Customer Preference to and Substitution between Commercial Readymade Foods and Homemade Foods: A Case Study in Dhaka City, Bangladesh

Abstract

The present study examines the customer preference patterns and degree of substation between commercial ready-made traditional foods ((CRTF) versus homemade traditional foods (HTF) in Dhaka City, Bangladesh. The present study is based on responses of 450 customers (190 male and 160 female) chosen randomly from 28 traditional ready-made food sellers. Non-traditional fast-food sellers are not considered. Variations across demographic features have been considered. However, variations across locations or geo-prism effects (such as between Dhaka City and a rural area) have not been considered in the present study. Instead of cross-price elasticity, the study measures the price-adjusted substitution effect which is moderate (1.20). Therefore, relative price is a moderately important determinant factor influencing consumer preference patterns. On the other hand, the price elasticity of demand for CRTF is very low (0.90). The study also finds that the Income elasticity of CRTF is 1.267. The additional major findings of the study are: (1) male customers buy CRTF more than female customers; (2) household income level positively induces to prefer CRTF; (3) poverty of time also play important role in forming preference patterns, particularly in case of busy, professional consumers; (4) bulk-breaking is a weak reason to prefer CRTF; (5) the current marital status contributes to forming the choice patterns; (6) the level of Household Income; and finally (7) Indolence is found to be an important determinant factor. However, the present study can’t find the true academic backgrounds of the respondents.