutions such as the construction of cold storage facilities, processing facilities, improving quality standards,
and making amicable exports are long-term, time-consuming, capital-needed initiatives. Even then, it is
debatable how it would support small and medium farmers. But, introducing a new marketing channel, such as
contract farming (Man & Mohd Nawi, 2010) and strengthening the existing efficient marketing channel, for
example, retail marketing (Heijden & Vink, 2013), could bring out immediate results that boost the farmers'
morale by providing a guaranteed market, stable income, and price protection.
Need and Scope for Retail marketing in India
Even though the esteemed Green Revolution increased the production of various products, boosting the
agricultural economy, terms such as ‘indebtedness’ and ‘poverty’ are still associated with the farmer. The reasons
could be a lack of focus on the other income-generating aspects, marketing, and infrastructure development. An
article in the Mint published by Anonymous (2017) with the banner - “When big retail meets small farmers”
illustrated the entry of corporates like Amazon, Big Basket, and Grofers enter into the retail space for selling
fresh fruits and vegetables. This step will benefit the farmers, improving the supply chain and bringing markets
closer to farmers as collection centers reduce the price spread. The authors Vishnu & Kumar (2019) compiled
the strategies of retail markets such as the supply of diversified products, penetration into tier two and tier three
cities, variations in quality addressing a wider income range, and unique marketing and on-door delivery helping
them to set up their strong bases. The method of paired comparisons by Vivek et al. (2020) showed the consumer
preference for hyper/supermarkets that provide a wide range of quality products under one roof. Studies showing
positive results at both producer and consumer end make a claim retail marketing to the rescue is a possible
solution.
Retail marketing to the rescue
A study by Singla (2017) showed increased farmers’ income by practicing retail marketing (Slamet et
al., 2017) (supermarkets). Nuthalapati et al. (2020) justified that the increased income is because of raised farm
gate prices with an average effect of 20.00 per cent or more. Fewer intermediaries, lower transaction costs, and
a regular supply of high-quality vegetables forced supermarkets to pay more, thereby increasing farm gate prices.
In line with it, research results of Borah (2017) convey that the producers share in consumer rupee 63.66 per
cent when commission agent and primary wholesale were in the marketing channel, which dropped to 55.00 per
cent with the addition of merchant wholesalers. But the marketing channel with the only retailer in between end-
user and producer extracted 72.83 per cent share in consumers' price. Studies (Naik & Suresh, 2018) also
confirmed that the retailers who will be in direct contact with the consumer could help the farmers maintain
quality standards. The extent of marketing constraints faced by the vegetable farmers was found (Islam et al.,
2019) to be inversely proportional to the training received on vegetable marketing and market information
availability.
Even after the evident benefits and site advantage (peri-urban), the retail marketing practice was
insignificant and faced discontinuance in our study area (Ranga Reddy district). Before formulating measures to
make retail marketing a supplementary marketing channel for vegetables in the study area, it is necessary to
study their knowledge level followed by opinion in this regard. The following study was formulated as a
continuation of Velamuri et al. (2021) with the objective - To distill the opinion of vegetable growers on retail
marketing and to ascertain the relationship with the profile of respondents.
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Methodology
An Ex-post facto study was designed in the year 2021 to study the opinion of vegetable growers residing
in Ranga Reddy district, a peri-urban area with leading vegetable area and production in Telangana on the retail
market. Following multistage sampling, out of 27, three mandals were selected with a higher area under vegetable
cultivation on average for the years 2018-2021 viz; Chevella, Ibrahimpatnam, and Shabad, respectively. From
each Mandal, three villages were purposively selected from each based on the area under vegetable cultivation
criteria in the year 2020-2021 (Rythu Samagra Samachara Sekara, RSSS data). The total number of farmers in
each village was collected from the gram panchayats, and the sample size of 150 (1% of the sample) vegetable
growers was fixed. A proportionate random sampling method was used to determine the number of respondents
needed to be selected in each village. Vegetables grown in the study were: Tomatoes, leafy vegetables, carrots,
brinjal, green chilles, okra, beans, and ridge gourds. An interview schedule consisting of 11 dichotomously
answered statements, both positive (4) and negative (7), prepared by Gangadhar (2014) was used with suitable
modifications to analyze the opinion on retail marketing. The scoring procedure followed was 2,1 for ‘Yes,’ and
‘No’ responses for positive statements, vice-versa for negative statements, and 0 for I don't know under both
instances. Frequency and percentage were determined for each statement, and a respondent's total score was
obtained on the summation of responses for each statement. The respondents were grouped into three categories
as, poor opinion, good, and better opinion on retail marketing by calculating mean and standard deviation to
make amicable for the chi-square test (test for independence) analysis. The statistical analysis was performed
using IBM SPSS statistics 22.
Results and discussion
Opinion of vegetable growers on retail marketing
It could be articulated from Table 1 that 78.00 per cent of vegetable growers in the study opined to have
a reduction in marketing prices by retail marketing and have an increase in returns (74.00%). The respondents'
outlook towards retail marketing was the possible quick payment (59.33%) and motivation to adopt improved
agriculture practices (54.00%). It could be speculated that these opinions were formed based on information
received from peers and their marketing experiences. Only 48.00 percentage of the sample took a stance that
retail marketing could be trustworthy for transparent pricing and weighment of produce.
Table 1 - Opinion of vegetable growers on retail marketing (n=150)
S.No.
Statements
Opinion
Yes
No
I Don’t
Know
1
Retail marketing is a more complex function than
general marketing.
91
(60.67)
36
(24)
23
(15.33)
2
Quick payment is possible through retail marketing.
(+)
89
(59.33)
46
(30.67)
15
(10.00)
3
Retail marketing is not suitable for adoption by all
categories of farming communities- big, medium,
and small farmers.
78
(52.00)
43
(28.67)
29
(19.33)
4
The cost of marketing will be more in retail
marketing compared to the conventional marketing
system.
12
(8.00)
117
(78.00)
21
(14.00)
5
Retail marketing is not suitable for my region.
39
83
28
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(26.00)
(55.33)
(18.67)
6
Retail marketing is more trustworthy than
conventional in many aspects, Ex- Pricing,
weighment of produce. (+)
72
(48.00)
57
(38.00)
21
(14.00)
7
Retail marketing is risky to adopt.
85
(56.67)
43
(28.67)
22
(14.67)
8
Retail marketing increases the returns from
farming. (+)
111
(74.00)
22
(14.67)
17
(11.33)
9
Rules and regulations in retail marketing are in
favor of retailers.
121
(80.67)
11
(7.33)
18
(12.00)
10
Retail marketing motivates farmers to adopt
improved agricultural practices in a better way for
(other) different crops. (+)
84
(56.00)
32
(21.33)
34
(22.67)
11
Retail marketing will result in total dependency on
retail companies.
74
(49.33)
25
(16.67)
51
(34.00)
On the other hand, the majority of respondents (80.67%) had the suspicion that rules and regulations
could be in favour of retailers, thereby declaring retail marketing as a complex function (60.67 %) and felt the
risk associated with it (56.67 %) as observed from Table 1. A portion of the respondents (52.00%) verdict that
retail marketing was only suitable for some farmers (Natawidjaja et al., 2014), and it increases dependency on
retail companies (49.33 %). Even with all this, 55.33 percentage of the respondents had a notion that retail
marketing could be a suitable solution for their area. It is important to note that vegetable growers mostly
remained undecided (34.00%) for the statement, viz., retail marketing increases dependency on retail companies.
As the respondents did not practice retail marketing intensively, it could have remained the most ambiguous.
© 2023 IJRAR November 2023, Volume 10, Issue 4 www.ijrar.org (E-ISSN 2348-1269, P- ISSN 2349-5138)
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Overall scores of vegetable growers' opinions on retail marketing
The overall scores were calculated for each respondent, and based on mean and standard deviation, and
they are categorized.
(n = 150)
Figure 1. Distribution of vegetable growers according to their opinion on retail marketing
From Figure 1, it can be concluded that 63.37 per cent, which is nearly two-thirds of vegetable growers,
had a good opinion towards retail marketing. Following it was 20.66 percentage of vegetable growers with poor
and 16.00 per cent with better opinion. The mean value of opinion was found to be 10.040, with a standard
deviation of 5.405. These results are on par with Namitha (2017), who performed a multi-dimensional analysis
on the sustainability of vegetable cultivation in the Tiruvanthapuram region of Tamil Nadu. These results send
a positive sign for the retail marketing agencies to start the liaison process with vegetable growers of the study
area and extension officials to facilitate it.
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Chi-square test of independence between independent variables and respondents’ opinion on retail
marketing
The Chi-square test gives the relationship between nominal data of the opinion on retail marketing of
vegetable growers and independent variables.
Table 2. Relationship between independent variables and respondents' opinion on retail marketing
expressed by chi-square test of independence
S. No.
Variables
Chi-square
Value
Contingency
coefficient value (c)
1.
Age
2.935
0.139
2.
Education
35.785**
0.439
3
Occupation
5.435
0.187
4
Landholding
16.819*
0.319
5
Area under vegetable production
19.255**
0.337
6
Experience in vegetable farming
4.190
0.165
7
Annual income
2.192
0.120
8
Market orientation
8.743#
0.235
9
Market intelligence
8.719*
0.234
10
Information seeking behaviour
7.587
0.219
11
Decision-making ability
17.179*
0.320
12
Economic motivation
1.805
0.109
13
Credit orientation
6.976*
0.211
14
Infrastructure facilities
6.683
0.207
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15
Market facilities
4.936
0.178
** Correlation is significant at 0.01 level (2- tailed)
*Correlation is significant at 0.05 level (2- tailed)
#Correlation is significant at 0.06 level (2- tailed)
It could be interpreted from Table 2 that the chi-square (Pearson) value of education (35.785) (Slamet et
al., 2017) and area under vegetable production (19.255) (Natawidjaja et al., 2014) were found significant at a 1
per cent level of probability.
The contingency coefficient value (denoted by c, maximum value 1) is also a measure that states the level
of relationship between variables, as reaffirmed by Glen (2018). The larger the value of c (means distant from
zero) more the relationship will be. The contingent values of education and area under vegetable production were
0.439 and 0.337, respectively.
At 5 per cent level of significance, variables like landholding (16.819), market intelligence (8.719),
decision-making ability (17.179), and credit orientation (6.976) were positively significant with contingency
values 0.319, 0.234, 0.320, 0.211, respectively, and market orientation (8.743) showed a considerable
relationship at 6 per cent level of significance. These results concord with Tura and Hamo (2018), who analyzed
market outlet choices of smallholder farmers in Ethiopia.
The plausible explanation for such results could be that as individuals' education level increases, they
attain better analyzing abilities and form opinions considering different factors. The increased landholding and
extension of the area under vegetable production will yield more to supply throughout the year (Singh, 2020),
for which vegetable growers need to explore various marketing systems and thereby get a new outlook. The
same argument works well for market intelligence and market orientation. When a person has a strong market
inclination and intelligence, he or she is exposed to new marketing systems such as retail marketing. The ability
to make decisions has a considerable impact on opinion formation. Even when several marketing outlets already
exist, people consciously decide to engage in retail marketing. Once taken and implemented, the decision will
undoubtedly contribute to the development of a point of view. When credit institutions support vegetable
growers, the process of forming opinions about retail marketing will be aided. Individual credit orientation is
thus critical in shaping attitudes about retail marketing.
Conclusion
Because peri-urban areas are closely connected to cities, they are more likely to grow vegetables for market
availability of their perishables. Aside from market access, additional factors such as market prices and
marketing expenditures (e.g., transportation) substantially impact farmer income. And the old marketing system
is acting in the opposite manner, with market price volatility and rising marketing costs. In such a case, retail
marketing emerges as a complementary marketing channel that must be strengthened in order to combat price
pressures. It is critical to understand the viewpoint of vegetable growers before involving many stakeholders in
the development of a marketing channel; thus, the current study was done. According to the findings, the majority
of vegetable growers believe it will lower their marketing expenses and enhance their returns. Respondents
agreed that retail marketing was appropriate for their location and all types of farms. Nonetheless, they expressed
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their reservations regarding the laws and regulations and their reliance on the retail agency. Understanding this
retail agency can help in establishing ground rules, and clarifying their operating pattern and expectations from
farmers, which could lead to greater transparency and improved farmer participation. Concerning participation,
the chi-square test revealed that factors such as vegetable growers' education, landholding, the area under
cultivation, market intelligence, market orientation, decision-making ability, and credit orientation positively
influence their opinion formation toward retail marketing. The job of extension employees and retail marketing
firms here is to improve these elements, allowing them to explore new marketing channels.
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