CONSUMER PREFERENCE ANALYSIS

TOWARDS TRADITIONAL MARKET

A Thesis

Submitted to

Devi Ahilya Vishwavidyalaya, Indore

For the Degreee of
Doctor of Philosophy (Ph.D.)
In
Management

By

Ram Verma

Under the Supervision of

Dr. Ajit Upadhyaya

Associate Professor and
HOD-Marketing PIMR Indore

Research Centre
Prestige Institute of Management and Research
Indore (M.P.)

2015
 Declaration by the Candidate (Para 12b)
I, the undersigned Ram Verma declare that the present thesis entitled "CONSUMER

PREFERENCE ANALYSIS TOWARDS TRADITIONAL MARKET" is my

own work, conducted under the supervision of Dr. Ajit Upadhyaya, Associate

Professor and HOD-Marketing at Prestige Institute of Management and Research,

Indore (M.P.) approved by Research Degree Committee. I have put in more than 200

days of attendance with the supervisor at the research centre.

I further declare that to the best of my knowledge this thesis does not contain any part

of any work, which has been submitted for the award of any degree either in this

University or in any other University/ Deemed University without proper citation.

Supervisor Ram Verma

Dr. Ajit Upadhyaya
Associate Professor and HOD-Marketing
Prestige Institute of Management
And Research, Indore (M.P.)

Date:

Dr. Yogeshwari Phatak

Director
Prestige Institute of Management and Research
Indore (M.P.)

i
 Certificate of the Supervisor (Para 12c)
This is to certify that the work entitled "Consumer Preference Analysis Towards

Traditional Market” is a piece of research work done by Mr. Ram Verma under my

guidance and supervision for the degree of Doctor of Philosophy of Devi Ahilya

Vishwavidyalaya, Indore (M.P.) India. The candidate has put in an attendance of

more than 200 days with me.

To the best of my knowledge and belief the thesis:

1. Embodies the work of the candidate himself;

2. Has duly been completed;

3. Fulfils the requirements of the Ordinance relating to the Ph. D. Degree of the

University and

4. Is up to the standard both in respect to content and language for being referred to

the examiner.

Dr. Ajit Upadhyaya

(Supervisor)
Associate Professor and HOD-Marketing
PIMR, Indore (M.P.)
Date :

Forwarded By

Director
Prestige Institute of Management and Research
Indore (M.P.)
ii
 ACKNOWLEDGEMENT
The completion of this thesis has been possible by the direction, guidance and support

of several individuals who have not only supported but encouraged me to carry out

this study.

I begin with expressing my sincere gratitude towards my supervisor, Dr. Ajit

Upadhyaya, Associate Professor and HOD-Marketing, Prestige Institute of

Management and Research, Indore who showed me the direction and guided me in

every possible way in conducting this study. Throughout the study he has been very

patient and supportive. He came out more as a friend and counselor rather than a

traditional Ph.D guide.

I would also like to thank Dr. Rajeev Shukla, Professor and HOD-MBA, Shri

Vaishnav Institute of Technology & Science, Indore for his valuable inputs and

suggestions during this study.

I would also like to thank Dr. Yogeshwari Phatak, Director, Prestige Institute of

Management and Research, Indore and all the staff of this institute.

I would like to express my sincere thanks to all the respondents who patiently

provided their valuable opinion during the data collection needed for my study

without which this research would not have been possible. I would also like to thank

my dear friend Joseph Tharayil who was always there as a support.

I am indeed grateful for the love and care of my parents, my dear wife Mrs. Shalini

Verma, who has been a mental support and a reassuring spouse. And above all, I owe

the thesis work to my loving children Kush and Lav, for those endless irrecoverable

hours that I should have spent joyfully with them.

iii
I finally thank GOD, the almightily, for having blessed me with a caring and

understanding family and for providing me with the intellectual strength and ability to

pursue this work.

Date: Ram Verma

Place: Indore

iv
 PREFACE
Retail is one of the most attractive sectors of the Indian economy which is going

through an evolution of changes. The growth rate of retail in India has been

tremendous over the past few years. Changes in retail policies, rapid infrastructural

development, flexible credit system, availability of disposable income and favourable

demographics are some factors leading to the growth of this sector. With the coming

of organized formats of retail, traditional retail formats are facing a challenge to

sustain their presence in the market. The purpose of this study was to analyze the

consumer preference towards the traditional market.

Many studies have been conducted to learn about the consumer behavior and

preferences towards organized retail. However need was felt to study and analyze the

consumer preferences with respect to the traditional markets as this sector is

challenged by the newer concept of organized format of retail. Thus this research

attempts to analyze the consumer preferences and contribute to the retail industry and

to the field of academics.

The present study titled ‘Consumer Preference Analysis towards the Traditional

Market’ is a descriptive research based on the primary data collected from the

respondents of tier-II city of Indore (Madhya Pradesh), India.

The data analysis was done in compliance with the research objectives. The study

explored six factors of Consumer Preferences namely, Product Assortment, Consumer

Ease, Consumer Service, Consumer Value, Consumer Convenience and Consumer

Need Based Consumption. Factor analysis and reliability test indicate that these

v
factors are relevant and reliable hence would help in developing a better insight of

consumer preferences towards the traditional market system.

The study will be helpful for retailers, researchers and other people interested in

related field. The results of this study will enable the people in traditional retail in

developing appropriate strategies and to sustain their existence in the trade. The

research has opened new perspective of study which may guide the researchers to

study further on other dimensions which remain unexplored.

Date: Ram Verma

Place: Indore

vi
 CONTENTS
Page
No

Declaration i
Certificate ii
Acknowledgement iii-iv
Preface v-vi
List of Tables x
List of Figures and Graphs xi

CHAPTER – 1 INTRODUCTION 1-38

1.1 Conceptual Framework 2
1.1.1 Preference 2
1.1.2 Consumer Preference 3
1.1.2.1 Factors influencing the consumer preference 4
1.1.3 Retailing 6
1.1.3.1 Characteristics of Retailing 8
1.1.4 Retailer 8
1.1.4.1 Functions of a Retailer 9
1.1.5 Evolution of Retail 11
1.1.5.1 Indian Context of Retail 11
1.1.6 Indian Retail Timeline 14
1.1.6.1 Factors for the Development of Retail in India 15
1.1.7 Retail Formats 18
1.1.7.1 Organized Retail 18
1.1.7.1.1 Formats of Organized Retail 19
1.1.7.2 Unorganized/Traditional Retail 21
1.1.7.2.1 Formats of the Unorganized/Traditional 23
Retail
1.1.8 Organized Retailing v/s Unorganized Retailing 24
1.1.9 Traditional Grocery Stores/Kirana stores 25
1.1.9.1 Indian Grocery Retail Market 26
1.1.9.2 Market share of Kirana Stores 27
1.1.10 Consumer Preference towards the Traditional Grocery 28
Store/Kirana Store
1.1.11 Retailing Scenario in India – Past to Present 31
1.1.12 Future of Retail 32
1.2 Rationale of the Study 33
1.3 Objectives of the Study 34
1.4 Hypotheses of the Study 35

CHAPTER – 2 REVIEW OF LITERATURE 39-121

2.1 Consumer 39

vii
2.2 Preference 40
2.3 Consumer Preference 41
2.3.1 Parking 44
2.3.2 Operating Time 45
2.3.3 Quality 45
2.3.4 Credit 47
2.3.5 Convenience 48
2.3.6 Location 50
2.3.7 Loose Items, Shopping Time and Habit 54
2.3.8 Price 55
2.4 Demographics 61
2.5 Perception 68
2.5.1 Store Image 71
2.5.2 Assortment 72
2.5.3 Service 77
2.5.4 Loyalty 80
2.5.5 Patronage 87
2.5.6 Store Attributes 89
2.5.7 Relationship 91
2.6 Retail 98
2.7 Retailer 100
2.8 Evolution of Retail in India 101
2.9 Retail Formats 104
2.9.1 Organized Retail 106
2.9.2 Traditional Retail 109
2.9.2.1 Traditional Grocery Stores/Kirana Stores 110
2.9.3 Organized Vs Unorganized Retail 115
2.10 Retail Format Choice 121

CHAPTER – 3 RESEARCH METHODOLOGY 122-134

3.1 Research Approach 122
3.1.1 Research Design 122
3.2 Type of Research 123
3.3 Scope of the study 123
3.4 Sampling Method 123
3.4.1 Type of Sampling 123
3.4.2 Sampling Unit 124
3.4.3 Sample size 124
3.4.4 Area of sampling 124
3.5 Sources of Data Collection 124
3.5.1 Secondary Data 124
3.5.2 Primary Data 125
3.6 Tools for Data Analysis 125
3.6.1 Test for Normality 127
3.6.2 Test of Reliability and Validity 127

viii
 3.6.3 Factor Analysis 128
3.6.4 KMO and Bartlett’s test 129

CHAPTER – 4 Results and Discussions 135-177

4.1 Respondents’ Profile 135
4.1.1 Gender wise Profiling of Respondents 135
4.1.2 Age wise Profiling of Respondents 136
4.1.3 Education wise Profiling of Respondents 137
4.1.4 Working Status wise Profiling of Respondents 138
4.1.5 Income wise Profiling of Respondents 139
4.2 Testing of Hypotheses 140

CHAPTER – 5 SUMMARY, CONCLUSION AND SUGGESTIONS 178-189

5.1 Summary 178
5.2 Conclusions 180
5.3 Suggestions 187

CHAPTER – 6 Implications and Limitations 190-192

6.1 Implications for the Researchers 190
6.2 Implications for the Kirana Store Owners 191
6.3 Limitations of the study 192

REFERENCES 193-237
APPENDICES
Appendix 1: Factor Analysis 238
Appendix 2: Test for Normality 243
Appendix 3: Research Instrument of the Study 244

ix
 LIST OF TABLES
No Details Page
No.
TABLES
1.1 Different Retail Formats in India 18
1.2 Organized Retailing v/s Unorganized Retailing in India 24
1.3 Characteristics of Kirana Store and Supermarket 26
1.4 Reasons for the Consumer Preference towards Traditional Market 30
(Kirana stores)
3.1 Cronbach’s Alpha 128
3.2 KMO and Bartlett's Test 130
4.1 Gender wise Profiling of Respondents 135
4.2 Age wise Profiling of Respondents 136
4.3 Education wise Profiling of Respondents 137
4.4 Working Status wise Profiling of Respondents 138
4.5 Income wise Profiling of Respondents 139
4.6 Gender wise independent sample t-test for Factors of Traditional 141
Market
4.7 Gender wise Mean and Standard Deviation for Factors of Traditional 143
Market
4.8 Age wise Analysis of Variance for Factors of Traditional Market 147
4.9 Age wise Mean and Standard Deviation for Factors of Traditional 149
Market
4.10 Education wise Analysis of Variance for Factors of Traditional Market 155
4.11 Education wise Mean and Standard Deviation for Factors of Traditional 157
Market
4.12 Working status wise Analysis of Variance for Factors of Traditional 162
Market
4.13 Working status wise Mean and Standard Deviation for Factors of 165
Traditional Market
4.14 Income wise Analysis of Variance for Factors of Traditional Market 171
4.15 Income wise Mean and Standard Deviation for Factors of Traditional 173
Market

x
 LIST OF FIGURES AND GRAPHS
No Details Page
No.
FIGURES
1.1 Indian Retail History 11
1.2 Indian Retail Evolution 13
1.3 India’s retail market 17
1.4 Development of Retail Formats in India 18
2.1 Customer Perceptions of Quality and Customer Satisfaction 86
2.2 Emerging Retail Formats 106

GRAPHS
4.1 Gender wise Profiling of Respondents 135
4.2 Age wise Profiling of Respondents 136
4.3 Education wise Profiling of Respondents 137
4.4 Working Status wise Profiling of Respondents 138
4.5 Income wise Profiling of Respondents 139

xi