Retailer acceptance of a new low-unit premium whole-spice brand: A product acceptance model (PAM) analysis in the kirana trade channel of west Hyderabad

Introduction

India occupies a unique and dominant position in the global spice economy, cultivating more than 75 spice varieties across approximately 4.68 million hectares and producing 11.99 million tonnes annually, accounting for nearly 75 per cent of world spice production (Spices Board of India, 2024-25) [1] . The Indian spice sector, valued at over USD 4.72 billion in annual exports, supports the livelihoods of millions of farmers, traders, and processors, and spices remain deeply embedded in the country's cultural, agricultural, and economic fabric. India's spice export value grew from USD 3,000 million in 2020-21 to USD 4,723 million in 2024-25, a compound annual growth rate of approximately 12 per cent, with the United States, China, the UAE, Bangladesh, and Thailand among the leading export destinations. Alongside this export growth, the domestic premium market for branded spice products has expanded steadily in urban India, driven by rising disposable incomes, increased health consciousness, and consumer preference for quality-assured, hygienically packaged food products. Within this context, low-unit-premium packaging -the sale of branded, quality-certified whole spices in small, affordable pack sizes typically priced between ₹5 and ₹30 -has emerged as a significant strategy for reconciling premium positioning with the price sensitivity of mass urban and semi-urban markets. Low-unit packs are argued to reduce the per ceived financial risk of trial purchase and to align naturally with the small, frequent buying habits of kirana-store customers (Balasubramanian et al., 2018) [2] . The West Zone of Hyderabad -comprising Kondapur, Kukatpally, KPHB, Gachibowli, Madhapur, Miyapur, and Lingampally -is one of the most commercially dynamic fast-moving consumer goods (FMCG) trading corridors in the city, combining a dense concentration of IT and technology-sector employment with a layered demand structure spanning upper-middle-income professionals, middle-class families, and budget-conscious households. This socio-economic diversity, along with a dense network of traditional kirana retail outlets, makes the zone a suitable setting to study trade-channel acceptance of a new premium whole-spice brand. Company X, a sub-brand of Honey Naturals headquartered in Kondapur, is an emerging manufacturer and distributor of premium whole spices -principally black pepper, green cardamom, and cloves -sold in small, affordable, hygienically sealed packs. As the company plans its market launch in the West Zone, it requires an empirically grounded understanding of the competitive landscape, retailer preferences, and trade-level willingness to stock its products. However, while the premium-branded spice segment in India is growing rapidly, the specific dynamics of this market at the kirana-retail level -including retailers' awareness, stocking behaviour, and psychological readiness to adopt a new brand -remain empirically understudied. Technology-acceptance-derived frameworks have received limited academic attention in the Indian spice-retail context for low-involvement FMCG trade-channel decisions. Against this background, the present study was undertaken with four specific objectives: (i) to analyse the competitive scenario and market segmentation of whole spices in the West Zone of Hyderabad; (ii) to examine kirana retailers' preferences for low-unit premium wholespice packs; (iii) to assess retailers' acceptance of stocking Company X's products using an adapted Product Acceptance Model; and (iv) to identify effective launch strategies for low-unit whole spices in small retail outlets. The study is guided by the hypothesis that retailers are willing to stock the firm's low-unit-premium whole-spice packs (H 1 ), against the null hypothesis that they are not (H 0 ).

Conceptual framework: the Product Acceptance Model

The study's assessment of retailer acceptance draws on the Product Acceptance Model (PAM), an adaptation of Davis's (1989) [3] Technology Acceptance Model (TAM) to the FMCG trade-channel context. While TAM was originally developed to explain individual users' acceptance of information technology systems, its underlying logic -that a stakeholder's belief in the usefulness and ease of adopting an innovation shapes attitude, which in turn shapes behavioural intention and, ultimately, actual adoption behaviour -transfers naturally to a kirana retailer's decision to stock a newly introduced premium product. The PAM framework used in this study comprises five sequentially linked constructs, each measured on a five-point Likert scale (1 = Strongly Disagree, 5 = Strongly Agree) except the final construct: Perceived Usefulness (PU) -whether stocking the brand is expected to improve sales and margins; Perceived Ease of Use (PEOU) -whether stocking and selling the product is expected to be free of difficulty; Attitude Toward Adoption (ATT) -the retailer's overall evaluative orientation toward stocking the brand; Behavioural Intention (BI) -the expressed intention to stock the product in the near term; and Actual Brand Adoption Behaviour (ABAB) -the concrete, categorically measured decision to place or commit to an order. Within this framework, PU and PEOU are conceptualised as antecedents of ATT; ATT, in turn, predicts BI; and BI is treated as a proximate -though not deterministic -predictor of ABAB, which also reflects the influence of external contextual factors such as trade margin, promotional support, and competitive pressure. This chain of relationships forms the analytical backbone of Section 4.4.

Materials and Methods

Research design

The study adopted a descriptive research design, appropriate for describing retailers' existing awareness, preferences, and stocking intentions regarding a newly introduced brand without experimental manipulation of variables. The design combined primary data collected directly from retailers with secondary data from official and industry sources, and supplemented it with PAM-based statistical analysis to examine the psychological antecedents of trade acceptance.

Study area and sampling

The study was conducted in the West Zone of Hyderabad, Telangana, purposively selected because Company X is operationally headquartered in Kondapur within this zone, because the zone represents one of the highest concentrations of FMCG retail activity in the city, and because its diverse socio-economic composition supports representative findings across consumer segments. Data collection took place from the third week of March 2026 to the third week of June 2026. The study employed a multi-stage purposive sampling procedure. In the first stage, five major market clusters within the West Zone -Kondapur Kukatpally, KPHB, Miyapur and Lingampally -were purposively selected for their concentration of retail outlets and socioeconomic diversity. In the second stage, 20 kirana retailers were selected from each cluster using convenience sampling during active trading hours, yielding a total sample of 100 retailers. Retailers operating for less than six months, or not stocking any spice products, were excluded to ensure response relevance.

Data collection

Primary data on retailer profiles, brand awareness, stocking behaviour, and perceptions of the PAM constructs were collected through personal interviews using a structured, pre-tested interview schedule administered at respondents' business premises. The schedule comprised two sections: a socio-demographic and business-profile section, and a section measuring the PAM constructs (PU, PEOU, ATT, BI, ABAB) on a five-point Likert scale (1 = Strongly Disagree, 5 = Strongly Agree), together with open-ended items on competitive brands, expectations of new FMCG brands, and preferred launch strategies. The instrument was pre-tested on a pilot sample of 10 retailers before finalisation. Secondary data were drawn from Spices Board of India and Directorate of Arecanut and Spices Development publications, Ministry of Commerce and Ministry of Agriculture reports, industry and trade sources, Company X records, and peer-reviewed literature on agribusiness marketing and consumer behaviour.

Analytical tools

Descriptive statistics (frequencies, percentages, means, and standard deviations) were used to characterise respondents' demographic and business profiles and the distribution of responses to the PAM constructs. Garrett's ranking technique converted retailers' ordinal rankings of brand-choice factors and trade-promotion preferences into comparable mean scores. Pearson product-moment correlation analysis examined bivariate relationships among the five PAM constructs, and multiple linear regression was used to test which of the four antecedent constructs -PU, PEOU, ATT, and BI -significantly predicted retailers' Actual Market Acceptance (AC), specified as:

where Y (AC) is the dependent variable, β 0 is the constant, β 1 -β 4 are standardised regression coefficients for each predictor, and ε is the error term. All variables were standardised before estimation, and Actual Market Acceptance was operationalised as an ascending fourpoint ordinal composite derived from retailers' trial-order status (No = 1, Undecided = 2, Planning within a month = 3, Already placed an order = 4).

Results

Demographic and business profile of respondent retailers

All 100 respondents were kirana or general-store retailers, equally distributed across the five sampled market zones (20 each), a balanced design intended to prevent findings from being skewed by any single locality. Trade experience was fairly evenly spread: 38 per cent of retailers reported 5-10 years of experience in the FMCG or spice trade, while 31 per cent each reported 2-5 years and more than 10 years of experience. This mix captures the perspectives of both established traders, who can benchmark a new entrant against incumbent brands, and newer retailers, who may be more receptive to experimenting with new product lines.

Competitive scenario and market segmentation

All 100 sample retailers reported stocking cloves, black pepper, and cardamom, confirming that these are universally available whole spices in West Zone kirana outlets. The market included distinct competing brands or packaging types, spanning Grade A, B, and C quality tiers at the common ₹10 price point. A clear trade-off between quality grade and quantity supplied was observed: Grade A brands (e.g., Sri Subramanyam, Omni Gold, Manish Brand) offered smaller quantities of superior quality, while Grade C brands (e.g., Prince, local transparent packs, Telangana Spices) offered larger quantities at comparatively lower quality -for example, Sri Subramanyam supplied 4.0 g of cloves, 5.0 g of black pepper, and 1.7 g of cardamom per ₹10 pack, compared with Prince's 5.5 g, 6.0 g, and 2.5 g respectively. Notably, none of the eleven identified competitors offers a distinctly branded, nationally recognisable low-unit premium proposition, pointing to an unoccupied competitive space. Customer purchasing behaviour was strongly anchored around small, affordable pack sizes: 75 per cent of retailers reported that customers most frequently purchase 3-5 g packs of cloves, and 60 per cent reported the same range for black pepper. In comparison, 70 per cent reported that customers prefer sub-3 g packs of cardamom, reflecting its comparatively higher unit value. Lower-income families constituted the largest primary customer segment (47 per cent). Together with budget-conscious households (18 per cent) and price-and value-sensitive consumers, they accounted for 65 per cent of the customer base. Consistent with this, 45 per cent of retailers reported the ₹10 price point as the fastest-selling, and a further 35 per cent reported ₹5, together accounting for 80 per cent of fast-moving packs. Price emerged as the dominant driver of consumer brand choice (Garrett score 75.13), followed closely by quality/purity (65.33). At the same time, packaging attractiveness and origin/grade labelling ranked lowest, indicating that end-consumers in this segment respond most strongly to price and quality fundamentals rather than promotional or aesthetic cues.

Retailer preferences for low-unit premium whole-spice packs

A striking finding was that none of the 100 sample retailers (0 per cent) reported awareness of any existing premium whole-spice brand already offering low-unit packs in their market area -indicating that this specific positioning is presently unoccupied, a clear white-space opportunity, though one that will require retailer and consumer education given the absence of a reference brand.

Retailers expressed relatively high trade-margin expectations for a new premium brand: 40 per cent required a 55 per cent margin, 35 per cent required 50 per cent, and 25 per cent required 40 per cent, with none willing to stock at margins of 30 per cent or below. This closely mirrors the 45-55 per cent margin range currently offered by established brands, indicating that retailers benchmark a new entrant's offer against prevailing trade economics rather than demanding an unusual premium.

On preferred pack price, 45 per cent of retailers favoured ₹10 and 35 per cent favoured ₹5, jointly accounting for 80 per cent of preference -closely mirroring the fastest-selling price bands reported in Section 4.2 and validating the ₹5-₹10 range as the appropriate entry-price band. Among pack-level features, compact size for shelf display, purity/quality certification, tamper-proof/sealed packaging, and printed shelf-life/expiry date were all rated highest (mean = 4.51 on a 5-point scale), ahead of clear origin/grade labelling (4.47). In contrast, retailers rated attractive/branded design lowest (4.08), indicating they value functional trust cues far more than decorative packaging. Regarding shelf velocity, 55 per cent of retailers reported that lowunit packs currently sell within a month and 45 per cent within a week, confirming healthy underlying sales velocity for the format even without a branded premium player. Within PU, the low-unit price point was rated highest for its ability to attract new customer segments (mean = 4.16); within PEOU, ease of ordering and replenishment scored highest (mean = 4.09). On Actual Brand Adoption Behaviour, 47 per cent of retailers reported planning to place a trial order within a month, 24 per cent remained undecided, and 29 per cent indicated they would not order. Among the 47 willing retailers, 46.8 per cent intended to commit initially to 1-3 SKUs, 31.9 per cent to 3-6 SKUs, and 21.3 per cent to more than 6 SKUs, indicating a preference for cautious, low-risk trial adoption. However, Pearson correlation analysis revealed that all inter-construct correlations among PU, PEOU, ATT, BI, and Actual Market Acceptance (AC) were weak in magnitude (|r| < 0.15) and statistically non-significant at the 5 per cent level (all p > 0.15), with the strongest -still weak -association observed between PEOU and AC (r = 0.142, p = 0.159). This result is an important, if cautionary, finding for Company X: it indicates that favourable attitudinal and intentional scores on the PAM constructs did not, within this sample, statistically translate into differences in actual or planned trial-ordering behaviour. Factors not directly captured within the PAM constructs -such as margin certainty, end-consumer brand awareness, and direct trade-promotion incentives -appear likely to play a more decisive role in converting retailer sentiment into firm stocking decisions.

Retailer acceptance of Company X -PAM analysis

Effective launch strategies for small retail outlets

Retailers' ranked preferences for trade promotions, converted into Garrett scores, placed higher margin per unit clearly first (mean score 72.64), followed by free product samples for trial display (63.35) and buy-X-get-Y schemes (60.33); credit terms/deferred payment (37.25), return/buyback policy on unsold stock (35.40), and point-of-sale display material (31.03) ranked lowest as standalone incentives.

Discussion

Together, the findings describe a market opportunity that is both genuine and conditional. On the demand side, the study confirms that Hyderabad's West Zone kirana channel is a price-anchored, valuesensitive environment in which the ₹5-₹10 pack-price band and quality/purity credentials dominate both consumer brand choice (Table 1) and retailer stocking preference (Section 4.3). The complete absence of retailer awareness of an existing branded low-unit premium competitor (Section 4.3) is a rare and valuable finding for a new entrant: it indicates that Company X would not be displacing an incumbent but rather defining a new category within an alreadyproven pack format, since generic low-unit packs already demonstrate healthy shelf velocity (Section 4.3).

On the trade-acceptance side, the PAM analysis offers a more nuanced picture than descriptive statistics alone. Taken at face value, the uniformly favourable mean scores across PU, PEOU, ATT, and BI (Table 2), together with the 47 per cent of retailers already planning a trial order, would appear to offer strong support for the study's alternate hypothesis that retailers are willing to stock the brand. Yet the weak, statistically non-significant correlation (Table 3) and regression results (Table 4) complicate this interpretation considerably. Within this sample, retailers' stated perceptions of usefulness and ease of use did not function as a reliable predictor of their actual or intended ordering behaviour -a pattern that echoes a broader stream of technology-and innovation-acceptance literature noting that attitude-behaviour gaps are common in low-involvement, high-frequency, habitual purchase and stocking contexts, where situational and relational factors can override generalised attitudinal dispositions. This attitude-behaviour gap is consistent with -and partially explained by -the study's other findings. Retailers' overwhelming identification of end-consumer brand-awareness deficits (75 per cent) as their principal concern (Section 4.5), combined with their strong preference for tangible, relationship-based trade support -margin, sampling, POS material, and in-person sales visits (Table 5) -over softer or more passive forms of engagement, suggests that positive sentiment toward a new brand is necessary but not sufficient for conversion into firm orders. In practical terms, retailers appear to be signalling that their favourable disposition is conditional on Company X actively reducing two forms of perceived risk that the PAM does not fully capture as measured constructs: the risk that end-consumers will not recognise or pull the brand off the shelf, and the risk that trade economics will not remain competitive with the 45-55 per cent margin already commanded by established players. These findings have a specific implication for applying TAM-derived frameworks to FMCG trade-channel research. While PAM proved useful descriptively -cleanly separating usefulness, ease of use, attitude, and intention as distinct, individually interpretable dimensions of retailer perception-its predictive power for actual adoption behaviour in this setting was limited. This suggests that future applications of acceptance models in comparable trade-channel contexts may benefit from incorporating explicit margin-certainty and consumer-pull variables as additional predictors, rather than relying on the core TAM constructs alone.

Conclusion and strategic recommendations

Conclusion on the hypothesis

The evidence gathered provides mixed but broadly encouraging support for the study's alternative hypothesis (H 1 ). Mean scores for all four PAM antecedent constructs were comfortably above the scale midpoint, and 47 per cent of retailers expressed a firm intention to place a trial order within a month, together indicating a general willingness among retailers to stock low-unit-premium whole-spice packs. At the same time, the weak and statistically non-significant correlation and regression results show that this favourable sentiment did not translate into a measurable, predictable pattern of actual adoption behaviour within the sample. The null hypothesis (H 0 ) is therefore not fully supported -retailers do show willingness in aggregatebut the meaningful gap between attitude and firm commitment (24 per cent undecided, 29 per cent unwilling) confirms that willingness alone will not be sufficient without targeted trade-level intervention.

Conclusions

The study establishes that the West Zone of Hyderabad presents a genuine, currently unoccupied market opportunity for a low-unit-premium whole-spice brand. Price and quality remain the twin pillars of both consumer brand choice and retailer stocking decisions, with the ₹5-₹10 pack-price band and a 50-55 per cent trade margin emerging as clear benchmarks for market entry. Retailers value functional packaging cues-purity certification, tamper-evidence, shelf-life information, and compact sizing-far more than decorative branding, and they overwhelmingly prefer field-based, relationship-driven trade engagement over passive or digital communication. At the same time, the study highlights an important caution: positive retailer attitudes and intentions did not show a statistically significant relationship with actual or planned adoption behaviour, suggesting that attitudinal readiness is a necessary but not sufficient condition for market success, and that Company X's launch will depend critically on executionlevel factors -consumer-facing brand-awareness generation, assured trade margins, and consistent field-force engagement -that lie outside retailers' initial perceptions alone.

Strategic recommendations

1. Pricing and margin strategy: Anchor the initial product range around ₹10 packs, supported by a ₹5 entry-level option, and offer a trade margin at the upper end of the prevailing 50-55 per cent band to match retailer expectations and remain competitive with established brands.

2. Trade promotion design: Lead the launch trade scheme with a competitive per-unit margin and free trial samples for in-store display -the two highest Garrett-ranked promotion types -supplemented by buy-X-get-Y offers as a secondary lever, while treating credit terms, buyback policies, and POS material as supporting incentives.

3. Consumer awareness building: Invest in localised consumer-facing awareness activities -in-store demonstrations, local advertising, and sampling -in parallel with trade-focused efforts, since lack of end-consumer brand awareness is retailers' single biggest concern.

4. Retailer engagement model: Prioritise a field-force-led go-tomarket approach built around regular, in-person sales-representative visits, supplemented by free POS/branding material and introductory first-order discounts.

5. Packaging and product design: Emphasise functional trust cuesvisible purity/quality certification, tamper-proof sealing, printed shelf-life dates, and compact, shelf-friendly sizing -over purely decorative packaging design.

6. Distribution and delivery: Adopt a demand-responsive, on-demand delivery model as the default, while offering optional weekly service to faster-turnover outlets and monthly service to slower-moving ones.

7. SKU and trial strategy: Launch with a compact initial SKU assortment of one to three core products, aligning with the cautious trial behaviour observed among willing retailers, and expand only after initial sell-through is demonstrated.

8. Conversion of undecided retailers: Design a targeted follow-up and in-store demonstration programme aimed at the 24 per cent of retailers who remained undecided, as this segment represents the most readily convertible swing group.

Taken together, the demographic, competitive, preference, acceptance, and launch-strategy findings converge on a consistent narrative: Company X is entering a market with genuine unmet demand for a credible low-unit premium whole-spice brand and favourable underlying retailer sentiment, but success will depend on translating that sentiment into firm stocking commitments through sustained, fieldbased trade engagement and parallel consumer-awareness investment, rather than on product quality or trade economics alone.

Limitations and scope for further research

The study has several limitations to consider when interpreting and applying its findings. Geographically, it is confined to five market clusters within the West Zone of Hyderabad and may not fully capture the retail dynamics of other zones or of Hyderabad's broader metropolitan area. The sample of 100 retailers, while adequate for the descriptive and PAM-based analytical objectives, may not fully represent the heterogeneity of all kirana retailers, particularly smaller or informally operated outlets not captured through convenience sampling.

The findings reflect market conditions observed during March-June 2026 and may evolve as the competitive landscape and consumer preferences change. Responses on stocking behaviour and margin expectations are self-reported rather than verified through transaction records and may be subject to recall or social-desirability bias.

Finally, the study was undertaken within the time, budget, and resource constraints typical of an academic dissertation, precluding a larger-scale or longitudinal design. Building on these limitations, the study suggests several directions for future research. The study could be extended geographically to other zones of Hyderabad and to comparable FMCG-intensive urban markets in South India to test the generalisability of the pricing, margin, and promotional findings reported here. A longitudinal follow-up tracking actual post-launch sell-through, repeat-order rates, and retailer retention against the baseline PAM scores collected in this study would allow direct empirical validation of the attitude-behaviour gap identified in Section 4.4. It would help determine whether the weak PAM-to-adoption relationship observed here is specific to the prelaunch survey context or a more durable feature of kirana-channel adoption behaviour. Since the present study examined the trade channel exclusively, a complementary demand-side study directly surveying end-consumers on their awareness, willingness to pay, and purchase behaviour for low-unit premium whole spices would provide a fuller, two-sided picture of the market opportunity. Finally, future studies could examine the relative effectiveness of specific trade-promotion instruments -such as sampling programmes versus margin enhancements -through controlled pilot launches across matched retailer groups, generating more definitive causal evidence than the cross-sectional design employed here.

References

1. Spices Board of India. Annual statistical publication and exportimport data of Indian spices. 2024-25.
2. Balasubramanian S, Krishnaswamy R. Low-unit packaging strategies and trial conversion in semi-urban and urban FMCG markets. Journal of Retail and Consumer Marketing (as cited in source thesis). 2018.
3. Davis FD. Perceived usefulness, perceived ease of use, and user acceptance of information technology. MIS Quarterly. 1989;13(3):319-340.
4. Directorate of Arecanut and Spices Development. Area and production statistics of spice crops in India. Government of India. 2024-25.
5. Ministry of Commerce and Industry, Government of India. India's spice export performance reports. 2024-25.
6. Company X. Company records and product profile, Kondapur, Hyderabad. 2026.
7. How to cite this article: Sahithi V, Reddy AS, Radhika P, Dhanalaxmi D. Retailer acceptance of a new low-unit premium whole-spice brand: A product acceptance model (PAM) analysis in the kirana trade channel of west Hyderabad. International Journal of Agriculture Extension and Social Development. 2026;9(9):1069-1074. doi: https://www.doi.org/10.33545/261807