Joanna Chudzian, M.Sc. Warsaw University of Life Sciences Faculty of Economy Department of Agrarian Policy and Marketing Consumer preferences on dairy market Key words consumer preferences, dairy market, brand, consumer behaviour, consumption in Poland Abstract This paper shows the results of the questionnaire research about preferences on dairy market. The main aim of this paper is to show the differences between traditional and modern products. To do this characteristics of respondents, ways to get information about products, most often chosen brands and deciding factors for purchase are presented. Finally the paper shows also how the income, gender and then place of residence can differentiate consumer preferences on dairy market. Introduction Dairy market in Poland has a great potential in a comparison with other markets of food product due to the popularization of this category of products in the recent years. The changes are very dynamic and are mainly affected by the degree with which market offer matches changing preferences of buyers which on the other hand are altering together with a change in lifestyle of consumers that manifests itself through: - increasing attention to the health and nutritional values of food products, - reduce of time spending on household activities, including preparing meals, - expectation of the convenience of food products, - expectation of the facility of preparation, - expectation of the availability of food products (Adamczyk, 2005). The consequence of these changes is that consumers choose convenient food and food such as “light” or “diet”. Both of these groups include dairy products, especially modern, because modern products on dairy market have a great potential and there exists a low market saturation of this category of products. This paper presents buying behaviour of consumers from Masovian Voivodeship who gave opinion about traditional and modern dairy products. The basic criterion for the selection of the respondents were market saturation level for each product and the degree of processing of a product, which includes traditional (low-level processing) and the modern products (with a high degree of processing). When examining the degree of saturation, milk desserts and milk drinks are included in the group of modern products ("new generation") with high flexibility of income and consumption expenditure (1.0 and above 1.0). In contrast, yoghurts and cream cheese were among the traditional products with a higher saturation level and flexibility close to 1.0. Main goals and scope of work The main goals of my study was to evaluate consumer preferences for dairy market with an emphasis on the traditional and modern dairy products. Research conducted in April 2009 was a pilot survey and was carried in order to identify the relevant factors differentiating consumers from Masovian Voivodeship, to verify the research questionnaire and to determine the details of the qualitative research. Appropriate test (quantitative test, qualitative test and environmental test) will be held in September 2009. Methodology Raw data obtained from questionnaires from 100 respondents from the Polish Masovian Voivodeship was a main data source. Sampling was deliberate and consumers were picked who prefer flavored yoghurts, cream cheese, milk desserts or milk drinks and live in Masovian Voivodeship. Data collected during the research were then subject to to statistical analysis. Empirical results Survey included 100 people (61 women and 39 men) living in Mazovian Voivodeship (in Poland). 35 percent of the trial subject comes from big cities (with over 100,000 inhabitants), 44 percent from smaller towns and 21% live in the country. Analyzing shopping habits of the examined people one can observe varied preferences regarding frequency of buying dairy products and amount of money spent on it. 35 percent of the trial subjects buy dairy products twice a week. Similar number of people buy more than twice a week and 30 percent less. Average expenses for dairy products are approximately 101,5 PLN, however gender differentiate this amount – women spend over 120 PLN per month while men monthly buy dairy products for almost half of this sum (69 PLN). It may follow from the fact that in Poland women do the shopping more often buying also for other members of the family. Majority of respondents (over 60 percent) declare buying dairy products in self- service stores (supermarkets and megastores). Interesting is that almost 30 percents of the people point to small neighborhood shops and markets as the places where they buy dairy products. It seems like these places may correspond to consumer preferences of safe places to buy food necessities. Preference for buying in self-service stores reflects results regarding sources of information about dairy products (fig. 1). The majority of respondents choose impersonal forms of acquiring information, i.e.: advertisement or product packaging (almost 60 percent). Figure 1. Source of the information about dairy products Source: own research. Consumer asked about knowledge of the brands and producers of chosen dairy products first of all pointed Danone, Bakoma and Zott. Such results confirm existing distribution of shares on polish dairy market since there are three groups of producers – group of the main leaders (indicated above) with overall share of 75 percent of the market, group of the local leaders (especially noticeable in analysis of cream cheese) and local producers with low market position (Szwacka-Salmonowicz, Chudzian, 2007). In the questionnaire survey however most popular brands differ considerably with reference to particular product categories. In case of flavored yoghourts results confirm analysis of sales and market leaders – Danone, Bakoma oraz Zott are most often chosen by more than 90 percent of consumers. With reference to the cream cheese results are completely different. Preferable brand on the market is still Danone with a share of 45 percent, however one third of consumers point local leaders (Mlekovita, Ostrowia i Krasnystaw) as the most often chosen brand. In case of the products of new generation, the most popular brands of milk desserts overlap shares of the market leaders yet leaving place for an other brand – Bacha – which is clearly appreciated (15 percent of consumers). Surprising is fact that Mlekovita (local leader) with popularity on the level of 20 percent is most often chosen milk drink. It seems that this observation is related to the novelty of that category of dairy products which is still characterized with growing popularity on Polish market. In conclusion, it seems that the large number of examined people pointing to the well- known brands clearly indicates identification of brand or producer with high quality but also with increasing to brands of dairy products in Poland. However quality and brands are just some of the many deciding factors for dairy products. During the survey people were asked to arrange factors that have the biggest impact on their decision on buying particular product from flavored yoghurts, cream cheeses, mil desserts and milk drinks. Figures 2 and 3 show these arrangements for traditional and luxury categories of the dairy products respectively. Figure 2. Importance of deciding factors for flavored yoghurt choice. Source: own research. Respondents declared that the most important factors deciding of all the dairy purchase in the market is the quality, taste and price. For traditional products also brand, ingredients and health qualities proved to be important. Less important were advertising, current promotion sales and friends and family opinions. Therefore It seems that for choosing traditional products consumer already has his own opinion and use routine or reduced decision process. Figure 3. Importance of deciding factors for milk drink choice. Source: own research. By contrast, in the case of modern milk products in addition to price, quality and taste it appears that also ingredients and advertising (which are opinion factors) play important role. It seems, therefore, that for modern products such as milk drinks or desserts consumer often chooses extended, prudent decision-making process and tries to gain more information, because the product is new and unknown (Żelazna, Kowalczuk, Mikuta, 2002). The study also looked at: - how the gender, place of residence and income affect consumer behavior (differences between traditional and modern dairy products were observed and some results proved to be statistically significant), - the impact of advertising on consumer behavior (there was a significant result for modern milk products). Summary The analysis of consumer preferences in polish dairy market shows the number of important conclusions. It appears that dairy products are widely and often purchased by consumers in Poland. However, consumers differ in the way of getting information about dairy products and in their preference with respect to choice of brands. Selecting flavored yoghurts, cream cheese, milk desserts and milk drinks consumers usually pay attention to the quality, taste and price of products. As the least important they see opinion from family and friends, the origin of the product and ecology. In conclusion, the study gave very interesting results and suggests directions for further consideration and analysis as it is worth to answer also other research questions such as: Is there a model defining consumer behavior on dairy market? or: Why consumers making the purchase choice look mostly at the quality and price of dairy products? Bibliography Adamczyk, G. (2005). Preferencje konsumentów na rynku warzyw mrożonych. W: K. Gutkowska, L. Nawojek (red.) Konsument żywności i jego zachowania w warunkach polskiego członkowstwa w Unii Europejskiej. [Ford consumer and his behaviour in conditions of polish memberships in European Union]. Warszawa: Wyd. SGGW, s. 143-150. Maison, D., Noga – Bogomilski, A. (2007). Badania marketingowe. Od teorii do praktyki. [Marketing research. From theory to practice] Gdańsk: GWP. Szwacka – Salmonowicz, J. (2003). Zmiany zachowań nabywców jako determinanta kształtowania strategii segmentacyjnych przedsiębiorstw przemysłu spożywczego w Polsce. [Change of the behaviour as a determinant of forming segmentation strategy for companies in food industry in Poland] Warszawa: Wyd. SGGW, s. 122. Szwacka, J, Chudzian, J. (2007). Lojalność jako determinanta silnej marki na rynku przetworów mleczarskich [Loyalty as determinants of strong marks on dairy market] (s.309-318). W: S. Makarski (red.) Marketingowe mechanizmy kształtowania lojalności. [Marketing mechanisms of forming of loyalty] Rzeszów: Wydawnictwo Uniwersytetu Rzeszowskiego. Żelazna, K., Kowalczuk, I., Mikuta, B. (2002). Ekonomika konsumpcji. Elementy teorii. [Economics of consumption. Elements of theory]. Warszawa: Wyd. SGGW, s. 152-157. W, s. 152 -157.