The study of factors affecting the buying behavior in shopping malls in Ahmedabad

Internal faculty guide: Prof. P. K. Yadav

Submitted by: Poojan Vyas (101334)

Submitted on: 09/01/2012

Declaration

I hereby declare that the project title The study of factors affecting the buying behavior in shopping malls in Ahmedabad is our original work and has not been published elsewhere. This has been undertaken as the dissertation project in partial fulfillment of the course Master of Business Administration (FT).

Thank you, Poojan Vyas(101334)

Acknowledgement

I would like to express my gratitude and would like to thank my faculty guide for the project Prof. P. K. Yadav for giving me an opportunity to work on the topic which helped me gain in depth understanding of the factors affecting consumer behavior in this modern form of retailing called shopping malls. Timely advices given by Prof. P. K. Yadav were very helpful. He ensured that I don t lose my focus while working on the project. I would also like to thank other faculty members Prof. Sari Matilla, Prof. Ashwini Awasthi who provided insights about how to structure the project.

Index 1. Introduction 1.1 History of Retail 1.2 Formats of Retailing 1.3 Indian Retail Scene 1.3.1 Growth of Indian Retail Sector 1.3.2 Recent Trends 1.3.3 Major Players in the industry 1.3.4 Opportunities and Challenges 2. Shopping Malls 2.1 Meaning 2.2 Where did it start in India 2.3 Some stories 3. Buying Behaviour 3.1 Meaning 3.2 Psychology of buying 3.3 Social class and culture 3.4 The buying Process 4. Research Methodology 4.1 Problem Statement 4.2 Objectives 4.3 Data Collection 7

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4.4 Type of research 4.5 Questionnaire and contact method 4.6 Sampling technique 4.7 Sample Size 5. Statistical Tests and softwares used .38 6. Analysis and interpretation ...39 6.1 According to age 6.2 According to education 6.3 According to income 6.4 According to location 7. Conclusions and findings ..46 8. Recommendations for growth ..47 9. Implications 48 10. References 49 11. Annexure ..50

Executive Summary

Shopping malls, as the modern form of retailing have been emerging in India since a last few decades. Shopping malls have been coming up very quickly and in huge number in Tire 1, 2 and even 3 cities in India. But sustainability in the long term is an issue. Taking the sample of 250 respondents on different demographics various factors affecting the buying behaviour in shopping malls in Ahmedabad are analyzes. Different factors have different impacts on people from different age, education and income groups and people from different locations. Major contributing factors are merchandise, site location, price, structure and ambience, culture in the mall, purpose.

1. Introduction History of Retail

Virtually all of us shop, sometimes as a pleasure and sometimes as a burdensome chore. But when and how did it all begin? The answer is probably to do with surpluses. As we got better at cultivating the land, some people found that even after feeding their families and animals and putting food into storage, there was some left over. Rather than waste this surplus, it was traded for other surpluses or perhaps tools or other objects. Those that had enough land and were particularly good at producing food from it would have realized that they were on to a good thing by deliberately producing surpluses. Eventually the informal trade in goods would have become more organized, with central markets being formed where these producers could get together on a regular basis in order to exchange goods. Of course, trading goods for other goods is all very well until you have just about everything you are likely to ever need, or the product you want has yet to be produced. In order to get around this, people started to owe goods to other people. Early forms of credit may have just been verbal agreements. As time passed, some traders and producers decided to keep a record of what was owed. One way this was done was by the debtor leaving some collateral with the creditor - some object or an animal that was held by the creditor until the debt was paid. This was OK until the debtor needed the tool or animal in order to produce the very goods that were owed. An alternative way of denoting credit was to use a symbolic object, such as small animal. Since small animals are not very portable, it became more normal to use small inanimate objects such as pebbles. Over time these small object became more decorated and valued and eventually metal coins and paper notes became more and more familiar. So early trading gave rise to money. As time passed, some producers would have found they were better at selling the goods than growing them (or perhaps enjoyed it more!). Others preferred to stick to growing. So there was a gradual separation of the producers and the traders.

And it was not just food that was sold. Tools, trinkets, jewelry, cups, plates and many other objects would have been traded as well. The informal markets would, over time, become more formal and more permanent. So shops began. Other traders would prefer to travel around selling their goods. These became known as peddlers. Selling from a regular market, from a permanent shop or peddling goods are known collectively as retailing.

At some time during the beginnings of civilization, groups began to trade with one another. How or why this occurred is not known, but various explanations have been given. Let's take a look at the history of retail. THEORIES ON THE BEGINNING: One theory suggests that trade was an instinctive invention based on the need for food, water, and bodily comforts. Another is based on human aggressiveness. Another one asserts that trade was an outgrowth of friendly gift giving. Yet another very plausible explanation suggests that people who had more goods than they could consume traded the excess away. Whatever the reason, it became a staple of civilization. Below is a brief history of retailing.

ANCIENT RETAILING:
In the ancient world, trade flourished simple because some has a surplus of one good and desired the goods they did not have or could not produce. The earliest traders were Cretans who sailed the Mediterranean and carried on trade with the people of that area. They flourished for 2,000 years, and their culture influenced other great trading civilizations. The Phoenicians followed the Cretans as civilizations major traders. You could view them as distributors. They distributed the goods of Egypt and Babylonia. Tyre, Sidon, and Carthage were the principal trading cities of this empire. This group was in turn succeeded by the Romans. The Romans established a sophisticated form of retailing. Numerous small shops were set up with centers.

In fact, ancient ruins indicate that the world's first department store was in Rome!! With the fall of this empire, retailing disintegrated.

THE DARK AGES:

During the period after the fall of the Roman empire, the only retailers were peddlers. They carried their store around on their back. They went from village to village selling their wares. They often offered inferior merchandise. By the 13th century fairs and markets flourished. Early fairs often had a religous foundation. On feast days people would gather at their churches and exchange goods. Larger markets were also called fairs and people traveled long distances to participate. These fairs eventually became amusement and exist in an entertainment form today! By the 12th century artisan and tradesmen began to organize into "guilds" and opened up small shops. They helped them gain social and economic advantages.

HISTORY OF AMERICAN RETAILING:

Many American retailing institutions originated after 1850. Prior to that, many Americans lived on farms and were self sufficient. During this time itinerant peddlers and general stores were basically the only retailers in the country. After 1850, department stores became important. For example, Richs was established in Atlanta in 1867 by 4 Hungarian immigrants. Simon Lazarus, an immigrant from Poland, opened a men's clothing store in Columbus, Ohio in 1851. Macy's can be traced to 1858. As department stores grew in cities, Rural citizens made us of catalogs from mail order houses. This allowed them to get the goods they needed without the hassle of traveling long distances into the city. From here, chain stores evolved. Technology improved. The Internet boomed! The rest is the making of history!!

Types of retail
Retailers are business firms engaged in offering goods and services directly to consumers. In most but not all cases, retail outlets are primarily concerned with selling merchandise. Typically, such businesses sell individual units or small groupings of products to large numbers of customers. A minority of retailers, however, also garner income through rentals rather than outright sales of goods (as in the case of enterprises that offer furniture or gardening tools for rent) or through a combination of products and services (as in the case of a clothing store that might offer free alterations with the purchase of a suit). The retail industry is a massive part of the overall U.S. economy. In the mid-1990s, for example, retail establishments accounted for better than one out of five jobs in the country, and pulled in more than $2 trillion on an annual basis. Moreover, many retail niches are characterized by a healthy population of smaller enterprises; indeed, the vast majority of retail employees in the United States work at establishments with fewer than 20 employees. Retail trade is widely known as a very competitive area of commercial endeavor, and observers note that many fledgling retail establishments do not survive for more than a few years. Indeed, competition for sales has become so great that consumers have seen a marked blurring of product lines among retailers. Increasingly, retailers have taken to stocking a much greater variety of goods than their basic industry classification would indicate (bookstores, for example, increasingly stock music products, while food, liquor, office supplies, automotive supplies, and other wares can all be found in contemporary drug stores). This development further complicates efforts to establish and maintain a healthy presence in the marketplace. But for the small business owner who launches a retail store on an adequate foundation of capital, business acumen, and attractive merchandise, involvement in the trade can be rewarding on both financial and personal fulfillment levels.

y Department Stores A department store is a set-up which offers wide range of products to the end-users under one roof. In a department store, the consumers can get almost all the products they aspire to shop at one place only. Department stores provide a wide range of options to the consumers and thus fulfill all their shopping needs. y Merchandise: Electronic Appliances Apparels Jewelers Toiletries Cosmetics Footwear Sportswear Toys Books CDs, DVDs Examples - Shoppers Stop, Pantaloon y Discount Stores Discount stores also offer a huge range of products to the end-users but at a discounted rate. The discount stores generally offer a limited range and the quality in certain cases might be a little inferior as compared to the department stores. y Wal-Mart currently operates more than 1300 discount stores in United States. In India Vishal Mega Mart comes under discount store. y Merchandise: Almost same as department store but at a cheaper price. y Supermarket A retail store which generally sells food products and household items, properly placed and arranged in specific departments is called a supermarket. A supermarket is an advanced form of the small grocery stores and caters to the household needs of the consumer. The various food products (meat, vegetables, dairy products, juices etc)

are all properly displayed at their respective departments to catch the attention of the customers and for them to pick any merchandise depending on their choice and need. y Merchandise: Bakery products Cereals Meat Products, Fish products Breads Medicines Vegetables Fruits Soft drinks Frozen Food Canned Juices y Warehouse Stores A retail format which sells limited stock in bulk at a discounted rate is called as warehouse store. Warehouse stores do not bother much about the interiors of the store and the products are not properly displayed. y Mom and Pop Store (also called Kirana Store in India) Mom and Pop stores are the small stores run by individuals in the nearby locality to cater to daily needs of the consumers staying in the vicinity. They offer selected items and are not at all organized. The size of the store would not be very big and depends on the land available to the owner. They wouldn t offer high-end products. Merchandise: Eggs Bread Stationery Toys Cigarettes Cereals

Pulses Medicines y Speciality Stores As the name suggests, Speciality store would specialize in a particular product and would not sell anything else apart from the specific range. Speciality stores sell only selective items of one particular brand to the consumers and primarily focus on high customer satisfaction. Example -You will find only Reebok merchandise at Reebok store and nothing else, thus making it a speciality store. You can never find Adidas shoes at a Reebok outlet. y Malls Many retail stores operating at one place form a mall. A mall would consist of several retail outlets each selling their own merchandise but at a common platform. y E Tailers Now a days the customers have the option of shopping while sitting at their homes. They can place their order through internet, pay with the help of debit or credit cards and the products are delivered at their homes only. However, there are chances that the products ordered might not reach in the same condition as they were ordered. This kind of shopping is convenient for those who have a hectic schedule and are reluctant to go to retail outlets. In this kind of shopping; the transportation charges are borne by the consumer itself. Example - EBAY, Rediff Shopping, Amazon y Dollar Stores Dollar stores offer selected products at extremely low rates but here the prices are fixed. Example - 99 Store would offer all its merchandise at Rs 99 only. No further bargaining is entertained. However the quality of the product is always in doubt at the discount stores.

Retail in India

The India Retail Industry is the largest among all the industries, accounting for over 10 per cent of the country s GDP and around 8 per cent of the employment. The Retail Industry in India has come forth as one of the most dynamic and fast paced industries with several players entering the market. But all of them have not yet tasted success because of the heavy initial investments that are required to break even with other companies and compete with them. The India Retail Industry is gradually inching its way towards becoming the next boom industry. The total concept and idea of shopping has undergone an attention drawing change in terms of format and consumer buying behaviour, ushering in a revolution in shopping in India. Modern retailing has entered into the Retail market in India as is observed in the form of bustling shopping centres, multistoried malls and the huge complexes that offer shopping, entertainment and food all under one roof. A large young working population with median age of 24 years, nuclear families in urban areas, along with increasing workingwomen population and emerging opportunities in the services sector are going to be the key factors in the growth of the organized Retail sector in India. The growth pattern in organized retailing and in the consumption made by the Indian population will follow a rising graph helping the newer businessmen to enter the India Retail Industry. In India the vast middle class and its almost untapped retail industry are the key attractive forces for global retail giants wanting to enter into newer markets, which in turn will help the India Retail Industry to grow faster. Indian retail is expected to grow 25 per cent annually. Modern retail in India could be worth US$ 175-200 billion by 2016. The Food Retail Industry in India dominates the shopping basket. The Mobile phone Retail Industry in India is already a US$ 16.7 billion business, growing at over 20 per cent per year. The future of the India Retail Industry looks promising with the growing of the market, with the

government policies becoming more favourable and the emerging technologies facilitating operations.

The Indian Retail Scene

India is the country having the most unorganized retail market. Traditionally it is a family s livelihood, with their shop in the front and house at the back, while they run the retail business. More than 99% retailer s function in less than 500 square feet of shopping space. Global retail consultants KSA Technopak have estimated that organized retailing in India is expected to touch Rs 35,000 crore in the year 2005-06. The Indian retail sector is estimated at around Rs 900,000 crore, of which the organized sector accounts for a mere 2 per cent indicating a huge potential market opportunity that is lying in the waiting for the consumer-savvy organized retailer. Purchasing power of Indian urban consumer is growing and branded merchandise in categories like Apparels, Cosmetics, Shoes, Watches, Beverages, Food and even Jewellery, are slowly becoming lifestyle products that are widely accepted by the urban Indian consumer. Indian retailers need to advantage of this growth and aiming to grow, diversify and introduce new formats have to pay more attention to the brand building process. The emphasis here is on retail as a brand rather than retailers selling brands. The focus should be on branding the retail business itself. In their preparation to face fierce competitive pressure, Indian retailers must come to recognize the value of building their own stores as brands to reinforce their marketing positioning, to communicate quality as well as value for money. Sustainable competitive advantage will be dependent on translating core values combining products, image and reputation into a coherent retail brand strategy. There is no doubt that the Indian retail scene is booming. A number of large corporate houses Tata s, Raheja s, Piramal s, Goenka s have already made their foray into this arena, with beauty and health stores, supermarkets, self-service music stores, new age book stores, every-day-low-price stores, computers and peripherals stores, office equipment stores and home/building construction

stores. Today the organized players have attacked every retail category. The Indian retail scene has witnessed too many players in too short a time, crowding several categories without looking at their core competencies, or having a well thought out branding strategy.

Growth of Indian Retail Sector

Retail and real estate are the two booming sectors of India in the present times. And if industry experts are to be believed, the prospects of both the sectors are mutually dependent on each other. Retail, one of India s largest industries, has presently emerged as one of the most dynamic and fast paced industries of our times with several players entering the market. Accounting for over 10 per cent of the country s GDP and around eight per cent of the employment retailing in India is gradually inching its way toward becoming the next boom industry. As the contemporary retail sector in India is reflected in sprawling shopping centers, multiplex- malls and huge complexes offer shopping, entertainment and food all under one roof, the concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. This has also contributed to large-scale investments in the real estate sector with major national and global players investing in developing the infrastructure and construction of the retailing business. The trends that are driving the growth of the retail sector in India are
y y y y

Low share of organized retailing Falling real estate prices Increase in disposable income and customer aspiration Increase in expenditure for luxury items (CHART)

Another credible factor in the prospects of the retail sector in India is the increase in the young working population. In India, hefty pay packets, nuclear families in urban areas, along with increasing working-women population and emerging opportunities in the services sector. These key factors have been the growth drivers of the organized retail sector in India which now boast of

retailing almost all the preferences of life - Apparel & Accessories, Appliances, Electronics, Cosmetics and Toiletries, Home & Office Products, Travel and Leisure and many more. With this the retail sector in India is witnessing rejuvenation as traditional markets make way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. The retailing configuration in India is fast developing as shopping malls are increasingly becoming familiar in large cities. When it comes to development of retail space specially the malls, the Tier II cities are no longer behind in the race. If development plans till 2007 is studied it shows the projection of 220 shopping malls, with 139 malls in metros and the remaining 81 in the Tier II cities. The government of states like Delhi and National Capital Region (NCR) are very upbeat about permitting the use of land for commercial development thus increasing the availability of land for retail space; thus making NCR render to 50% of the malls in India.

India is being seen as a potential goldmine for retail investors from over the world and latest research has rated India as the top destination for retailers for an attractive emerging retail market. India ss vast middle class and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets. Even though India has well over 5 million retail outlets, the country sorely lacks anything that can resemble a retailing industry in the modern sense of the term. This presents international retailing specialists with a great opportunity. The organized retail sector is expected to grow stronger than GDP growth in the next five years driven by changing lifestyles, burgeoning income and favourable demographic outline.

Recent trends
y Retailing in India is witnessing a huge revamping exercise as can be seen in the graph y India is rated the fifth most attractive emerging retail market: a potential goldmine. y Estimated to be US$ 200 billion, of which organized retailing (i.e. modern trade) makes up 3 percent or US$ 6.4 billion y As per a report by KPMG the annual growth of department stores is estimated at 24% y Ranked second in a Global Retail Development Index of 30 developing countries drawn up by AT Kearney. y Multiple drivers leading to a consumption boom: y Favorable demographics y Growth in income y Increasing population of women y Raising aspirations: Value added goods sales y Food and apparel retailing key drivers of growth y Organized retailing in India has been largely an urban y Phenomenon with affluent classes and growing number of doubleincome households. y More successful in cities in the south and west of India. Reasons range from differences in consumer buying behavior to cost of real estate and taxation laws. y Rural markets emerging as a huge opportunity for retailers reflected in the share of the rural market across most categories of consumption y ITC is experimenting with retailing through its e-Choupal and Choupal Sagar rural hypermarkets. y HLL is using its Project Shakti initiative leveraging women self-help groups to explore the rural market. y Mahamaza is leveraging technology and network marketing concepts to act as an aggregator and serve the rural markets. y IT is a tool that has been used by retailers ranging from Amazon.com to eBay to radically change buying behavior across the globe. y E-tailing is sslowly making its presence felt.

Top Players in Indian Retail Industry

1. Pantaloon Retail: It is headquartered in Mumbai with 450 stores across the country employing more than 18,000 people. It can boast of launching the first hypermarket Big Bazaar in India in 2001. An all-India retail space of 5 million sq. ft. which is expected to reach 30 mn by 2010. It is not only the largest retailer in India with a turnover of over Rs. 20 billion but is present across most retail segments - Food & grocery (Big bazaar, Food bazaar), Home solutions (Hometown, furniture bazaar, collection-i), consumer electronics (e-zone), shoes (shoe factory), Books: music & gifts (Depot), Health & Beauty care services (Star, Sitara and Health village in the pipeline), e-tailing (Futurbazaar.com), entertainment (Bowling co.) One of their recent innovations include e-commerce hybrid format of small shops , the area for these stores will be 150 sq. ft. fitted with 40 digital screens. Customers will be encouraged to browse through the entire range of products on digital screen. They will be able to place the order, the delivery of which will be arranged by the shop to their homes within a few hours 2. K Raheja Group They forayed into retail with Shopper s Stop, India s first departmental store in 2001. It is the only retailer from India to become a member of the prestigious Intercontinental Group of Departmental Stores (IGDS). They have signed a 50:50 joint venture with the Nuance Group for Airport Retailing. Shoppers Stop has 7, 52, 00 sq ft of retail space with a turnover of Rs 6.75 billion. The first Hypercity opened in Mumbai in 2006 with an area of 1, 20,000 sq. ft. clocking gross sales of Rs. 1 bn in its first year. Crossword brand of book stores, Homes stop a store for home solutions, Mothercare a concept stocking merchandise related to childcare are also owned by them. Recently, Raheja s have signed an MoU with the Home Retail Group of UK to enter into a franchise arrangement for the Argos formats of catalogue & internet retailing.

The group has announced plans to establish a network of 55 hypermarkets across India with sales expected to cross the US$100 million mark by 2010. 3. Tata group: Established in 1998, Trent - one of the subsidiaries of Tata Group - operates Westside, a lifestyle retail chain and Star India Bazaar - a hypermarket with a large assortment of products at the lowest prices. In 2005, it acquired Landmark, India's largest book and music retailer. Trent has more than 4 lakh sq. ft. space across the country. Westside registered a turnover of Rs 3.58 mn in 2006. Tata s has also formed a subsidiary named Infiniti retail which consists of Croma, a consumer electronics chain. It is a 15000-17000 sq. ft. format with 8 stores as of September 2007. Another subsidiary, Titan Industries, owns brands like Titan , the watch of India has 200 exclusive outlets the country and Tanishq, the jewellery brand, has 87 exclusive outlets. Their combined turnover is Rs 6.55 billion. Trent plans to open 27 more stores across its retail formats adding 1.5 mn sq ft of space in the next 12 DLF malls. 4. RPG group: One of the first entrants into organised food & grocery retail with Foodworld stores in 1996 and then formed an alliance with Dairy farm International and launched health & glow (pharmacy & beauty care) outlets. Now the alliance has dissolved and RPG has Spencer s Hyper, Super, Daily and Express formats and Music World stores across the country. RPG has 6 lakh sq. ft. of retail space and has registered a turnover of Rs 4.5 billion in 2006. It is planning to venture into books retail, with the launch of its own bookstores Books and Beyond by the end of 2007. An IPO is also in the offering, with expansion to 450+ MusicWorld, 50+ Spencer's hyper outlets covering 4 million sq. ft. by 2010. 5. Landmark group:

were launched in 1998 in India. Lifestyle is spread across six cities, covering 4.6 lakh sq. ft. with a turnover of Rs 3.5 billion in 2005. A new division named Lifestyle International has emerged for their international brands business comprising Bossino, Kappa and Springfield in their portfolio. Their retail mix includes Home solutions (Home centre), fashion (lifestyle, landmark International), value retailing (max retail), hypermarkets & supermarkets (Max), kids entertainment (Funcity). They plan to invest Rs. 300 crores in the next two years to expand on Max chain, and Rs 100 crores on Citymax 3 star hotel chain. They have already instituted a separate company christened Citymax Hotels (India). 6. Piramal Group In September 1999, Piramal Enterprises announced their arrival into retail with the launch of three retail concepts: India's first true shopping mall of international standards, called Crossroads; a lifestyle department store named Piramyd Megastore; and a family entertainment centre known as Jammin. Piramyd Megastore and Jammin were anchor tenants for Crossroads (recently sold to Pantaloon for Rs 4 billion). In 2001, the group entered the business of food & grocery retail with the launch of TruMart supermarkets in Pune. They have around 18 TruMart stores covering 1.90 lakh sq. ft. registering a turnover of Rs 37.6 mn in 2005. Piraymd Megatsore s contributes more than 70 % to their retail mix with a turnover of Rs 112.8 mn. They plan to open 150 stores covering 75 mn sq ft of retail space in the next 5 years. 7. Subhiksha Subhiksha is a Chennai-based, decade old, no frills, food, grocery, pharma and telecom, discount retail chain. ICICI Venture Capital holds 24% in the equity capital of Subhiksha. It has more than 500 stores across the country covering a retail space of more than 1 million sq ft with a registered turnover of Rs 3.34 bn in 2006. It has a planned investment of Rs.300 crores to ramp up its operations to 1200 stores by 2008. New but potential BIG players

8. Bharti-Walmart Their plans include US$ 7 bn investment in creating retail network in the country including 100 hypermarkets and several hundred small stores. They have signed a 50:50 percent joint venture agreement with Walmart. Wal-Mart will do the cash & carry while Bharti will do the front-end. 9. Reliance India s most ambitious retail plans are by reliance, with investments to the tune of Rs. 30,000 cr ($ 6.67 bn) to set up multiple formats with expected sales of Rs 90,000 crores ($20 bn) by 2009-10. There are already more than 300 Reliance Fresh stores and the first Reliance Mart Hypermart has opened in Ahmedabad. The next ones are slated to open at Jamnagar, followed by marts in Delhi / NCR, Hyderabad, Vijaywada, Pune and Ludhiana. 10. AV Birla Group They have a strong presence in apparel retailing through Madura garments which is subsidiary of Aditya Birla Nuvo Ltd. They own brands like Louis Phillipe, Van Heusen, Allen Solly, Peter England, Trouser town. In other segments of retail, AV Birla Group has announced investment plans of Rs 8000 - 9000 crores in the first 3 years till 2010. The acquisition of Trinethra (food & grocery) chain in the south has moved their tally to 400 stores in the country. Their More range of 15 supermarkets are slated to open at Nashik, Pune and other tier II cities in Western India in 2007. INDIA sS NUMBER OF DOMESTIC GROCERY CHAINS AND EARLY FOREIGN ENTRANTS

Opportunities and challenges

The forecast for branded products was somewhat mixed. There is plenty of opportunity for goods and services that offer new consumer concepts or new product qualities, but most Indians believe brands are more expensive even when they're not. It can be difficult for a new product to get over that initial hump with a customer, but Raheja estimated that the number of branded goods would grow from 2 percent to 20 percent of the consumer market over the next five years. From a sector perspective, mall specialty stores that sell goods such as toys or watches should do well, said Biyani. Moderator Rangan wondered if the organized shopping phenomenon was limited to the country's urban centers. "The consumer in India is far more aware than he ever was," said Jain. It may take time for the "shop 'til you drop" mentality to take firm root in the cities and reach the country's more rural regions. But panelists agreed that the retail industry in India would continue to undergo significant growth and change in the years to come. For entrepreneurs looking to get in on the ground level, the industry offers a wealth of opportunity.
y y y y y y y y

The tax structure in India favors small retail business Lack of adequate infrastructure facilities High cost of real estate Dissimilarity in consumer groups Restrictions in Foreign Direct Investment Shortage of retail study options Shortage of trained manpower Low retail management skill

2. Shopping Malls Meaning

A shopping mall, shopping centre, shopping arcade, shopping precinct or simply mall is one or more buildings forming a complex of shops representing merchandisers, with interconnecting walkways enabling visitors to easily walk from unit to unit, along with a parking area a modern, indoor version of the traditional marketplace. Modern "car-friendly" strip malls developed from the 1920s, and shopping malls corresponded with the rise of suburban living in many parts of the Western World, especially the United States, after World War II. From early on, the design tended to be inward-facing, with malls following theories of how customers could best be enticed in a controlled environment. Similar, the concept of a mall having one or more "anchor" or "big box" stores was pioneered early, with individual stores or smaller-scale chain stores intended to benefit from the shoppers attracted by the big stores.

Where did it start in India

The story of great Indian mall boom started from emergence of Gurgaon, an Industrial suburb in Delhi. In a development that surprised many town planners, Gurgaon transformed itself overnight by first housing the headquarters of many multinational corporations and then calling itself the shopping mall capital of India. Then to join the bandwagon was Rajouri Garden with a number of world class malls coming up within a short duration of time. But this mall clutter led to a continuing downfall of some of malls in Delhi which was accelerated by the economic recession affecting the world.

Some stories in Indian Retail

MUMBAI - As part of its efforts to decongest its capital city Mumbai, the western Indian state of Maharashtra conceived a satellite town called Navin Mumbai (New Mumbai). One of the premier attractions of New Mumbai is Vashi, standing out for its wide roads, well-planned residential blocks and huge, neat gardens. Most Vashi residents would rush to these gardens in the evenings to catch up with some fresh air, as well as gossip. But of late the gardens wear a deserted look as the crowds now throng to Center One, a newly opened seven-story steel-and-glass shopping mall near Vashi railway station. Some of the visitors are serious shoppers, attracted by the convenience of buying a wide variety of goods under one roof at economical prices. But most are partaking of new experiences - gawking at luxury goods, cooling off in air-conditioned comfort and enjoying an ambience seen only in Hollywood movies up until now. The scene is repeated every day in about 50 new shopping malls in big towns, smaller cities and, of course, the large metropolises across the country. A rash of malls has suddenly appeared over the Indian landscape, where only a handful existed five years ago. A study by Knight Frank, a real-estate consultancy outfit, says that no less than 25 million square feet (more than 2.3 million square meters) of organized retail space will come up across the country by 2005. According to one estimate, 300 malls are already under construction countrywide. Take the example of Gurgaon, a sleepy little suburb of the Indian capital New Delhi. In a development that surprised many town planners, Gurgaon transformed itself overnight by first housing the headquarters of many multinational corporations and banks, and then calling itself the "shoppingmall capital of India". Each mall in Gurgaon is about 300,000 square feet in size, with every leading retailer, or, to use a trade parlance, "anchor", occupying anything between 60,000-80,000 square feet. A popular destination for the trendy young crowd is the City Center Mall on Mahatma Gandhi Road - for eating out, shopping and watching movies. Another attraction is the Metropolitan Mall, complete

with a multiplex cinema theater, underground parking and a food court. Leading construction company DLF Universal has floated DLF Mega Mall and the DLF City Center, which boast, apart from stores selling leading international and Indian brands, multi-cuisine restaurants occupying 20,000 square feet, piped music, an entertainment arcade and high-speed lifts and escalators. It is not just the north of the country that is seeing a furious construction of malls. Visakhapatnam, a fast-growing city in the southern state of Andhra Pradesh, is witnessing a huge demand for shopping malls. The biggest of them, CMR Shopping Mall, occupies 60,000 square feet over five floors. The throng of buyers who visit the mall are working class and office employees of the numerous public and private sector outfits that are based in Visakhapatnam. Similarly, Ahmedabad in western India is slowly becoming a magnet for shopping malls. More than half a dozen malls have sprung up in Ahmedabad, known as a fading city of dying textile mills until a few years back. The biggest of them, aptly called Super Mall, occupies a gargantuan 90,000 square feet and has 200 shops in its folds. But the biggest mall-construction activity in India is taking place, as expected, in Mumbai, the country's financial and business capital. In all, 25 malls are under construction, each measuring anything between 90,000 and 600,000 square feet. A hefty Rs4 billion (US$87 million) is being pumped into these projects by 20 investors. About a dozen malls are already up and running in the upmarket south side of the city, as well as the downmarket distant suburbs. The anchors that first pull the crowds here - and at other malls all over the country - are as varied as they come. There are the US and European chains such as McDonald's, Lacoste, Pizza Hut, Benetton, Subway, Marks & Spencer and Mango. Their success has spawned the emergence of successful Indian chains such as Pantaloon, Globus, Shoppers Stop, Giant, Lifestyle and Big Bazaar. Stores named after popular branded merchandise also act as effective anchors. These include the likes of Tommy Hilfiger, Swatch, Arrow, Louis Vuitton and Nike.

Foreign mall operators cannot enter India as foreign companies are not allowed to own real estate in India. Companies like Nike, McDonalds and Reebok sell at mall outlets through their Indian subsidiaries or franchisees. McDonalds, for example, has appointed two master franchisees in India, and these in turn have appointed numerous sub-franchisees all over the country. A sub-franchisee, therefore, could open a McDonalds outlet either as a standalone store or as one of the many stores in a mall. Making the job easier for the anchors is a gradual change in the Indian economy from a socialistic to a capitalistic one. This has led to a rise in the numbers of middle-class consumers, their wallets stuffed with more disposable income. According to one estimate, over the past three years, consumer spending has increased at a respectable rate of 12% per annum. Earlier, a large majority of Indians believed in the Spartan asceticism of the Father of the Nation, Mahatma Gandhi. But the new generation of shoppers like their contemporaries worldwide - believe in living for today and splurging at the mushrooming malls over the weekends. These consumers, many of whom have been exposed to shopping trends in the West, are also more aware and discerning. Another reason for the ongoing boom in mall activity is the opportunity to retailers for a greater accessibility to real estate at affordable prices. Part of this is due to easier availability of bank and institutional finance. And in places such as Mumbai, the freeing up of much-needed real estate. This has happened with the many closed textile mills in the central part of the city now being allowed to exploit their real estate for other commercial purposes. Investors are attracted by the 14% returns in the malls business, compared to 11% in the office segment and 6% in the residential segment. For the young crowd, malls have become areas in which to "hang out", to catch up with friends in stores like Cafe Coffee Days and Barista, each vying to be the Starbucks of India. There's also an entertainment factor, with more and more of the youngsters beginning to see shopping as an enjoyable pastime. Many of these are working women; the goods in the malls are now not only enticing but attainable as well.

The mall phenomenon is vividly captured by Paco Underhill in his book Call of the Mall (Simon & Schuster), and when he writes "the mall is the venue where the young have their first taste of social freedom and the rest of us compare notes", he could be talking about a location anywhere in the world, including India. "Malls are very much like television. Another totally fake environment that attempts to pass itself off as a true reflection of who we are and what we want. We disdain it, and yet we can't stop watching. Or shopping," elaborates Underhill. The mushrooming of the Indian malls is being followed by a process of segmentation, each trying to project a particular environment, a specific image. In Mumbai, for instance, is Crossroads, the country's first mall (opened in 1999), a chic, ultra-modern collective of international brands including Swarowski, Lacoste, Tag Heur and Marks & Spencer and eat-outs such as Pizza Hut, Subway and McDonald's. At the other extreme is R-Mall in suburban Mulund, proudly displaying homegrown retail labels such as Big Bazaar (household items), Hakoba (ladies' wear), Planet M (music), Food Bazaar (groceries), Weekender Kids (children's wear) and Pantaloon (men's readymades). The phenomenal success of Pantaloon if proof enough that the successful mall of the future will store goods that are more accessible to a broader segment of Indian society. Launched in 1987 as the country's first ready-made trouser brand by Kishore Bayani, Pantaloon has now grown into the Rs4.5 billion (sales) Pantaloon Retail (India) Ltd. Two months ago, Bayani launched his own mall, the six-storied Bangalore Central, stocking more than 300 brands across a 120,000-square-foot area. Bangalore Central also houses Central Square - a dedicated space for product launches, impromptu events, exciting shows and art exhibitions. Biyani will soon open new malls Hyderabad Central and Pune Central - in other Indian cities. Another group in expansion mood is Shoppers' Stop. The Mumbaiheadquartered chain employs 2,000 people at 16 stores and has ambitious plans to expand to 25 locations by 2005. Lifestyle India is all set to open seven shopping malls - each at a cost of Rs100 million - over the next three years. By then, its turnover expected to jump to Rs7 billion from the Rs4 billion at

present (from seven malls). Lifestyle India is looking at smaller Indian cities like Kochi, Indore, Ludhiana, Chandigarh, Lucknow and Jaipur for its plan to fan out all across India. Similarly, Piramal Holdings Ltd, which pioneered the concept in India with Crossroads, is planning to set up malls in four other cities besides Mumbai. But Bayani has a word of caution for would-be entrepreneurs trying to cash in on the booming mall business. "The taxation and legislation system is complex and difficult to navigate," he has said. Some analysts also warn that too many malls are being built, creating a bubble that is likely to burst. "The developers have to watch out that they don't oversupply," cautions Megha Shenoy, a Mumbai-based real-estate analyst. "As it is, only a handful of them [developers] understand the retail property business property. The majority are jumping onto the bandwagon without even realizing the pitfalls." According to a survey conducted by global property consultancy firm Cushman & Wakefield, not all mall operators are likely to benefit equally. "Only the ones in favorable locations and having the right format and suitable strategies are likely to remain long-term players," informs the report. But Indian businessmen are known for their sheep mentality. A single success in any new field spawns many me-too imitators. However, as is evident from Indian business history, many private airlines, courier companies and granite exporters have bitten the dust. The survivors in the mall sector will emerge only once the dust has been cleared from the frenetic mall-construction sites.

3. Consumer Buying Behaviour

What influences consumers to purchase products or services? The consumer buying process is a complex matter as many internal and external factors have an impact on the buying decisions of the consumer.

The Psychology of Buying

In order to market a product to a target group, manufacturers should determine the needs of the buyer. Some buyers are looking for a sense of safety and belonging, while others want to gain esteem in the eyes of their peers. When providing information to buyers, marketers must understand how the product is perceived. Chances are the buyer will interpret information about the product based on previous knowledge and beliefs, but learning about the product can change the buyer's behavior. Buyers will also purchase products based on their personalities and lifestyles. For example, people who want to live an active, healthy life may opt for organic foods and reject suntanning products.

Family Situation

Many buying decisions are based on what is best for the family. The marketer should be aware of who is making the buying decisions for family products. For newlyweds with no children, purchasing might be a joint decision between husband and wife. For families with young children, it might be a stay-at-home parent making the decisions. Once teenagers enter the picture, they may have buying power on their own, aside from family purchases.

Social Class and Culture

According to Alex Brown, a former professor of marketing at the University of Delaware, social class determines to some extent, the types, quality, (and) quantity of products that a person buys or uses. For example, your social class may determine which jeans you will buy. An upper-class woman with inherited wealth would probably buy a different pair of jeans from what would appeal to an inner-city male. Deep-fried food may be an easier sell in the South, where it is a traditional part of the cuisine, than in California where the food has panAsian influences.

The Buying Process

The buying process starts with the consumer recognizing a need, or a difference between what he now has and what he needs to purchase to change his condition. At the basic, physiological level, hunger stimulates a need to buy food. The next step is to seek out information about the product and evaluate the alternatives. The purchase decision can be based on such elements as packaging, method of payment as well as the features and benefits of the product. Often there is a post-purchase evaluation, with the consumer forming an opinion about the item obtained.

4. Research Methodology

Problem Statement
Shopping malls in India have been increasing day by day but malls suffer in the long term so the sustainability of the malls is the issue.

Objectives
y To find out various factors that affect the buying behavior in shopping malls. y To suggest how to improve the sustainability of shopping malls over the period of time.

Data Collection
Secondary Data To gain the insights about the industry and to get the industry trends some amount of secondary data was taken into consideration. Primary Data For the purpose of collecting data, a structures questionnaire would be made using the various scales mainly likert scale.

Type of research

It would b e a descriptive research. Main characteristic of such a research is to describe a general or a market characteristic or a function or functions. Here we want to know the major factors affecting the buying behaviour in shopping malls.

Questionnaire and contact method

It would be a structured questionnaire and respondents would fill it and respond. Questionnaires would be handed over personally.

Sampling technique
Non probability and quota sampling would be used. Non-probability sampling is generally used when there is a lack of proper sampling frame or there are time and expense constraints. Quota sampling is a two stage restricted judgemental sampling.

Sample Size Demographics

Age

Group
<25 25-35 35-45 Above 45 Graduation Post-graduation Others <2lakhs 2-5lakhs Above 5 lakhs

Total
62 64 64 60 91 133 26 110 80 60

Grand Total

250

Education

250

Income

250

5. Tools used

Statistical Tests

y ANOVA analysis y Mean Analysis

Softwares used

y MS Excel y SPSS y MS Word

6. ANALYSIS AND INTERPRETATION According to Age

SS Merchandise Between Within Total Site Location Between Within Total Price Between Within Total Between Within Total Between Within Total Between Within Total 2.08 63.4 65.6 2.43 68.9 71.4 1.6 42.5 43.2 1.9 54.8 56.73 1.52 44.85 46.37 .17 24.05 24.22 Df 3 246 249 3 246 249 3 246 249 3 246 249 3 246 249 3 246 249 Mean Square .696 .258 F 2.69 Sig. .047

.812 .280

2.89

.036

.538 .172

3.13

.026

Structure

.634 .223

2.84

.038

Culture

.506 .182

2.77

.042

Purpose

.057 .098

.586

.625

ANOVA test has been conducted for people from different age groups to check the impact of merchandise, site location, price, structure, culture and structure of the mall at 0.05 level of significance.

Mean Analysis Age <25 25-35 35-45 >45 Sample size 62 64 64 60 Mean 3.64 3.51 3.62 3.59

Interpretation: y People of age below 25 are most sensitive to mall attributes like merchandise, site location etc as the mean is highest followed by people of the age 25-35. Looking at ANOVA factors merchandise, site location, price, structure, culture at the mall affect the people of different age directly as the p for all of them are below .05. There is no significant impact of purpose across the different age groups. Age and merchandise: Young consumers are more influenced by brands and merchandise compared to old ones(above 45) who are quality conscious. Middle aged people(25-35) look to maintain balance and try new things at times. Age and location: Above 45 consumers prefer purchasing from nearby stores. 35-45 prefer quality and change both. They buy low-involvement products from nearby stores and don t mind going a little far for the others. Young ones are flexible. Age and price: Generally, younger the consumer less price conscious he is and vice-versa. Age and structure: Consumers above 45 don t look for the ambience and facilities while the young ones want a complete experience and people of middle age are little concerned about it. Age and culture: Cultural attributes of the mall impact people across all ages differently Age and purpose: Main question is regarding window shopping, planned shopping, entertainment etc. It is flexible across age groups.

According to Education
SS Merchandise Between Within Total Site Location Between Within Total Price Between Within Total Between Within Total Between Within Total Between Within Total .995 64.6 65.56 .291 71.1 71.4 .161 43.7 43.8 . 965 55.67 56.73 1.17 45.20 46.37 .17 24.05 24.22 Df 2 247 249 2 247 249 2 247 249 2 247 249 2 247 249 2 247 249 Mean Square .447 .262 F 1.825 Sig. .163

.146 .288

.506

.604

.080 .177

.454

.636

Structure

.483 .226

2.137

.120

Culture

.587 .183

3.20

.042

Purpose

.085 .097

.875

.418

ANOVA test has been conducted for people from different education groups to check the impact of merchandise, site location, price, structure, culture and structure of the mall at 0.05 level of significance. Mean Analysis: Education Graduation Post-graduation Others No. of Samples 91 133 26 Mean 3.57 3.62 3.48

Interpretation: Consumers who are very educated are too much affected by the mall attributes as it suggests mean for post graduates is highest. Irrespective of education merchandise, price, site location, structure, purpose have an impact on buying decisions. Education and merchandise: More educated people are more smart buyers and they have a higher capability to analyze whether they are getting their value for money. While prople with less education are much more influenced by ads, word of mouths, promotions etc. Education and location: Education and distance to go to malls aren t having a very high co-relation as this factors differs from the convenience of person to person. Education and price: More educated people see d price keeping the value for money dimension in mind. People with less education generally have this perception that costlier the product better it is in terms of quality. Education and structure: Less educated people generally get more influenced by the ambience and facilities at mall. So they visit the mall for that.

According to Income
SS Merchandise Between Within Total Site Location Between Within Total Price Between Within Total Between Within Total Between Within Total Between Within Total 1.58 66.38 6.96 .118 71.305 71.422 1.58 66.38 67.96 .1.441 44.93 46.377 1.441 44.93 46.377 .224 24.002 24.226 Df 2 247 249 2 247 249 2 247 249 2 247 249 2 247 2493. 2 247 249 Mean Square .792 .269 F 2.94 Sig. .054

.059 .289

.204

.0816

.792 .269

2.94

.054

Structure

.720 .182

3.96

.020

Culture

.720 .182

3.96

.020

Purpose

.112 .097

1.152

.318

Mean Analysis: Income <2 lakhs 2-5 lakhs >5 lakhs No. of Samples 110 80 60 Mean 3.68 3.56 3.67

Interpretation: People having income of below 2 lakhs are most influenced by the mall attributes. Followed by the people having the family income of more than 5 lakhs. Middle level people aren t too much influenced by the attributes like merchandise, structure, ambience, price etc. Merchandise, price, structure, culture, these four attributes are significant. They four differ according to income and have different incomes on different income groups the rest are comparatively constant. Income and merchandise: People with higher income prefer to shop from the malls as they have a higher purchasing power. They prefer buying branded products and don t mind paying higher prices for high quality merchandise. People with lower income don t have too high spending power. Income and Price: People with low incomes are price sensitive and they take price into consideration while making a purchase. They take price into consideration when they shop from malls. Prices at shopping malls have less impact on people with higher incomes. They want high class and branded products. Income and structure: Generally people with higher incomes are high-spenders so they are pretty sensitive to the ambience and atmosphere at the shopping malls and they also want a perfect shopping experience while shopping at malls. SO they are too sensitive about the structure of the malls and also the facilities available compared to those with the low income.

According to residency location:

Location and merchandise: People living in better areas are more concerned about the quality products. They also don t mind spending for buying classy and trendy items and exploring large variety of items compared to people living in semi-urban or small areas of cities. They are much more utility conscious. Location and price: People living in the lavish areas of the city comparatively have a higher purchasing power and generally are high-spenders. SO they aren t too much concerned or affected by the price when they go to buy things from the shopping malls. Location and mall location: People living in semi-urban areas or the areas which aren t too developed in the city generally buy things from nearby stores. They don t go too far to buy things. Convenience plays a major role for them.

7. Conclusions and findings

y Age: While buying from shopping malls younger people are influenced by brands and varieties of merchandise, structure, ambience, location while for older people factors like convenience, location(how near the mall is), price, quality of merchandise, culture at the mall, facilities play a major role. y Education: More educated people take quality and price of merchandise into consideration keeping their value for money in mind. They get attracted by location, facilities, structure etc given that they are getting their value for money. Less educated people attracted quickly because of huge brand names, ambience, location, overall experience at mall, entertainment etc. Culture and the adaption to local customs is very important. y Income: People with high income generally want an overall experience. They want a lavish ambience and good facilities. They are ready to pay higher prices in the malls. High quality merchandise and big brand names attract them to the malls. While people with middle income are quality conscious. Quality merchandise attract them. They are price sensitive to some extent. They explore large variety of products. For people with low incomes price and location plays a major role.

8. Recommendations for sustainable growth

y Providing wide variety of merchandise is important. Having big brands to attract higher spenders and also having normal merchandise brands and quality and utility products is important. y Combination of high-quality merchandise and also the normal merchandise has to be there. So that even people with low-pockets spend more. And striking the balance between them is too important. y Products have to be priced smartly. High priced products should be there. Also on the other hand medium and low priced products are there. So money is generated from the spenders of all the size and mall can also hold onto the spenders of different potential. y Striking the balance between the products of different sizes is very important. y Location of the mall has to be chosen very smartly. It should be made sure that it is in a good area and also the reach and convenience has to be kept in mind. This also has a severe trade-off with increasing real estate prices. y The structure of the mall has to be good. It has to have a good ambience and has to have facilities. It has to be very well organised and has to have trained representatives. y The mall has to have proper information kiosks and sign boards and assistance when needed. y Mall can have many entertainment activities to increase the foot-falls. y Adapting to local culture is extremely important. Malls just don t have to be the replicas of western culture. They have to adapt to local culture. y Different consumers have different buying, spending, and consuming habits. Malls have to position themselves accordingly.

9. Implications
y This will help understand how retailing over the years have emerged and also how retailing has been modernised throughout the years. y This will help in understanding the consumers perceptions about the various attributes about shopping malls. y This will help understanding how various factors contribute to attract consumers to the shopping malls. y This will also help in giving keen understanding about the factors that need to be improved by the shopping malls to have a long term sustainable growth. y This will help shopping malls to come up with the strategies to increase foot-falls and increase the revenues and capitalise on increased footfalls

10.

References

y Ganguly.(July 15, 2010) Gurgaon mall failure retrieved from www.indianretailforum.net y Jain.(2009)Location Factor. 4:Oct Retrieved at (sept 8, 2010) www.indianretailforum.net y Morris. A.(October 15, 2007) Information for intelligent retailing. www.emerald.com y Retail History(March 3, 2008).pp 1-13 y Challenges and opportunities of retailing www.business.mapsofindia.com y y Call of the Mall-Paco Underhill y The Businessworld(Sept, 2011 edition) y Official website of Indian Retail Forum www.indianretailforum.net y Jain(2009) Location Factors Retrieved from www.indianretailforum.com y www.emerald.com y www.thehindubusinesskine.com y www.deadmalls.com y Retailing shopping(Suite101) http://www.suite101.com/article.cfm/retailing_shopping/65949

11.

Annexure

Questionnaire
Questionnaire

Sir/Ma m, As a part of our MBA curriculum, I have undertaken a research study of the factors affecting buying behavior in shopping malls in Ahmedabad. Please spend your valuable time to respond to following questions. I ensure that information provided by you will be used only for academic purposes.

Name: Address: Gender: Age: Below 25 25-35 35-45 above 45 Other______

Education: Graduate

Post Graduate

Family Income:_________ E-mail ID: 1. Quality of merchandise in the shopping malls attract me to shop from the shopping malls Strongly agree agree neutral disagree strongly disagree

2. I prefer to shop from malls as branded and wide variety of products is available. Strongly agree agree neutral disagree strongly disagree

3. I don t mind traveling a bit(more than 3kms to go to shop at shopping malls. Strongly agree agree neutral disagree strongly disagree

4. I don t mind paying a high price for shopping from shopping malls. Strongly agree agree neutral disagree strongly disagree

5. I purchase these product from shopping malls. 5.1 Vegetables, grocery and dairy

5.2 5.3 5.4 5.5 6.

Household items Clothes and cosmetics Electronics and furniture Others I like to have a complete shopping experience when I shop. The ambience, facilities and atmosphere play a major role while shopping. agree neutral disagree strongly disagree

Strongly agree

7. I believe that services, approach of representatives, culture in the mall play an important role Strongly agree 8. 8.1 8.2 8.3 8.4 agree neutral disagree strongly disagree

When I go for shopping I do window shopping I have specific thing in mind I go for entertainment I go because malls are status symbols

Thank You!!!