PANTALOON RETAIL INDIA (LIMITED)

PROJECT REPORT
CONSUMER INTRECTION &
CONSUMER SERVICE
KRISHNA PAL VERMA
8/27/2009
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Guided By

Mr. UMESH PANDAY,’DM’

Submitted by

KRISHNA PAL VERMA

JPPGDM-080121
Contect no.-09452967144
J.P. Institute of Management
Meerut

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Board of directors
Mr. Kishore Biyani, Managing Director
Kishore Biyani is the Managing Director of Pantaloon Retail (India)
Limited and the Group Chief Executive Officer of Future Group. To
know more.

Mr. Gopikishan Biyani, Wholetime Director

Gopikishan Biyani, is a commerce graduate and has more than

twenty years of experience in the textile business.

Mr. Rakesh Biyani, Wholetime Director

Rakesh Biyani, is a commerce graduate and has been actively
involved in category management; retail stores operations, IT and
exports. He has been instrumental in the implementation of the
various new retail formats.

Mr. Vijay Kumar Chopra, Independent Director

V.K.Chopra is a fellow member of The Institute of Chartered

Accountants of India (ICAI) by profession and is a Certified
Associate of Indian Institute of Bankers (CAIIB). His banking
career spans over 31 years and he has served senior management
positions in Central Bank of India, Oriental Bank of Commerce,
SIDBI, Corporation Bank and SEBI.

Mr. Shailesh Haribhakti, Independent Director

Shri Shailesh Haribhakti, is a Chartered Accountant, Cost

Accountant, and a Certified Internal Auditor. He is the Deputy
Managing Partner of Haribhakti & Co., Chartered Accountants and
past president of Indian merchant Chambers. He is on the Board of
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 several Public Limited Companies, including Indian Petrochemicals
Corporation Ltd., Ambuja Cement Eastern Ltd. etc. He is on the
Board of Company since June 1, 1999.

Mr. S Doreswamy, Independent Director

S. Doreswamy, is a former Chairman and Managing Director of

Central Bank of India and serves on the board of DSP Merrill Lynch
Trustee Co and Ceat Limited among others.

Dr. D O Koshy, Independent Director

D. O. Koshy, holds a doctorate from IIT, Delhi and is the Director of

National Institute of Design (NID), Ahmedabad. He has over 24
years of rich experience in the textiles and garment industry and
was instrumental in the setting up of NIFT centres in Delhi,
Chennai and Bangalore. He is a renowned consultant specializing
in international marketing and apparel retail management.

Ms. Bala Deshpande, Independent Director

Bala Deshpande, is Independent Director, Pantaloon Retail (India)

Ltd. and also serves on the boards of Deccan Aviation, Nagarjuna
Construction, Welspun India and Indus League Clothing Ltd, among
others.

Mr. Anil Harish, Independent Director

Anil Harish, is the partner of DM Harish & Co. Associates &

Solicitors and an LLM from University of Miami. He also serves on
the board of Mahindra Gesco, Unitech, IndusInd Bank and Hinduja
TMT, among others.

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Specialized besinesses

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CONTENTS

• Acknowledgement
• Preface
• Executive Summary
• Objective of the project
• Research Methodology
• Company Profile
• Marketing Plan
• Management Hierarchy
• Findings And Analysis
• Limitation
• Suggestions/Recommendations
• Bibliography
• Questionnaire

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 ACKNOWLEDGEMENT
A work is never a work of an individual. We owe a sense of
gratitude to the intelligence and co-operation of those people who
had been so easy to let us understand what we needed from time
to time for completion of this exclusive project.
We want to express our gratitude towards Mrs. Ismeet
dheer ,HR, Pantaloons :: DT City Center:: Delhi ,for giving us an
opportunity to do this project. Last but not the least, we would like
to forward our gratitude to Mr.Avnish pariyar, ’store
head’,Mr.Umesh Panday,’DM’ Internet & J.P. Institute of
Management College. Meerut. who always endured us and
stood by us and without whom we could not have envisaged the
completion of our project.

KRISHNA PAL
VERMA
PGDM
(2nd YEAR)

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 PREFACE

Business,theworld over are struggling to suction

conpetitiveness in a rapidly globling economy. The boundaries of
traditional trade partner are getting dissolved and emerging
market present future opportunities as well as new rivals. In such
competitive global environment, it is imperative for every
organization to generate the highest level of customer
satisfaction. To attain these objectives, it has become necessary
for the organization to look for the high skilled and employee
according to job.
These days, corporate across the world are facing a difficult
task of “Customer interaction”. Retaining its best employees, a
company can improve customer satisfaction, product sales etc. in
other words a business can be improve in all over direction.
Future group is a reputed company; future group brand store
such as life style, shoppers stop, etc..Pantaloons store sailing
many home brand international brand for man casuals and
formals and also for kids and ladies. During working on this
project I have observed how the pantaloon store because they

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perform our job very honestly and they maintain the section
perfectly.

Major Milestones
19 Company incorporated as Manz Wear Private Limited.
87 Launch of Pantaloons trouser, India’s first formal trouser
brand.
1 Launch of BARE, the Indian jeans brand.
991
19 Initial public offer (IPO) was made in the month of May.
92
1 The Pantaloon Shoppe – exclusive menswear store in
994 franchisee format launched across the nation. The company
starts the distribution of branded garments through multi-
brand retail outlets across the nation.
19 John Miller –Formal shirt brand launched.
95
1 Pantaloons – India’s family store launched in Kolkata.
997
20 Big Bazaar, ‘Is se sasta aur accha kahi nahin’ - India’s first
01 hypermarket chain launched.

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 2 Food Bazaar, the supermarket chain is launched.
002
20 Central – ‘Shop, Eat, Celebrate In The Heart Of Our City’ -
04 India’s first seamless mall is launched in Bangalore.
2 Fashion Station - the popular fashion chain is launched
005
aLL – ‘a little larger’ - exclusive stores for plus-size
individuals is launched
20 Future Capital Holdings, the company’s financial arm
06 launches real estate funds Kshitij and Horizon and private
equity fund Indivision. Plans forays into insurance and
consumer credit.
Multiple retail formats including Collection i, Furniture
Bazaar, Shoe Factory, EZone, Depot and
futurebazaar.com are launched across the nation.
Group enters into joint venture agreements with Generali.

What is Pantaloons ?
Celebrate the Fresh Look, Fresh Feel & Fresh Attitude at
Pantaloons Fresh Fashion !
Fashion is all about the now. Why, then should people not
see a fresh look every time they walk into a Pantaloons
store? That is the thought behind 'Fresh Fashion'. An idea
that has captured the imagination of young India. With a
focus on the youth of today, Pantaloons offers trendy and
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hip fashion that defines the hopes and aspirations of this
demography.
Pantaloons Fresh Fashion stands out as a fashion
trendsetter, on the lines of how fashion is followed
internationally. The ‘look’ and ‘what’s in’ today for the
season is sacrosanct.
Pantaloons takes its promise of 'fresh fashion' very
seriously making available to its customers the latest in
fashion every week!
All Pantaloons stores reflect the new ideology -- Fresh
Feeling, Fresh Attitude, Fresh Fashion. The stores offer
fresh collections and are visually stimulating thanks to
appealing interiors and attractive product display!
The first Pantaloons was opened in Gariahat in 1997. Over
the years, it has undergone several transitions. When it
was first launched, this store mostly sold external brands.
Gradually, it started retailing a mix of external brands
while at the same time introduced its own private brands.
Initially positioned as a family store, it finally veered
towards becoming a fashion store with an emphasis on
'youth' and clear focus on ‘fresh fashion’.
Today, the fashion store extends to almost all the
major cities across the country. Pantaloons has established
its presence with stores not just in the metros, but also in
smaller towns.

Pantaloons stores have a wide variety of categories like

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casualwear, ethnicwear, formalwear, partywear and
sportswear for Men, Women and Kids.

Images Fashion Forum 2009

Most Admired Fashion Group Of The Year - Future Group
Most Admired Private Label - Pantaloons, the lifestyle
format
Critics Choice For Pioneering Effort In Retail Concept
Creation - Central
Coca-Cola Golden Spoon Awards 2009
Most Admired Food & Grocery Retailer Of The Year
Most Admired Food Court
Most Admired Food Professional
2008
Indian Retail Forum Awards 2008
1. Most Admired Retail Company of the year - Future Group
2. Retail Face of the Year - Kishore Biyani
3. Best Retailer Of The Year ( Hypermarket) - Big Bazaar
Future Group was awarded the Most Admired Retail Company
of the year by the Indian Retail Forum at a glittering ceremony
organised in Mumbai. Mr Kishore Biyani also won Retail Face
of the Year.

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 India Retail Forum (IRF) is a platform for intellectual insights
and information exchange for the retail business in the Indian
subcontinent. The forum presents the business of retail in the
region to a global audience, with the express aim of facilitating
understanding about and encouraging investment in this
massive marketplace.
Big Bazaar, the value format of Future Group bagged the Best
Retailer Of The Year ( Hypermarket).
The INDIASTAR Award 2008
1. Food Bazaar: Best Packaging Innovation
Food Bazaar bagged the INDIASTAR Award for Best Packaging
Innovation in India, for its private label brand Fresh And Pure
Chakki Atta.
INDIASTAR Award is a biennial event which aims to promote
and encourage excellence in packaging design, innovation and
technology. The contest was established in 1972 and is
considered as the most popular and premier event for India’s
packaging fraternity. This year there were around 357 entries
and the participants had to submit a sample of their designs
for selection.
With this award, Pantaloon Retail (India) Limited becomes the
first Indian Retailer to win the prestigious INDIASTAR Award.
Retail Asia Pacific 500 Top Awards 2008
Gold Winner -Top Retailer 2008 Asia Pacific
Retail Asia Publishing Pte, the institutor of these awards, aims
to set a platform that appraise, raises and recognizes the
development and growth of retailing throughout the Asia
Pacific region.

Coca-Cola Golden Spoon Awards 2008

1. Most Admired Food & Grocery Retail Visionary of the Year:
Kishore Biyani
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 2. Most Admired Food & Grocery Retailer of the Year –
Supermarkets: Food Bazaar
3. Most Admired Food & Grocery Retailer of the Year -
Hypermarkets: Big Bazaar
4. Most Admired Retailer of the Year - Dynamic Growth in
Network Expansion across Food, Beverages & Grocery:
Future Group
5. Most Admired Food & Grocery Retailer of the Year -
Consumer's Choice: Big Bazaar
The Coca-Cola Golden Spoon Awards 2008, were given away
for the first time as a culmination of the ‘Food Forum India
2008’ – a two day convention, which saw the participation of
leading brands, retailers & retail support organizations from
across the globe. The awards were presented to honour
enterprise, innovation and achievement in the food retailing
business as a benchmark of excellence.
The Reid & Taylor Awards For Retail Excellence 2008
1. Retail Leadership Award: Kishore Biyani
2. Retail Best Employer of the Year: Future Group
3. Retailer of The Year: Home Products and Office
Improvements: HomeTown
The Reid & Taylor Awards for Retail Excellence are an
important feature of the Asia Retail Congress, Asia’s single
most important global platform to promote world-class retail
practices. These awards are aimed at honouring the best, in
the Asian Retail scenario. India played host to Asia Retail
Congress 2008.

2007
Images Retail Awards
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 Most Admired Retail Face of the Year: Kishore Biyani
Most admired retailer of the year: Large format, multi product
store: Big Bazaar
Most admired retailer of the year: Food and Grocery: Food Bazaar
Most admired retailer of the year: Home & office improvement:
HomeTown
Most admired Retail Company of the year: Pantaloon Retail (India)
Ltd.
1. Images Retail Forum followed strict international benchmarks in
deciding the top honours for Images Retail Awards ’07, with
IRIS as knowledge partner and global consulting firm AT
Kearney as the Process Approver.
National Retail Federation Awards
International Retailer for the Year 2007 – Pantaloon Retail (India)
Ltd
1. The National Retail Federation is the world’s largest retail trade
association with over 1.4 million members in the US and across
the world. Some of the past winners of the award include Metro
AG (Germany), Carrefour (France), Zara (Spain), Boticario
(Brazil) and Ito Yokado (Japan). The award was presented at the
Retail’s Big Show held in January 2007 in New York.
World Retail Congress Awards
Emerging Market Retailer of the Year 2007 – Pantaloon Retail
(India) Ltd
1. The inaugural World Retail Congress held in Barcelona, Spain in
March 2007 attracted over one thousand retail professionals
from over sixty countries. The awards were decided by a
multinational Grand Jury. Winners in other categories included
Inditex, Mall of Emirates, Marks & Spencer and IKEA.
Hewitt Best Employers 2007
Best Employers in India (Rank 14th) – Pantaloon Retail (India) Ltd
1. Leading human resources consultancy, Hewitt Associates
conducts an annual survey of the best employers in India, as
part of its global initiative. It is based on CEO interview, People
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 Practices Inventory and Employee Opinion Surveys. Pantaloon
Retail became the only retailer to feature among the twenty-five
best employers in India.
PC World Indian Website Awards
Best Indian Website In The Shopping Category - Futurebazaar.com
1. PC World, a leading consumer technology magazine selected the
best Indian websites in various categories based on use of
technology for delivering solutions, information being presented
in an intuitive and concise manner and overall experience aided
by design.
Reader’s Digest Trusted Brands Platinum Awards
Trusted Brands Platinum Award (Supermarket Category) – Big
Bazaar
1. The Reader’s Digest awards are based on surveys done among
consumers by independent research agency, Nielsen Media
Research. This is the second consecutive time Big Bazaar has
won this award.
2006
Retail Asia Pacific Top 500 Awards
Asia Pacific Best of the Best Retailers – Pantaloon Retail (India) Ltd
Best Retailer in India – Pantaloon Retail (India) Ltd
1. The Retail Asia publication in association with EuroMonitor and
KPMG honours the best retailers in 14 countries across the Asia
Pacific region. The awards were presented in Singapore in
October, 2006.
Asiamoney Awards
Best Managed Company in India (Mid-cap) – Pantaloon retail
(India) Ltd.
1. The Asiamoney publication conducts a poll among fund manages
and investors and does a quantitative analysis of financial
performance to select best managed companies in Asian
countries.
Ernst & Young Entrepreneur of the Year Award

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 Ernst & Young Entrepreneur of the Year (Services) – Kishore Biyani
1. Considered to be one of the most prestigious business awards in
India, a jury comprising leading names in Indian business
selected the winners based on courage, creativity, passion,
endurance and vision.
CNBC Indian Business Leaders Awards
The First Generation Entrepreneur of the Year – Kishore Biyani
1. Organized by CNBC-TV18, the twelve awardees in various
categories are decided by a high profile jury, along with
research partners - The University of Chicago Graduate School
of Business, Development Dimensions International (DDI) and
AC Neilson ORG MARG.
2. Lakshmipat Singhania – IIM Lucknow National Leadership
Awards
Young Business Leader – Kishore Biyani

The award recognizes and honors individuals who have

contributed consistently to the betterment of our country
through their pursuit of excellence. The awards were presented
in New Delhi by the Prime Minister Dr. Manmohan Singh in
December, 2006.

Images Retail Awards

Best Value Retail Store – Big Bazaar
Best Retail Destination – Big Bazaar
Best Food & Grocery Store – Food Bazaar
Retail Face of the Year – Kishore Biyani
1. The Images Retail Awards are decided through a nationwide
consumer & industry poll and nominations followed by
performance assessment by team of analysts and jury.
Readers’ Digest Awards
Platinum Trusted Brand Award - Big Bazaar
1. The Reader’s Digest awards are based on surveys done among
consumers by independent research agency, Nielsen Media
Research.

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 CNBC Awaaz Consumer Awards
Most Preferred Large Food & Grocery Supermarket – Big Bazaar
1. Conducted in association with AC Nielsen-ORG Marg across 21
major cities, nearly 10,000 consumers were asked to choose
their most preferred brands.
Reid & Taylor Awards for Retail Excellence
Retail Entrepreneur of the Year – Kishore Biyani
2005
Images Retail Awards 2005
1. PRIL- Most Admired Retailer of the Year
2. Food Bazaar- Retailer of the Year(Food and Grocery)
3. Big Bazaar-Retailer of the Year(Value Retailing)
4. Central-Retail Launch of the Year
Voted by Business Today magazine as one of the
1. Top 20 Companies in India to watch in 2005
2. India’s most investor-friendly companies in the top 75
3. India’s Biggest wealth creators in the top 100
DAKS London
1. PRIL- Brand Builder of the Year
2004
Images Retail Awards 2004
1. PRIL- Most Admired Retailer of the Year
2. Food Bazaar- Retailer of the Year(Food and Grocery)
3. Big Bazaar-Retailer of the Year(Value Retailing)
4. Central-Retail Launch of the Year
Reid & Taylor and DLF Awards
1. PRIL - Retailer of the year
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 2003
Indian Express Award
1. PRIL –Marketing Excellence and Excellence in Brand Building
Indusland Bank (India Brand Summit)
1. PRIL - Excellence in Brand Building

CONSUMER BUYING BEHAVIOR

Understanding the buying behavior of the target market is the
essential task of marketing management under marketing concept.
The consumer market consists of all the individuals and households
who buy or acquire good and services for personal consumptions. The
buying behavior tries to find out the answers for the questions, who
buys? How do they buy? Where do they buy? Do they buy?
(A)FACTORS INFLUENCING CONSUMER BUYING BEHAVIOR
There are four major factors that influence the buying behavior such
as cultural factors, social factors, personal factors, and psychological
factors.
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i. CULTURAL FACTORS: Culture is the most fundamental
determinant of a person wants and behavior. Values,
perceptions, preferences, and behavior are the main variable
under culture of an individual. Each culture contains sub-culture
like nationality, religious group, geographical area, and linguistic
divisions etc.
ii. SOCIAL FACTORS: A consumer behavior is also influenced by
social factors such as the consumer reference group family and
social roles and status.
iii. PERSONAL FACTORS: A buyer decision is also influenced by
his or personal characteristics, notably the buyers age, lifestyle,
occupation, economic circumstances etc.
PSYCHOLOGICAL FACTORS: a person buying choice is also
influenced by four major psychological factors such as motivation,
perception, learning belief and attitudes.
(B) BUYING DECISION PROCESS
It includes buying roles, types of buying and steps in buying process.
I. BUYING ROLE
The buying role could be classified into four parts. These are initiator,
influencer, decider and buyer.
II. TYPES OF BUYING BEHAVIOR
Consumer decision taking varies with the type of buying decision.
There are four types buying behavior such as Complex buying
behavior, Habitual buying behavior, Variety seeking buying behavior.
III. STAGES IN BUYING DECISION PROCESS

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Here are five stages in buying decision process namely problem
recognition search, evaluation of alternatives purchase decision and
past purchase behavior.
NEED RECOGNITION
The buying process starts with the buyer’s recognition of a problem of
need. The buyer senses a difference between his actual state and
desired state.
INFORMATION SEARCH
There are different sources from where a consumer can gather
information like personal sources commercial sources, experimental
sources.

EVALUATION OF ALTERNATIVES
After gathering information about different products the customer will
be in a fuss as to choose which product among the mainly alternatives
consumer usually evaluate the alternatives on traditional basis, on the
basis of utility function etc. from the many alternative consumers at
last choose the best one for him.
PURCHASE DECISION
A consumer who decides to execute purchase intention will be making
up to five purchase decisions.

POST PURCHASE BEHAVIOR

After purchasing the product and services the consumer will
experience some level of satisfaction or dissatisfaction with the
product and services that will influence subsequent behavior. If
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consumer is satisfied he may show the probability of buying the
product the next time, satisfied customer will say good thing about
the product, proving the statement that "satisfied customer is the best
advertisement.” A dissatisfied customer may take some action against
it. They may try to reduce the dissonance by abandoning returning the
product.
Understanding consumer needs and buying process is the foundation
of any company. By understanding how buyers go through problem
recognition, information search evaluation of alternatives, the
purchase decision and post purchase behavior marketers can pick up
many clues as to how to meet buyers need.

LITERATURE REVIEW
Marketing
Marketing is a societal process by which individuals and groups
obtain what they need and want through creating, offering and freely
exchanging products and services of value with others or other wise it
is the process of planning and executing the conception, pricing,
promotion and distribution of ideas, goods, services to create
exchanges that satisfy individual and organizational goals.
Marketing Strategy
Marketing strategy is a set of objectives, policies and rules that leads
the company's marketing efforts. It is the marketing approach to
accomplish the bread objective of the marketing approach to
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accomplish the bread objective of the marketing plan. The various
process of marketing strategy are given below.
1. Selecting largest markets segmentation
2. Positioning
3. Product
4. Price
5. Place
6. Promotion
7. Research and development
8. Marketing research

Market segmentation and selecting target market

It is an effort to increase a company's precision marketing. The
starting point of any segmentation discussion is mass marketing. In
mass marketing, the seller engaged in the mass production, mass
distribution and mass promotion of one product for all buyers. Market
segment consists of a large identifiable group within a market with
similar wants, purchasing power geographical location, buying
attitudes or buying habita. It is an approach midway between mass
marketing and individual marketing. Through this the choice of
distribution channels, and communicaton channels become much
easier. The researchers try to form segments by looking at consumer
characteristics; geographic, demographic, and psychographic. After
segmenting the market then target market selected.

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2. Positioning: - The positioning is a creative exercise donw with an

existing product. the well known products generally hold a distinctive

position in consumer's minds. The positioning requires that every

tangible aspect of product, price, place and promotion must support

the chosen positioning strategy. Company should develop a unique

selling proposition (USP) for each brand and stick to it, PPL

consistently promotes its DAP fertilizer by Higher yield at lower cost.

As companies increase the number of claims for their brand, they risk

disbelief and a loss of clear positioning. In general a company must

avoid four major positioning errors. Those are under positioning over

positioning, confused positioning and doubtful positioning.

3. Product: - A product is any offering that can satisfy a need or

want. The major types of basic offerings are goods, services,
experiences, events, places, properties, organizations, information
and ideas. The company gives more importance in quality, packaging,
services etc. to satisfy the customers. The products has it's life cycle.
The product strategies are modified in different stages of product life
cycle.
4. Price: - It is the most important aspect in company's point of view.
Price of the product will be decided by the company according to the
competitor's price.

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5. Place: - This plays a major role in the entire marketing system.
The company emphasis on it's distribution network. Proper
distribution network gives proper availability of the product.
6. Promotion: - Promotion is the one of the major aspects in
marketing strategies. By adopting various promotional activities the
company create strong brand image. It also helps in increasing the
brand awareness. It includes advertising, sales promotioins and
public relations etc.
7. Research and Development: - After testing, the new product
manager must develop a preliminary marketing strategy plan for
introducing the new product in to the market. The plan consists of
three parts. The first part describes the target market's size,
structure and behavior. The second part out lines the planned price,
distribution strategy and marketing budget for the first year. The
third part of the development describes the long run sales and profit
goals and marketing mix strategy over time.
MARKETING MIX
Target Market

Product Price Promotion Place

Product List price Sales Channels
variety promotion
Quality Discounts Advertising Coverage
Design Allowances Sales forces Assortments
Features Payment Public relation Locations

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 period
Brand Credit Direct Inventory
name terms marketing
Packaging Transport
Sizes
Services
Warrantie
returns

MARKETING STRATEGY
Marketing is not Euclidean geometry a fixed system of concept.
Rather marketing is one of the dynamic fields with in the
management arena. The market faces continually a new challenge
everyday and companies must respond to it positively. Therefore it is
not surprising that new market idea keep surfacing to meet new
market place challenges.
The market process is applicable to more than goods and
services. Anything related to market including ideas, events, policies,
prices and personalities comes under market strategy. However it is
important to emphasize opportunity in the market through market
strategy.
Following strategies adopted by the organization.
A strong quality of the product and customer satisfaction:
Customers always believe in good quality product. in my survey I
found that in percentage term more people is quality conscious and

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not price conscious. Customer satisfaction is very important part of
the organization that at any cost they have to fulfill.
A growing relationship with customer and customer
retention:
Nowadays a good relation with customer is very important for
organization. Sale is totally depending on the relation with the
customers. Customer's retention is also a major aspect for growing
business. It means keep the old customer and try to make new
customer.
Focus on competitors activity:
Every organization should must be careful about it's competitors
step, because they can disturb the growing sales process of the
organization.
A growing emphasis on global thinking and local marketing
planning:
Companies are increasing by pursuing market beyond their
borders. When they enter other countries they must follow the
tradition of that country and also they make plan for local market that
which type of product has more demand and how can it run in the
market.

Promotional Strategy
Under the market strategy promotional idea is very important.
Organization provides some schemes or rebates to retailers or
consumers. They make advertisement according to convenient of the
people and the feature of the product.
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 So on the basis of marketing strategy a organization runs in the
market. It is several types of which makes helpful to increase sales
and turnover of the organization.

RESEARCH METHODOLOGY:

The research for the study comprised of:

A. SECONDARY RESEARCH:
A comprehensive secondary research was carried out to find
out the various factors that affect the buying decisions of the
consumers in a department store. The main objective of this
study was to analyze how much significant effect each of these
factors has on conversion rate of a store and also their influence
on the buying decisions of the consumers.
It consisted of:

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 – Searching secondary data sources, which included books,
journals, magazines, Internet, library, etc.
– Research and analysis of the secondary data collected from
the store to determine the trends.

B. PRIMARY RESEARCH

The research was carried out in two stages:

1. Tracking the customers’ movements in the store.

The movement of around 100 customers’ in the store was

tracked on the store map (obtained form the store). This
was carried out in a structured, disguised manner to
understand and evaluate:
 The high, medium and low traffic zones in the store.
 The purchases and conversion rate of each section.
 Customers’ movement in the store and the differences in
the behaviors of men/women/ kids and their different
shopping preferences.
 The retail settings that affect the buying decisions.

2. Customer survey through a structured, non-disguised

questionnaire.

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 The questionnaire was prepared on the basis of in-dept
interviews with the store customers and management staff.
It was test marketed on a few consumers and then the final
draft was made.

SAMPLING PLAN
PLAN::

• Non Probability Convenience sampling method was used

to select the customers.
• The sample size was 100, a number derived judgmentally.

• Analytical tools used: SPSS Software and Microsoft Excel.

2.4a LIMITATIONS OF THE SURVEY:

 The research and analysis of the project was conducted

over a period of three months. The scope of this project
has therefore been limited by the time available for the
same.
 The study was conducted on the floor and hence was
limited to the customers visiting the store.
 Non Probability Convenience Sampling, which has been
used in the research, has its own sets of limitations,

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 though an effort was made to be as rational as possible
while pursuing this research.

 All the limitations and disadvantages that attach

themselves to any effort in the collection, tabulation and
analysis of the primary data apply to this project as well.
This would include the selection error, the measurement
error, interviewer effect, non- response rate, and data
login error of the analyst.

2.4b SCOPE OF THE STUDY

• The study is limited to the customers visiting the store from the
entire NCR region.
• The study is also limited to a particular store only.

SECONDARY RESEARCH
3.1 SCIENCE OF SHOPPING

The science of shopping is a hybrid discipline, part physical science

and part social science and only part science at all because it is also
an art. It is a practical field concerned with providing information that
can improve the retailer's edge and the odds of making a wrong
decision. Much of the value of the science lies in the ability to go

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beyond collecting data and making educated guesses about what it
means and how best to respond.

1
“A recent study discovered that 75-80 per cent of shoppers
often leave a store without any purchases due to the inability to
find products or differentiate between them.” Here comes the
two-fold challenge. How to connect with the customer and at the same
time grow in a competitive marketplace crowded with similarities at
every level? Since the mass market and universal audience are things
of the past, traditional advertising no longer works to convey a
brand's image with a difference. In search for growth, companies
must think beyond conventional avenues. For most, growth is not
always about square footage expansion but making the most of what
they already have.

The very concept of conversion rate implies that shoppers need to be

transformed into buyers, i.e. when potential customer becomes an actual
customer. Conversion rates vary widely depending on what kind of store or
product we're talking about. In some sections of the supermarket,
conversion rate is probably 100% (dairy or toilet paper). In an art gallery
full of paintings, probably the conversion will be less than 1%. Conversion
rate measures what you make of what you have - it shows how well or how
poorly the entire enterprise is functioning.

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3.2 CUSTOMER SERVICE

For a retailer, it costs more to get new customers than to keep the
ones you have. Also the longer you can keep a customer, the more
valuable that customer becomes.Studies done by consultants such as
McKinsey have shown that repeat customers generate over twice as much
gross income than new customers.
2
"Firms that only understand buyer behavior may do a good job of selling
existing products within existing channels of distribution. But firms that
understand consumption behaviors are able to create value with new or
improved products and distribution channels.”

For example, if an apparel retailer wants to find out what types of clothing
its typical customers really want to buy, it might want to get into consumers'
closets, literally. Enlightened retailers might ask women to show them how
they put together their wardrobes -- how they use the fashions they own,
which may span several years. From such an exercise, retailers can learn
how consumers mix and match items, which items they choose to keep in
their closets for many years, and why.

However, many organizations do not allocate the time, or the money, to

educate and train their employees to deliver the service customers want.
Often, the reason is that those organizations don't realize how important
customer service is to their bottom lines.

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Importance of a good customer service:

➢ Educating employees to provide quality service works to an

organization's advantage in many ways. Of primary importance is that
it improves customer retention. By finding out what services
customers want -- and then delivering them -- businesses can develop
and nurture a strong, loyal customer base.
➢ Loyal customers are not only important, they are essential.
3
”Research shows 65 percent of a typical organization's
business comes from current loyal customers.”
Besides making up a base of customers who continue to purchase a
company's products or services, those loyal customers help drive the
company's business by delivering the most powerful and cheapest
form of advertising available: word of mouth. A strong customer
base is the most credible source to potential customers, spreading the
reputation of the business, free of charge, and attracting new customers.

➢ 4
As a customer's relationship with [a] company lengthens, profits rise.
“Customer defections have a surprisingly powerful impact on
the bottom line. It is common for a business to lose 15 to 20
percent of its customers each year. When defections are cut in
half, the average growth rate more than doubles. A five percent
change in rate of retention swings profit increases from 25
percent all the way to 100 percent.”

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 ➢ Bad service has another pitfall: It causes employee turnover.
Studies have shown that employee turnover was inversely
proportional to employee perceptions of the quality of service
provided by their employers. When service is perceived as bad, not
only do consumers not like to patronize the company, but employees
don't like to work for it.
The highest turnover rates are associated with companies possessing the
lowest employee ratings of service quality. That finding was confirmed when
Sears surveyed customers in 771 of its stores. In stores that received
relatively high customer service ratings, 54 percent of the sales force
turned over in a year compared with 83 percent at stores with low customer
service scores.
➢ How we treat customers throughout the year when they
are purchasing or even when they are returning items,
sets the stage for their future business. Contradictions in
consistency will drive them to the competition. You see the gift
at the holidays, is the gift our customers give us by coming back
to show how much they have appreciated us all year long!

➢ Employees are not bad performers, just poorly trained. In

order to have consistent service, employees must have
consistent training on a continual basis. What's more is that they
must be held accountable for their performance on a continual
basis, not just at a once a year review time. Lastly, employees
need to be rewarded consistently so that they realize their
importance in the company. Without them, there would be no
business, now would there?
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 ➢ Treating Customers Well:
We make it difficult for them to buy and then we make it
more difficult for them to bring it back and we wonder why
they choose to shop elsewhere?
Train the employees to have patience to work within store policy
and to do it positively while showing how proud they are of the
store and its products.

PANTALOONS: Fashion by Pantaloons

Pantaloons is the company's departmental store and part of life

style retail format. In fact, PRIL took its very initial steps in the
retail journey by setting up the first Pantaloons store in
Kolkata in 1997. In a short time Pantaloons has been able to
carve a special place for it self in the hearts and minds of the
aspirational Indian customers. The Stores have entire range of
Menswear, Womenswear, Kidswear, Activewear, Accessories,
Cosmetics, Fragrances, Homeware, Jewellery, Toys, Books,
Music, Stationery, Gift, Novelties, etc.
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With 16 stores across the country and an ever-increasing
stable of private brands, Pantaloons - in the coming years is
poised to become a leading fashion trendsetter.

Growth through private labels: A striking characteristic of

Pantaloons has been the strength of its private label
programme. In Pantaloons 70% of apparel sales come from
own labels. John Miller, Ajile. Scottsvile, Lombard, Annabelle,
Honey, Bare are some of the successful brands created by the
company.

Manufacturing: There is a drive for backward integration,

into manufacturing. Pantaloons is a manufacturer retailer.
Manufacturing helps the company plan the products better
depending on what is selling at the stores and also helps better
margin. The company has trouser manufacturing unit in
Tarapur and a denim plant in Goregaon, Mumbai.

Customer Relationship Management (CRM)

CRM is a management approach that seeks to create, develop

and enhance relationships with carefully targeted customers to
maximize customer value, corporate profitability and shareholder
value. CRM leverages information technology (IT) to implement
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relationship-marketing strategies. Already customers are getting
actively involved, either directly or indirectly with production
processes. They make suggestions, they ask for smaller, brighter,
easier-to-use products.

CRM is not a tool that is specific to any industry type, so there is

no one single definition of Customer Relationship Management.
It is up to the organization to formulate one for itself in order to
achieve the CRM goals that it sets for itself. Companies that
have adopted CRM regard every customer as an individual with
specific needs and tailor their services accordingly. Information
Technology comes into the picture to help manage Customer
relationships in an organized way.

On an average a company has only a 5 to 20 percent probability

of making a successful sale to a new prospect but has a 60 to 70
percent probability of selling again to active customers. It would
be wiser to invest in encouraging an existing customer to
purchase again. Companies that followed up lapsed cases
experienced 20 to 40 percent successful sales. Without a doubt
customer retention is vital to every company's long-term
profitability and success and CRM, through target selling and
customer loyalty programs, can help to motivate the best
customers and to remain loyal as a method of increasing
revenues internally.

Rising customer expectations have stiffened the competition

among companies to improve their customer support services.
Today’s customer has access to the latest technological devices
that give him instant information, allows him to make instant

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transactions, buy, sell or transfer money, he has access to it all
over his palm top, PDA, mobile phone or desktop. Today’s
customer is knowledgeable, he knows what he wants and the
Internet is a powerful tool in his hands.

More than ever, customers today have an important role to play

in the product lifecycle. Customers are continually pressing for
improved support services in terms of product coverage,
business-ease, response-time and price (or at least value-for-
money!).” With a wide variety of services available at competitive
prices and easily accessible at the click of a button, improved
customer services are becoming the need of the day. Customers
are driving companies to migrate from being purely product-
centric to purely customer-centric, taking care of all customer
requirements even before they are demanded.

From current customer trends, it is easy to define the future

customer. The volume of information available via the Internet
will make the future customer a knowledgeable one. As more
customers and businesses go online, the Internet will foster a
global community that communicates at real-time. Customers
will have access to a wider variety of products and prices to
choose from. To stay ahead of competition, companies will have
to anticipate customer needs even before a need arises. As more
and more women began to drive two wheelers in India, the
smarter manufacturers realized that one factor that might hold a
sari-clad woman back, would be having to kick-start her bike.
Along came the self-starter button and presto, a surge of women
two wheeler drivers! The success of companies will depend on
how well they are able to predict customer behavior, anticipate
requirements and provide for them. The future customer will
have a larger stake in the company’s project plans, his input will
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have value and his feedback will be consequential to the
development of products or the way a service is delivered. This
implies a significant alteration in the supply chains that we see
today.

Figure

The CRM strategy should include:

(a) Operational CRM: Automating interaction with the customers

and sales force, and
(b) Analytical CRM: Sophisticated analysis of the customer data
generated by operational CRM and other sources like POS (Point
of Sales) transactions, web site transactions, and third-party data
providers.

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A typical retail organization has a huge customer base and often
customer's needs are fairly differentiated. Without the means to
analyze voluminous customer data, CRM Strategy is bound to be
a failure. Hence, Analytical CRM forms the core of a retailer's
customer relationship strategy. Marketing and sales functions
are the primary beneficiaries of Analytical CRM and the
Main touch points from where the insights gained about the
customer is absorbed in the Organization. Analytical CRM uses
the key business intelligence tools like data warehousing, data
mining, and OLAP to present a unified view of the customer.

Following are some of the uses of Analytical CRM In Retailing

Customer Segmentation

Customer segmentation is a vital ingredient in a retail

organization's marketing recipe. It can offer insights into how
different segments respond to shifts in demographics, fashions
and trends. For example it can help classify customers in the
following segments
1) Customers who respond to new promotions
2) Customers who respond to new product launch
3) Customers who respond to discounts
4) Customers who show propensity to purchase specific products

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Campaign/ Promotion Effectiveness Analysis

Once a campaign is launched its effectiveness can be studied

across different media and in terms of costs and benefits; this
greatly helps in understanding what goes into a successful
marketing campaign.

Campaign/ promotion effectiveness analysis can answer

questions like:

Which media channels have been most successful in the past for
various campaigns?
Which geographic locations responded well to a particular
campaign?
What were the relative costs and benefits of this campaign?
Which customer segments responded to the campaign?

Customer Lifetime Value

Not all customers are equally profitable. At the same time

customers who are not very profitable today may have the
potential of being profitable in future. Hence it is absolutely
essential to identify customers with high lifetime value; the idea
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is to establish long-term relations with these customers. The
basic methodology used to calculate customer lifetime value is -
deduct the cost of servicing a customer from the expected future
revenue generated by the customer, add to this the net value of
new customers referred by this customer, and discount the result
for the duration of the relationship. Though this sounds easy,
there are a number of subjective variables like overall duration
of the customer's relation with the retailer, gap between
intermediate cash flows, and discount rate. We suggest data
mining tools should be used to develop customized models for
calculating customer lifetime value.

Customer Loyalty Analysis

It is more economical to retain an existing customer than to

acquire a new one. To develop effective customer retention
programs it is vital to analyze the reasons for customer attrition.
Business Intelligence helps in understanding customer attrition
with respect to various factors influencing a customer and at
times one can drill down to individual transactions, which might
have resulted in the change of loyalty.

Cross Selling

Retailers use the vast amount of customer information available

with them to cross sell other products at the time of purchase.
This effort is largely based on the tastes of a particular customer,
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which can be analyzed using BI tools based on previous
purchases. Retailers can also 'up sell' - sell more profitable
products - to the customer at the time of contact.

Product Pricing

Pricing is one of the most crucial marketing decisions taken by

retailers. Often an increase in price of a product can result in
lower sales and customer adoption of replacement products.
Using data warehousing and data mining, retailers can develop
sophisticated price models for different products, which can
establish price - sales relationships for the product and how
changes in prices affect the sales of other products.

Target Marketing

Retailers can optimize the overall marketing and promotion

effort by targeting campaigns to specific customers or groups of
customers. Target marketing can be based on a very simple
analysis of the buying habits of the customer or the customer
group; but increasingly data mining tools are being used to
define specific customer segments that are likely to respond to
particular types of campaigns.

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Figure

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Designing a customer loyalty program

Customers' expectations are increasing. They want: service,

products that meet their Needs, value for money and added
benefits. In response to this, retailers are stepping up. Their
promotional activity to the extent that sales and special offers
have become Everyday affairs, rather than end of season stock
clearances. As a result margins are Being eroded to dangerously
low levels. Some retailers have introduced card-based collector
schemes that give electronic points According to the customer's
spend, which are subsequently exchanged for gifts or Discounts.
The more strategically minded retailers are introducing systems
that monitor Customer behavior in order to respond better to
their increasing demands. Both Approaches are commonly
known as customer loyalty programmes, however, the latter
Approach is the only one that is sustainable and really merits
being considered as such.

The basic electronic points schemes are just another way of

delivering a promotion and rely upon giving a higher value
incentive to differentiate from the competitors. The objective
should be to maintain the customer's loyalty, not by bribery, but
by offering a Better service, thus preserving margins and
profitability. This section examines the elements that need to be
considered when designing a customer loyalty programme. It
defines the strategic objectives and examines what components
of the scheme are needed to achieve the benefits, including
mechanics and customer rewards. Finally, it reviews some data

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analysis techniques that can be used to refine the scheme in the
light of experience gained from running targeted promotions.

What is Customer Loyalty?

Customer loyalty involves building a long-term relationship

between the supplier and the individual customer in order to
improve profitability. To achieve this the supplier needs to
understand the customers' spending habits and know what
products they currently buy (and don't buy) so that any
communication can be meaningful. Customers respond better to
someone who understands their special needs - a personalized
approach offering products that are really relevant is more likely
to produce the required result.
Ideally, all customers need to be approached with something that motivates them

to spend more if maximum growth is to be achieved, which is not possible from a

single, all encompassing campaign. If traffic through the store needs building or a

supplier has a new product, the focus will be on ways of attracting new customers.

In all cases there is an essential need to know and understand the spending habits

of existing customers and what entices new shoppers into the store. A successful

scheme is one that engenders sustainable, long-term loyalty at an affordable cost.

This cannot be achieved with bribery alone, the customer needs to feel wanted and

special. It should be embraced with a comprehensive customer

care programme.

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Objectives and Benefits

When designing a customer loyalty programme it is, first,

important to agree the strategic objectives. These will differ from
scheme to scheme. To increase profit the aim will be to change
customer behavior and, in particular, they’re buying habits. In a
declining market customer retention may be the only objective. A
number of key objectives and the benefits to expect are
discussed below:
• increase the turnover and profit
• customer retention
• establish long term relationships
• improve product awareness
• develop advocates
• increase frequency
• cross sell departments
• reduce mark-downs
• improve the effectiveness of direct marketing

Increase Turnover and Profit

In any business, other than a declining market, the key aim of a

customer loyalty scheme must be to increase profitability - there
is no point in rewarding customers for their loyalty and getting
nothing additional in return. To be worthwhile increased loyalty
must result in increased spend (i.e. turnover), whilst retaining
reasonable margins, thus improving profits.

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Recent tests have shown that a spend related reward scheme can
increase average spend by 30%, however, a realistic target would
be 10 to 20% on a long term basis.

Customer Retention

Clearly, one approach to retaining existing customers is to offer a

suitable reward scheme. However, giving away something to
those customers who would have made the purchases anyway is
not cost effective. Instead of expensive "give-away's" the
customer needs to be given special privileges as a member of an
elite and prestigious club. By raising the self-esteem of the
customer and communicating on a personal level with
worthwhile information, and making offers which are relevant,
the perceived value can be made to appear high but at a
relatively low cost.

Establish Long Term Relationships

By definition, this should be one of the aims of all customer

loyalty schemes. It is widely Accepted that it is a lot easier (and
more cost effective) to sell to the existing customer base. Also,
some organizations establish a dialogue with their customers in
order to obtain regular feedback on its products and services
rather than conducting ad-hoc customer surveys. It is vitally
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important to know the customer's view of new and existing
products and to gauge their reaction to targeted promotions.

Improve Product Awareness

A loyalty scheme that restricts redemption to November and

December will increase the frequency during the key months
when Diwali products are on display, therefore increasing
awareness. Also, the availability of a new product can be
communicated to those customers likely to be interested with the
aid of a suitable customer marketing database.

Develop Advocates

Personal recommendation is the best way of attracting new

customers - a genuinely loyal Customer will become an advocate
for the organization. Two recent trials demonstrate the pulling
power of a loyalty scheme. With no advertising other than point
of sale within the stores dramatic increases in club membership
were seen. In both cases a loyalty scheme was devised for
members of a long established club.

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Increasing Frequency

Out of town stores normally have a higher average spend than

high street stores because Customers want to make it
worthwhile to travel the distance. Consider the gain to be made
with one additional visit per customer where the average spends
is RS 300 and the annual frequency is 4. This situation is, again,
often related to the customer segment and suggests targeted
offers would be beneficial. An appropriate reward scheme might
be visit related for, example, spend over RS 300 on 4 occasions
within a month to earn a reward, or a free instant win prize on
each visit.

Cross Selling Departments

High street chemist chains stock a wide variety of products and

often enjoy high frequency but very low averages spend. This is
partly as a result of an association certain customer groups have
with a particular product, for example, ladies may buy cosmetics
on a regular basis but nothing else. If this situation can be
identified there is an opportunity for cross-selling departments.

Reduce Mark-Downs

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These days mark-downs have increasingly become a standard
way of selling rather than a Mechanism for clearing unwanted or
ends of season stock. This has resulted in eroded margins and
reduced profits. A loyalty scheme will reduce the need to employ
these tactics. Where stock needs to be cleared an alternative to
price reductions is to make special offers to loyalty customers.
This has the added benefit of increasing the value of the loyalty
scheme to existing members and providing a powerful reason for
new customers to join.

Improving the Effectiveness of Direct Marketing

Mails are costly. Indiscriminate mass mails are wasteful and even
more costly. Whereas there is, perhaps, little scope to reduce the
cost per person of direct marketing, 'hit' rates can be improved
dramatically by targeting those customer groups most likely to
respond to the product(s) on offer. This means a bigger return
from the campaign or an equivalent return from fewer mailed
customers. To achieve this we need to understand what products
are likely to appeal to particular customers groups.

Elements of a Successful Scheme

Since, by definition, a scheme needs to be long term and cost

effective, the customers' interest needs to be maintained. To
achieve this it is important to:
• Make the scheme understandable and easy to use
• Offer a reward with wide appeal and a high perceived value
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• Communicate with the customer in a way which is meaningful
to them
• Establish a way of "locking-in" the customer

The Mechanic

There is no universal reward mechanic that will work for

everyone. It has to be designed taking into account the:
• Strategic objectives
• Retail operation
• Frequency of purchase
• Value of purchase
• Average spend
• Customer types and groups

Whatever is appropriate it is essential to communicate to the

customer what he/she has Earned. In a reasonably high
frequency outlet this will normally mean telling the customer
his/her cumulative "points" balance at the point of sale at every
purchase. Statement based schemes where the customer is
informed at three monthly intervals are only appropriate for low
frequency operations. Constantly reminding the customers of the
benefits that are accruing will maintain interest and motivate
them to reach their target even quicker. Depending upon the
objectives the "points" can be related to one of the following:

Spend

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To increase average spends. There may be a minimum purchase
necessary and increasing Level of points or discounts earned for
an increasing spend. Particularly useful for low value products.
For example: 1 point for every RS 50 done by most of the
retailers in India.

Frequency

Appropriate to build traffic through the store, where the

propensity to spend is already high for visitors. Also, useful to
make customers aware of new products on display in the store at
the start of a new season. For example: spend RS 300 on 4
separate visits in a month and receive 100 bonus points.

Period

Special offers to attract customers on light days. For example:

double points on Mondays.

Product/Department

Provides the means by which suppliers can participate in the

scheme by funding special offer points.

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The Reward

To motivate the customer to participate the choice of reward is

vitally important. Of course, it is highly dependent upon the type
of customer, but in all cases it should be:

• Attractive and desirable to the target audience.

• Achievable in a reasonable timescale whilst bearing in mind
that the customer should be made to work for his/her reward
but not feel that it is only appropriate for the very high
spenders. Increasing value rewards for increasing spend
enables the impatient to receive some reward quickly to get
them "hooked".
• A range of rewards to give broad appeal to a wide range of
customers.
• A high perceived value to make it a genuine reward for loyalty.
• Low actual costs. Can be achieved by offering shelf products,
which have an in-built Margin.
• A cash-in dates so that the liability can be calculated and
cleared down. Interestingly, a Cut-off date does increase spend
as customers strive to maximize their points before Closure.

Types of Reward

These fall into four categories:

Own Goods

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For example: gift vouchers, discounts or services. Generally low
cost because the reward has a built-in margin. Applicable when
the product is desirable and is not replacing genuine purchases
that would have been made anyway. Perhaps surplus product can
be used (as long as it is still desirable). Not appropriate if there
is no direct benefit to the customer or his/her family such as free
petrol to a company car driver.

Currencies

For example: Most of the airlines use in India Free Air Miles,
which can be used for discount travel, holidays, car hire, hotels
etc. Provides a good mechanism for broadening the appeal and
providing a range of rewards easily.

Gift Catalogues

Gifts as in terms if Vouchers given by Retailers to their

customers.

Affinities

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Increasingly popular for schools, charities etc. The reward has to
be appealing to the charity concerned. Though hardly any
retailers use it in India.

Funding the Reward

It is important to understand from the outset how the reward is

to be funded and to calculate the likely cost (and the benefit).
Again, the strategy will depend on the individual retailer's
circumstances and objectives.

Examples are as follows:

• Increased spend
• Increased frequency (and hence spend)
• Reduce mark-downs
• Increase margins
• Offer spare capacity (e.g .hotel rooms, travel seats etc)
• Increased privileges (at little or no cost)

The aim should also be to retain customer's loyalty through the

relationship marketing by making full use of the database. The
reward can be reduced over time. Some retailers look to their
suppliers to fund their promotions by offering rewards based
entirely on individual product purchases. However, it is
important not to confuse supplier led brand switching schemes,
which have no place in a customer loyalty scheme. The purpose
is to increase spend not switch it from one product to another.

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Capturing Customer Data

In the right hands a marketing database presents an exciting

opportunity to increase the value of existing customers as well as
providing a means of attracting new ones. However, as many
retailers, suppliers and service providers have already
discovered, it can be an embarrassingly expensive millstone if
not properly thought through. Storing data is expensive. Before
embarking upon the building of a marketing database it is
important to have clear objectives.

Categories of Data to Capture

It has already been pointed out that storing data is expensive so

it is important to capture only that which is really needed. The
category of data detailed below is a comprehensive list of what
can be collected.

Customer Details

This is fairly static data including:

Name and address
Family and ages
Job and income level
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Residence (own, rent)
Credit cards held
Interests?
Special needs etc. etc.
Not all customers will give all this level of information on first
asking. It is, however, possible to deduce certain details later. For
example: if payment method is captured on each purchase we
can soon learn what credit cards are held, if toys are purchased
we can gain details of the children from the guarantee
registration card, etc.

Frequency

How often does this person visit the store? On what days of the
week? Hour of the day? Is the frequency increasing or
decreasing? Do certain types of in-store promotions or mailing
campaigns effect the frequency?

Regency

When did the customer last visit. Is this potentially a lost

customer?

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Spend

Is this increasing as required? Does it vary by customer profile?

Do particular types of promotions affect it?

Sites Visited

Is the customer loyal to a particular store? What distances are

traveled, on what days? Will this customer travel give the right
incentive?

Products Purchased

Offers what special offers are taken-up?

Departments what is the level of spend by department?
How does this vary by season and
promotion?
Lines what is the typical shopping basket of
this
individual?

Capturing the data can be relatively straightforward but it is

unlikely that anyone will really need to maintain a history of each
and every product item purchased by each and every customer.

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For a large supermarket chain this would amount to
approximately 500 gigabytes per annum!

Monitoring, Measuring and refining the Scheme

As has been stated earlier in this paper it is important to define

the objectives at the start and design the scheme and system
around achieving those objectives. The dichotomy is that in order
to design an effective scheme there needs to be a good
understanding of the customer and one of the purposes of the
system is to capture data to achieve this.

Therefore, designing a successful scheme has to be an iterative

process:

1. Design basic scheme

2. Implement system
3. Monitor customer behavior
4. Measure response and performance
5. Refine the design in the light of experience
6. Return to 2. Above

It is not the purpose of this paper to examine ways of analyzing

customer data, however, two statistical techniques (regression
and cluster analysis) are mentioned as examples for targeting
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and segmentation. Considerable advances are being made in this
area with the emergence of "intelligent" techniques, which are
self-learning (e.g. neural networks).

Targeting

Targeting customers is a way of improving the response rate to

promotions. This involves
Measuring the size and characteristics of the target audience
and the response and behavior to various offers, and then using
the data to improve the offer.
A common technique for this is regression analysis, which is
based on past behavior:
• Identify customer purchasing characteristics or attributes
• Score individuals according to the characteristics
• Target the high scoring individuals in future promotions
Customer characteristics are purchase related (e.g. frequency,
average spends,
Departments/products purchased, stores visited etc.) but can
also be linked to lifestyle data.
The high scoring individuals (i.e. those with common
characteristics) are expected to yield a higher response rate.

Segmentation

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Segmentation involves defining customer groups and devising
separate marketing approaches to each group. Customers within
a segment are as similar as possible and customers in different
segments are most dissimilar. It is expected that customers in
the same group will react to promotions in a similar way.
Cluster analysis is a statistical technique for segmentation. This
again relies upon identifying like characteristics, which can be
lifestyle based but preferably uses purchasing data:
• Identify customer purchasing characteristics or attributes
• Divide into large number of segments
• Reduce segments to a manageable number by combining
segments with close
Characteristics (nearest neighbor method)
– Market to customers in same segment
This technique enables appropriate and relevant offers to be
made to customer groups, which builds stronger relationships
since the marketing is more meaningful to the individual
customers.
Whereas there is every likelihood that in five years time most
retailers will have a customer loyalty scheme of some form, it is
important to carefully analyze the objectives and the benefits
that are expected. And then to constantly review the benefits
that is actually being achieved and refines the programme
accordingly.
In summary, you should only embark on such a system if one or
more of the following is true:
You can benefit from knowing your customers and they’re
purchasing behavior

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You have an attractive proposition that is sustainable over the
long term
There is a competitor threat emerging that can be defended by
locking in your customers
Into long term loyalty programme
Your competitors are implementing a scheme (?)
It will retain your share of a declining market.
The cost/benefit analysis shows that profitability can be increased as
a result

Customer Loyalty Programs of Retailing in India

A loyalty programme is an advanced stage of a well-managed

CRM process and must be graduated to and not jumped into.
Launching a loyalty programme depends on the Life State of a
mature CRM system, data maturity and organizational
preparedness. It needs some amount of investments in
technology, specialized software, statistical tools and logistics.
Earned rewards program by most of the retailers in the form of
vouchers in India are actual cash payoffs, differed or otherwise
and need efficient management. The best loyalty programmes
are driven out of customer anaytics that work on mature
data.When customers opt in to a permission-based loyalty
programme, they are more milling to share information as well,
enabling retailers to create a dialogue with customers.

Clearly, there is no one, right way to market through any one

channel,
but there is a right way to market to customers across several
channels, and a loyalty marketing programme can help. A
successful
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programme assumes that all channels are included in the
customer
relationship that measurable objectives have been established,
and
that promises are kept. With this foundation in place, a
programme can
boast the following characteristics:

1. Visibility: A loyalty programme must be highly visible

regardless
of the channel. A Web site can show special offers for
programme
members, a catalogue can feature the programme prominently
and
shoppers in the store should be asked if they'd like to join.
Cross-promotional materials should be present and easily
obtainable.
2. Simplicity: To succeed, a loyalty programme must be easy to
use in
all channels. Minimize the fine print; the more the customers
have to
figure out, the less they like the programme.
3. Value: The balance of reward and recognition must establish
value
in the customer's mind and motivate incremental purchases.
Programme
rewards should be credited regardless of where the customer
prefers to
shop. And while the price of merchandise should be consistent
across
all channels, don't be afraid to offer incentives to encourage
customers to try a new shopping experience.
4. Trust: Keep the promises made by the loyalty programme. If
the
promise is for a personalized, highly valued service, don't
bombard
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 program participants with meaningless offers that obviously
are
available to everyone.
Recent studies indicate that customers who shop more than one
of a
retailer's channels - perhaps looking online and buying in the
store
or reading the catalogue/leaflet and buying online-spend more
money
with that retailer than single-channel shoppers.

The best way to coordinate marketing objectives across channels

is to
build a knowledge base of customer behaviors and preferences.
Retailers cannot afford to let legacy systems interfere with
building
this knowledge base. A well-conceived and executed loyalty
programme
can be the key to turning invisible shoppers into hand-raising
volunteers and profitable customers

The organized retailers in India have started with their loyalty

programmes for instance Pantaloon: Green Points, Shoppers
Stop: First Citizen, Ebony: Elite club, Lifestyles: The Inner Circle
and Westside: Club West these loyalty programmes are in built
up with the CRM strategies for each companies. Though every
loyalty club has its pros and cons to the program but the main
reason of worry for the organized retailers in India is the amount
of average Walk Ins purchasing from the stores. The people
visiting the Malls or specific store locations unlike, Wal-Mart in
US these companies haven’t yet been able to fulfill the need of
the customers towards the loyalty club.

As part of my dissertation research shows that most of the loyalty

clubs in India are similar in their purchase schemes and
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privileges. I would further support in other sections of the
dissertation.

Analysis of Questionnaire

Most of the respondents go to near by areas to shop. The malls in

Mumbai where weekend rush is a major pinpoint. The others are
markets like Crawford , Heera panna.

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The preference towards the area of Mall holds the key to where
people frequently shop. The success of a store is concentrated
towards the area of the place and the brand value it holds in
terms of the changing consumer lifestyles. The average walk ins
are high in Shoppers stop because of the wholesome
entertainment in the location of the store. I believe if Pantaloon
as a store can look for opportunities where there is wholesome
entertainment along with the Mall E.g. Forum in Kolkotta it
would surely add to their profits.

The Loyalty club members are less because of the number of

people who frequently shop at the same store in a particular
area. The respondents I asked questionnaire vary from places in
Pantaloon, Shoppers Stop, Internet and marketing my mailers.

As you can see majority of the loyalty programs members are

through In store purchases. The loyalty clubs in India are at
initial stage of getting the customers. There are similar programs
of every organized retailer for membership. The criteria for
Pantaloon are higher because of majority of respondent from
being collected from that area.

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76 | P a g e
Most of the people who frequently shop at the same stores are
members of two or more loyalty club programs. Most of the
common is being Shoppers Stop and Pantaloon. Shoppers Stop
is most preferred loyalty club with members getting updates
and knows how about the store regularly. Pantaloon loyalty
program isn’t followed in terms of its CRM processes unlike
Shoppers Stop. Westside stores follow up is very punctual in
terms of their reminders to their selected customers.

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All the loyalty programs provide similar offers. They invite you
to different events depending upon your membership relating
to the card you hold.

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The respondents who were members of pantaloon loyalty club
were 24. The graph clearly shows that the staff of pantaloon is
very good and helpful in terms of the services. Unlike most of
the shoppers people aren’t satisfied enough with the kind of
reward structure the company provides. But, the best part of
the people is the kind of promotion offers differs from the
rivals. I think this can be a Unique Selling Preposition for
pantaloon stores all over India.

Most of the time the shoppers aren’t interested in any sort of

loyalty program because it doesn’t add to much to their value.
The criteria for the shopping stores to have a loyalty program
is to increase the frequent purchases of the store but,
somehow it isn’t able to cater the services of the respondent
who is at an age where he or she is doing her graduation or
about to start his or her career.

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Out of the 31 respondents most of the people aren’t willing to
be a member of any loyalty club as such probably because of
shopping at different places in different areas. One of the
mains reason being said by few customers is they don’t add to
the overall value to their purchases.

As you can clearly see from the above graphs the loyalty club
members are usually high-end A1 customers who frequently
shop at a particular place. Most of the people are working
executives and businessmen who find ambience and latest
fashions the key dominants to shop and enroll for the loyalty
program.

Findings from Questionnaire

1) People respond better to Internet mailers then courier. I

think that this suggests the loyalty club members are
technosavy so, there is a need for all the loyalty clubs to
start their online ventures in relation to their CRM process.
2) Most of the organized retailers in India are offering similar
services on customer loyalty programs. From a customer’s
stand he or she would only be differentiated by the brand
name of the company.
3) Shoppers Stop is the number one retailer whose Customer
loyalty program is very well integrated compared to the
other retailers.

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4) Pantaloon as a store appeals more to the working class and
family oriented people especially in Gurgoan.
5) Lifestyle is at a initial phase of launching the Customer
loyalty program.
6) The average number of walks ins in a store is generally on
the place of the mall.
7) The CRM strategies of all the organized retailers are still
very less integrated in terms of the international players like
Wal- Mart and other multi chain outlets in the World.
8) I think the changing consumer patterns are not tapped by
the retailers for the Customer loyalty programs
9) Banks provide cash back credit card in form of an extended
discount to various organized retail outlets.
10)The Reward structure needs a revision to tap in more
customers so that the profit margins can be increased
11)Overall, the companies should start looking for means to
attract people coming in at the store in the form of extended
shopping hours, double points on off days etc.
12)The pantaloon store should have a small area specified to
the entertainment segment inside the store in the form of
contest etc.

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Limitations of the Project

1) Most of the questionnaire filled by the customers are

suppose to be a loyalty club member of two or more clubs
2) Organized retailing in India as an industry has just started
5
to prosper with the emergence of FDI 5 in retailing and
6
emergence of shopping malls6 in India
3) The loyalty programmes of organized retailers mentioned in
the project are very similar compared to international
loyalty programs
4) The CRM implementation in retail has just been started in
retailing in the form of supplier goods purchase and
customers
5) The survey is too small to predict the initial reaction of
customers towards different loyalty clubs
6) The organized retailing in India is just 2% of the total
retailing compared to the other parts of the world.
7) Time needed to study the CRM Process along with the
loyalty programs of the retailing industry
8) In relation to customer loyalty survey the organization also
needs to do employee loyalty survey which would form a
base to an CRM process

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BI BLI OG RAP HY

BOOKS
AUTHOR PHILIP KOTLER
TITLE MARKETING MANAGEMENT
PLACE OF PRENTICE HALL OF INDIA LTD.
PUBLICATION NEW DELHI
DATE OF SEPTEMBER
PUBLICATION
NUMBE 31-50
R OF PAGES
MAGAZINE
AUTHOR MURTHY E.N.
TITLE ANALYST
DATE OF ISSUE JULY 2006
PAGE NUMBER 41-46

– www.pantaloon.com
INTERNET
– www.amazon.com
– www.economictimes.com

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 APPENDIX
QUESTIONAIEER
1.NAME :
2.AGE :
3.ADERSS:
4.GENDER:

5.How often do you buy apparels(clothes) ?

– Once a week
– Once in 15 days
– Once a month
– Once every three month
– Once every 6 month
– Once a Year
6.From where do you buy your
apparels(clothes) ?
• Pram id
• Central ’s
• Shopper’s
• Mega mart
7. How much do younormally spend on

apparels(cloths) bought
from shopping mall in a single
shopping

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 • Less than 500
• Between 500 to 1000
• Between 1000 to 2000
• Between 2000 to 5000
• More than 5000
• Not applicable
8. Do you have ‘Green Card ‘?

• Yes
• No
9.Are you interested to be a part of ‘Green
Card ’?
• Yes
• No

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