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IMPACT OF DEPARTMENTAL STORES ON THE SMALL SIZED STORES

M.COM (SEM III)

European Commission

CHAPTER 1. INTRODUCTION
The Indian retail market is the fifth largest retail destination all across the globe. It has been ranked as the most attractive emerging market for investment in the retail sector in 2012. In the entire Gross Domestic Product of India, the share of retail trade was between 810% in 2007, where presently it has touched around 21%.

Consumerism is on the rise with the rising trend of middle class segment in the country. The Indian consumer (retail) market in all probability will grow four times by 2025. The value of India's retail market has touched US$ 629 billion. India has escalated up to the 12th most preferred retail destination globally in 2012 (in 2008, they ranked 44th).

The Indian retail industry comprises both organized (4%) and unorganized retailers (96%).The organized retail segment in India is growing at a faster pace, owing to a strong economy, favorable demographics, rising income, changing lifestyle and consumer aspirations of an everburgeoning middle class. The organized market comprises large players such as future-group, RPG, ITC etc. with greater enforcement of taxation mechanism and better labor law monitoring. They have an efficient supply chain management, with superior vender relationships, quality customer service, efficient merchandizing and timely promotional campaigns. On the other hand, unorganized market/traditional retailers consists of small retailers, local kirana shops, owner-manned general stores, chemists, footwear shops, apparel shops, cart hawkers etc. They are prone to tax evasions and lack of labor law supervision.

India is considered one of the largest unorganized retail markets in the world working in less than 500 sqft retail space.

IMPACT OF DEPARTMENTAL STORES ON THE SMALL SIZED STORES

M.COM (SEM III)

Research Methodology
Descriptive research method has been used in the present study. Descriptive studies are designed to obtain pertinent and precise information concerning the current status of phenomena and whenever possible, to draw valid general conclusions from the facts discussed. The main purpose of the study is to find out the current performance of the Kirana shops in and around (western suburbs and south ). An attempt is made to find out the impact of organised retailing on unorganised retailers who deals with food and grocery and to what extent they provide customer satisfaction. Sample Size 50 organized retailers 50 un-organized retailers o 40 {food and grocery}

Retailers operating Food and Grocery

Types of research Questionnaire method Personal interviews

Scope of the Study The Indian market has seen vast changes in political, economical and social environment, which has a great impact on consumption. With the Indian as well as international corporate entering into the Indian retail scenario the market has been divided between the traditional and the organized sector. The Indian retail scenario is presently facing the similar situations as the mom and pop stores in the developing nations faced at the emergence big box retailers. There are various issues that need to be addressed, like what would be future patterns of consumption, which formats of retail would be preferred by consumers and will the rise of organized retail affect the traditional retailers. Grocery industry is strongly driven by price competitiveness, Product selection, assortment and courtesy of personnel are also very important in determining

IMPACT OF DEPARTMENTAL STORES ON THE SMALL SIZED STORES

M.COM (SEM III)

format choice with cleanliness being the most important attribute regardless of format of grocery shops. The dimensions that are relevant for grocery store choice are: Price- consciousness, Assortment, Behaviour of the store personnel, Cleanliness, Quality, Deals/ Specials/promotions, Ease of Shopping, Time/ Day of Shopping, No of outlets, Location / Distance, Home Order/Delivery, Shopping list / Unplanned, Recreational / Time spent at store, Frequent buyer schemes, Payment/ Credit facility, Shopping companions, In-store specialty, Store signage/ ambience, Parking, Expenditure/ no of times shopping, Apathy/ Stress, Refund / Exchange. To discern the difference, if any, between customer perceptions of grocery store attributes for kirana stores and organized retailers, the present study has been conducted with 40 unorganized retailers and 80 customers of organized and unorganized retailers in five areas of to be precise western suburbs and south . Such sample will also facilitate analyse the impact of organized retailing in the unorganized sector. Preparation of the Questionnaire This study utilized a Standardized Open-Ended Interview (SOEI) conducted among 120 respondents. The very purpose of this research is to know the impact of organize retailing of food and grocery on neighborhood shops in area and their practices of the business and the effect of trading in relation to customer purchasing practices in the retailing market. The study demands direct answers from the subjects, which without any ambiguity will determine the factors contributing positively or negatively for assessing the functioning and the effect of business in relation to retail shops and their impact organization. The questions that were included in this study were prepared based on the literature collected on issues pertaining to unorganized retailer and purchase pattern of customers. Some of the key issues that emerged in the literature and which formed part of the questions were grouped under the following headings

Questionnaire 1: Unorganized retailer survey Section - I: Owners Profile Section - II: Outlet Type 3

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M.COM (SEM III)

Section - III: Employee and customer profile Section IV: Turnover and profit Section V: Sales Composition Section VI: Facilities and services Section- VII: Market trends and dealing with competition Section- VII: Impact of organized retail Questionnaire II: Customer Interview Schedule Section- I: Purchase Behaviour Section II: Profile of the respondents Initially, a pilot study has been conducted on 25 respondents each to pre-test the format and determine the relevance and depth of the data obtained in the interview. Necessary corrections were made to the questionnaire wherever required. A sample of 50 unorganised retailers, 50 customers of organised retail.50 customers of unorganized retailer were selected for the study giving equal representation of 10 each in all categories to five selected constituencies. All the respondents selected for the study are above 18 years of age. The samples were chosen from five areas of .

Limitations of study During in formal interviews, the few respondents views were found to be different than what they expressed in the questionnaire, so this thing took more time to found correct response from respondent. Language became a barrier to communication; since small retailers were not able to understand certain ideas of marketing. The survey is based on the sample size and it may or may not be true representative of the entire un-organized sector. Time constraint.

IMPACT OF DEPARTMENTAL STORES ON THE SMALL SIZED STORES

M.COM (SEM III)

Objective of Study
This study has following below objectives; 1. To understand the factors or strategies followed by organized retailers to capture the market. 2. To understand the factors or strategies followed by non-organized retailers to overcome the competition. 3. To compare the strategies adopted by different retailers to capture and competition. 4. To analyze the present retail scenario with respect to the share of unorganized retailers. 5. To analyze the factors affecting the buying behaviour of consumers with respect to food and grocery in retail business. 6. To analyse the perception of unorganized retailer on the entry of organized players based on performance of last two years. 7. To study the reasons for consumers patronizing unorganized retailer despite the existence of new organized formats. 8. To analyse the various factors influencing the preference of a retail outlet by a customer. 9. To identify the potential for the organised retailers in and suggest few strategies to unorganised retailers to compete with organized retailers.

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M.COM (SEM III)

Hypothesis
The analysis is based on the retailers performance against five determinants for store choice by a customer. They are:

1. Product categories dealt by the retailer. 2. Facilities available in the outlet, 3. Various services offered by the retailer, 4. Retailers adoption to the changing market trends 5. Readiness to face the competition of organized retailer

Therefore the proposed first set of hypothesis is as follows.

Hypothesis- I 1. The age group of the retailers is not significant in dealing with above mentioned determinants of store choice. 2. The educational qualification of unorganized retailers is not significant in dealing with the above mentioned determinants of store choice. 3. The type of retail outlets is not a deciding factor in dealing with the five determinants of store choice. 4. The size of the shop is not significant in dealing with the five determinants of store choice. 5. There is no relationship between number of years of experience in the business and the five determinants of store choice.

Buying Behavior of Organized Retail Consumers: In this regard four hypotheses are given below and this forms the second set of hypothesis for the study. Hypothesis II 1. (a)There is no significant relationship between the distance of therespondents (organised retail customers) residence and the amount spent in the outlet. (b) The distance of the respondents (organised retail customers) residence will not have an 6

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M.COM (SEM III)

impact on the purchase of different items from the outlet. 2. (a) There is no significant relationship between the amounts spent by the respondents at the organised outlet and the mode of transport used by them. (b) The purchase pattern of respondents of organized outlet is same irrespective of the mode of transport used by them to reach the outlet. 3. (a) There is no significant relationship between the amount spent in the organised retail outlet and frequency of purchases of the respondents. (b) There is no significant difference in the frequency of purchase from the organised retail outlet and the different product category purchased by the respondents. 4. (a) There is no significant relationship between the average monthly household income of the respondents and their spending at an organized outlet (b) The various products purchased by the respondents in an organized outlet are not dependent on their average monthly income.

Buying Behaviour of Unorganized Retail Consumers: Hypothesis III 1. (a) There is no significant relation between the amount spent by the respondents (unorganised retail customers) during one visit and the distance of their residence from the outlet. (b) There is no significant difference between the distance of respondents (unorganised retail customers) residence and the various products purchased by them. 2.(a) There is no significant relationship between the amount spent by the respondent at the unorganized retail outlet and the mode of transport used by them to reach the outlet (b) There is no significant difference between the purchase of various product categories by the respondents at the unorganizedoutlet and the mode of transport used by them to reach the outlet. 3. (a) There is no significant relationship between the amounts spent by the respondent during one visit and the frequency of purchases from the unorganized retail outlet. (b) There is no significant difference among the frequency of purchase and the different product category purchased by the respondent at the unorganized retail outlet. 4. (a) There is no significant relationship between amount spent by the respondent during the visit to the unorganized outlet and the average monthly household income of the respondents

IMPACT OF DEPARTMENTAL STORES ON THE SMALL SIZED STORES

M.COM (SEM III)

(b) There is no significant difference in the purchase of various product categories by the respondent at an unorganized outlet and their average monthly income.

Data Collection
The data has been collected after preparation of the suitable questionnaire and subjecting it for pilot study, the final questionnaire was prepared and administered for data gathering and had visited the retailer/customers and administered the questionnaire from the selected one hundred and fifty (150) samples i.e., 50 unorganized retailers, 50 customers of unorganized retailer, 50 customers of organized retailer from five areas of (10 each of each category from one area). How the sample was contacted, and how the data was collected is explained under appropriate headings. It was also explained to each and every respondent that the information would be used for research purpose and identities will not be revealed. As a part of interview process the study followed which included first point: Contacting the respondent Explaining the research being undertaken Establishing rapport and neutrality Agreeing a time for the interview

How the Data was collected The questions included in this research were prepared based on the literature review and theoretical frame work emphasizing on the following components:Questionnaire 1 Profile of the respondents Type of the outlet Employee and customer profile Turnover and profit Sales composition Facilities and services Market trends and dealing with competition 8

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Impact of organized retail

Questionnaire 2 Purchase behavior Respondents profile

In depth interviews were used to gather primary data pertaining to the above mentioned components using structured interview schedules. The interviews were conducted over a period of three weeks. The interview process comprised of introducing opening question, probing questions, prompting a summary, conclusion of the interview, thanking the interviewee for the timeand co-operation. Each in depth interviews with unorganized retailer lasted for on an average 45 minutes and for customers it lasted for 20 minutes. Along with obtaining data from the interview process, the data was also obtained from direct observations. Secondary data was also collected from various reports and studies conducted in India.

IMPACT OF DEPARTMENTAL STORES ON THE SMALL SIZED STORES

M.COM (SEM III)

Review of Literature
As organized retail market is in its nascent stage in India, not many studies have been conducted in this area. Several studies in developed markets have focused on the impact of malls and supermarkets on the strategies followed by small stores. An attempt is being made to explore the research gap and studies conducted in this area to arrive at the objectives of the study.

From the literature reviews, it can be understood that adequate research has not been undertaken in India to analyze the impact of organized retailers. As organized retailers have started off recently in major metros, it is essential to understand the strategies adopted by organized retailers. It becomes imperative to analyze the strategies adopted by small retailers to sustain themselves in the market place with pace of organized retailers expansion plans. Thus food and grocery are the major categories being affected. Hence, the same are considered for this study.

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Chapter 2. Analysis I
The chapter analyses the profile of 50 unorganized retail outlets, 50 retail customer and 50 organized retail customers. To facilitate the study, was divided based on the assembly constituency areas and thereafter the major organized retail outlets (food & General stores) in these areas have been identified. While the respondents for organized and unorganized retail customers have been based on exit interviews, the respondents for unorganized retailer survey have been based direct approach. Profile of Unorganized retailer and outlet Age (Years) <20 20-29 30-39 40-49 50-59 >60 Total (E) (W) (N) (S) 1 (12.5%) 4 (50%) 3 (37.5%) 1 (12.5%) 10 (20%) 2 (25%) 3 (37.5%) 1 (12.5%) 2 (25%) 10 (20%) 2 (25%) 1 (12.5%) 2 (25%) 2 (25%) 1 (12.5%) 10 (20%) 3 (37.5%) 3 (37.5%) 1 (12.5%) 10 (20%) 3 (37.5%) 2 (25%) 3 (37.5%) Outskirts Total 1 (2.5%) 7 (17.5%) 13 (32.5%) 12 (30%) 6 (15%) 1 (2.5%) 50 (100%)

10 (20%)

The table shows the distribution of respondents education level. 8 samples each from 5 assembly constituencies were collected. For the sake of analysis, the data has been categorized into following groups; Less than 20 years, 20-29 years, 30-39 years, 40-49 years, 50-59 years and above 60 years. Off the 40 samples, it is observed that 30 % of the respondents belong to the age group of 40-49 followed by 32.5% belonging to 30-39 years. The percentage of respondents belonging to the age group of 50-59 is 15 % and only 17.5% respondents fall in the age group of 20-29. The number of respondents falling in the age group of less than 20 and greater than 60 is observed to be insignificant. Across the constituencies, it has been observed that in the case of Mumbai (E) and Mumbai (N) the maximum respondent belong to the age group of 30-39. In balance 3 constituencies the trend is congruent with the overall result. There was only one respondent belonging to age group of above 60 and he was from Mumbai (N). Similarly there was only one respondent from the age group of less than 20, and he was from Mumbai (S).

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M.COM (SEM III)

Education Illiterate No formal schooling Up to 5th Upto 10th Upto 12th Diploma Graduate Post Graduate Total

(E)

(W) 1 (10) 1 (10) 1 (10) 4 (40) 3 (30)

(N) 1 (10) 1 (10) 3 (30) 3 (30) 1 (10)

(S)

1 (10) 1 (10) 5 (50) 3 (30)

6 (60) 4 (40)

Outskirts 1 (10) 1 (10) 3 (30) 5 (50)

Total 3 (6) 4 (8) 8 (16) 23 (46) 11 (22)

10 (20.0)

10 (20.0)

1 (10) 10 (20.0)

10 (20.0)

10 (20.0)

1 (2) 50 (100.0)

The above table explains the educational qualification of the unorganised retailers. Qualification of the retailers have been categorized into illiterate, no formal schooling (but can read and write), upto 5th standard, upto 10th standard, upto 12th, Diploma, graduate and Post Graduate. It is observed that among the 50 respondents, 23 of them, i.e. 46% of the respondents belong to the category of upto 10th. At the same time, 22% of the respondents had schooling upto 12th. While 16% of the respondents belong to the category of upto 5th, it is observed that 8% of the respondent had no formal schooling but can read and write. The percentage of illiterate respondents has been observed to be low (6%). It is also observed that the number of respondents in the higher education level category (Diploma, Graduate and Post Graduate) very low. Across the constituencies also the maximum respondents possess the education qualification of upto 10th.

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M.COM (SEM III)

Relationship between Age and Educational Qualifications of unorganized Retailers

<20 Illiterate No formal schooling Up to 5th Upto 10th Upto 12th Diploma Graduate Post Graduate Total 1 (2)

20-29 1 (2)

2 (4) 1 (2)

30-39 1 (2) 1 (2) 4 (8) 4 (8) 5 (10)

40-49 1 (2) 2 (4) 2 (4) 6 (12) 6 (12)

50-60 1 (2) 2 (4) 1 (2) 3 (6) 1 (2)

>60

1 (2)

Total 4 (8) 5 (10) 8 (16) 16 (32) 13 (26)

1 (2)

4 (8)

2 (4) 17 (34)

2 (4) 19 (38)

8 (16)

1 (2)

4 (8) 50 (100.0)

The above table analyses the relationship between age and educational qualification of retailers. It was brought earlier that maximum respondent belong to the age group of 40-49. It was also observed from table that the maximum respondents had the maximum educational qualification of upto 10th standard. The above table shows that maximum respondent (38%) belong to the age group of 40-49 and have the educational qualification of upto 10th standard. It also emerges that the second highest number of respondents (34%) belong to the age group of 30-39 also had the maximum educational qualification upto 10th. The third highest number of respondents belonging to the category of 30-39 and have the maximum qualification upto 12th standard.

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Type of Outlet of Unorganised Retailer Type (E) (W) (N) (S) Outskirt Total Grocery Store 1 (2) 1 (2) 1 (2) 1 (2) 1 (2) 5 (10) General Store 6 (12) 5 (10) 4 (8) 5 (10) 6 (12) 26 (52) Groceries, fruit and veg 1 (2) 2 (4) 2 (4) 2 (4) 2 (4) 9 (18) Others 2 (4) 2 (4) 3 (6) 2 (4) 1 (2) 10 (20) Total 10 (20) 10 (20) 10 (20) 10 (20) 10 (20) 50 (100.0)

The above table analyses the respondents outlet type. The respondents outlets have been categorized into Groceries stores which sells only grocery items (rice, wheat, grains oil, ghee etc) general stores which sells all food and grocery items, Stores selling groceries, fruit and vegetables as well as others who sell a wide range of products including food and groceries. It is observed that about 52% of the respondents outlets belong to the category of general stores. From the above table it is observed that the majority of respondents in all the assembly constituencies belong to the category of general store. Only meagre 10% respondents belong to the conventional format like grocery stores. Interestingly 20.0% of the respondents belong to the category of others who sells a wide range of products of which food and grocery is only a part.

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Size of the Store of Unorganised Retailer

Area <200sqft 200-500sqft 500 1000sqft Above 1000sqft Total

(E) 7 (14) 2 (4) 1 (2) 10 (20)

(W) 5 (10) 3 (6) 2 (4) 10 (20)

(N) 4 (8) 2 (4) 1 (2) 3 (6) 10 (20)

(S) 4 (8) 2 (4) 3 (6) 1 (2) 10 (20)

Outskirts 4 (8) 3 (6) 2 (4) 1 (2) 10 (20)

Total 24 (48) 10 (20) 10 (20) 6 (12) 50 (100.0)

The above table explains the size of the respondents outlet including the go down area. For the ease of analysis the outlet has been classified based the Square Feet area of the store. The categories used are less than 200 sqft, 200-500 sqft, and 500-1000 sqft and above 1000 Sqft. It emerges that the maximum respondents belong to the outlets having area less than 200 sqft. While 20.0% of the outlet belongs to the category of 500-1000 sqft area while 20.0% of outlets have fall in the category of 200-500 sqft. Only 12.0% of the outlet belongs to the category of above 1000 sqft. Across the constituencies, the maximum outlets have the area less than 200 Sqft. Size of the Go Down of the Unorganised Retailer Area < 100 Sqft 100-200 200-500 >500sft Total 3 (6) 2 (4) 10 (20.0) (E) 5 (10) (W) 5 (10) 1 (2) 3 (6) 1 (2) 10 (20.0) (N) 4 (8) 1 (2) 2 (4) 3 (6) 10 (20.0) (S) 5 (10) 1 (2) 2 (4) 2 (4) 10 (20.0) Outskirts 4 (8) 1 (2) 2 (4) 3 (6) 10 (20.0) Total 23 (46) 4 (8) 12 (24) 11 (22) 50 (100.0)

The table depicts the distribution of sample of five areas from (E), (W), (N), (S) and Outskirts of retailers by their size of the godown. Among the total sample majority of the outlets have a godown area (46.0%) of less than 100sft in which, 10.0 per cent outlets are from (W), 8.0 per cent outlets are from Outskirts, 10.0 per cent outlets are from (S), 10.0 per cent outlets are from (E) and the 8.0 per cent from (N). From the total sample a significant group (24.0%) are having
area less than 500 sqft. Year of existence

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No of Years (E) (W) (N) (S) Outskirts Total

<5yrs 2 (4) 1 (2) 2 (4) 2 (4) 2 (4) 9 (18)

5-9yrs 5 (10) 4 (8) 2 (4) 5 (10) 4 (8) 20 (40)

10-19yrs 3 (6) 3 (6) 2 (4) 3 (6) 2 (4) 13 (26)

Above 20yrs

2 (4) 4 (8)

2 (4) 8 (16)

Total 10 (20.0) 10 (20.0) 10 (20.0) 10 (20.0) 10 (20.0) 50 (100.0)

The table analyses the details regarding the number of years of retailers existence in this business. Among the total sample a significant group ie,40% are into business between 5-9 years among which 11.5 per cent are from (E), 10.0 per cent are from Outskirts, 10 per cent are from (S), 8 per cent are from (W) and 4.0 per cent are from (N) .It is also observed that 26.0% of the retailers belong to the category of 10-19 years in business, where 6 per cent are from (S), 6 per cent are from (W) and 4 per cent are from outskirts, 6 per cent are from (E) and 4.0 per cent are from (N) Profile of Customers of Organized Retailers The study has been conducted on 50 customers of organised retailers, 10 each belonging to (E), (W), (S), (N) and Outskirts. And the study is based on survey using pre-designed questionnaire which contains two sections. The first section of the questionnaire deals with the buying behaviour of customers of organized retailer and the second section deals with profile of the respondent. This study was conducted to analyse the consumer behaviour of customers in an organized outlet. This will in turn help to establish the impact of organized retailing on unorganized retailer. To begin with the general profile of the customers has been analysed and results are as given below

Age Profile of the Customers Visiting the Organized Outlet 16

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<20 yrs (E) (W) (N) (S) Outskirts Total 3 (6) 6 (12) 1 (2) 10 (20)

20-29 yrs 2 (4) 2 (4) 2 (4) 3 (6) 1 (2) 10 (20)

30-39 yrs 2 (4) 3 (6) 2 (4) 1 (2) 2 (4) 10 (20)

40-49 yrs 2 (4) 1 (2) 2 (4) 3 (6) 2 (4) 10 (20)

50-59 yrs 2 (4)

>60 yrs 2 (4) 2 (4) 1 (2) 2 (4) 2 (4) 10 (20)

Total 10 (20.0) 10 (20.0) 10 (20.0) 10 (20.0) 10 (20.0) 50 (100.0)

3 (6) 3 (6) 2 (4) 10 (20)

The table analyses the distribution of sample (E), (W), (N), (S) and Outskirts by their age group. For the sake of analysis the respondents have been grouped into age groups of less than 20 years, 20-29 years, 30-39 years, 40-49 years, 50-59 years and greater than 60 years. It is clear from the analysis that a majority of respondents of visiting the organized outlet

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M.COM (SEM III)

Chapter 3. Analysis II
The result has been generally divided in to three parts. The first part deals with establishing relationship between certain factors. The existence of significant relationship is checked for personal factors like age, gender, place of living, educational qualification etc. with the factors/ attributes which are discussed below:
Accessibility

Reason for preferring kirana stores Variety of products. Ambience in case of departmental retail chains and cleanliness, display space etc. in case of local kirana store is perceived to be same. Price discounts & credit facilities available. Relationship with the shopkeeper in case of local kirana store and behaviour of the sales personnel assisting the Consumers in case of departmental retail chains are perceived to be the same. Touch, see and feel factor.

The existence of relationship implies the responses of the groups defined according to each factor are not homogeneous. In this study we focus ourselves only on the differences based on the consumer behavior of local kirana store buying and departmental retail chain shoppers. Though the study also deals with buyers who buy both from local kirana stores as well as from departmental stores but still we focus on the differences independently rather than taking both of them at the same. The part of the study which consists of buyers from both retail buying segment and local kirana store buying only deals with the basic facts associated with it and a basic comparison based on the data. The first part of the study deals with establishing relationship between different demographic segments based on age, demography, psychography ,etc and the factors which generally affect the buying pattern. This establishing relationship has been done for both local kirana store segment and departmental retail shoppers segment. The second part of the 18

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study deals with finding out the point of difference in the consumer behavior pattern of the two segments based on the factors taken in to account. The third part of the study as said earlier consists of the basic facts regarding the buyers who buy from both local kirana stores and departmental retail chains.

Important and Significant Relationships and Reason for Preference towards Kirana Stores Reason for preference towards kirana Stores have a significant relationship with age and education level of the consumers at 5% and 10% level of significance respectively. This can be shown by the following graph: Facilities Provided by the Unorganised Retailer (E) (W) (N) (S) Outskirts

Using plan using plan using plan using plan using plan

Computerized billing Credit card machine Scanning / bar coding Computerized Accounting Refrigerator, hot case etc Air Conditioning Electronic Weighing machine

5 1 1 2 8 2 5 5 2 9 1 2 1 1 7

3 2

9 2 2

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The table indicates the distribution of sample of five areas from (E), (W), (N), (S) and Outskirts w.r.t facilities provided by the retailer. In (E), 8 respondents use refrigerators and 5 respondents use electronic weighing machine and 2 respondents are planning to use refrigerator and 2 others are planning to use air conditioning facilities. In (W), 2 respondents use

computerised accounting, 9 use refrigerators and 2 uses electronic weighing machine and one respondent is planning to use refrigerator and 2 of them are planning to use air conditioning facilities. In (N) 7 respondents use refrigerators, 5 use computerized billing, 1 each use credit card machine, scanning/bar coding and computerized accounting and electronic weighing machine. Further 5 respondents of this area are planning to use computerized billing and 3 & 2 each are planning to use refrigerator and air conditioning facilities. In (S), 9 respondents are using refrigerators and one respondent is planning to use refrigerator hot case etc. In Outskirts, 9 respondents are using refrigerators and 2 are using electronic weighing machine and 2 of them are planning to use air conditioning facilities. It is observed that a huge majority of respondents use refrigerators/ hot cases for storage of perishable food materials. The second most used facility is electronic weighing machine and the third used facility is computerized billing. Among the facilities which the respondents are planning to implement, air conditioning of the outlet ranks first. Among respondents the other facilities like, credit card machine, scanning barcode reading, computerized accounting etc are hardly used and are not planned to be used in the near future. Market Trends and dealing with Competition This section, establishes the market trends and how the unorganized retailer envisages his business in the coming years. Adaptability to changing situation is the essence of surviving competition. How an unorganized retailer prepares for competition from the organized sector needs to be analysed. Further despite the competition from organized sector, does the organized retailer finds relevance for his business in days to come could be analysed. Further, in the quest for surviving competition the retailer needs to be abreast with technology, changing government policies, emerging socio-economics of customer and evolving business practices. This section, also try to establish the various options a retailer is exercising to maintain his place despite competition from organized retailers. 20

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Opinion of Unorganised Retailers about Large Self Service Stores

Supermarket the way to future (E) (W) (N) (S) Outskirts Total 5 (10) 6 (12) 5 (10) 4 (8) 5 (10) 25 (50)

Supermarket will not last for long 2 (4) 1 (2) 1 (2) 2 (4) 2 (4) 8 (16)

Super Markets are not Competitor 3 (6) 3 (6) 3 (6) 4 (8) 3 (6) 16 (32)

My set of customers Are different

Total 10 (20.0) 10 (20.0) 10 (20.0) 10 (20.0) 10 (20.0) 50 (100.0)

1 (2)

1 (2)

Table shows the opinion of the unorganized retailers about large self-service store (Organized retailers). The options given were super markets is the way to future, super markets will not last long, super markets are not their competitors and the customers of unorganized retailers are different. Among the respondents 50 % feels that super market is the way to future. Whereas 32.0% of the respondents feel that supermarkets are not their competitors. It is also observed that 16% of the respondents feel that supermarket will not last for long and only 2 % of the respondents have a feeling that their customers are different. The trend hold true for all the constituencies of the city. Impact of Organized Retail This section has been formulated to find out the adverse effect of the arrival of organized retailers on the unorganized ones. In this section the investigators is tries to find out whether the unorganized retailer has foreseen any threat to his business and therefore has made any changes in his business practices. The response to this question will also help us to establish whether the unorganized retailer consider the arrival of organized retailer has any long lasting significance. Further, this section also aims at establishing whether the organized retailing is been seen as the only way for future survival. 21

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Change in Unorganised Retailer's Business Post Entry of New Organized Retailer in the Vicinity

Yes (E) (W) (N) (S) Outskirts Total 12 (24) 3 (6) 3 (6) 2 (4) 4 (8)

No 7 (14) 7 (14) 8 (16) 6 (12) 10 (20) 38 (76)

Total 10 (20.0) 10 (20.0) 10 (20.0) 10 (20.0) 10 (20.0) 50 (100.0)

The table shows the respondents opinion about the change in their business after the entry of organized retailer in the vicinity. It is observed that 76.0 percent of the respondents feel that there is no change in their business whereas 24.0 percent of the respondents feel that there is a change. In the case of Outskirts, none of the respondents feels that there is a change, whereas in the case of (S), 8.0 percent of the respondents feel that there is a change in the business since the arrival of organized retailers. In the case of (E) and (W), 6 percent of the respondents feel that there is a change, whereas 14 percent of respondents feel that there is no change in their business after the entry of organized retailer.

Buying Behaviour of organized retail customers Section deals with the purchase behaviour of customers of organised retailers. This has been analysed to study the purchase pattern of the customers from all five constituencies in an organized retail outlet. Before testing the different hypothesis the survey results for the various factors will be analyzed in detail.

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Items Purchased during the Visit to Organised Outlet (E) (W) (N) (S) Staples Other grains Oil/ghee Other food toiletries Cosmetics Household products Fruits / veg Others 4 9 6 8 9 9 8 9 6 7 10 9 9 8 9 9 7 9 9 7 9 5 6 7 4 9 7 8 8 6 5 8 10 9 5 9 Outskirts 7 7 7 4 6 6 4 7 7

The table explains the distribution of items purchased during the visit. For the sake of the analysis the products in an organized outlet have been divided into staples, other grains, oil/ghee, other food items, toiletries, cosmetics, household products, fruits/vegetables and others. By analysing the data it is understood that the maximum number of respondents purchase household products from the organized outlet. The next popular item among the organized retail customers is the packaged food category. It is clear from the above table that the total number of customers for staples segment is very less

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Purchase of the Same Products from an Unorganized Outlet


Yes (E) (W) (N) (S) Outskirts Total 6 (12) 7 (14) 6 (12) 6 (12) 7 (14) 32 (64.0) No 4 (8) 3 (6) 4 (8) 4 (8) 3 (6) 18 (36.0) Total 10 (20.0) 10 (20.0) 10 (20.0) 10 (20.0) 10 (20.0) 50 (100.0)

The table indicates the distribution of sample (E), (W), (N), (S) and Outskirts by their habit of purchasing same products from unorganized outlet. It is understood that 64 % of the respondents purchase the same products from an unorganized outlet also. Only 36% of the respondents depend on the outlet for the purchase of the same products. It is evident from the above table that in (S) the respondents show a good loyalty to the organized retailer as the % of respondents who will not purchase the same products from unorganized retailer is very high. Effect on the Overall Expenditure on the Product Categories by Shopping from Unorganized Outlets Remained Increased Decreased Total same 2 (4) 8 (16) 10 (20.0) (E) 2 (4) 5 (10) 3 (6) 10 (20.0) (W) (N) (S) Outskirts Total 4 (8) 2 (4) 3 (6) 3 (6) 2 (4) 15 (30) 5 (10) 7 (14) 8 (16) 31 (62) 10 (20.0) 10 (20.0) 10 (20.0) 50 (100.0)

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The table analyses the distribution of sample (E), (W), (N), (S) and Outskirts by their overall expenditure on the product categories change by shopping from unorganized outlets. This analysis also establishes whether the customer patronize Organised retailers due to cost saving. It is seen that 62% of the respondents feels that the overall expenditure remained the same irrespective of purchasing the products from any type of outlet. Only few feels that they are sticking on to organized outlet because they feels that the overall expenditure will be more if they purchase the same products from an unorganized outlet. But the maximum response shows that they are not regular customers as they feel that their overall expenditure decreases if they purchase the same product category from an unorganized outlet. OVERVIEW The results of the study indicate that there is clear distinct space for organized and unorganized retailers to operate in . While there is a large scale transformation of retail outlet is forecasted, current study indicates that the organized and unorganized retailers targets to meet very specific needs of customer. Products like staples are the strongholds of unorganized retailer, whereas household cleaning products and packaged foods are much sought after products in an organized outlet. The specifics of the findings are discussed in subsequent paragraphs. In unorganised retail sector it has been observed that majority of the owners are in the age category of 30 to 49 years, in which majority has educational qualification upto 10th standard. It could be seen that the middle aged group contributes majority of retailers, with minimum education levels. This could be due to the fact that better educated lot dont consider conventional retailing as appealing career option, thereby migrating into other fields including organized formats of retailing. This limitation in the educational levels of retailers is likely to limit the growth prospects of this sector as harnessing latest technologies including computerization requires the retailer to be aware and familiar with them. Majority of the unorganised retail outlet belongs to the category of general stores and only very few belong to the conventional format like grocery stores. Interestingly the second largest number of outlet belongs to the category of others who sells a wide range of products of which food and grocery is only a part. In terms of area of the outlet majority fell in the category of outlet having area less than 200 sqft and in terms of godown area majority had area less than 100 sqft. This is indicative of the fact that majority of the unorganized retail outlet falls in the category of small shops with less store area as well as godown area for storage. Since majority of the outlet belongs to the category of general stores, which deals with items like, 25

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toiletries, cosmetics, household cleaning products etc in addition to food and grocery, they should be adequate inventory of these items to continuously meet the demand. However, since the store area and godown areas are less there is a risk of losing customer. The scope for improving the product range to meet wide category of needs of customers, is very limited. Since majority of the unorganized retailer have started their outlet themselves and majority of them have come to this business in the last 8-9 years, it is reasonable to conclude that even until recently unorganized retailing has been perceived to be a promising business. However, the response of unorganised retailers to the question of bringing their children into the same business, majority felt that they would not compel them. This could be due to that, the existing retailers feel that changing times require new formats of business. Hence they prefer to leave the choice to the next generation, who are better equipped to face the changing times. It is observed that a huge majority of respondents use refrigerators/ hot cases for storage of perishable food materials. The second most used facility is electronic weighing machine and the third used facility is computerized billing. Among the facilities which the respondents are planning to implement, air conditioning of the outlet ranks first. Among respondents the facilities like, credit card machine, scanning barcode reading, computerized accounting etc are hardly used and are not planned to be used in the near future. It is evident from the above that even the unorganized retailer is aware of the need to change with time. The features of an organized retail outlet which makes it functioning more efficient and adds to the convenience of the customers are being emulated by more and more unorganized retailers. It is important to notice that air conditioning ranks first among the facilities that unorganized retailers would like to add to his outlet. This is in line with the efforts made by organized retailers in making shopping and enjoyable experience. When it comes harnessing new technologies that would enhance the efficiency of the outlet, the unorganized retailers are prepared to accept newer ways. The perception among majority of unorganized retailers that features like cash credit and home delivery to its customers would help attract / retain them, indicates the resolve of the unorganised retailer to hold on to his strong points, i.e. the personal touch of his services such as home delivery and cash credit. It may be noted that, it is the very fact that the unorganised retailer caters for the customers in the close vicinity that enables him to resort to such services, which could not be easily emulated by organized retailers catering for mass. The researchers effort to establish the future plan of unorganised retailers, thereby analyse his worries and concerns, revealed that a majority of 26

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respondents would like to diversify their business by investing in a new business. However, they will do this along with the current business, subject to availability of finance in terms of a bank loan. This clearly indicates that the unorganized retailers are not finding any serious threat to his business. However, he is fully aware of the changing times and the requirement of adaptation. He is willing to diversify or modulate his business to meet these requirements, provided fund are available. This view point is further re-iterated by the fact that majority of the unorganized retailer feels that super market is the way to future and majority of them also feel that they should change with the modern time. Notwithstanding the above, majority of the unorganized retailers are unwilling to take up the franchisee of organized retail outlets. The probable reason could be the faith and confidence these traditional retailers have in the way they conduct their business. While they are ready to adapt and diversify, they dont find it essential to be a franchisee of organized retailers which has a less understanding about the local needs. This only emphasizes the motto, ' think globally but conduct locally'. It is clear from the analysis that a majority of respondents of visiting the organized outlet belonged to the age category of 20-29 years who are relatively young lot. Among this crowd major chunk visits the outlet with some companion. This shows that the customers want to take the shopping as an enjoyable experience and like to share it with some companion. The maximum respondents have an average monthly income of Rs 10,000- Rs 20,000. They stay at a distance of 1km-5km from the organized outlet and use a two wheeler to reach the outlet. As far the publicity of the organized outlet is concerned, in a small city like majority of the respondents believe in word of mouth publicity. They would like to believe in others experiences rather than advertisements and hoardings by the outlet. So it becomes important for the outlet to make the customers as satisfied as possible so that this is the only way to attract more customers to the outlet. Even though majority of respondents makes purchases of food and grocery more than thrice a month; maximum respondents make maximum only two purchases from the organised outlet. This shows that the customer is not loyal to the outlet and depends on other retailers for their regular purchases. Further it is understood from the analysis that maximum respondents spend only less than Rs 500 during the visit, and the maximum number of respondents purchase household cleaning products from the organized outlet. The next popular item among the organized retail customers is the packaged food category. This could be another reason why the customers frequency of visiting the organized outlet is less. Generally the customers make the purchase of the above mentioned 27

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products once or twice in a month and not on a regular basis like in the case of staples. It is inferred from the analysis that there is a significant relation between distance of residence of the customers of organized retailers and frequency of purchases made and the amount spends at organized outlet whereas there is no significant relation between mode of transport of the organized respondents and the amount they spend at the outlet. The maximum respondents who visited the unorganized outlet were in the age category of 50-59 yrs stay very close to the outlet. Most of the respondents go to the outlet by walk. They are traditional consumers who are in the close vicinity. Also it is inferred that a large number of respondents visit the outlet alone. This shows that the customers will visit an unorganized outlet for a real need of daily consumable items like staples. The analysis shows that the major medium of publicity of an unorganized outlet is word of mouth publicity In the case unorganized retailer majority of respondents visit the same outlet more than thrice a month for making purchases. The overall analysis shows that majority of the respondents will not purchase the same products from an organized outlet. This shows that the customers visiting an unorganized retailer will not go to any other outlet to make purchases and will be loyal to the outlet. Since the customers visit the outlet more than thrice a month, they would like spend fewer amounts during one visit. It is clear from the study that a large number of the respondents have spent only less than Rs 500 during the visit. Even though the customers of unorganized retailers stay loyal to them, they support the view of opening up of new large organized retail outlets. This indicates that for certain products the customers would like to depend on an organized outlet at the same time being loyal to the unorganized retailer for products of daily use. This supports the view that there is distinct space for both types of retailers to exist. It is observed that there is no significant relation between the amount spent by the organized respondents during one visit and the distance of their residence from the outlet, mode of transport used by them to reach the outlet and the frequency of purchases from the outlet. It is also inferred that there is an influence of certain variables on preference of retail outlets by the customers. Consumers appear to prefer the retail outlet keeping in view of price, Location, Service, distance, an amount of purchase. Also personal characteristics like age on education of the Consumers are influencing the preference of the outlets.

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Chapter 4. Summary, Conclusion and Recommendation


SUMMARY: Ending upon the socio-economic factors related to the country. In the developed economies, organized retail is in the range of 75-80 per cent of total retail, whereas in developing economies, the unorganized sector dominates the retail business. In developing countries, the retailing business continues to be dominated by family-run neighbourhood shops and open markets. With the changing demographic features and improvement in quality of life of urban India, the Indian retail sector is witnessing a tremendous growth. Strong underlying economic growth, population expansion, the increasing wealth of individuals and the rapid construction of organised retail infrastructure are key factors behind the growth. The growth in the overall retail market will be driven largely by the explosion in the organized retail market. The market is witnessing a migration from traditional retailing to modern/Organised retailing formats, with an explosive proliferation of malls and branded outlets. Modern retailing outlets in India are increasinglybecoming global in standards and are witnessing intense competition over 12 million small and medium retail outlets exist in India, the highest in any country. Traditional retail is highly pronounced in small towns and cities, with a primary presence of neighbourhood 'kirana' stores, push-cart vendors, 'melas' and 'mandis'. The growth in organized retailing has been the national trend over the last decade, with many organized retail chains developing larger stores that specialize in providing a wide selection of produce in a particular product range, lucrative pricing, one stop shopping etc. This prompted a study to establish the potentials of Visakhapatnam for the growth of retailing with the focus on consumer preferences and behaviour. Further, since the city is dominated by traditional retailers, the study also attempts to establish the impact of organized retailers on unorganized sector in Visakhapatnam with respect to the purchase behaviour consumers of food and grocery (The outlets which sells food, grocery, household items, toiletries and cosmetics).Towards this, the main objective of this study has been to analyze the impact of growth of organized retailers on unorganized retails in the food and grocery segment in Visakhapatnam.

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With this overall objective the sub objectives of the study are as follows. 1. To analyze the present retail scenario with respect to the share of unorganized retailers. 2. To analyze the factors affecting the buying behaviour of consumers with respect to food and grocery in retail business. 3. To analyse the perception of unorganized retailer on the entry of organized players based on performance of last two years. 4. To study the reasons for consumers patronizing unorganized retailer despite the existence of new organized formats. 5. To analyse the various factors influencing the preference of a retail outlet by a customer. 6. To identify the potential for the organised retailers in AP and suggest few strategies to unorganized retailers to compete with organised retailers. On realization of the objectives, the researcher progressed with the study of the available literature on the subject, wherein, the concept of consumer behaviour, theories involved; models and tools available based earlier studies, retailing models and strategies and gathered the statistical data on the retail industry. Descriptive research method has been used in the present study. Descriptive studies are designed to obtain pertinent and precise information concerning the current status of phenomena and whenever possible, to draw valid general conclusions from the facts discussed. The main purpose of the study is to find out the current performance of the neighborhood shops of retailers in and around Visakhapatnam and find out the impact of retailing of food and grocery business performed by them and to what extent they are getting customer satisfaction. Two open ended structured questionnaire, one for the organized retailer and the other for customers of the retailer have been used for data collection. In addition to interviewing, data was also collected from secondary sources and through observations during field activities.

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CONCLUSIONS: The findings of the study are divided into three parts. First part deals with the major findings of the data analysis of the unorganized retailer survey. The second part deals with the analysis of the results of the survey of buying behaviour of customers of organized retailer and the third part deals with the major findings of the survey of buying behaviour of customers of unorganized retailer. The major findings of the study are explained below. Unorganized Retailer Business 1. Of the 50 samples, it is observed that the majority of respondents (owners of unorganized retail outlets) belong to the age group of 40-49 years. It is apparent from this that unorganised retailing is dominated by people of higher age group and majority of them has already been in this business for more than 5 years. With a meagre 10% entering the scene of traditional retailing within the last 5 years, it could be inferred that the traditional retailing still remains the forte of older age group who have been in this business for long. This is due to following: (a) The older generation involved in the traditional retailing is unaware of the advantages of an Organised retail outlet and its future growth prospects. (b) The traditional retailer still believes that there is enough scope and room for them to survive despite entry of organised retailers. Probability due to his confidence in strong loyalty of local consumers and meeting their specific needs. (c) The younger age group of retailers, say below the age of 35 years, who are well aware of the modern trends in retailing do not consider traditional formats as viable option for future livelihood. 2. It is also observed that the major portion had only the basic educational qualifications and the number of respondents in the higher education level category is very low. As the very nature of the Unorganised retail formats do not require any formal training or expertise on the part of the retailer, the uneducated and those possessing minimum education background has over the years 31

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have found this sector suitable. The majority of the respondents belong to the category of uneducated lot, who must have taken this up as a livelihood. 3. It is observed that about majority of the surveyed outlet belongs to the category of general stores. Only meager 5.0% respondents belong to the conventional format like grocery stores. Traditionally the local mom and pop shops used to cater for the grocery requirement of locality. Subsequent the entry of Organised retailing formats, one of the apparent advantages that the traditional retailers found was the ability of the organised format to lure the customer with their range of products (promoting one stop shopping). This has led to a proliferation of general store formats among the traditional retailers, to cater for the daily requirement of grocery, packaged food, perishable food products, toiletries etc. 4. The store area of the maximum outlets is less than 200 sqft and godown area of less than 100sft which revealed that the average size of traditional retail outlet selling food and grocery had an average size of 217 sqft which includes the go down area. 5. According to the unorganized retailers, a significant group of their customers belong to Lower Class and Lower Middle Class. The lower class represents people who are either daily-wagers or who work for the Unorganised trade and industry; their employment is seasonal which means they may remain jobless during the off-season. Their purchases are meager and suit only the mom-and-pop stores. Those belonging to the lower end of the middle income group are generally employees of organised public/ private sector. Not generally upwardly mobile, this group of employees has over a period of time perfected the art of living within their means. To these people too, organised retail makes little sense since they cannot afford to pay cash down for their purchases. They buy from the mom-and-pop stores on credit during the month and settle the bill when they receive their salaries in the first week of the succeeding month. This also corroborates with the finding that majority of the unorganised retailer considers cash credit is strong feature of their outlet which attracts and retain the target consumers. 6. Among the facilities available in an unorganised retail, it is observed that a majority of respondents use refrigerators/ hot cases for storage of perishable food materials. The second most used facility is electronic weighing machine and the third used facility is computerized billing. 32

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Among the facilities which the respondents are planning to implement, air conditioning of the outlet ranks first. The organized outlets runs on a large amount of automated facilities like Air conditioned outlets, credit card machine, scanning barcode reading, computerized accounting etc. Although these facilities are not at the easy reach of unorganized retailers which runs with limited investments, the features like electronic weighing machines and computerized billing which they had incorporated to survive is indicative of the fact that the Unorganised retailer considers this modern features improves his efficiency and image. Further, it is also indicative of their willingness to imbibe technology as long its useful and is within their reach. 7. The strong features of the unorganized retailers are the personal care and other services like cash credit and home delivery given to the individual customers. Among the features that contribute to personal care, the unorganized retailers feel that features like cash credit and home delivery to its customers attracts / retains them. The Unorganised retailer here follows the Concentrated Marketing Strategy, which is aimed at connecting with and selling products to a specific consumer group. 8. Even the traditional unorganised retailers feel that super market is the way to future and hence they should change with the modern time. Further, majority of them plan to continue with their current business. From these observations it could be inferred that while they intend to continue with their traditional approach, they do accept that they need to modernize. This is also suggestive of the confidence they have in the traditional format and its future prospects which is based on their strong faith in loyal customers base and their personal relationship with the customers. Even with the entry and expansion of organised retail formats, the traditional retailers believe that their traditional form will survive. 9. Considering the huge employment opportunity in retail sector and to that the fears of the traditional retailers there has been studies in to analyse the possibility of inviting small retailers as well as individuals to become franchisees on a revenue sharing model. Accordingly, the respondents (Unorganised Retailers) were asked about their opinion on taking up the franchisee of organized retail outlets. Almost all respondents have expressed unwillingness to become franchisees of organised retailers.

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10. One of the hypothesis tested was whether the age group of the retailers is not significant in dealing with determinants of store choice selected for the study such as facilities available, product categories, various services offered, how the retailer deals with the market trends as well as competition and Readiness to face the impact of organized retailer. It emerges from the analysis that there is no significant difference between. 11. Another hypothesis tested was that the educational qualification of unorganized retailers is not significant in dealing with the above mentioned determinants of store choice Even though majority of the respondents had only the basic educational qualifications, it is inferred that there is a significant difference between educational qualification of the respondent and the determinants like various product categories he deal with, readiness to face impact of organized retail and facilities of the outlet. It is observed that among the respondents there were few well qualified retailers also. The majority of this part is youngsters who believe in innovating to meet the present requirement of the customers.

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RECOMMENDATION: Suggestion to the unorganized Retailers: 1. The finding of the customer survey with respect to the factors influencing in selecting an outlet indicates that the services and facilities provided by the outlet is a deciding factor for choice of outlet. Hence unorganized retailers should aim at imbibing facilities like airconditioning, electronic weighing machines, computerized billing etc which are the strong features of organized retailers. Further, to retain their customers and attract more customers, unorganised retailers need to continue with the services like home delivery and cash credit which are attractive features of unorganised retailers. 2. The customers do not mind traveling greater distances to reach an organized outlet for the purchase of packaged foods household cleaning products and fruits & vegetables. This could be due to the wide choice of these products available in organized retail outlet. Hence unorganized retailer should endeavor to add more variety of household cleaning products, packaged food and fruits & vegetables in their outlet. 3. The Unorganized retailer here follows the Concentrated Marketing Strategy, which is aimed at connecting with and selling products to a specific consumer group. The Unorganised retailer should therefore focus on the staples that are essential for the given locality, in terms of availability, quality and variety. 4. The Unorganised retailer needs to cater for an optimum store area to adapt to the changing requirement of the market. The finding that there is a significant difference with regard to the size of store and how the retailer deals with market trends and competition also corroborate the fact that the store area of an unorganized retailer has a significant bearing on his adaptability to change. 5. Unorganised retailers should leverage cost effective technologies such as SMS, e-mail, etc to extend the reach of his personal touch with consumers. Suggestions to policy makers and other stakeholders:

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It is felt that a successful unorganized retailer should try and consolidate his strongholds, wherein he utilizes the available resources and innovative methods to face the challenge from the organized retailers. Towards this, initiatives like co-operative collaboration which enables individual retailers to match the prices offered by organized retailers should be encouraged. It will entail central sourcing of consumer goods by cooperative and then passing out the goods to the individual retailers along with the price advantage. This will then result in large base of consumers preferring to do business with the friendly unorganized retailer. 2. It is beneficial for the unorganized retail to find ways and means to give a facelift to his outlet. In this direction, innovative programmes such as super value store programme which are aimed at small unorganized retailers to update their look and help them add value to their stores should be encouraged. As per this the FMCG companies will be buying shelf space from the retailer and will be giving some discount to their retailers on their products. Besides these tangibles they also train unorganized retailers on modern retail basics. 3. The survey findings are indicative of the fact that in Visakhapatnam, there is a definite distinct space for each type of retail formats. The varying socio-economy and cultural aspects plays a vital role in the preference of outlet. Not with standing this modern efficient ways of conducting business is the need of the hour irrespective of the type of the retail outlet. The unorganized retailer in particular needs to be fully aware of this reality. The lower levels of education prevalent in the unorganized retail sector along with the instances of agitations against organized retail formats calls for institutionalized intervention by government agencies towards educating unorganized retailer. 4. One of the major hurdles in the development of unorganized retailer is lack of adequate funds. Majority of them are small scale retailers who dont have the wherewithal to upgrade themselves to meet the changing market conditions. The government/financial institution may consider this and offer adequate funds in the form soft loans. This is relevant considering the agitation by the unorganized retailers.

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Suggestions to Organised Retailers: 1. One of the key observations by customers is that it is very difficult to find the uniqueness of retail stores. Uniqueness in retailing require innovation leading to distinct retail models through an appropriate mix of physical stores and online formats, aided by technology drivers like mobile phones, could be used by companies to create unique retail models that reach out to a wider customer base in shorter times and at lower costs. Companies in India should seriously consider leveraging existing lines of business into retail formats, whether through a chain of stores or online sales models. There are ample niche opportunities for companies who wish to enter the retail business and develop unique value propositions for their customers. 2. The main characteristics of a Nuclear Urban Family are the members are highly individualistic, they have adequate spending power, the members have divergent tastes and they have unique needs that require its solutions. The findings of the study bring out certain definite way ahead for the unorganised retailer. A few them, such as, up gradation of the store facilities and widening the range of services provided by the retailer, cooperative collaboration, super value programmes, fund allocation in the form of bank loans etc have been highlighted. Despite the strength of apparent plausibility of the above findings, some of the limitations of the study are large population size, focus only on consumer behavioural aspects and does not cover other aspects such as logistics, supply chain, Store area etc., and element of personal bias in the survey Scope for further research While this research will provide greater understanding of the impact of organized retailer on unorganized retailer based on the purchase behaviour of the consumers, further research is encouraged to address some limitations of this research. The scope of the study is limited as it focuses on only on the buying behaviour of the consumers leaving the other gamut of activities associated with retailing such as supply chain aspects, logistics aspects, financial aspects, environmental aspects etc: Further the study is restricted to food and grocery retailing whereas category wise analysis will provide a better understanding of the sector. Since the study is aimed at establishing the impact on the unorganized retailers, the analysis and findings are more 37

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concentrated on unorganized retailer. A similar threadbare analysis of organized retailer will throw more light on the challenges faced by each sector.

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Bibliography 1. http://www.dissertation-statistics.com/research-designs.html 2. http://www.experiment-resources.com/descriptive-research-design.html 3. http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=62AE31CD42C 938A75C7BCB555080FE89?contentType=Article&contentId=857204 4. www.wikipedia.com 5. The Icfaian Journal of Management Research Vol 8,Article no 6: Booming Supermarkets 6. Article on Wall-Mart Effect 7. Business Research Methods by Donald.R.Cooper and Pamela.S.Schindler published Tata McGraw-Hill Edition 8.

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ANNEXURE QUESTIONAIRRE We would like to find out what is the most important strategy in attracting and retaining customers. Below are a number of strategies retailers adopt. Please select the answer the best expresses how important you think the factor is to you. Mumbai (E) Private brands Discount offers Ambience Attractive display Parking Loyalty cards Fresh stocks Use of technology Reduced price Credit facility Home delivery More advertisement No change Convenient timings Nearness Parking facility More varieties Mumbai (W) Mumbai (N) Mumbai (S) OutSkirt

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