Gupta

Dave
Editors

Visit us at www.emeraldinsight.com

ISBN : 9781786354105

Editors:
Anshu Gupta
9 781786 354105 Kartik Dave
Retail Marketing in India
Trends and Future Insights
 Retail Marketing in India
Trends and Future Insights

Editors

Anshu Gupta
Kartik Dave

Emerald Group Publishing (India) Private Limited

New Delhi

Emerald Offices
Bingley, Cambridge, Sao Paulo, Johannesburg, Dubai, New Delhi, Beijing, Kuala Lumpur, Melbourne
Emerald Group Publishing (India) Private Limited
1001-1004, 10th Floor, Hemkunt Towers, 6, Rajendra Place, New Delhi - 110008

Title: Retail Marketing in India: Trends and Future Insights

Copyright © 2016 Ambedkar University

Contact: Anshu Gupta (anshu@aud.ac.in)

No part of the publication may be reproduced, stored in a retrieval system, transmitted in any form or by any
means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of
the publisher. Any opinions expressed in the articles/chapters are those of the authors. Whilst Emerald India
makes every effort to ensure the quality and accuracy or the content, Emerald India makes no representation
implied or otherwise, as to the articles/chapters suitability and application and disclaims any warranties,
express or implied, to their use.

This edition can be exported from India by the publisher, Emerald Group Publishing (India) Private Limited.

ISBN: 978-1-7863541-0-5
 Editor’s Profile
Anshu Gupta is presently associated with School of Business, Public Policy and
Social Entrepreneurship, Ambedkar University Delhi (AUD), India as Assistant
Professor in the Operations and Decision Sciences area. She obtained her Ph.D.,
M.Phil. and M.Sc. degrees in Operational Research (OR) from University of Delhi
(DU), India. Her research in Ph.D. was in the domain of mathematical modeling
and optimization in the field of Marketing and Software Reliability. She has served
as Assistant Professor (Adhoc) and Research Fellow at Department of OR, DU
before joining AUD. She was gold medalist in the master degree, 2003 and received v
Young Author of the Year award by the society for reliability engineering, quality
and operations management (SREQOM), 2009. She has published several papers
in refereed national and international journals of repute. He has co-authored a book
Software Reliability Assessment with OR Applications, published by Springer,
2011 and a chapter in Wiley Encyclopedia of Operations Research and Management
Science. Her teaching interests include quantitative methods, decision sciences,
operations management, supply chain management and total quality management.
She is currently pursuing research in the domain of innovation diffusion modeling,
optimization for promotion planning, media planning models, supply chain
optimization and quality management (six sigma methodologies).

Kartik Dave presently is Dean (Officiating) and Associate Professor at School of

Business, Public Policy and Social Entrepreneurship, Ambedkar University Delhi,
India. He is Management Graduate and Doctorate in Marketing Management from
M L S University, Udaipur. He brings in-rich experience of 5 years in industry and
around 13 years in academics. He served as visiting faculty at Rouen Business
School, France and ETEA, Spain. He has developed new courses like Challenges in
Marketing in Emerging Markets, Services Excellence etc. His areas of teaching are
Services Marketing, Marketing Management, Marketing Strategy, Retail Marketing,
Branding, Social Media Marketing etc. He has been guiding Ph.D. Students in
the area of Marketing, Services Marketing, Branding, Luxury Marketing, Retail,
Human dimension in Marketing, Skills and Inclusive Marketing. Dr. Kartik Dave
has published many research papers, cases and articles in academic journals and
newspapers. He has been writing in International journals of repute published by
Wiley, Inder Science Publications, Emerald, Springer Gabler, Science Direct etc.
 PREFACE
Retail Industry in India has been experiencing unprecedented changes for the last
couple of decades. It is projected to reach $1 trillion from the current $600 billion
(BCG Report 2015). At the same time, modern retail is also expected to grow three
fold to $180 billion from the present $60 billion. Indian consumers are evolving
with greater brand recognition, rising income, urbanization, urge for exciting buying
experience, and better environment. On the other hand, retailers are also striving for
differentiated formats, greater supply chain efficiency and optimization, leveraging
e-commerce and internet technology, mobile technology, and data analytics to gain vii
sustainable advantage. E-commerce offers greater convenience, broad assortment,
superior value proposition, and higher discounts to customers. However, there are
plenty of challenges before retailers to match the expectations of their customer
such as managing customer experience through omni channel strategies, supply
chain, and infrastructure. Further, talent management, implementing technology,
and costing are paramount for survival and growth of the industry. The Indian Retail
Conference, 2016 was organized by School of Business, Public Policy and Social
Entrepreneurship (SBPPSE), Ambedkar University Delhi, India during February 26–
27, 2016. The conference spanning over two days had the theme: “Indian retail: Will
it Strive or Thrive?” It provided the participants a platform to deliberate challenges,
opportunities, and future of retail in India.
The conference proved to be a great success with about 200 distinguished
participants from industry and academia including research scholars and graduate
students. The conference provided ample opportunity to the participants to take part
in fruitful discussions and intellectual exchange that contributed to the success of
the conference. The conference received more than 80 abstracts for presentation on
four broad themes: 1. Retail Consumer. 2. Retail Marketing. 3. E-Tailing and Retail
Strategy, and 4. Retail Operations and Supply Chain. Forty-one papers selected
through a blind review process were presented by research scholars in four parallel
sessions. Apart from the research presentations, keynote addresses, invited talks, and
panel discussions on current issues in retail management by eminent professors and
leading industry practitioners were highly appreciated by the participants. Ample
opportunity for networking was also provided to the participants.
All papers presented at the conference were first reviewed by the conference
editorial board and selected parers are then sent for blind review to the eminent
experts in the area. Eleven papers selected from the two step review process have
been published in this conference proceeding. Eminent professors who accepted our
invitation to review the papers provided feedback to the researchers to improve their
research findings as well as manuscript presentation. Our contributors showed positive
response to the suggested revisions. The sincere efforts made by both reviewers and
contributors have made it possible to bring quality research output into this publication.
The proceedings from the conference provide an opportunity to the readers to read a
good selection of refereed papers that were presented at the conference.
The research papers presented in the conference were both theoretical as well as
empirical. Mostly empirical papers passed the review process.
The study by Saha et al. from the track retail strategy investigates the effect on
customer preferences and brick-and-mortar market because of price discount offered
by the e-commerce firms on Information and Technology (IT) products. The authors
 conducted survey of customer and sellers in the Nehru Place, New Delhi (Asia’s largest
electronic and IT goods market). Results are drawn based on Chi-square Automatic
Interaction Detection (CHAID) decision tree analysis. The study finds evidence of
significant shift from brick-and-mortar seller to online platforms with high price-
choice sensitivity among consumers.
The empirical study from the track retail customer by Sharma and Kesharwani
presents a framework to explore store loyalty by segmenting green consumer. It tests
the relationship between sociodemographic and psychographic variables and store
loyalty of green consumers. Findings of the study identify the consumer’s dimension
viii that may influence by greentailing to generate store loyalty.
The study by Das elaborates the strategic price behavior of the large capital retail
traders in fixing prices of agricultural food items. The study also throws light and
identifies how small capital retail traders can compete in the market in the presence of
large capital retail traders.
Four papers examine the different factors that effect of the customer preferences
for organized retail segment for different product categories or geographical locations.
The study by Rathee and Rajain attempts to identify the factors that influence the
consumer preference for organized retailing in NCR and Haryana region empirically.
The findings suggest three factors namely service quality, variety, and supplementary
services are the key determinant of the consumer preference for organized retailing.
On the other hand, the research conducted by Sharma examines the influence of nature
of product and frequency of visits on store loyalty in some cities of Uttarakhand. The
study by Garg et al. conducted in Delhi–NCR region using survey method determines
the effect of price and factors related to store and category characteristics on the
purchase behavior of fruits and vegetables products in organized retail segment.
Another empirical work by Mullick analyze the shopping experience at retail centres in
NCR–Delhi using the survey method. The findings of the study bring out the important
elements of better mall management.
The study by Aggarwal et al. discusses the importance of online advertising in the
retail advertising mix. The author identifies the requirement for developing a model that
can help the web publisher in optimizing their revenue from advertisement taking care
of the time preference and other requirement of the advertisers. A model is proposed
in the study to determine the optimal placement schedule of advertisements for online
portals considering advertisers’ time window, location, and frequency preferences and
also illustrated with a case study
One of the primary concerns of the retail industry is sustainable growth. It
generates the requirement from the supply chain members to rethink on their goals
and redesign their strategies. Two papers presented in the track Retail Operations
and Supply Chain focus on the sustainability aspect of the retail supply chains. The
study by Darbari and Agarwal delves into literature to identify key dominant areas
for improving sustainability of Indian electronic retail supply chain. Eleven enablers
of sustainability are identified and using Interpretive Structural Modeling (ISM)
technique a structural hierarchy is extracted to understand the association between the
suggested enablers and their level of impact on the environment and society. The study
by Gandhi et al. presents an integrated supplier selection, procurement, inventory
control and transportation model, and case study that helps in evaluating the suppliers,
determining optimum quantity to procure, choosing transportation vehicle type along
with managing environmental issues, obtaining optimal stock keeping units (SKU)
and safety stock for each product category to fulfil a specified service level for retailers
with a cost minimization objective.
The study by Gupta and Bhatt presents a method based on Technique for Order
Preference by Similarity to Ideal Solution (TOPSIS) for performance assessment and
ranking of 52 countries in retail trade using retail sales data for the year 2011 under
different grocery and non-grocery categories.
The success of conference is a reflection of the support and dedication of the various
concerns. We are extremely thankful to Ambedkar University Delhi and our co-sponsor
Konica Minolta Business Solutions India Pvt. Ltd. for the generous financial support.
We are grateful to our distinguished guest speakers and panellists who came all the ix
way from different parts of the country to deliver inspiring talks and discussions. We
would like to thank all participants for their contributions to the conference program
and the proceedings. We also acknowledge the unwavering support received from the
faculty, staff members and students of the school in organizing the conference.
Our special thanks to the reviewers of the proceedings for providing valuable
feedbacks in time and help towards the improvement of quality of papers presented in
the conference.
We hope this volume will add value to the existing literature and will be helpful to
the practicing managers and leaders.
Anshu Gupta and Kartik Dave
 Contents

Preface vii

1. Competing with Virtual Entities: IT Product Purchases in India 1

Debdatta Saha, Ram Narayan Shrestha, T M Vasuprada

2. Greentailing and Green Consumer Profile: Retailers’ Strategies xi

for Store Loyalty 16
Nitika Sharma, Subodh K Kesharwani

3. Quality Attribute and Non-linear Pricing under Changing Agriculture-

Food Retailing: A Study in India 27
Dipankar Das

4. Factors Influencing Consumer Preferences towards Organized Retailing

in NCR and Haryana 42
Rupa Rathee, Pallavi Rajain

5. Influence of Nature of Product and Frequency of Visit on Store Loyalty:

A Study of Uttarakhand 53
Deependra Sharma

6. Purchasing Fruits and Vegetables: Role of Price and Store Characteristics 65

Srishty Garg, Shreshth Goyal, Chanakya Purohit, Shaily Wadhwa,
Pankaj Priya

7. A Study of Shopping Experience in Selected Retail Centres in NCR 79

Naushadul Haque Mullick

8. Optimal Advertisement Planning on Web considering Time Window

Concept 90
Sugandha Aggarwal, Arshia Kaul, Anshu Gupta, Prakash Chandra Jha

9. An Interpretive Structural Modelling Approach for Analysing the Enablers

towards Adoption of Initiatives for a Sustainable Supply Chain 103
Jyoti Dhingra Darbari, Vernika Agarwal

10. A Fuzzy Multi-Criteria Optimization Model for Allocating SKU and

Suppliers in SC System 117
Kanika Gandhi, Kirit Goyal, Abhinav Jha

11. Performance Assessment of 52 Countries Across the Globe in Retail

Sector and Ranking based on TOPSIS 130
Seema Gupta, Chandra Prakash Bhatt
 Competing with Virtual Entities:
IT Product Purchases in India
Debdatta Saha1*, Ram Narayan Shrestha2, T M Vasuprada3
1
Assistant Professor, Faculty of Economics, South Asian University, New Delhi
Research Scholar, Faculty of Economics, South Asian University, New Delhi
2,3

Abstract
This paper investigates the impact of recent price discounts offered by e-commerce
entities such as Flipkart on consumer preferences and on wholesale brick-and-mortar
sellers for Information and Technology (IT) products, specifically computers, laptops
and related accessories. Our results are based on a consumer survey in Delhi and a
supply-side survey of sellers at Asia’s largest electronic and IT goods market for
this product category (Nehru Place market, New Delhi). The Chi-square Automatic
Interaction Detection (CHAID) decision tree analysis is used to understand the
determinants of consumers’ preferred shopping destination. We find evidence of a
significant shift away from brick-and-mortar shops in favor of online purchases with
high price-choice sensitivity among consumers. Business strategies that traditional
shops are following to counter the online price challenge are investigated. It is found
that diversification of the product basket and price risk, rather than seller experience,
is a robust strategy to counter Bertrand price competition in retail.

Keywords
Bertrand Price Competition in Retail, Consumer Decision-making process, Chi-square
Automatic Interaction Detection (CHAID), Seller’s Risk Perception, Durable Goods
Purchase

1. Introduction and Objectives

In recent times, the biggest Schumpetarian upheaval in the Indian retail space has been
the explosion of e-commerce, with tempting choices and unbelievable prices across an
unimaginably large spectrum of consumer products (groceries, baby diapers, computers,
laptops, mobile phones, etc.). Although the present volume of e-commerce is miniscule
relative to total retail sales in India, the recent growth surge of e-commerce is impressive
with Credit Rating and Information Services of India Limited (CRISIL), estimating a
Compound Annual Growth Rate (CAGR) of 50–55% for the next three years.
In this paper, we study the effect on consumer preferences and offline business
strategies due to competition by e-commerce in the sales of computers, laptops and
accessories. The choice of the offline market place in this paper, namely Nehru Place,
is driven by the fact that it is Asia’s largest electronic goods marketa. The product
category of IT goods is durable in nature, which is the desired product attribute for
which we intended our study. Retail Marketing in
India: Trends and
* Corresponding Author: Debdatta Saha (debdatta@sau.ac.in) Future Insights
a
 This is mentioned in Sundaram (2004) as well as e-resources such as http://india24.xyz/ pp. 1–15
nehru-place-asias-biggest-computer-electronics-gadget-market/, http://www.nehruplace.net. © Ambedkar University
in/articles/nehru-place-asia-biggest-it-market.htm
 In terms of novelty of our results, we find significant price sensitivity among
Retail Marketing in
consumers for durable goods (mostly in line with the existing literature). Our
India: Trends and paper is unique as it integrates the demand side with the supply side, which is rare
Future Insights in the empirical literature. We highlight the fragility of the nature of Bertrand price
competition in the market, as we find that experience matters less than price-risk
diversification for offline retail. This, coupled with the dominance of price-choice for
online preference,b raises questions about the limits of e-commerce. Entrepreneurship
development through e-commerce is a policy thrust in India now. Our results
underscore significant qualifiers for the potential of e-commerce as an engine of
2 growth. Additionally, a methodological contribution of our paper is the application of
non-parametric technique of decision tree analysis (CHAID).

2. Research Question
This paper investigates the following research questions:
i.  What is the impact of the aggressive marketing strategies by e-tailers on
consumers’ preferences in terms of shopping destination for consumer durables in
the category of computers, laptops and accessories?
ii. What is the impact of the same, if any, on the brick-and-mortar sellers of such
durables at the Nehru Place market?

3. Conceptual Framework and Related Literature

3.1 Literature Review

Table 1 provides a summary of relevant literature (mostly USA), whereas Table 2
compares our results with relevant papers from India.

3.2 Impact on Consumers

Our results are based on a consumer survey conducted in May–June 2015 in Delhi,
through direct interviews. The sample is drawn from the population randomly,
consisting of University students, working professionals residing in the NCR region,
working professionals at Nehru Place, self-employed consumers and some non-
residents of Delhi. There is heterogeneity in consumers’ familiarity with Delhi’s
markets, as well as in their online purchasing behaviour in the selected sample. Out
of an initial sample size of 132, our survey resulted in 130 valid observations (due to
non-responses for some questions).
We studied the choice of preferred location of purchasing laptops and computers as
well as accessories by asking consumers to rank their preferences of shopping destination
in four categories:
Category 1: Nehru Place (excluding dedicated dealers within the market)
Category 2: Dedicated dealersc (within and outside Nehru Place)
b Our significant and surprising contribution is that neither shopping ease nor price discovery
is important for online preferences in shopping behaviour.
c We treat dedicated dealers as a separate category, as these shops do not have the price-
setting flexibility like traders at Nehru Place. These shops have the branding power of the
brand they sell (HP, Asus, etc.) but are limited by the pricing policy of the brand they represent.
After-sales services are a part of the sales strategy of these shops. Some of our respondents
specifically mention that they prefer going to dedicated dealers at Nehru Place.
 Category 3: Retailer near to consumer’s home other than Nehru Place Competing with
Virtual Entities: IT
Category 4: Online Product Purchases
A comment about the way we have modelled the Nehru Place market is due. Located in India
in South Delhi, this commercial centre has been functional since the early 1980s. We
perceive it as the wholesale purchase destination in Delhi for the product category of
our interest, with traders offering best prices and choices for a variety of IT products.
However, this market houses many other establishments. Hence, our analysis provides
a partial characterization of the entire Nehru Place market.

3.3 Methodology for Consumer Behaviour Characterization 3

Using a non-parametric regression technique CHAID, we attempted to understand
the possible reasons for the choice of preferred shopping destination for laptops and
computers for the entire distribution of consumers. CHAID is a recursive partitioning
method developed by Kass (1980), which uses Chi-square tables to branch the
decision-making process revealed by the data into initial nodes and subsequent nodes
(in decreasing levels of significance). In our case, CHAID analysis visually aids the
understanding of the decision-making process of all consumers in terms of variables
affecting the decision in decreasing order of importance, where the significance of
the variables is measured by the successive Chi-square values at each node. Also, the
independent variable with the smallest p-value is the variable which appears first after
the dependent variable. The initial node lists the preference of shopping destination of
all the consumers which is our dependent variable. The next level of the decision tree
also known as the “parent node” begins with the most significant variables affecting
choice of destination. Also, the clubbing of the categories of the independent variable
happens according to the pair of least significantly different categories with respect to
the dependent variable. That is, if a pair of categories for the independent variable is
not statistically significant, the two categories will be merged together in the branching
process. The following layer of the tree is the second most important to influence
variables in shopping destination choice and is also the “terminal node” in our analysis.
The tree is formed in this manner, with the least important variables forming its terminal
branches. For calculations, we have stopped the branching process of the tree whenever
the total number of observations on any branch falls short of 10 observations.
As a non-parametric method, CHAID has some distinct advantages over other
methods when it comes to modelling choice of consumers. In the first place, most
marketing research surveys (as well as in this study) result in ordinal or categorical
variables that rule out traditional regression methods. Second, among non-parametric
techniques such as kernel regression, non-parametric multiplicative regression and
neural networks, CHAID is most suitable for understanding the hierarchical nature of
the decision process. Apart from CHAID, there are other decision tree algorithms such as
Classification and Regression Trees (CART; Breiman et al., 1984), Automatic Interaction
Detection (AID; Morgan and Sonquist, 1963) and Theta Automatic Interaction Detection
(THAID). Perreault and Barksdale (1980) note the superiority of CHAID over AID and
THAID as it cross-tabulates all variables of interest and is based on data theory (like
alternating least squares optimal scaling). Additionally, the splits created by CHAID
are not by peculiarities of the sampling procedure. Recent applications of CHAID in
direct marketing include the works of Haughton and Oulabi (1993) and McCarty and
Hastak (2007). The latter study finds that CHAID outperforms other techniques such as
 Future Insights
India: Trends and
Retail Marketing in

Table 1: Summary of Papers Comparing Online vs. Offline Purchases Worldwide

Authors Market Variable(s) Methodology Central Result Strengths Drawbacks

Goolsbee USA; Retail computer Empirical: Probability of buying offline remotely Captures price Online purchase
(2001) Computers prices (online Hedonic price vs. online significantly depend on sensitivity of buyers estimates mixed
and offline regressions; relative prices across channels by up with remote
"remote") logit using more than 20,000 computer purchases
estimation observations
BiynjoliSs-on USA; Books Prices of Empirical: Online prices lower than offline with Simple approach to Product base very
and Smith and CDs selected books Hypothesis smaller price adjustments; online price analyse price dispersion narrow; results
(2000) and CDs (online testing using dispersion sensitive to price definition across channels may not generalize
and offline) t-tests (posted versus weighted price); online to entire industry,
channel increases retailer heterogeneity particularly India
more than offline
Balasubra- No Specific Retail prices Theoretical: With enough information about sellers Simple application Results heavily
manian Market (offline alone) Framework direct marketing is a viable channel; of Salop (1979) to dependent on
(1998) based on Salop direct marketer retains competitive study competition model assumptions
(1979) advantage by controlling information between direct versus
to consumers conventional retail
Forman et al. USA; Books Relative price of Empirical: Increased access to offline stores cause Rare study relating Assumption of high
(2009) online vs. offline Difference- shifts from online to physical retailers location of offline stores online disutility
in- Difference with likelihood of costs unrealistic for
regression online purchases India at present
Prince (2007) USA; Retail computer Empirical: Supply-side factors ((i). expansion of Integration of both Results depend on
Personal prices (Online Probit PC firms in 1997 (ii).customization for supply and demand side time period (1996-
computers and offline) estimation high end buyers by online retail) alone factors 98); may not be
explain switch from offline to online replicable in India
Nelson et al. USA; Price dispersion Empirical: Price dispersion is positively related to Broad based study with Use of single price
(2007) Books, (online alone) Multivariate price of products and number of sellers many product categories point online for
Electronics regession calculating price
and Music dispersion
 Table 2: Summary of relevant Indian studies

Authors Market Variable(s) Methodology Central Result Strengths Drawbacks

Drawbacks Subjective Severe sample Data is limited to Severe sample Results too Non- Severe sample
analysis, non- selection bias (Mall two cities with selection bias general, may representative selection bias
representative intercept technique) a small sample (75 % students not hold for all of Indian youth (Mall intercept
of India size without market segments (includes a technique)
purchasing narrow subset)
power)
Strengths Life-style based Demographic Consumers' Holistic analysis Life-style based Captures Consumer Survey
segmentation of and social factors search as well as of online segmentation of noveltyseeking Inventory (CSI)
the consumers included in analysis cognitive costs shopping (surfing the consumers behaviour of innovatively tested
included and actual consumers for India
purchases) effectively
Central Price does Young consumers Older consumers Young Indian Middle-aged Young Indians Brand and
Result and not determine prefer online (ease prefer to adults mostly Indians (offer mostly purchase quality-conscious
Comparison online of use); men are purchase airline surf rather than enthusiasts) online using cash shoppers unlikely
preference more likely to shop tickets through purchase online mostly shop as a preferred to purchase online
[Result in online; ease of use offline mode [Results partly online [Results mode of payment [Result indirectly
contrast with determines online [Result in line similar to our partly similar to [Result in line in line with our
our paper] usage [Age result in with our paper] paper] our paper] with our paper] paper]
line with our paper;
not gender]
Methodology Empirical: Empirical; Empirical; Empirical; Empirical: Empirical: Empirical: Factor
Cluster and Exploratory factor Descriptive Descriptive Factor and Multivariate and regression
Factor analysis; analysis; Regression; statistics; analysis; Pearson Cluster analysis; regression analysis;
Chi-square tests; ANOVA; Cronbach's Multivariate correlation Chi-square tests; analysis; Cronbach's alpha
Cronbach's alpha regression Cronbach's alpha Cronbach's alpha
alpha
Market General online General online Airlines General online General online General online General online
(India) shopping shopping shopping shopping shopping shopping
Authors Gehrt et al. Khare et al. (2012) Beldona et al. Gupta et al. Pandey et al. Khare et al. Khare (2016)
(2012) (2011) (2008) (2015) (2010)
 Recency, Frequency and Monetary Value (RFM) when the response rate to a mailing is
Retail Marketing in
low. Nong (2003) mentions an application of CHAID for partitioning Internet users into
India: Trends and homogenous sub-groups for targeted advertising. Ritschard (2010) discusses the CHAID
Future Insights decision tree analysis as an improvement upon the earlier tree methods.

3.4 Results on Consumer Purchase Behaviour

Around 42% of the 130 consumers ranked Nehru Place as their first preference and
this is statistically significant. The reason for market preference was measured in the
6 survey through:
I. Preference for features of various aspect of the purchase (variable feature_pref,
see Figure 1), which was coded in seven categories:
Category 1: Better price
Category 2: Better choice
Category 3: Ease of travel to the shop
Category 4: After sales service
Category 5: Possibility of discount on repeat purchase
Category 6: Possibility of resale of the product
Category 7: Any other reason

Categories 1 and 5 are price-related reasons for purchase. Whereas category 1 deals
with price of immediate purchase, category 5 concerns price of repeat purchases.
Most responses for category 7 were concerned with quality and other choice-related
variables.
II. Demographic variables such as the age of the respondent, gender, own transport
ownership and number of years of stay in Delhi.
III. Behavioural variables such as familiarity with Delhi markets (categorized in
three categories of low familiarity, moderate familiarity and extreme familiarity) and
online shopping frequency (categorized as infrequent (once a year), moderate (once a
quarter) and very frequent (monthly)).
The non-parametric regression (see Figure 1) shows that the most important
variable affecting the distribution of market preference (variable market_pref) is the
first category of decision variables feature_pref, with a statistically significant Chi-
square value of 39.00 and adjusted p-value of 0.00. The feature_pref variable in data
is trifurcated as follows: categories 1 and 5 (which together reflect the price sensitivity
of the consumers) with a total of 46 observations, categories 2 and 7 (which together
reflect the choice-related variables of purchase) with 45 observations and categories 3
and 4 (which are related to logistical issues with purchase) with the remaining 39 of the
total sample of 130. Category 6, which is resale possibilities, does not influence market
preference in our sample. Thus, all pairs of categories which are least significantly
different with respect to variable market_pref have been clubbed together. We find that
this clubbing of categories also has a legitimate economic interpretation.
Both the price sensitivity branch and the choice-related branch of the feature_pref
variable show Nehru Place as the significant first choice of consumers (58.7% and
46.7%, respectively). The logistical issues branch, on the other hand, shows dedicated
dealers as the significant first preference for consumers, with 46.2% observations
of a total of 39 along this branch). Consumers who consider after-sales service and
ease of travel as important decision variables rank dedicated dealers higher than the
other three categories. This is presumably due to the trust placed on dedicated dealers Competing with
Virtual Entities: IT
for after-sales servicing and logistical difficulties of parking private vehicles at the Product Purchases
congested Nehru Place. Recently, a multi-level parking has been built in the market. in India
However, the parking charges are very steep.

7
Feature_pref

Age

Figure 1: CHAID Output for the Entire Sample of 130 Consumers

Key: Category 1. Nehru Place; Category 2. Dedicated dealers; Category 3. Nearest local retailers;
Category 4. Online

The decision tree has two more branches, one beginning at Node 2 (choice related
categories) and the other at Node 5 (logistical issues categories). After controlling
for choices (45 observations), the only demographic variable which is statistically
significant is age, with an adjusted p-value of 0.032. Nodes 4, 5 and 6 divide the age
variable into three classes (less than 21 years: young and inexperienced; 7 observations),
between 21 and 22 (relatively older and more experienced; 6 observations) and greater
than 22 (older and experienced; remaining 32 observations of the total of 45). Here, the
distribution of market preference shows an interesting trifurcation. For the young and
inexperienced (with 71.4% of the total number of consumers at the node), online is the
first preference, the relatively more experienced age group between 21 and 22 years
rank dedicated dealers as their first preference, whereas the older and most experienced
(greater than 22) rank Nehru Place as their first preference.
Young and inexperienced first purchasers in our data experiment significantly
more with online purchases. This observation highlights the demographic that is
fuelling the recent online purchasing frenzy. Older consumers are more wary of
 online purchases. Many consumers in the higher age cohorts mentioned that even
Retail Marketing in
if they purchase IT products online, they visit Nehru Place once for verifying
India: Trends and the product description as advertised online. The clustering of age within a gap
Future Insights of one year at 21–22 is potentially explained by the fact that this is the age for
beginning university education and consumers are risk-averse about experimenting
with laptops/computers and accessories (as incomes are very low: either parental
endowment or scholarships). For an age higher than 22, consumers have presumably
gathered more experience than the younger cohorts and are more confident about the
offline wholesale market place.
8 After controlling for logistical issues (Node 5), the only demographic variable
which statistically significantly influences market preference is own transport, with
an adjusted p-value of 0.046. This variable is categorized into two (19 observations
with own transport and remaining 20 of the 39 observations without own transport).
In either of the cases, dedicated dealers are the first preference (52.6 and 40.0% of the
total number of observations, respectively). As discussed earlier with logistical issues
of purchase, our data is indicative of poor civic facilities at the Nehru Place market.
Accessibility of the market has improved in the last two years, with a metro station on
the opposite side of the market. However, this aids access of consumers who use public
transport rather than private vehicle owners. Hence, there is no effect of own transport in
the preference ranking of shopping destination.
The data is naturally bifurcated into two partsd:
I. Historical consumers: Consumers (a total of 75) who actually purchased a
laptop/computer in the last two years.
II. Potential consumers: Consumers (a total of 53) who did not purchase in the
last two years, but might purchase in the future.
Figure 2 shows the non-parametric output for historical consumers. The dominance
of Nehru Place is higher for this category of consumers (with 52% of total 75 consumers
ranking it first at Node 0). The reason for this preference is explained by the next branch
of the decision tree with only the feature_pref variable being statistically significant.
The demographic and behavioural variables are insignificant for historical consumer
behaviour. The branching of the feature-pref variable is different from the overall result
for all consumers. Here, at Node 1, categories 1, 2 and 5 are merged together (price,
choice and discount on repeat purchase). Node 2 represents only category 4 (after-sales
service) and Node 3 (ease of travel and other reasons). The risk estimate here is 0.413
with a standard error of 0.057.
For consumers who made actual purchases during the last two years, Node 1 ranks
Nehru Place as the significantly first preference (with 68.1% of total consumers at the
node). These consumers treated price, choice and discount on repeat purchase as a
composite category in making this ranking decision. Node 2 ranks dedicated dealers
as the first preference (60% of total observations at this node concentrated here).
Consumers for whom after-sales service is the most important category in making a
purchase have made this preference ranking. Node 3 (ease of travel and other reasons)
have an even split between Nehru Place and nearest retail shop (each with 33% of the
total observations).

d We lost two observations in the process of bifurcating the entire consumer sample of 130.
The risk estimate is 0.438 with a standard error of 0.044.
 Competing with
Virtual Entities: IT
Product Purchases
in India

Figure 2: CHAID Output for 75 Historical Consumers

Key: Category 1. Nehru Place; Category 2. Dedicated dealers; Category 3. Nearest local retailers;
Category 4. Online

The results indicate that for experienced historical consumers, Nehru Place is the best
shopping destination for computers from a price-choice point of view. On the other
hand, if after-sales servicing is dominant category for making a purchase decision,
dedicated dealers are the best bet. This preference ranking in favor of Nehru Place,
which is much more marked for historical consumers than in the overall scenario
with all 130 consumers, undergoes a significant transition for the potential customer’s
category.
Figure 3 shows the CHAID output for the 53 potential consumers, 39.6% of whom
rank Nehru Place as their first preference. Feature-pref alone is statistically significant
in explaining this ranking, with categories 3 and 4 (ease of travel and after-sales service)
clubbed in one node (Node 1) and categories 1, 2, 5 and 7 bunched in Node 2 (price
and choice combined variable) clubbed in another category. Node 1 expectedly ranks
dedicated dealerships as the first preference, as after-sales services is a dominant category
here. On the other hand, Node 2 ranks Nehru Place at the top. The risk estimate is 0.528
with a standard error of 0.069.
Summarizing the results, potential consumers consider Nehru Place as the best
destination for computer purchases along the price-choice dimension. Dedicated dealers
are the best choice if after-sales services matter in decision-making.
Notably, there is a shift away from Nehru Place in favor of online purchasing in
our data. Though potential consumers rank Nehru Place as their first preference (39.6%
observations), it is much reduced from the 52% majority ranking given by historical
consumers. Only 18.7% of the historical consumers had an online preference, whereas
37.7% of the potential consumers foresee themselves as online consumers.
That online pricing and choice basket has dented consumer preferences is corroborated
by this shift factor. On the price front, there has been recent news about raging price
wars between online giants like Flipkart and Amazon. We calculated some indirect
 measures of price sensitivity to examine whether or not it is online pricing that has been
Retail Marketing in
a primary reason for this shift. We observe that price and choice together has been the
India: Trends and most important purchase determinant in our sample, rather than price alone. For all the
Future Insights consumers in the data, the bundled variable of price–choice was ranked as the most
significant variable for purchase by 58.8% of historical consumers and 57.4% of the
potential consumers. Price alone is ranked as the most important decision variable by
33.6% of the overall consumers and 27.8% of the new consumers.

10

, ,

1 18.8 3
2 43.8 7

Figure 3: CHAID Output for 53 Potential Consumers

Key: Category 1. Nehru Place; Category 2. Dedicated dealerships; Category 3. Nearest local
retailers; Category 4. Online

For the combined price-choice variable, most consumers cluster their preferences either
at Nehru Place or online (54.5% at Nehru Place and 37.7% online). While not a perfect
measure of price elasticity, we can claim from our data that consumers are sensitive
about prices and about the choice of brands available in making an IT product purchase
decision. These price-choice sensitivity results are in line with existing academic
research such as Maxwell (2001) and Gupta (2011).

4. Supply-side Analysis: Survey Results from Nehru Place

Traditional businesses, over the last two years, have been adversely impacted due to
Bertrand price competition with large online sellers, as reported by most of the retailers at
Nehru Place. We interviewed and collected data from 44 establishments at Nehru Place.
Non-response from sellers has limited our sample size. Our focus was primarily on the
organized retail trade in computers.e This is representative of the entire market as the
overall presence of unorganized retail is 5% of the total market. There is a significant
amount of variation in terms of monthly sales, monthly rent and margins. Monthly sales

e Only two of our respondents are from unorganized retail.

figures vary from 0.75 lakhs to 600 lakhs for these shops. Eight of the 17 shops revealed Competing with
Virtual Entities: IT
that their net monthly income shows a variation of 0.11 lakhs to 113.5 lakhs. Product Purchases
in India
4.1 Discussion of Results for the Supply Side
Hypothesis 1: Retail traders (non-dedicated dealers) in Nehru Place prefer to sell
computer-related accessories rather than branded laptops and computers to survive
the online price challenge.

Table 3: Classification of 41 Shops According to Products Sold 11

Category Frequency %
Computers only 12 29.27
Mobiles only 5 12.20
Repairs and Data Recovery 4 9.76
Accessories and Spare Parts 13 31.71
Both Computers and Mobiles 7 17.07
Total 41 100.00
Source: Authors’ own Calculations

Table 4: Cross-tabulation of Experience with Perceived Competition

Experience 
Very
Very Moderate Mature Experienced
Perceived Competition New Experience Sellers and Mature Total
Online 4 4 3 5 16
Other Sellers in the Market 2 1 0 1 4
Other Brands and Products 2 3 2 1 8
No Perceived Competition 5 0 1 2 8
Total 13 8 6 9 36

Pearson Chi2 (9) = 7.1394 Probability = 0.623

Fisher’s Exact p-value = 0.659
Source: Authors’ own calculations

Table 3 above shows that the majority (almost 32 per cent of the sample) are engaged
in the business of selling accessories and spare parts, followed by about 30 per cent
selling computers alone. Given that our survey is biased towards functional firms, the
large concentration of accessory sellers lends partial credence to our hypothesis of
business strategies to survive intense online competition. Many computer sellers in
their interviews mention the strategy of diversification into accessories and spare parts
business, as this faces less competition from online selling.
In Table 4 seller’s experience is categorized as: very new (0 to 4 years), moderate
experience (5 to 9 years), mature sellers (10 to 14 years) and very experienced sellers
(more than 15 years of trading) and their sellers’ perceived threat of competition is
 ranked in four categories, namely online competition, sellers in the market, other
Retail Marketing in
brands and products and no competition perceived. From Table 4 it can be inferred
India: Trends and that 16 out of total 36 shops categorized by experience complain that e-competition
Future Insights has been the largest source of competition for them over the last two years. Some cell-
values in Table 4 contain less than 5 observations making a normal t-test invalid for
inference. Hence, we used the Fisher’s Exact Test, under the null hypothesis that there
is no statistically significant relationship between the source of competition and seller
experience. The test values indicates that we cannot reject the null hypothesis. Note
that we have lost some data points due to non-responses in all question categories in
12 tables 3 and 4.
Hypothesis 2: Years of trading experience does not matter for perception of
competition.
The degree of price setting freedom is categorized as: no freedom, moderate freedom
and full freedom. Table 5 shows that there is a statistically significant relationship between
sellers’ perception of competition and the degree of price setting freedom.
Hypothesis 3: The degree of price setting freedom has an impact on the perception
of likely competition among sellers at Nehru Place.
Due to non-responses on price-setting freedom, our sample here is of only 32
business establishments, 14 of whom perceive e-commerce as their biggest competition.
12 of these 14 shops reported that they have full freedom to set their prices. Price risk
is diversified more if the establishment has lower price setting freedom (dedicated
dealerships). Hence, majority of the shops with an online threat perception have full
price setting freedom

Table 5: Cross-tabulation of Price Setting Freedom of Shops with

Perceived Competition
  Price Setting Freedom 
Full Moderate No
Perceived Competition Freedom Freedom Freedom Total
Online 12 1 1 14
Other Sellers in the
Market 1 0 3 4
Other Brands and Products 0 2 5 7
No Perceived Competition 3 0 4 7
Total 16 3 13 32

Pearson Chi2 (6) = 18.6319 Probability = 0.005

Fisher’s Exact p-value= 0.000
Source: Authors’ own Calculations

Due to non-responses on price-setting freedom, our sample here is of only 32 business

establishments, 14 of whom perceive e-commerce as their biggest competition. 12
of these 14 shops reported that they have full freedom to set their prices. Price risk
is diversified more if the establishment has lower price setting freedom (dedicated
dealers). Hence, majority of the shops with an online threat perception have full price
setting freedom.
5. Conclusion Competing with
Virtual Entities: IT
In the recent times, e-commerce sites by offering massive discounts, free home delivery Product Purchases
and other attractive offers such as buybacks, 30-day replacement, etc. have wrenched in India
away a certain market share away from offline markets. This is clearly established
through our consumer survey, showing a shift away from the wholesale brick-and-
mortar market at Nehru Place in favor of online buying, though the former continues
to the most preferred destination for IT products among a large subset of our sample.
The primary advantage for online purchasing over the offline market place for a
consumer is that it minimizes travel and search costs. Consumers can buy a bundle of
13
commodities (FMCG, durables, etc.) through a single search online. However, the trust
that people place on experiencing a product can only be provided by offline market
places. Interestingly, in our survey consumers’ choice of location of purchase is dictated
by a combined price–choice variable and not convenience of shopping. Price discounts
and product variety online is the driving force for this shift in consumer preferences.
On the supply side, if a very experienced and mature trader has not diversified
from selling standardized IT products, intense price competition is likely to hurt him/
her just as much as a new seller at Nehru Place. What provides further support to
our claim is that the degree of price setting freedom that a trader has influences his
perception of price competition from online traders. This clearly indicates that traders
with diversified price risk will survive this competition and there will be exit of a large
number of undiversified small traders from the traditional market.

6. Limitations
Our sample on the supply side suffers from a survival bias. It does not pick up data
on sellers who have exited the market already. The static nature of our survey cannot
address this issue. Further, as a survival strategy, diversification of the product basket is
very important for the brick-and-mortar shops. Due many non-responses from sellers,
we could not empirically establish this result. Our offline market sample is from one
wholesale market alone, though consumers reveal this market to be the most relevant
for making IT product purchases in New Delhi.

7. Further Research
To understand the total impact of e-commerce in the product category we are
investigating, we have started further research on pricing and non-price promotional
behaviour of e-tailers. We also extend our research to other offline market places to
study the dynamic pattern of entry and exit to enrich the existing results.

8. Managerial Implications
The advantage of traders in a offline marketplace like Nehru Place seems to lie in
trading in “non-standardized” products with a high informational content. Non-
standardized products are brand-specific components and parts and for which the
consumer does not have adequate know-how to order online. This helps traders retain
market share, as standardized products with less informational requirement are sold
online at discounted prices.
A simple strategy of diversifying into the repairs business by existing computer
dealers is going to be self-defeating, as our research indicates that consumers interested
in repairs of computers prefer to go to dedicated dealers of the computer brand rather
 than general repair shops at Nehru Place. Such a strategy will only attract the residual
Retail Marketing in
demand of consumers whose product warranty has either expired or who have made
India: Trends and foreign purchases and faces invalid warranty in India.
Future Insights

References
Balasubramanian, S. (1998). “Mail versus mall: A strategic analysis of competition
between direct marketers and conventional retailers”, Marketing Science, 17(3):
181–95.
Beldona, S., Racherla, P. and Mundhra, G.D. (2011). “To buy or not to buy: Indian
14
consumers’ choice of online versus offline channels for air travel purchase”, Journal
of Hospitality Marketing and Management, 20(8): 831–54.
Breiman, L., Friedman, J., Stone, C.J. and Olshen, R.A. (1984). Classification and
Regression Trees. Belmont, CA: Wadsworth International.
Brynjolfsson, E. and Smith, M.D. (2000). “Frictionless commerce? A comparison of
internet and conventional retailers”, Management Science, 46(4): 563–85.
Forman, C., Ghose, A. and Goldfarb, A. (2009). “Competition between local and
electronic markets: How the benefit of buying online depends on where you live”,
Management Science, 55(1): 47–57.
Gehrt, K.C., Rajan, M.N., Shainesh, G., Czerwinski, D. and O’Brien, M. (2012).
“Emergence of online shopping in India: Shopping orientation segments”,
International Journal of Retail and Distribution Management, 40(10): 742–58.
Goolsbee, A. (2001). “Competition in the computer industry: Online versus retail”,
Journal of Industrial Economics, 49(4): 487–99.
Gupta, N. (2011). “Extent of susceptibility to interpersonal influence and price sensitivity
among Indian youth: Is there a relationship between these two constructs?”, Young
Consumers, Emerald Group Publishing Limited, 12(4): 361–69.
Gupta, N., Handa, M. and Gupta, B. (2008). “Young adults of India-online surfers or
online shoppers”, Journal of Internet Commerce, 7(4): 425–44.
Haughton, D. and Oulabi, S. (1993). “Direct marketing modeling with CART and
CHAID”, Journal of Direct Marketing, 7(3): 16–26.
Kass, G.V. (1980). “An exploratory technique for investigating large quantities of
categorical data”, Applied Statistics, 29(2): 119–27.
Khare, A. (2016). “Consumer shopping styles and online shopping: An empirical study
of Indian consumers”, Journal of Global Marketing, 29(1): 40–53.
Khare, A., Khare, A. and Singh, S. (2012). “Attracting shoppers to shop online:
Challenges and opportunities for the Indian retail sector”, Journal of Internet
Commerce, 11(2): 161–85.
Khare, A., Singh, S. and Khare, A. (2010). “Innovativeness/novelty-seeking behaviour
as determinants of online shopping behaviour among Indian youth”, Journal of
Internet Commerce, 9(3–4): 164–85.
Maxwell, S. (2001). “An expanded price/brand effect model: A demonstration of
heterogeneity in global consumption”, International Marketing Review, 18(3):
325–43.
McCarty, J.A. and Hastak, M. (2007). “Segmentation approaches in data-mining:
A comparison of RFM, CHAID, and logistic regression”, Journal of Business
Research, 60(6): 656–62.
Morgan, J.N. and Sonquist, J.A. (1963). “Problems in the analysis of survey data, and a
proposal”, Journal of the American Statistical Association, 58(302): 415–34.
Nelson, R.A., Cohen, R. and Rasmussen, F.R. (2007), “An analysis of pricing strategy Competing with
Virtual Entities: IT
and price dispersion on the internet”, Eastern Economic Journal, 33(1): 95–110. Product Purchases
Nong, Y. (Ed.) (2003). The Handbook of Data Mining. Mahwah, NJ: Lawrence in India
Erlbaum Associates.
Pandey, S., Chawla, D. and Venkatesh, U. (2015). “Online shopper segmentation based
on lifestyles: An exploratory study in India”, Journal of Internet Commerce, 14(1):
21–41.
Perreault Jr, W.D. and Barksdale Jr, H.C. (1980). “A model-free approach for analysis
of complex contingency data in survey research”, Journal of Marketing Research,
17 (4): 503–515. 15
Prince, J.T. (2007). “The beginning of online/retail competition and its origins: An
application to personal computers”, International Journal of Industrial Organization,
25(1): 139–56.
Sundaram, R. (2004). “Uncanny Networks: Private, Urban and New Globalization”,
Economic and Political Weekly, 39(1): 64–71.
Ritschard, G. (2014). “CHAID and earlier supervized tree methods”, in McArdle,
J.J. and Ritschard, G. (Eds.), Contemporary Issues in Exploratory Data Mining in
the Behavioural Sciences. Routledge, New York and London (Taylor and Francis
Group): 48–74.

Declaration
The authors would like to acknowledge the contributions of Kumarjit Saha (Indian
Statistical Institute, New Delhi) and the following M.A. Development Economics
students (2014), Faculty of Economics, South Asian University, who helped in the
surveys—From India: Shelly Gulati, Akanksha Batra, Anubrata Deka; From Pakistan:
Prem Kumar and Ajmal; From Afghanistan: Md Mahdi Frough Abdurrahman Rahmani
and Md Salim Samimy and Mr Swarn Singh at Nehru Place.
The corresponding author wishes to thank the South Asian University for giving a
grant under the Professional Development Allowance ( ` 30,000) for conducting the
survey and the subsequent research.
 Greentailing and Green Consumer
Profile: Retailers’ Strategies
for Store Loyalty
Nitika Sharma1*, Subodh K Kesharwani2
1
Research Scholar, Department of Commerce, University of Delhi, Delhi,
2
Reader, School of Management Studies, IGNOU, New Delhi,

Abstract
Purpose: This study aims to combine the literature on green marketing and retailing into
a new managerial framework, to explore store loyalty by segmenting green consumer
characterization. In addition, this study explores the concept of “greentailing” in
consumer behaviour.
Design/methodology/approach: This study summarizes the literature related to the
sociodemographic variables, psychographic variables, and the store loyalty to analytically
explore the concept of greentailing. A questionnaire was administered to empirically verify
the hypothesis. Data collected from Indian consumers was analysed using correlation and
multiple regression analysis.
Findings: Sociodemographic variables identified as weak measures in explaining
store loyalty while psychographic measures showed significant positive effect on
store loyalty through greentailing. The relevance of perceived consumer effectiveness
(PCE) and environmental concern (EC) found more apparent than sociodemographic
variables. The conclusions drawn in the study are useful to the retailers to understand
the measures that affect the store loyalty among consumers and will help them in
improving the greentailing strategies.
Originality: Although researchers have been examining the role of greentailing in
the context of green consumerism, the outcomes and processes like green strategies,
environmental performances and the sustainable behaviour of consumers, it may be
safely affirmed that the broader greentailing dimensions with respect to consumer’s
segmentation and store loyalty remains explored limitedly. This study provides the
comprehensive understanding of various determinants of greentailing, affecting the
store loyalty of the retailers.

Keywords
Greentailing, Store Loyalty, Perceived Consumer Effectiveness, Environmental
Concern, Psychographic Factors, Sociodemographic Factors

1. Introduction
Consumers at present, are conscious regarding environment (Sharma and Kesharwani,
Retail Marketing in 2015) and this generated the demand of environment-friendly products (Gam, 2011).
India: Trends and
Owning to growing environmental awareness, Indian retail sector intend to take
Future Insights
pp. 16–26
© Ambedkar University * Corresponding Author: Nitika Sharma (nitikasharma28@gmail.com)
viable green initiatives. In order to gain prominence in competitive market, it is Greentailing and
Green Consumer
important for retailers to showcase the environmental friendly products they are Profile: Retailers’
selling or the environmental practices they are indulging. This concept is known as Strategies for
“Greentailing”. Also, these environmental practices develop positive image in the mind Store Loyalty
of environmental conscious consumers (Kumar, 2014). Sharma and Narula (2015)
examined that environmental consciousness positively influences the store loyalty.
Authors also stated that consumer who has a belief that his/her actions may positively
influence the environmental problems will show higher repeat purchase, willingness
to recommend, and enduring desire to maintain the relationship with commitment over
a period of time with one store. Lee et al. (2012) also demonstrated the significant 17
influence of green retailing activities on environmental consciousness.
In the past studies, the profiling of green consumers has been examined using different
lenses. These studies broadly discussed the green behaviour, environmental consciousness
of consumers and the relationship of sociodemographic and psychographic variables
with environmental behaviour (Sharma and Sharma, 2013; Akehurst et al., 2012;
Laroche, 2001; Straughan and Roberts, 1999). It is argued that the examination of these
variables in greentailing is limitedly explored to establish their relationship with store
loyalty. Despite the pioneer studies which discussed the segmentations of consumers
in retail market with many orientations and contexts (Birtwistle et al., 1998; Lockshin
et al., 1997; Darden et al., 1976), few attempts have been made to empirically explore
the extent to which, or how, green consumer segmentation may endow store loyalty or
how these demographic and psychographic variables can imbue commitment for a store
among consumers. This paper aims to profile the sociodemographic and psychographic
variables of green consumers in greentailing.
Conceptually, retail image can be patronage by performing social responsibility
towards the society (Gupta and Pirsch, 2008). Within the retailing context, activities
with some good social cause or beyond the interest of the firm exemplify constructive
store image. Since, greentailing includes two aspects of environmental conscientious
retailing; one involvement of sale of products which have smallest amount of adverse
impact on the environment and second to aware the consumers to adopt one or the other
methods like providing paper, jute, recyclable, or biodegradable bags; by charging a
little extra money for carry bags, by environment-friendly packaging or by motivating
“Bring your own bag”, retailers may create positive image among customers (Sharma
and Narula, 2015).

2. Literature Review and Framework

The review is presented as follows.

2.1 Greentailing
Retail sector is prevailing in acquainted, demanding, and competitive environment
(Woodruff, 1997). Ferraro and Sands (2009) explored that green retailing can gain
competitive advantage as green projects may have the potential to yield high return
on investment and cost savings. Sinha (2011) found that sustainable practices adopted
by retailers facilitate green consumptions. Mcmillan Dictionary defined greentailing
as “the business of selling environmentally-friendly products to the public and/or
the practice of using environmentally-friendly methods to run a business which sells
products to the public”.
 2.2 Green Consumer Profiling
Retail Marketing in From the managerial perspective, it is important to identify the consumers who may
India: Trends and be influenced by greentailing to generate store loyalty. Several studies have been done
Future Insights
in the literature to profile the population of customers conscious towards greentailing,
segmenting the profile of green oriented conscious consumers of the population
(Sharma and Sharma, 2013; Akehurst et al., 2012; Schlegelmilch et al., 1996). Mainly,
the two variables were categorized; sociodemographic factors such as gender, age,
education, income, and social class and psychographic factors, such as PCE, altruism,
ecological consciousness, lifestyle, personality, motivation, and values (Sharma and
18 Sharma, 2013; Akehurst et al., 2012; Thompson et al., 2009; Paco and Raposo, 2008;
Straughan and Roberts, 1999).

2.2.1 Sociodemographic Characterization

During the last three decades, pioneered studies of Roberts (1996), Schlegelmilch et
al. (1996), and Kilbourne and Beckmann (1998) determined the sociodemographic
segmentation of environmental conscious consumers. These studies showed that
sociodemographic profiling has less impact on green behaviour. However, it is argued
by Diamantopoulos et al. (2003) that it is important to study the sociodemographic
variables to investigate its impact on environmental-friendly consciousness of
consumers and studied its relationships with environmental measures. In this study, we
have empirically explored the linkage between sociodemographics and store loyalty in
green marketing context.

2.2.1.1 Age
In an attempt to conceptualize the environmental consciousness constructs, many
studies considered age as a parameter to segmentalize green consumers (Sharma and
Sharma, 2013; Straughan and Roberts, 1999; Widegren, 1998; Altenburg et al., 1996).
Many studies indicated that younger age group exhibits higher environmental concern
(Sharma and Sharma, 2013; Straughan and Roberts, 1999; Grunert and Kristensen, 1992;
Arcury et al., 1987). Many authors have found different result in context of relationship
between age and green variables. Diamantopoulos et al. (2003) investigated 33 studies
and reported significant relationship between age and environmental consciousness
in two studies only. However, since majority of the studies indicated insignificant
relationship, therefore to support the view an alternative hypothesis of difference is
postulated in greentailing context.
H1: Age is related to store ttloyalty in case of greentailing.

2.2.1.2 Gender
Several studies examined the linkage between gender and green consumer behaviour.
Diamantopoulos et al. (2003) reported significant relationship between gender
and greentailing while few other studies contradicted these findings (Sharma and
Sharma, 2013; Akehurst et al., 2012; Straughan and Roberts, 1999). While some
studies reported that females are more environmentally conscious than males.
Few others reported that men relatively have more environmental knowledge than
women (Diamantopoulos et al., 2003; Grunert and Kristensen, 1992; Arcury et al.,
1987). It may therefore be conjectured that gender has no association with store loyalty Greentailing and
Green Consumer
in green marketing context. Profile: Retailers’
H2: Gender is related to store loyalty in case of greentailing. Strategies for
Store Loyalty

2.2.1.3 Education
Many studies were relatively homogenous in their findings that higher educated
consumers are more sensible and concerned towards environment as they understand
the environmental issues better and act accordingly (Straughan and Roberts, 1999; 19
Zimmer et al., 1994). Conversely, few studies observed that education has no significant
relationship with green consumer behaviour (Sharma and Sharma, 2013; Akehurst et
al., 2012). Due to the inconsistency in the past results, to support the view following
alternative hypothesis of no difference is postulated in greentailing context.
H3: Education is related to store loyalty in case of greentailing.

2.2.1.4 Income
According to the studies Sharma and Sharma, 2013; Awad, 2011, income has a positive
correlation with green consumer behaviour. Few authors have found it otherwise, i.e.,
no relationship between income and green activities. Hence, it can be asserted that
income may affect store loyalty in green marketing context.
H4: Income is related to store loyalty in case of greentailing.

2.2.2 Psychographic Characterization

Since the 1990s, many researchers have been considering psychographic variables
in profiling the green consumers and mainly considering the variables, namely
Altruism, Collectivism, Ecological concern, Liberalism, and PCE (Rowlands et al.,
2003; Straughan and Roberts, 1999; Schlegelmilch et al., 1996; Shrum et al., 1995).
However, no attempts have been made to empirically explore the extent to which, or
how these variables affect the store loyalty in greentailing context. In this paper, we
have taken two psychographic variables explicitly; PCE and EC and it has been found
that higher level of environmental consciousness among consumers apparently show
more green purchasing behaviour (Sharma and Kesherwani, 2015; Schlegelmilch et
al., 1996). The concept of characterization of green consumers is at mature phase and
sociodemographic variables have limited utility in characterization of green consumers.
It may be asserted that relevance of sociodemographic variables is relatively less in
explaining store loyalty in greentailing context.
H5: Sociodemographic variables are less relevant than psychographic variables in
explaining Store Loyalty in case of greentailing.

2.2.2.1 Perceived Consumer Effectiveness (PCE)

According to the ecological marketing perspective, it has been observed that
environmental consciousness manifests through attitudes and beliefs of consumer’s
actions contribute towards the solution of environmental problems (Sharma and
 Sharma, 2013; Straughan and Roberts, 1999; Kinnear et al., 1974). This phenomenon
Retail Marketing in
is known as PCE. Kinnear et al. (1974) first defined the term PCE as “the measurement
India: Trends and of one’s belief in the result of his/her own actions”. Previous studies were relatively
Future Insights homogenous in reporting significant relationship between PCE and green consumer
behaviour (Sharma and Sharma, 2013; Akehurst et al, 2012; Kim and Choi, 2005;
Straughan and Roberts, 1999). This study proposes the construct, “PCE” to address the
premise that it may influence store loyalty if retailers include environmental-friendly
activities like usage of renewable energy, encouraging the notion of bring your own
bag, biodegradable bags/packages, selling of environmentally products, self-efficient
20 in store operationalization and charging extra for store bags, etc.
H6: PCE is related to store loyalty in case of greentailing.

2.2.2.2 Environmental Concern (EC)

Conceptually, environmental concern is linked with individual’s general orientation
toward environment (Kim and Choi, 2005; Straughan and Roberts, 1999; Chan, 1996).
EC is the willingness of the consumers to solve the ecological problem and readiness
to change their behaviour for better environment (Dunlap and Jones, 2002; Chan
and Lau, 2000). The proposed explanation is that as environmental concern triggers
the individual’s awareness (Dunlap and Jones, 2002), beliefs, and value orientation
(Schultz, 2000) to willingly show an environmental behaviour will lead to store loyalty
in case of greentailing.
H7: EC is related to store loyalty in case of greentailing.

3. Methodology
Research methodology is presented as follows.

3.1 Data Collection and Survey Instrument

The quantitative study was developed to test the relationship among sociodemographic
variables, psychographic variables, and store loyalty of green consumers when retailers
perform greener activities. To study the effects of two major profiling variables, i.e.,
sociodemographic variables and psychographic variables on store loyalty when retailers
attempt to adopt greentailing approach a questionnaire is prepared and data is collected
from 134 participants. Table 1 represents the summary of demographic classifications.

Table 1: Demographic Classifications

Gender (n = 134) (%) Education (n = 134) (%)
Male 65.20 Senior Secondary 4.30
Female 34.80 Under graduate 39.40
Total 100.00 Post graduate 36.00
Professional Education 17.40
Other 2.90
Total 100.00
 Greentailing and
Age (in years) (n = 134) (%) Monthly Income (n = 134) (%) Green Consumer
18–23 35.40 <10,000 20.10 Profile: Retailers’
Strategies for
24–29 44.20 10,001–25,000 26.10 Store Loyalty

30–35 16.50 25,001–40,000 20.40

36–41  1.70 40,001–55,000 25.40
42 and Above 2.20 >50,001 8.00
Total 100.00 Total 100.00
21
3.2 Measures
Following measures are used for the study.

3.2.1 Sociodemographic Variables

Gender, age, education, and income were considered as independent variables in this
study.

3.2.2 Psychographic Measures

PCE and EC were examined as independent measures in psychographic measures
(adapted from Kim and Choi (2005)). PCE’s Cronbach’s alpha coefficient was 0.739
and EC was 0.788.

3.2.3 Store Loyalty in Greentailing

To examine the store loyalty of the respondents when retailers adopt greentailing
strategies, we gave them a hypothetical situation. Five questions were administered
to investigate the store loyalty of respondents in case of greentailing. The calculated
Cronbach’s alpha of the instrument was 0.934.

4. Results
For the preliminary analysis, the correlation analysis was run. The results indicated
that the demographic variables, i.e., age and income were positive, and gender and
education were negative and insignificantly correlated with store loyalty (p-value >
0.001). However, the correlation coefficients of psychographic classifications were
significantly and highly correlated with store loyalty (p < 0.001).
Further regression analysis was carried to test the hypotheses. General assumptions
of the multiple regressions were taken into consideration. Store loyalty was taken
as the dependent variable and demographic variables viz age, gender, income, and
education were taken as dependent variables (Regression model M1). According to
the regression model fitted on the data, R2 = 0.006, F(4,130) = 0.206 and p - value
= 0.934, leading to the rejection of the hypotheses: H1, H2, H3, and H4. Hence, this
study affirms that demographic variables (gender, age, education, and income) are not
significantly related in explaining store loyalty. The regression coefficients, standard
error and R2 values corresponding to all independent variables in the regression model
M1 are shown in table 2.
 Table 2: Regression Analysis (Model M1) of Demographic Variables with Store
Loyalty
Retail Marketing in
India: Trends and
Variables Coefficients Standard Error p-value
Future Insights
Constant 2.282 0.316 0.000
Gender -0.007 0.165 0.968
Age 0.098 0.117 0.401
Education -0.081 0.154 0.602
22 Income -0.030 0.113 0.789

To examine the hypotheses H6 and H7, stepwise regression models were fitted on the
psychographic variables considering PCE and EC as independent variables and store
loyalty as dependent variable. In the step one regression equation is fitted with PCE as
independent variable (model M2). As shown in Table 3, model M2 explains significant
relationship between PCE and store loyalty when retailers adopt green strategies with
R2=0.318 and F(1,133) = 62.005, p - value= 0.000. In the second step variable EC is
added as dependent variable removing the variable PCE. The R2 value for this model
(model M3) is 0.449 and F (1,132) = 108.577, p- value = 0.000 (refer Table 3).
In the third step both PCE and EC were taken as independent variables and the model
(model M4) explained R2 =0.552, F(2, 132) = 81.47 and p- value = 0.000 (see Table 4).
The results of models M2-M4 support the hypothesis H6 and H7. It implies that PCE and
EC have a positive association with store loyalty for greentailers.

Table 3: Stepwise Regression Analysis of Psychographic Variables with Store

Loyalty
Standard
Model Variable Coefficients Error p -value R2
Constant 0.918 0.179 0.000
M2 0.318
PCE 0.647 0.082 0.000
Constant 0.448 0.181 0.015
M3 0.449
EC 0.675 0.065 0.000

Table 4: Regression Analysis of Psychographic Variables (Model M4) with Store

Loyalty
Variables Coefficients Standard Error p-value
Constant 0.001 0.183 0.996
PCE 0.402 0.073 0.000
EC 0.533 0.064 0.000

Again stepwise linear regression is run to test H5 assuming demographic and

psychographic variables as independent variables and store loyalty as a dependent
variable (Model 5). The result shows R2 = 0.56 , F(6,128) = 27.16 and p-value = 0.000.
It is asserted that psychographic variables are appropriate in profiling green consumers
which lead to store loyalty in greentailing. The regression coefficients, standard error
and R2 values corresponding to all independent variables for the regression model M5
are shown in table. The results of Table 5 also show that demographic variables have Greentailing and
Green Consumer
no significant role in influencing store loyalty through greentailing. Profile: Retailers’
Strategies for
Table 5: Regression Analysis of Sociodemographic and Psychographic Store Loyalty
Variables with Store Loyalty (Model M5)
Variables Coefficients Standard Error p-value
Constant -0.188 0.289 0.518
Gender 0.031 0.112 0.779
Age 0.073 0.079 0.353 23
Education -0.014 0.104 0.895
Income 0.025 0.076 0.742
PCE 0.401 0.075 0.000
EC 0.539 0.066 0.000

The study shows that H1, H2, H3, and H4 are not supported and implies that
demographic variables are insignificant in profiling store loyalty of green consumers
in case of greentailing. However, H5, H6, and H7 are accepted which infer that
psychographics variables are more relevant and significant in impacting store loyalty
in case greentailing.

6. Discussions and Implications

The emergence of green market provoked many researchers to segmentalize and
characterized the green consumers. Therefore, by converging the multidisciplinary view
of retail management and green marketing, this paper presents an approach to examine
the profiles of environmental-friendly conscious consumers through two constructs,
namely demographic and psychographic variables and subsequently examining their
impact on store loyalty. The literature has not been conclusive in determination of
store loyalty through demographic and psychographic variables and how these
variables effect on action orientation of consumers. This study allows us to affirm that
demographic characterizations are not pertinent in explaining store loyalty among
consumers. Nevertheless, psychographic variables are verified to be more effectual in
profiling green consumers and establishing its association with store loyalty. It is worth
mentioning results are similar to the previous studies of Sharma and Sharma (2013),
Akehurst et al. (2012), Diamantopoulos et al. (2003), and Straughan and Roberts
(1999) where they have found that psychographic measures are more appropriate in
characterizing green consumer behaviour as compared to sociodemographic variables.
This study shows the five perspectives of store loyalty in greentailing. First, the
study attempts to understand the role of demographic characteristics and psychographic
measures on store loyalty in case of retailers indulge in green activities. Second, when
participants were asked if they will be regular and consistent buyer of the store which
is dedicated towards greentailing, most of the respondents agreed with it. Moreover,
most of the respondents stated that if a store performs a green activity they choose
that store over other non-green stores. Third, no noteworthy relationship between
sociodemographic classifications and store loyalty were reported. Fourth, there is a
positive and significant relationship between psychographic variables and store loyalty in
context of greentailing. It means that beliefs and behaviour of consumers generate store
 loyalty if retailers perform environmental-friendly practices. Fifth, this paper extends
Retail Marketing in
the research of green consumers buying behaviour by profiling the consumers and
India: Trends and investigating the influences of these variables on store loyalty in context of greentailing.
Future Insights The practical contributions in this study verify that retailers can achieve store loyalty
if they adopt green actions for preserving the environment. It implies that “judgment”
and /or “self-evaluation” are ever present phenomena in human psyche and PCE and
EC present in overt or subcutaneous form is forming loyalty among consumers. Hence,
marketers need to trigger psyche of consumers for store loyalty in greentailing context.
Environmentally sound retailing can help retailers in achieving store loyalty and
24 psychographic variables are more effective in leading store loyalty. Green retailers
should articulate the greener actions they are performing to magnetize new markets,
customers, and retain the existing green consumers.

7. Limitations and Future Scope

One of the limitations of this study is the small sample size and sampling technique
which might have affected the generalizability of the results. Moreover, sample
is collected from Delhi and NCR only. To revalidate the results, researcher may
extend the sample to other cities of the country. Further, in this study store loyalty
concentrates only on the hypothetical situation of greentailing and not focused on
any particular retailers. For further research, a particular retailer or group of retailers
can be considered to evaluate the results. Only a few variables of demographic and
psychographic characteristics have been examined. For further research, researchers
can use niche demographic segment like young, mid- to high-income, educated, urban
women, or enhanced classification of consumers. Furthermore, other psychographic
variables can be considered like Altruism, Liberalism, or Environmental concern for
better psychographic characterization of consumers. Factors and dynamics of PCE,
pro-environmental behaviour, and perspective of store loyalty change over period of
time. Hence, future researchers should carry the longitudinal study.

References
Akehurst, G., Afonso, C. and Martins Gonçalves, H. (2012). “Re-examining green
purchase behaviour and the green consumer profile: New evidences”, Management
Decision, 50(5): 972–88.
Arcury, T.A., Scollay, S.J. and Johnson, T.P. (1987). “Sex differences in environmental
concern and knowledge: The case of acid rain”, Sex Roles, 16(9–10): 463–72.
Awad, T.A. (2011). “Environmental segmentation alternatives: Buyers” profiles and
implications”, Journal of Islamic Marketing, 2(1): 55–73.
Birtwistle, G., Clarke, I. and Freathy, P. (1998). “Customer decision making in fashion
retailing: A segmentation analysis”, International Journal of Retail and Distribution
Management, 26(4): 147–54.
Chan, R.Y. and Lau, L.B. (2000). “Antecedents of green purchases: A survey in
China”, Journal of Consumer Marketing, 17(4): 338–57.
Chan, T.S. (1996). “Concerns for environmental issues and consumer purchase
preferences: A two-country study”,  Journal of International Consumer
Marketing, 9(1): 43–55.
Darden, W.R. and Perreault Jr, W.D. (1976). “Identifying interurban shoppers: Greentailing and
Green Consumer
Multiproduct purchase patterns and segmentation profiles”, Journal of Marketing Profile: Retailers’
Research, 13(1): 51–60. Strategies for
Diamantopoulos, A., Schlegelmilch, B.B., Sinkovics, R.R. and Bohlen, G.M. (2003). Store Loyalty
“Can socio-demographics still play a role in profiling green consumers? A review of
the evidence and an empirical investigation”, Journal of Business Research, 56(6):
465–80.
doPaço, A. and Raposo, M. (2009). “‘Green’ segmentation: An application to the
Portuguese consumer market”, Marketing Intelligence and Planning, 27(3): 364–79.
D’Souza, C., Taghian, M. and Khosla, R. (2007). “Examination of environmental beliefs 25
and its impact on the influence of price, quality and demographic characteristics
with respect to green purchase intention”, Journal of Targeting, Measurement and
Analysis for Marketing, 15(2): 69–78.
Dunlap, R.E. and Michelson, W. (Eds.) (2002). Handbook of Environmental Sociology.
Westport, CT : Greenwood Publishing Group.
Ferraro, C. and Sands, S. (2009). “‘Greentailing’: A key to thriving in the recession?”,
in  Ewing, M. and Mavondo, F. (Eds.), Australian and New Zealand Marketing
Academy (ANZMAC) Conference 2009 (pp. 1–9). Melbourne : Australian and New
Zealand Marketing Academy (ANZMAC).
Grunert, S.C. and Kristensen, K. (1992). “The green consumer: Some Danish
evidence”, Marketing for Europe—Marketing for the Future, 1:525–39.
Gupta, S. and Pirsch, J. (2008). “The influence of a retailer’s corporate social
responsibility program on re-conceptualizing store image”, Journal of Retailing and
Consumer Services, 15(6): 516–26.
Jensen, B.B. (2002). “Knowledge, action and pro-environmental behaviour”,
Environmental Education Research, 8(3): 325–34.
Jin Gam, H. (2011). “Are fashion-conscious consumers more likely to adopt eco-friendly
clothing?”, Journal of Fashion Marketing and Management: An International
Journal, 15(2): 178–93.
Kilbourne, W.E. and Beckmann, S.C. (1998). “Review and critical assessment of research
on marketing and the environment”, Journal of Marketing Management, 14(6):
513–32.
Kollmuss, A. and Agyeman, J. (2002). “Mind the gap: Why do people act
environmentally and what are the barriers to pro-environmental behaviour?”,
Environmental Education Research, 8(3): 239–60.
Kumar, P. (2014). “Greening retail: An Indian experience”, International Journal of
Retail and Distribution Management, 42(7): 613–25.
Laroche, M., Bergeron, J. and Barbaro-Forleo, G. (2001). “Targeting consumers
who are willing to pay more for environmentally friendly products”, Journal of
Consumer Marketing, 18(6): 503–20.
Lee, N., Choi, Y.J., Youn, C. and Lee, Y. (2012). “Does green fashion retailing
make consumers more eco-friendly? The influence of green fashion products and
campaigns on green consciousness and behaviour”, Clothing and Textiles Research
Journal, 30(1): 67–82.
Lockshin, L.S., Spawton, A.L. and Macintosh, G. (1997). “Using product, brand
and purchasing involvement for retail segmentation”, Journal of Retailing and
Consumer Services, 4(3): 171–83.
 Myers, J.H. (1996). Segmentation and Positioning for Strategic Marketing Decisions.
Retail Marketing in
Chicago: American Marketing Association.
India: Trends and Rowlands, I.H., Scott, D. and Parker, P. (2003). “Consumers and green electricity:
Future Insights Profiling potential purchasers”, Business Strategy and the Environment, 12(1):
36–48.
Schlegelmilch, B.B., Bohlen, G.M. and Diamantopoulos, A. (1996). “The link between
green purchasing decisions and measures of environmental consciousness”,  European
Journal of Marketing, 30(5): 35–55.
Schultz, P. (2000). “New environmental theories: Empathizing with nature: The effects
26 of perspective taking on concern for environmental issues”, Journal of Social
Issues, 56(3): 391–406.
Sharma, C.S. and Sharma, N. (2015). “Impact of self efficacy on green consumerism
through consumer’s motivation, PCE and attitude”, Journal of Management Review,
1(2): 40–52.
Sharma, N. and Kesherwani, S. (2015). “Encouraging green purchasing behaviour
by increasing environmental consciousness”, in Das, J.K., Zameer, A., Narula, A.,
Tripati, R. (Eds.), Reinventing Marketing for Emerging Markets (pp. 288–301).
India: Bloombury Publishing.
Sharma, N. and Sharma, C.S. (2013). “Encouraging green purchasing behaviour
through green branding”, Business Analyst, 34(2): 65–76.
Shrum, L.J., McCarty, J.A. and Lowrey, T.M. (1995). “Buyer characteristics of the
green consumer and their implications for advertising strategy”, Journal of
Advertising, 24(2): 71–82.
Sinha, R. (2011, March). “Green retailing: An exploratory study examining the effects
of sustainability on global retail landscape”, in Proceedings of the Conference on
Inclusive and Sustainable Growth Role of Industry, Government and Society.
Straughan, R.D. and Roberts, J.A. (1999). “Environmental segmentation alternatives:
A look at green consumer behaviour in the new millennium”, Journal of Consumer
Marketing, 16(6): 558–75.
Thompson, D.W., Anderson, R.C., Hansen, E.N. and Kahle, L.R. (2010).
“Green segmentation and environmental certification: Insights from forest
products”, Business Strategy and the Environment, 19(5): 319–34.
Yusof, J.M., Musa, R. and Rahman, S.A. (2011, June). “Self-congruity effect on
store loyalty: The role of green environment image”, in 2011 3rd International
Symposium and Exhibition in Sustainable Energy and Environment (ISESEE) (pp.
157–64). IEEE.
 Quality Attribute and Non-linear
Pricing under Changing Agriculture
Food Retailing: A Study in India
Dipankar Das*
Post-Doctoral Research Fellow, RTCHDS, Institute of Development Studies Kolkata,
University of Calcutta, Kolkata

Abstract
Large capital or corporate investment in agriculture is becoming an important issue
in Indian economy. Large capital investment may be domestic, foreign or both. While
domestic (Indian) large firms are allowed for retail as well as cash and carry trade,
100% Foreign Direct Investment (FDI) in cash and carry has become operational only
since 2006 with automatic route and in the single-brand retail market since 2012.
Most of the Asian countries have liberalized their retail markets. In this study, we
have discussed the strategic pricing behaviour of the large capital retail traders (LCT)
(including single brand, multi-brand retailers and both domestic and foreign) in the
retail agriculture market in India. A model has been established to show strategic price
behaviour of the food items in the changing retail markets in India.

Keywords
Agricultural commodities, Agriculture marketing and agribusiness, FDI, Non-linear
pricing, Retail markets,Wholesale markets

1. Introduction and Objectives

Large capital investment in agriculture is an important issue in the Indian economy.
Large capital investment can be domestic, foreign or collaborative. The Government of
India is continuously reforming agriculture through reforms in food processing, single
brand and multi-brand retail trading, cash and carry (wholesale) trade, export–import
policies and commodities exchange markets, etc. The Indian market is reformed for
domestic large capital traders, including, retailers, wholesalers, exporters, importers
and food processing firms. 100% FDI in cash and carry has become operational since
2006 with automatic route and in the single-brand retail market since 2012. In India
large capital retail traders as well as cash and carry (wholesaler) traders are either
involved in single or multi brand trade. These traders exist in organized as well as
unorganized sectors. The organized retail traders include privately owned large retail
businesses, publicly traded supermarkets, corporate-backed hypermarkets and retail
chains. On the other hand, unorganized retail traders are generally the small capital
retail traders (SCT) involved in conventional format of low cost retailing. These include
owner operated general stores, the local corner shops, convenience stores, handcart and Retail Marketing in
India: Trends and
pavement vendors, etc.
Future Insights
Single-brand retailing implies a retail store selling goods under a single brand name, pp. 27–41
whereas a, multi-brand retail refers to selling multi-brands under one roof. © Ambedkar University

* Corresponding Author: Dipankar Das (dipankar3das@gmail.com)

 FDI in retail has always been a debating issue in India. The main question is the
Retail Marketing in
competition between small and large retailers. It is debated that in the presence of large
India: Trends and retailers the predominant small scale retailers will exit from the market and the market
Future Insights will be oligopolistic. We have been trying to answer this question for the last few years.
In a country like India wherein a large number of small scale retailers are involved in
agriculture food products, inflation is an important issue. This study focuses on the
strategic pricing issues related to agriculture food retailing in India.
This paper is an extension of an earlier research work by the author (Das, 2015a,
2015b). Here, we have tried to analyse the strategic priceing behaviours of large capital
28 retail traders for agriculture-food commodities. We have explored the possible reasons
through which small capital retailers can continue existing in the market with their
limited competitive strength in the presence of large capital retailers.
It is found that large scale retailers are mostly involved in selling high quality products
whereas small scale retailers are mostly trading average quality products. Hence their
pricing is also different. The large scale retailers use non-linear pricing strategies and fix
higher prices for their products compared to the small scale traders. Since India is a cost
sensitive economy, therefore only, a small section of the total consumer will purchase from
the large retailers. The rest will buy from the small retailers. This is supporting the existence
of the small scale retailers in the retail market in the presence of the large retailers.
Objectives of the Study
(1) To identify the strategies for setting prices of agriculture-food products, by the
large capital retail traders in urban retail market in India.
(2) To analyse, whether the large capital retail traders can offer agriculture-food
items at lower prices.

2. Literature Review
The research question is whether with the presence of large retailers in the food retail
market, small retailers will be crowded out from the markets. To answer this question,
we need to search for the strategy adopted by the large retailers to enter into the market.
The Michael Porter’s “Three Generic Strategies” identifies the strategies which are
used to enter into the market. These are “Cost Leadership Strategy”, “Differentiation
Strategy”, “Focus Strategies” (Porter, 1980).
Treacy and Wiersema (1995) in their book “The Discipline of Market Leaders’’
have modified Porter’s three strategies to describe three basic “value disciplines” that
can create customer value and provide a competitive advantage. They are-operational
excellence, product leadership and customer intimacy. A popular post-Porter model
was presented by Mauborgne and Kim in the article “Creating New Market Space”
(1999). They discussed a “value innovation” model in which companies must look
outside their present paradigms to find new value propositions. Their approach
complements most of Porter’s thinking, especially the concept of differentiation. They
later introduced their ideas in the book “Blue Ocean Strategy’’. Thus, it is difficult, but
not impossible, to topple a firm that has established a dominant strategy. “Blue Ocean
Strategy’’ suggests that an organizations should create new demand in an uncontested
market space, or a “Blue Ocean”, rather than compete head-to-head with other suppliers
in an existing industry (Maubargne and Kim, 2015). From the market observations
and analyzing data, we have found that, the large retailers have adopted Blue Ocean
Strategy. They are actually trying to differentiate products from the existing small
retailers. They usually do not want to compete with the small retailers and set different
price-quality combinations. Maintenance cost for quality products is high and also Quality Attribute and
Non-linear Pricing
require technical skills, which is difficult to maintain for small retailers. In support of Under Changing
this argument few recent studies existing in the literature are discussed here. Agriculture-Food
The study “High Value Agricultural Commodities’’ conducted in Indonesia (Toiba Retailing
et al., 2013) has shown how the traditional food retailers are still operational among
the majority of consumers. It showed how a particular socio economic niche tends
to use large modern food retailers. The paper by Sahara et al. (2013) examined the
relationship between chili farmers and their buyers.The paper by Feenstra and Romalis
(2014) showed the influences of quality on the unit values of internationally traded
goods. Increased competition affects nonlinear pricing. The key fact revealed by the 29
heterogeneity amongst firms in any market is that, relative to the incumbent, individual
entrants tend to select two-part tariffs with higher tariff weightings, i.e. “high fixed
fees and lower marginal prices” (Davies et al., 2009;Yang and Ye, 2008). A study
in Indonesia and other countries in Asia by the International Food Policy Research
Institute (IFPRI) found that, firms are allowed to collect from the farmers maintaining
a quality standard (Toiba et al., 2013). Now, we need to understand the relationship
between quality and non-linear pricing strategies.
The theory of industrial organization discusses two non-linear pricing strategies -
bundling and tying.
Bundling can lead to the over supply or under supply of particular goods. Bundling
is a plausible tool to protect a multi-product monopolist in restricting entry of new
players in the market. It also help the monopolist in raising its profit (Nalebuff, 2004).
In India, at present newly arrived large capital firms are using bundling strategy in
selling agriculture-food items, combining the attribute of quality with it. This is
leading to inflation of food prices (Das 2015a, 2015b, 2015c). In case of mixed
bundling strategies, it is important to consider the ability to monitor purchases by
the monopolist (McAfeeet al., 1989). This is an alarming situation in relation to the
agriculture-food market. The study Bhattarai and Schoenle, 2011, established that
in the U.S. producer price index relating multi-product price setting frequencies of
price changes are more with the increase in the number of goods produced by the
firms. (Das 2015a, 2015b, 2015c) found that the large capital retail traders in the
agricultural food markets, agricultural food items maintaining some quality norms.
Selling food items of higher quality standards serve as a differentiation strategy for
large capital traders. These firms enjoy extra market power by selling differentiated
products, which translates into higher marketing margins. The degree of product
differentiation is determination of the size of the marketing margin (Azzam, 1999;
Dixit and Stiglitz, 1977; Keller, 1976; Tomek and Robinson, 2003; Wohlgenant,
1999, 2001). The concept of marketing margin is central to the analysis of a food
supply chain. A farm-to-retail marketing margin is the difference between the
implicit value of an agricultural commodity when sold at the retail level in processed
form versus the explicit value of the unprocessed commodity at the farm level.
In an earlier studya, it was observed that large capital retail traders were
not able to sell agricultural commodities or food items through their outlets at
lower prices. Further findings suggests that, if large capital single and multi-
brand retailers operate in the market, then small capital retail chain operate with
reduced market share. (Das, 2015a, 2015b). The competitive behaviour among
 Das, D. (2015a), “Impact of corporate investment on trading of agricultural commodities: A study
a

of select districts of West Bengal”, The University of Burdwan (Unpublished Ph.D. thesis).
 the corporate traders in the world market is found to be imperfectly competitive.
Retail Marketing in
The competition among the local small and large capital traders are generally not
India: Trends and of oligopolistic, but monopolistic in nature (Das, 2012). Therefore, to maintain
Future Insights the standard and high market share with high profit margin the corporate traders
always buy “standard products” specified by themselves from the farmers. As the
corporate traders mostly buy quality products at a higher price from the wholesale
markets and the farmers, so they are not generally able to offer lower prices in the
retail market.
The presence of large capital traders in the rural wholesale markets have changed
30 the price behaviour of agriculture commodities (Das, 2014). In a study related to the
bargaining power of the farmers, it has been shown how the preferences of SCT are
depending upon the preferences of LCTb (Das, 2014).
So far, after studying the identified literature we have found that for high quality
products the price will be higher. But no existing study in the literature discusses,
how the expenditure on other commodities is related to the purchase of particular
high quality agriculture food products. In this study we have explored how tying
expenditure among food and non-food items is related to the quantity discounts on
agriculture food products for large capital retail traders.
In this article, we have extended the work and built new models based on the new
database, related to strategic price behaviour of large capital retailers under the changing
or liberal retail market in India and have shown how the price behaviour of agricultural
or food items is changing based on the strategies applied by the large capital retailers.

3. Methodology
As explained in the literature section the “Blue Ocean Strategy” suggests that an
organization should create new demand in an uncontested market space rather than
competing head-to-head with other suppliers in an existing industry (Maubargne
and Kim, 2005). From the market observations and analyzing data, this study
attempts to establish that large capital retail traders have adopted “Blue Ocean
Strategy”. They differentiate their products from the existing small retailers. They
usually do not compete with the small retailers and set different price-quality
combinations. Maintaining high quality products require managerial skills and
large capital investments. That is difficult to maintain by the small retailers. Large
retailers are collecting high quality products and setting non-linear pricing strategies.
Therefore,we have used non-linear pricing methodology “Block Tariff” (Stahl and
Siegel, 2005) in our study and the non-linear price curve theoretically to analyze
and explain the pricing strategies of large capital retailers and scope of interaction
with the small capital retail traders. The study identifies whether the large
retailers are using “Tying”strategy or “Bundling” strategy. Bundling strategy is
further explored for “Mixed Homogeneous Bundling”and “Mixed Heterogeneous
Bundling” Further, it explores how these strategies are changing the per unit
price of agriculture-food products at the large retail stores. Non-linear pricing
methodology has been used here to identify the presence of quality attribute of
agriculture-food items sold by the large retailers. From the literature, it is clear that
if a firm uses non-linear pricing strategy it has some degree of monopoly power.
Formulation of the theoretical model is based on the primary data collected on
Das, D. (2015a), Impact of corporate investment on trading of agricultural commodities:
b 

A study of select districts of West Bengal, The University of Burdwan (Unpublished Ph.D. thesis).
strategies applied by the large retailers for agriculture commodities, especially food Quality Attribute and
Non-linear Pricing
items. Regarding the field survey, farm level data is collected from rural areas of Under Changing
West Bengal and data for retail markets is collected from urban markets in Kolkata. Agriculture-Food
The steps of the analysis are as follows: Retailing
Step 1: C ollect data to know how the large retailers (or LCT) collect agriculture-food
products from the rural wholesale markets.
Step 2: Analyse the collected data to identify the preferences of the LCT in their
collection process. The theory of Industrial Organization is used to know
the disparities of strategic behaviour between the LCT and the existing
predominant SCT present in the rural wholesale markets. 31
Step 3: C ollect data and identify the strategies adopted by the LCT in setting prices
in the retail markets.
Step 4: Analyse of the data and identify the non-linear pricing strategies.
Step 5: C onstruct the formal theoretical model based on data analysis.
Research question
Here, we are interested to know how tying expenditure among food and non-food
items is related to the pricing strategies adopted by LCT

4. Empirical analysis
The study is based on the survey conducted in the district of North 24 Parganas,
West Bengal, India, with four corporate firms, including one firm with 100%
FDI in cash and carry trade. These were Reliance Fresh, Keventer Agro, Aditya
Birla Group and Metro Cash and Carry. Metro Cash and Carry is the only
100% FDI in West Bengal in the wholesale market and others are domestic and
working in partnership with foreign firms through indirect control. To identify
the preferences of these LCT in their collection process and make sure that they
are collecting only high quality products, that divides the rural wholesale market
into two parts - average quality market and high quality market, we required
field evidences.
From Tables 1–3, we can understand the quality preferences of LCT when they buy
from the producers (i.e., the farmers).

Table 1: The Average Portion of Quality Products Collected by the Large

Capital Traders in West Bengal in the Year 2014 (Example 1)
Year 2014

Crops (fruits and Brinjal Lady’s Ridge Water Potato Pointed Ceylon
vegetables) Fingers gourd/ spinach gourd spinach
Chinese
okra
The average
proportion of 70% 60% 65% 80% 77% 80% 80%
quality products
The range of 10 katha 8 katha 8 katha 10 katha 10 5 katha 5 katha
average land used to 2 to 1.5 to 1 katha to to 10 to 10
by a farmer bighac bigha bigha 3 bigha katha katha
 (Here proportion of quality is based on size, color, freshness, etc. For example, in the
Retail Marketing in
case of potato and lady’s finger the special size is 3–4 inches, etc.)
India: Trends and
Future Insights Table 2: The Average Portion of Quality Products Collected by the Large Capital
Traders in West Bengal in the Year 2014 (Example 2)
Year 2014

Crops Bottle Cauli- Cabbage String Mango Turnip Broad

32 (vegetables) gourd/ flower beans beans
Calabash
The average
proportion
60% 80% 80% 20% 60% 87.5% 87.5%
of quality
products
The range of 10 katha 1.5 10 katha 10 katha 50 to 55 5 katha 3 katha to
average land to bigha to to 7 bigha to 12 trees to 10 4 katha
used by a 1 bigha 5 bigha katha katha
farmer

Table 3: The Average Portion of Quality Products Collected by the Large Capital
Traders in West Bengal in the Year 2014 (Example 3)
Year Crops The average Range of low The range of
(Vegetables) proportion quality product average land
of quality used by a
products farmer
2014 Bitter gourd 85% to 90% 10% to 15% 3 katha to 4
katha

Tables 1 - 3 shows, some quality norms are maintained while collecting fruits and
vegetables by large capital traders. Information from the officials of these firms, local
traders or small capital traders and farmers explain that, farmers are not preferring to
sell only quality portion to the LCT. Therefore, LCT depends on local level consolidator
or small capital traders. The LCT participates in the local mandis also. When the LCT
collects from the farmers directly, then they try to maintain a rejection of 20–30% as
non-standard and accept the rest. Moreover, when they collect from the local markets
or mandis then, they reject 10–15% as non-standard and accept the rest. Therefore, it
is observed that the farmers always try to avoid sell directly to the LCT and participate
in the local markets or mandis.
The following sections explains the pricing strategies adopted by the urban retail
traders in West Bengal based on the field survey.

 A “katha” (also spelled “kattha” or “cottah”) is a unit of area in Bangladesh and India,
c

approximately equal to 1/20 of a bigha (also formerly beegah) = 720 square feet and 1 acre
= 3 bigha.
4.1 Tying, Bundling and Per Unit Price Behaviours Quality Attribute and
Non-linear Pricing
Tying refers to a situation where a consumer buys a good only by purchasing another Under Changing
commodity as well. Corporate traders used to follow the strategy in setting prices for Agriculture-Food
Retailing
food items, for example, if any consumer buys a fixed value of certain commodity say
non food-grocery item then from that date of purchase until to some stipulated date
that the consumer shall have an advantage of getting food items with some specified
discount. Tables 4–10 help to understand tying strategy.

Table 4: Weekly Retail Price of Onion in Kolkata Market (Example - 1)

33
Market name Food items Weekly retail Weekly retail Average of two
(1) or Vegetable price on price on retail prices in
name 23.05.2014 30.05.2014 column (3) and
(2) (3) (4) (4) (5)
Kolkata Onion `25 per kg `22 per kg 23.50 per kg
(Data source: Website of Directorate of Economics and Statistics, Department of Agriculture and
Cooperation, Ministry of Agriculture, Government of India.)

Table 5: Daily Wholesale Price of Onion in Kolkata Market (Example 1)

Market name Food items Minimum Maximum Modal price on
(1) or Vegetable price on price on 28.05.2014
name 28.05.2014 28.05.2014 (5)
(2) (3) (4)
Bara Bazar Onion `13 per kg `13.75 per kg `13.75 per kg
(Posta bazar)
(Data source: website of agricultural marketing information network-AGMARKNET)

Table 6: Tying Strategy with Repeated Tying Expenditure (Example 1)

Shop or bill Food items or Strategic price Tying constraints
amount vegetable name
`150 Onion `10.90 per kg Maximum 2 kg per
bill of `150
(Data source: Spencer’s Kolkata Wednesday, 28.05.2014, The Times of India [Mid-Week blockbuster
offers]).

Table 7: Daily Retail Price of Onion in Kolkata Market (Example 2)

Market name Food items or vegetable Retail price on
(1) name 18.05.2016
(2) (3)
Kolkata Onion `14 per kg

Kolkata Potato `20 per kg

(Data source: Retail price reported as of 18/05/2014, Unit-Rs./` (Data Source-Market Intelligence Units,
DES)).
 Table 8: Daily Wholesale Price of Onion in Baro Bazar (Posta Bazar) Market
(Example 2)
Retail Marketing in
India: Trends and
Market name Food items or Minimum price Maximum price Modal price
Future Insights
vegetable name on 18.05.2016 on 18.05.2016 on 18.05.2016
(1) (2) (3) (4) (5)
Baro Bazar Onion `10 per kg `10.50 per kg `10.50 per kg
(Posta Bazar)
Baro Bazar Potato `16.40 per kg `16.50 per kg `16.40 per kg
34 (Posta Bazar)
(Data source: Website of Agricultural Marketing Information Network-AGMARKNET).

Table 9: Daily Wholesale Price of Onion in Kolkata Market (Example 2)

Market name Food items or Price on 18.05.2016
(1) vegetable name (3)
(2)
Kolkata Onion `8.50 per kg
Kolkata Potato `16 per kg
(Data source: Wholesaleprices reported as of 18/05/2014, Unit-Rs./` (Data Source-Market Intelligence
Units, DES)).

Table 10: Tying Strategy with Repeated Tying Expenditure

Shop or bill amount Food items or Strategic price Tying constraints
vegetable name
`59 for fruits Onion ` 9.90 per kg Maximum 2 kg
andvegetables per bill of `59
`59 for fruits Potato `13.90 per kg Maximum 2 kg
andvegetables per bill of `59
(Data source: Spencer’s Kolkata Wednesday, 18.05.2014, The Times of India Kolkata).

From the field survey (Example-1) as presented in Table 6, we observed that if any
consumer wants to buy onion, more than 2 kg at `10.90 per kg, then that consumer
needs to shop again for `150. Therefore, for first 2 kg onion, tying expenditure is `150,
for next 2 kg buy or 4 kg buy total, tying expenditure is `300, for 6 kg buys total tying
expenditure is `450 and so on. Tables 4 and 5 shows the average retail price on other
small capital retail markets and wholesale price of onion on the same date, offered by
the LCT. The important outcome of this data is when the wholesale price of onion in
Kolkata is `13.75 (both maximum and modal) and average retail price mainly in the
small capital retail markets is `23.50 then the LCT offers the strategic price of per
1kg onion at `10.90. It appears that the strategic price offered by LCT is lower than
the average retail price in the SCT stores of Kolkata, but it is not true. This is because
to get per 1kg onion at `10.90 at the LCT store, extra amount has to be spent by the
consumer on other commodities.
 From Tables 7–10, explains another identified “Tying dependent quantity discount”, Quality Attribute and
Non-linear Pricing
whereas Table 10 explains the quantity discount in the vegetables itself. Under Changing
Agriculture-Food
Retailing
4.2 Bundling
Bundling is a special case of tying in which two or more commodities are sold only
in fixed proportions. Bundling may be either pure or mixed. Pure bundling occurs
when a firm sells two or more products in a bundle and not individually. Mixed
bundling occurs when the commodities are made available both in bundles and
individually. Mixed homogeneous bundling can be a situation where for example 35
the price of two units of a good is lower than twice the price of one unit. Mixed
heterogeneous bundling is a situation where commodity bundling can also affect
several commodities. For instance, a restaurant ties the consumption of several
dishes into a menu.

4.2.1 Mixed Homogeneous Bundling

Table 11: Mixed Homogeneous Bundling Strategy for Onion taken by the LCT
Product name Weight per Maximum retail Strategic price or actual
packet (in kg) price per packet price with different
(1) (2) (MRP in `) selling strategies (in `)
(3) (4)

Onion 1 kg per packet `70 `70 per kg packet for

1–3 packets buy
`55 per kg packet for 4 kg
and above buy
(Source: advertisement by Spencer’s, Kolkata retail shop, The Telegraph, date– 31/05/2014)

Table 12: Mixed Homogeneous Bundling Strategy for Potato taken by the LCT
Product name Weight per Maximum retail Strategic price or
packet price per packet actual price with
(1) (in kg) (MRP in `) different selling
(2) (3) strategy (in `)
(4)

Potato 1 kg per packet `20 `20 per kg for below

1 kg buy
`16 per kg for 1 kg
and below 3 kg buy
`15 per kg for 3 kg
and above a buy
(Source: advertisement by Spencer’s, Kolkata retail shop, survey data, date-23/03/2014)
 Table 13: Mixed Homogeneous Bundling Strategy for Rice, Atta,
Pulses taken by the LCT
Retail Marketing in
India: Trends and
Product name Weight per Maximum retail Strategic price or actual
Future Insights
packet (kg) price Per packet price with different
(1) (2) (MRP in `) selling strategy (in `)
(3) (4)
Elina Long Grain 5 kg per `800 Buy 1 @ 215/pk
Rice packet (pk) Buy 2 @ 199/pk
36 Basmati Supreme 1 kg per Buy 1kg @ 38/kg
Loose Rice packet Buy 5 kg @ 37/kg
Ganesh Whole 5 kg per `171 `121/pk
Wheat Atta Premium packet
Masoor Dal 1 kg per `106 Buy 1 kg @ 107/kg
Premium Loose packet Buy 3 kg @ 105/kg
(Source: BIG BAZAAR offer under all the outlets in West Bengal, date April, 2014).

From Tables 11–13 and column 4 of each table, we find that large capital firms
are selling homogeneous commodities of different food items at a high price for the
lower quantity buys. Moreover, relatively lower price is offered for bulk purchase,
for example, Table 11 shows the fact that the price of 1kg packet of onion is `70,
if any consumer buys up to three packets and the price will reduce to `55 for each
packet for 4 or more kg buys.

4.2.2 Mixed Heterogeneous Bundling

Table 14: Mixed Heterogeneous Bundling Strategy for the Processed Food Items
taken by the LCT
Product name Weight per Maximum retail price Strategic price or actual
packet per bundle if buy price with the different
(in kg) individually and selling strategy if buy
(2) bundling discount is not specified products with
(1) available (MRP in `) specified bundle (in `)
(3) (4)
Wheat Atta+ 5 kg `1080 for all three `789 for the said products
Mustard Oil+ 5 litre products in non-bundle in the bundle
Sugar Crystal 5 kg
Oil+ 5 litre `635+ `635 for the said products
Sugar 3 kg Sugar price (not given) in the bundle
Wheat Atta+ 5 kg `165+ `165 for said products in
Salt 1 kg `16 (i.e., `181 for non the bundle
bundle)
Basmati Rice+ 5 kg `1590 for all three `888 for said products in
Mustard oil+ 5 kg products in non-bundle bundle
Sugar crystal 5 kg
(Source: Food bazaar seasonal discount offer under all the future group shops, date 12/08/2013).
 From Table 14, we have seen that a consumer will have advantage in buying a Quality Attribute and
Non-linear Pricing
specified bundle of different commodities of heterogeneous nature from the large Under Changing
capital retailers rather than the consumer’s choice bundle. For example, from Table 14 Agriculture-Food
of item (1), if a consumer buys wheat atta, mustard oil and sugar crystal of 5 kg each Retailing
respectively not in a single purchase then the total price would be `1080. However, if
that consumer buys the same items with the same weight on a specified day in bundle,
then the total price will reduce to `789. This means that to gain in terms of lower price
from the large capital retail shop, a consumer has to buy only the specified bundle. This
explains that in order to get discount or to reduce the price a consumer need to buy in
advance and the choice of a bundle is dependent. 37

5. Model for Deriving per Unit Price of Food Items at the Large
Capital Retail Market
We have dealt here with the service sector. In our current study, we are not dealing
with the case of monopoly market. Assuming that the nature of the market is
monopolistic competition as countably few LCT and large numbers of the SCT
are selling homogeneous but differentiated products. The product differentiation is
mainly qualitative (through grading). The LCT prefers to sell quality and standard
products with a high degree of non-linear pricing strategies (Das, 2015a, 2015b).
Another important notion of the demand curve for perfectly substitutable goods
explained in the book “The Theory of industrial Organization” (Tirole, 2007) is used
here to derive price curve. We have used “Block Tariff” (Stahl and Siege, 2005)
in our study and the non-linear price curve to analyse theoretically based on the
empirical evidences that this non-linear price in agriculture-food market is because
of quality preference and this must reduce consumer surplus and increase producers’
surplus (here LCT) and must have an impact on the general price level of food
products. An example of a block tariff is illustrated in the Figure 1.
Price per unit

0 q1 q2 q3 q4 q5

Number of units
Figure 1: Block tariff
 5.1 The model
Retail Marketing in Based on the survey data new models have been developed and explained in Figure 2
India: Trends and (per unit price measured on vertical axis and quantity in horizontal axis).
Future Insights
Explanation of dependence of quantity discount on tying expenditure
0 R1 is the total amount paid on buying commodities other than X. As tying is
there so the expenditure 0 R1 includes a price paid in advance to get r % discount on
food item. Let this extra payment be µ, where 0 ≤ µ ≤1. So the per unit payment in
38 advance for maximum 0q1quantity of commodity buys is 0 R1 0q1 .

Price per unit of A

one particular food C
product X
K
B D I

0 a q1 b q2 q3
R1 Quantity of one preticular
Total value of
food product X
expenditure on R2
non-food products
or “Tying”expenditure
Figure 2: Price and expenditure analysis of processed food products, based on
the strategies set by the large capital retail traders due to quantity discount

  (0R1 µ + (0R1 (1–µ ) = 0R1 (1)

Here, µ be the payment made in advance to avail the discount on food items purchased
and (1-µ) be the real amount spent for buying other commodities other than food item
X. Now, look for Oq2units’ food item buy. There is no limit of buying food item X for
getting a discount. This means the discount is not limited with the food item buy in
terms of quantity or value of purchase.
From the Figure 2, 0 R1 0q1 = tan a, 0R2 0 q 2= tan b, and tan a = tan b. So, if any
consumer wants to buy the 0qi amount of agriculture-food products X at a possibly
lower price with spending an extra amount on bundling (both mixed homogeneous and
mixed heterogeneous) and tying; then the new price equations Pq1 , Pq2 , Pq3 can now
be written for 0 q1 , 0 q2 and 0 q3 purchase quantity respectively as,

Pq1 = Bq1 + µ tan a (2)

Pq2 = Dq2 + µ tan b (3)

Pq3 = Kq3 (4)

Here, Pq1 , Pq2 , Pq3 denote the price per unit the food product, for quantities
0 q1 , 0 q2 , 0 q3 respectively.
 Expenditure equations for quantity discount with tying expenditure Quality Attribute and
Non-linear Pricing

{ }
Under Changing
E ( q X ) = pq X + µ 0 R1 for 0 < q X ≤ q1 Agriculture-Food
{{
EE( q( qX X) = }}
) = pqpqX ++µµ0 R01R1 forfor 0 0<<q qX ≤≤q1q Retailing
{ }
E ( q X ) = X pq X + µ 0 R2 for q1X< q X1≤ q 2
{{ { } }}
EE( q( qX X) =
) = pqpq ++µµ0 R0 R2 2 forforq1qfor
E ( q X ) =X X pq X
< q X X≤≤q q2 2
1< q
q 2 < q X ≤ q 3,
{{ }}
EE( q( qX X) =
) = pqpqX X for q q2 2<<q qX X≤≤q 3q,3,
for
Where, 0 R1 + 0 R1 = 0 R 2, and , P = p1 = p 2 = p 3,
Where,
Where
Where , ,0 R
0R1+
1+0R0R1=
1 =0 R
{
E0(R2q, X, and
) and
2 and
= ,P}, P=X=p+1pµ=
pq 0R
1= p
p 3p,3, 0 < q X ≤ q1
p12 2==for
39
E ( q ) = { pq + µ 0 R } for q < q ≤ q
It is clear that quantity discount was present previously for the “processed food
X X 2 1 X 2

E ( qprice
items”. Here, per unit { pq be} reduced tofora constant
) = will
X X
q < q lower
≤ q , level if that consumer
2 X
spend extra amount on other non-agriculture-food products. This means a fraction of
3

the total consumerWhere 0 R1 +to0 R

will be, able 1 = 0 Rthat.
access 2, and = p1 = limits
This, Pactually p 2 = pthe
3, market share of
the LCT.

6. Conclusion
Large retailers are collecting and selling only high quality products. It is clear
from our study that the presence of the large retailers divides the retail markets
into two parts; one of the average quality products and second for the high quality
products. This means they are applying “Blue Ocean Strategy”. They want to
create new demand in an uncontested market space, or a “Blue Ocean”, rather
than compete head-to-head with other small retailers in an existing industry. From
our study, it is clear that large capital retail traders do not offer agriculture-food
products at lower prices, but sell with non-linear pricing strategies. The “Quantity
discount” is available at the LCT store if the consumer spends a certain amount
on that commodity or other commodities. This means “Quantity discount” is not
independent and the quantity discount on agriculture-food products is dependent on
tying expenditure in food and/or non-food items. This behaviour raises consumer
expenditure. It explains that large retailers are selling to a section of the consumer
group, who are able to spend more to get quantity discount leaving the rest market
share for the small retailers. In addition, small capital retail traders still are in
a good position in terms of ability to offer agriculture-food products at a lower
price than large capital retailers. Small retailers are selling without maintaining
any quality constraints. It is observed that market interaction between the small
and large capital retailers, and the consumers with their rational behaviour ensure
the existence of small capital retailers in the retail markets. However, the market
shares of small capital retailers may decrease. But they will not exit from the
market, they can remain in the markets even with their limited capacity. The LCT
would target that consumers who are ready to buy high quality products, paying
higher prices and the rest of market share can be captured by SCT.
Moreover, from the theoretical model we also have seen that it is difficult for the
LCT to offer agriculture-food products at reasonable prices than the existing small
retailers or SCT. As the LCT is collecting and selling only high quality products,
therefore they are interested to differentiate the products from the existing SCT and
creating a new market.
 References
Retail Marketing in Adams, W.J. and Yellen, J.L. (1976). “Commodity Bundling and the Burden of
India: Trends and Monopoly”, The Quarterly Journal of Economics, 90(3):475–98.
Future Insights
Das, D. (2012). “Strategy in agricultural marketing leadingto inclusive growth under
changing retail trade in India with special reference to globalization”, Department
of Commerce (HMC) Seminar Volume on “Inclusive Growth:Emerging Scenario in
India”, Kolkata: Lawpoint Publications.
Das, D. (2014a), “A bargaining theoretic approach in finding changes of small capital
traders preferences with the presence of large capital or corporate traders and
40 condition for raising farmer’s gain under changing trading market of agriculture
commodities”, Paper presented at International Seminar on “Political Economy of
Agrarian Crisis and Enmvironmental Challenges in India”. Bolpur, Santiniketan:
UGC-SAP (DRS-1) Department of Economics and Politics, Visva-Bharati,
Santiniketan.
Das, D. (2014b). “Price Behaviour and Risk Measurement in Agricultural
Commodities:A Study of Impact of Corporate Investment in West Bengal”, Paper
presented at 34th Annual Conference of Bengal Economic Association, Supplement
to Artha Beekshan, 22. Lady Brabourne College, Kolkata-700017: Bengal Economic
Assiciation (Bangiya Arthaniti Parishad).
Das, D. (2015a). Impact of corporate investment on trading of agricultural
commodities:A study of select districts of West Bengal. The University of Burdwan
(Unpublished Ph.D. thesis).
Das, D. (2015b). “Strategic price behaviour of large capital retail traders in the retail
market and scope of interaction with the small capital retail traders: An empirical study
of West Bengal”, Indian Journal of Social and Natural Sciences,4(1):(Forthcoming).
Das, D. (2015c). “Economics of Risk Preference, Strategic Behaviour and Determinants
of Trust”, Indian Council of Social Science Research sponsored three-day
Economic Sociology Conference on Trust in Transaction organized. The Institute of
Development Studies Kolkata in collaboration with the Rabindranath Tagore Centre
for Human Development Studies.
Davies, S., Price, C.W. andWilson, C.M. (2009). “How Far Does Economic Theory
Explain Competitive Non-linear Pricing in Practice?”, CCP Working Paper
09-7,Economic and Social Research Council (E.S.R.C), University of East Anglia,
Centre for Competition Policy (CCP) .
Feenstra, R. and Romalis, J. (2014). “International prices and endogenous quality”,
Quarterly Journal of Economics, 129(2): 477–527.
Mauborgne, R.and Kim, W.C. (1999). “Creating new market space”, Harvard Business
Review,The January-February issue.
Mauborgne, R.and Kim, W.C. (2005). Blue Ocean Strategy: How to Create Uncontested
Market Space and Make Competition Irrelevant. United States of America: Harvard
Business Review.
McAfee, R. Preston, McMillan, J. and Whinston, M. D. (1989). “Multiproduct
monopoly commodity bundling and correlation of values”, Quarterly Journal of
Economics , 104(2):371–84.
Nalebuff, B. (2004). “Bundling as entry barrier”, The Quarterly Journal of
Economics,119(1):159–87.
Porter, M.E. (1980). Competitive Strategy: Techniques for analyzing industries and
competitors. New York: Free Press.
Rochet, J.C. and Stole, L. (2002). “Nonlinear pricing with random participation”,Review Quality Attribute and
Non-linear Pricing
of Economic Studies, 69:277–311. Under Changing
Sahara, G.A., Stringer, R. and Umberger, W. (2013). “Farmer-trader relationships in Agriculture-Food
Indonesia Chili Markets : The role of relationship quality in modern and traditional Retailing
supply chains”, Working Paper:High value Agricultural Commodities in Indonesia,
International Food Policy Research Institute.
Stahl, F. and Siegel, F. (2005).“Non-linear pricing of paid content products”, 18th Bled
eConference eIntegration in Action. Bled, Slovenia.
Thanassoulis, J. (2007). “Competitivemixed bundling and consumer surplus”, Journal
of Economics and Management Strategy, 16(2): 437–67. 41
Tirole, J. (2007). The Theory of Industrial Organization. New Delhi: Printice-Hall of
India Private Limited.
Toiba, H., Umberger, W., Wahida, Minot, N. andStringer, R. (2013). “Indonesian
consumer’s choice of food retail formats: Are traditional food retailers being
“Crowded out”, Working Paper: High value Agricultural Commodities in
Indonesia,International Food Policy Research Institute.
Treacy, M. and Wiersema, F. (1995). The Discipline of Market Leaders. United States:
Addison-Wesley.
Varian, H.R. (2010). Microeconomic Analysis (Third Edition ed.). New Delhi: Viva
Books Private Limited.
Yin, X. (2004). “Two-parttariff competition in Duopoly”,International Journal of
Industrial Organization,22(6): 799–820.
Yang, H. and Ye L. (2008). “Nonlinear pricing, market coverage, and competition”,
Theoretical Economics, 3: 123–53.
 Factors Influencing Consumer Preferences
towards Organized Retailing in
NCR and Haryana
Rupa Rathee1, Pallavi Rajain2*
1
Assistant Professor, Department of Management Studies, Deenbandhu Chhotu Ram
University of Science and Technology, Murthal (Sonepat)
2
Research Scholar, Department of Management Studies, Deenbandhu Chhotu Ram
University of Science and Technology, Murthal (Sonepat)

Abstract
Purpose: In the last two decades, retailing has experienced unprecedented changes,
as new and modern forms of retail outlets are coming up, the consumers prefer to
make purchases from organized retailing. This study aims to identify the factors that
influence consumer preference towards organized retailing.
Methodology: Descriptive research design has been used and both primary as well
as secondary data were collected. The primary data were collected using a structured
questionnaire with a sample of 200 respondents taken from NCR and Haryana region
(India) using convenience sampling. Secondary data comprised previously published
papers and articles. Principle component analysis using VARIMAX rotation was used
to extract the factors which influence the consumers. SPSS version 20 was used for the
purpose of analysis.
Findings: After the analysis, three factors were identified which include service
quality, variety, and supplementary services. The organized retailers should focus on
these aspects in order to increase their sales and attract more customers. They should
provide comfortable and tidy shopping space, trained, and helpful staff; and reward
the loyal customers. According to recent trends as concluded from the study, there is a
rapid growth in the organized formats due to the factors explored in this study. It also
shows that customers expect variety next to quality as the primary factors to shop in
the organized formats.
Originality: So far there has been no specific study in NCR and Haryana region on
factors influencing consumer preferences towards organized retailing.
Keywords
Organized Retailing, Consumer Preference, Factors

1. Introduction
The retail industry is broadly divided into organized and unorganized retailing where
organized retailing is based on the principle of unity and unorganized retailing is based
on the principle of singularity. Unlike unorganized retailers, some of the organized
retailers cut through various levels of middlemen to source directly from farmers.
Retail Marketing in Since they have multiple outlets, these corporate backed chains are also able to pass on
India: Trends and savings to the consumers by purchasing large volumes.
Future Insights
pp. 42–52
© Ambedkar University * Corresponding Author: Pallavi Rajain (pallavirajain@gmail.com)
1.1 Indian Retail Sector Factors Influencing
Consumer
The Indian retail sector is highly fragmented with 95% of its business being run by the Preferences towards
unorganized retailers (Dun and Bradstreet, 2009; Patel, 2015). Total retail employment Organized Retailing
in NCR and Haryana
in India, both organized and unorganized, account for about 8% of Indian labor work
force currently—most of which is unorganized. The retail sector is the largest source of
employment after agriculture, and has deep penetration into rural India generating more
than 22% of India’s GDP (Invest India, 2012). However, the organized retail is still at
a very nascent stage. A complete expansion of retail sector to levels and productivity
similar to other emerging economies and developed economies would create over 50
million jobs in India (Dohare, 2014). 43

1.2 Emerging Retail Formats

Before the decade of eighties, retailing in India was completely unorganized and
it thrived as separate entities operated by small and medium entrepreneurs in local
territories. There was lack of international exposure and only a few Indian companies
explored the retail platform on a larger scale. The Indian retail revolution was ushered
in by the eruption of malls across all regional markets. These emerging retail formats
provided a wide variety to customers and offered an ideal shopping experience with
an amalgamation of product, entertainment, and services. With the intervention of
organized retail in the form of modern retail formats such as hyper markets, one-stop
malls, specialty malls, and big-box retailing, has witnessed a remarkable shift in the
preferences of consumers. According to Hino (2010), the emergence and expansion
of supermarkets has gradually decreased the market share of the traditional formats
leading to a shift towards organized retailing.

1.3 Retail Marketing Strategies

Retail marketing strategies are playing significant role in the growth of organized retail
sector. Retailers are opting for various marketing strategies to attract consumers to buy
from emerging retail formats. The study by Mittal and Mittal (2008) suggested that
the retailers’ marketing strategy takes into account two sets of attributes: (i) loyalty
drivers and (ii) shopping experience enhancers. For shopping the loyalty drivers are:
attractive merchandise mix, sales promotions, price, and recommendation whereas the
shopping experience enhancers are store reputation/advertisements, temperature (air
conditioning), guarantee, and ambient conditions. Dalwadi et al. (2010) identified that
variables like (i) courteous staff members, (ii) customer attention, (iii) free gifts and
discounts, (iv) comfort and elegance, (v) proximity, (vi) variety, (vii) speedy service,
and (viii) assurance must be considered, while designing retail operations. Various
strategies were recommended (Grewal et al., 2009; Ghosh et al., 2010) for retailers in
designing their outlets that would meet the expectations of shoppers and how they can
shape customer experiences and behaviours.

1.4 Significance of the Study

Organized retail outlets are increasing in India day by day. It is happening due to
changing consumer preferences towards organized retailing. After the government
allowed Foreign Direct Investment (FDI) in retail, large number of new players
have entered this field. This study tries to explore the factors influencing consumer
 preferences towards organized retailing (Gurusamy and Prabha, 2011) as there has
Retail Marketing in
been no specific study in NCR and Haryana region so far. Therefore, this study is
India: Trends and useful in context of organized retailers and the factors that they need to focus on so as
Future Insights to attract more customers.

2. Literature Review
Review of the literature on organized and unorganized retailing was done to achieve
a comprehensive assessment of the terms and understand the shift in consumer
44 preferences. Sinha and Banerjee (2004) explored whether consumers were able to
perceive newer service dimensions in retailing after the introduction of new store
formats. The respondents were administered a structured questionnaire using Likert
scale. Overall, proximity and merchandise were the primary reasons for choosing the
store. Joseph et al. (2008) studied the effect of organized retail on small retailers and
vendors in the unorganized sector. The study found that unorganized retailers in the
proximity of organized retailers experienced a decline in sales and profit in the initial
years of the entry of organized retailers. The adverse impact, however, weakened over
time. Gupta and Singal (2012) identified the awareness about the organized retail
outlets in Hissar city. The results showed a paradigm shift of consumer preference for
organized retail outlets and the benefits provided by shifting from unorganized retail
outlets to organized retail outlets. Tiwari and Abraham (2010) investigated consumer
behaviour towards shopping malls in Raipur city. A self-administered questionnaire was
employed for data collection. Customers of Raipur gave high acceptance to dimensions
like exploration, convenience, and socialization. The study also revealed that young
customers of the Raipur city were found to be favorably inclined towards the mall than
their older counterparts. Similarly, Ravilochanan and Devi (2012) determined the items
most preferred by the customer in the organized retail trade. To identify the factors
which influence the choice of retail stores multiple regression analysis was carried
out. It was found from the multiple regression analysis that income and the young age
customers had a favorable effect on the choice of the retail store apart from occupation.
It was also noticed from the customer preference at the organized stores that several
items like grocery, books, cars, two wheelers, audio system, etc., were not preferred.
Gurusamy and Prabha (2011) analyzed the factors which influenced the consumers to
prefer organized retailing over unorganized retailing. The study showed that customers
were anxious towards organized retailing and they expected variety as a primary attribute
from retailers. However, satisfaction level regarding prices in organized formats was
comparatively low. Jhamb and Kiran (2012) tried to understand the improvement in retail
sector in India, especially the modern retail formats. The outcome of the study revealed
that consumers’ choice for modern retail formats varied as their income level increased.
Young consumers were more inclined to shop from modern retail formats as compared to
older ones as also found in an earlier study. Vemaraju (2011) tried to understand the impact
of customers’ perception and CRM on Indian retailing in the changing business scenario.
Findings revealed that majority of the customers preferred to purchase from retail outlets
on cash payment mode. Raut and Dash (2011) studied the consumer buying behaviour
in organized retailing in Noida and Greater Noida. The authors analyzed various factors
like accessibility, satisfaction, sales workforce factors, tangibility factors, promotional
factors, assortment factors, trustworthiness factors, and surveying factors. The results of
the study clearly highlighted the need for retailers to be much more customer centric than
they were already. Similarly, Vij (2013) tried to understand consumer behaviour towards
organized and unorganized retail stores and to find out the consumers’ satisfaction level Factors Influencing
Consumer
from organized retail stores as well as unorganized retail stores. In depth, qualitative Preferences towards
analysis revealed that India’s organized and unorganized retail sectors can co-exist and Organized Retailing
flourish. Khan et al. (2014) examined the consumer buying behaviour and identified the in NCR and Haryana
factors involved in purchasing decision in organized retail sector. The descriptive cross-
sectional design was conducted to identify the factors using structured questionnaire.
Findings of the study indicated that consumer demographics especially age, income,
occupation significantly influence purchasing decision. Kumar (2011) analyzed the
various strategies adopted by the unorganized retailers to overcome competition. The
results of factor analysis showed that product strategies were the most important factor 45
followed by price strategies, distribution strategies, and promotion strategies. The study
revealed that there was no difference between the strategies of the retailers and location
but found a slight difference with distribution strategies. Munjal et al. (2011) compared
organized and unorganized retail sector to know the sustainability of modern retail and
analyzed its growth and future potential. Research instruments used were questionnaires
designed in two sets, one for customers and another for retailers. From the customer
insight, it was found that the customer spending pattern indicated a high amount that
was spent by individuals in the category of food, apparels, and the general segment with
65% customers preferring organized retail over unorganized. The analysis also showed
that the customers saved more in the unorganized retail than the organized retail. Akram
et al. (2014) presented an account of organized and modern retailing in Indian context.
Secondary data were used to assess the current scenario. It was found that retailing, at
present, can be considered to be India’s backbone in terms of employment generation
after agriculture. Kanabar (2012) examined the activities that engage consumers in
malls, whether the mall culture is gradually gaining acceptance among consumers and
the reasons for such acceptance. The study found that consumers primarily visited the
malls for shopping, eating at food-courts, window shopping, and entertainment. They
also attended events, promotions, competitions, and product launches that are organized
in the malls and spent their leisure time with family and friends. Pandya and Bariya
(2012) studied various attributes of organized and unorganized retail outlets in Vadodara
city that were preferred by consumers. The analysis revealed that for the staple items,
more than 60% respondents preferred unorganized retail outlets, whereas less than 40%
respondents preferred organized retail outlets. However, respondents spent more money
in organized retail outlets as compared to unorganized ones.
Jhamb and Kiran (2012) studied the product and store attributes that influence
consumers to purchase from emerging retail formats. The study used descriptive
statistics, ANOVA test, and factor analysis and the findings revealed that consumers
prefer emerging retail formats due to their significant product attributes like improved
quality, variety of brands, and assortment of merchandise and store attributes like parking
facility, trained sales personnel, and complete security. Vikkraman and Dineshkumar
(2012) studied the consumers’ brand preference towards Fast-Moving Consumer Goods
(FMCG) with special reference to organized retail stores in Erode. Simple percentage,
chi-square method, weighted average rank were used for analysis. The result of the study
was that all the customers around Erode city were satisfied with the FMCG products
irrespective of brands but they needed some improvement in the customer service.
Manocha and Pandey (2012) checked the growth and development of Indian retail
industry and impact of organized retailing in India. The research design for this study was
descriptive and exploratory in nature. Most of the consumers responded that they had
 never stopped visiting Kirana stores. They strongly agreed on coexistence of both as
Retail Marketing in
requirement of the day. Organized retailing has not created conflict with unorganized
India: Trends and stores but has reshaped unorganized stores into budding/nascent organized stores. Gupta
Future Insights et al. (2012) examined the nature of changes in the retail sector that took place due to
organized form of retailing and implications of shifting to this new form of retailing.
Deeper insights into the consumer behaviour and store loyalty for local grocery stores
were obtained. The key finding of the research were that the unorganized retailers in areas
nearer to organized retailers were adversely affected in terms of their volume of business
and profit. Sane and Chopra (2014) analyzed the shopping motives of customers with
46 reference to organized retailing in metropolitan cities of India. Mall intercept technique
was used to collect the primary data from Pune and Mumbai. The findings indicated that
hedonic and convenience motives play a predominant role while shopping in organized
retail outlets by the selected age group. Singh and Singh (2015) tried to comprehend
consumer preference towards organized and unorganized retail and the market potential
of organized retailing in Moradabad city. Convenience sampling was used to collect
a sample of 100 individuals. It was found that organized retail sector was in a more
advantageous position as compared to unorganized sector. Organized retail sector, due to
economies of scale offered more services to the customers at reasonable prices.

3. Objective of the Study

To analyze the factors that influence the consumers to change their preferences towards
organized retailing from unorganized retailing.

4. Research Methodology

4.1 Research Design

Descriptive research design has been used in this study. Descriptive research was
chosen as it is used to describe characteristics of a population or phenomenon being
studied. Descriptive research helps in the exploration of the existing phenomena which
in this case are the factors which influence the consumers to change their preferences
towards organized retailing.

4.2 Sample Design

The sample population consisted of people who go to retail outlets for purchase. The
customers going out for purchase were requested to participate in the survey and fill
the questionnaires. A sample size of 200 respondents was taken using convenience
sampling from NCR and Haryana region keeping in view the cost and time constraints.

4.3 Questionnaire Design

A structured questionnaire was used to collect the primary data. The survey questionnaire
comprised of two sections: the first section comprised of demographic variables which
were used to depict the characteristics of the people surveyed in the sample. The second
section measured the factors which influence the consumers to change their preferences
towards organized retailing using a set of 13 statements selected from previous studies
after conducting a pilot survey. All responses were taken on a five point Likert scale,
with 1 for strongly disagree and 5 for strongly agree.
5. Data Analysis Factors Influencing
Consumer
Preferences towards
Organized Retailing
5.1 Reliability of the Instrument in NCR and Haryana
Cronbach’s alpha is the most common measure of internal consistency (“reliability”).
The value of Cronbach’s alpha was obtained to be 0.877, which indicated a high level
of internal consistency for the scale.

5.2 Demographic Details

47
Table 1: Demographic Details
Demographic Factors Category Percentage
Age Below 18 8.5
18–30 69.5
30–40 19.5
50 above 2.5
Gender Male 82
Female 18
Education Matric 5
10+2 17
Graduation 42
Post-Graduation 35.5
Illiterate 0.5
Occupation Student 53
Business 12.5
Professional 18
Govt. employee 7.5
Others 9

Among the respondents, 82% were males and 18% were females, majority of the
respondents (69.5%) belonged to the age group of 18–30 years, 19.5% belonged to
the age group of 20–40 years, 8.5% belonged to below 18 years’ category, and 2.5%
belonged to above 50 age group. Majority of the respondents (42%) were graduates,
35.5% were post-graduates. 53% of the respondents were students, 18% were
professional, 12.5% were businessmen, and 7.5% were government employees.

5.2 Factor Analysis

Previous literature suggested that factor analysis found to be the most suitable technique
to identify the prominent factors influencing preferences of consumers towards
organized retailing (Kumar, 2011; Raut and Dash, 2011; Gupta and Singal, 2012; Jhamb
and Kiran, 2012, Ravilochanan and Devi, 2012). Exploratory factor analysis was opted
for this study to identify the underlying relationships between measured variables and
also the data collected through the questionnaire was found fit for conducting factor
analysis as seen in Table 2. Several variables were taken from previous studies (Tiwari
and Abraham, 2010; Kumar, 2011; Raut and Dash, 2011) for which a pilot study was
conducted and only the most prominent variables were taken for the final survey.
Overall 13 variables were considered for the purpose of exploratory factor analysis.
 Table 2: KMO and Bartlett’s Test
Retail Marketing in Kaiser–Meyer–Olkin Measure of
India: Trends and 0.855
Future Insights
Sampling Adequacy
Approximate Chi-Square 948.206
Bartlett’s Test of Sphericity Df 78
Sig. 0.000

Kaiser–Meyer–Olkin Measure of Sampling Adequacy was used and as the KMO value
48 was 0.855 which is above the minimum requirement of 0.6, so the sample is adequate
for factor analysis. Three factors had been extracted using principal component analysis
using Varimax rotation. The three factors explained 58.26% of the total variance.
The results obtained through Varimax rotation helped to retain the factor loadings
greater than 0.50. The names of factors, factor loadings, variance, and reliability are
summarized in Table 3.
Naming of Factors: These three factors are named as, service quality, variety, and
supplementary services.

Table 3: Factors Extracted through Principal Component Analysis

Factor Statement Factor Percent of Reliability
Loadinga Variance

Service Quality Comfortable and tidy

0.860
ambience
Trained and helpful staff 0.783 40.65
Rewarding the loyal 0.752
0.544
customers
Variety Variety of payment options 0.751
Provides enough choice of
0.708
prices
9.52 0.759
Provides variety of products
0.642
to choose from
Provides s to choose from 0.588
Supplementary Transparency in system 0.756
Services Can touch and feel the
0.756
products to be purchased
0.760
Leads to time saving 0.559
8.08
Provides hassle free
0.550
replacement/repair facility
Proper facility for
0.537
safekeeping of belongings
Extraction Method: Principal component analysis.
extraction method, rotation method and iteration number is
footnote to the table.
Rotation Method: Varimax with Kaiser Normalization.
Rotation converged in 7 iterations.
a
6. Discussion Factors Influencing
Consumer
The paper examined the factors which influence the consumers to change their Preferences towards
preferences towards organized retailing. The results showed that 12 variables Organized Retailing
in NCR and Haryana
converged into three factors. One item had to be excluded as the factor loading was
less than 0.5 and failed to meet recommended level of internal consistency for scale
development. The reliability of all obtained factors was above 0.7 which showed
that the scale chosen was reliable for measuring the chosen factor. These factors are
discussed below:
Factor I: Service Quality
The analysis revealed that respondents have considered this factor to be the most 49
important factor with the highest explained variance of 40.65%. Three out of thirteen
statements load significantly on this factor. Service quality includes comfortable and
tidy ambience, trained and helpful salesperson, prompt services, and rewards for loyal
customers. Hence, foremost importance must be given to these aspects.
Factor II: Variety
The respondents have considered this factor to be second most important and
it explained 9.52% of variance. Four statements out of thirteen load on this factor.
Price options includes providing enough choice of prices, variety of payment options,
alternative items for same price, variety of products, and many offers to choose from.
These options give customers freedom of choice.
Factor III: Supplementary Services
Five statements load on this factor and the explained variance is 8.08%.
Supplementary services include transparency in system, replacement or repair facility,
facility for safekeeping of belongings, time saving, and freedom to touch products to
be purchased.
Previous literature also supports the result that service quality is the most important
factor as similar outcomes were found in the study by Jhamb and Kiran (2012). The
findings of their paper had revealed that consumers’ prefer emerging retail formats due
to their attributes like improved quality, variety of brands, and store attributes where
quality was considered as the core attribute. Therefore, it can be said that service
quality is the most important factor which influences the preference of consumers
towards organized retailing.

6.1 Practical Implications

The three factors extracted through this study shows that service quality, variety, and
supplementary services are considered to be important by consumers in influencing
their preferences towards organized retailing. The results supported the findings of
the previous studies (Gurusamy and Prabha, 2011; Jhamb and Kiran, 2012). Thus,
organized retailers can focus on these dimensions in order to improve their sales and
cater to a wide variety of consumers. The aspects of good quality service like neat and
clean surroundings, trained, and helpful staff appeal to customers. The availability of
wide variety of payment, price, and product options give freedom of choice to the
customers. The organized retail formats can take advantage of these factors and gain an
upper hand on the unorganized retailers.
 6.2 Future Work
Retail Marketing in This study provides direction for future researchers in better understanding of the
India: Trends and factors that influence consumer preferences towards organized retailing. An extensive
Future Insights
research is required as this study covers the regions of NCR and Haryana only, further
research could be conducted on a large sample covering a wider area. The dimensions
considered in this study are limited to 13 statements, in future studies more variables
can be included to diversify the scope of study.

50 6.3 Limitations
The study was conducted in limited geographical region and also the sample size taken
was limited, so the results might not be generalized to the entire population.

7. Conclusion
Recent trends have shown that there is a rapid growth in the organized retail formats.
This study was conducted on the changing consumer preferences towards organized
retailing from unorganized retailing. Factor analysis was applied to extract the
important factors that influence the preferences of consumers. After analyzing different
variables three factors were extracted which were named as service quality, variety,
and supplementary services. The results show that customers have a favorable opinion
towards organized retailing and they expect service quality as a primary attribute from
retailers. It also shows that customers expect variety next to quality. Majority of the
consumers are visiting organized formats for good service quality and variety as they
expect organized retailers to perform better on these dimensions. Besides these two
attributes, the customers also focus on supplementary services like hassle-free repair
and replacement facility, time-saving activities, and transparency in system. Today’s
youngsters are moving towards new and improved systems and as majority of the
consumers are young, so organized retail outlets should focus more on products that
appeal to them. From the study, it can be implied that the organized retailing will
see a rapid growth in the following years by exploring deeper into the factors that
differentiate their services from unorganized retailers.

References
Akram, H.W., Anwar, M. and Khan, M.A. (2014). “Organized and modern retailing in
India: A bird’s eye view”, Business Dimensions, 1(2): 123–34.
Dalwadi R., Rathod, H.S. and Patel, A. (2010). “Key retail store attributes determining
consumers’ perceptions: An empirical study of consumers of retail stores located in
Ahmadabad (Gujarat)”, SIES Journal of Management, 7(1): 20–34.
Dohare, B.L. (2014). “FDI retail in India”, Global Journal of Multidisciplinary
Studies, 3(6): 174–84.
Dun and Bradstreet (2009). Indian Retail Industry: Challenges, Opportunities and
Outlook. [ONLINE] Available at: https://www.dnb.co.in/IndianRetailIndustry/
overview.asp.
Ghosh, P., Tripathi, V. and Kumar, A. (2010). “Customer expectations of store attributes:
A study of organized retail outlets in India”, Journal of Retail and Leisure Property,
9(1): 75–87.
Grewal, D., Levy, M. and Kumar, V. (2009). “Customer experience management in Factors Influencing
Consumer
retailing: An organizing framework”, Journal of Retailing, 85(1): 1–14. Preferences towards
Gupta, H., Dubey, N. and Patani, P. (2012). “Effect of organized retail on unorganized Organized Retailing
retail in Indian retail market”, Research Journal of Management Sciences, 1(1): in NCR and Haryana
7–13.
Gupta, S. and Singal, R. (2012). “A shifting paradigm of consumer preference for
organized retail outlets: A case study of Hisar city”, International Journal of
Computing and Business Research, 3(3): 1–16.
Gurusamy, G. and Prabha, N. (2011). “A study on changing consumer preferences
towards organized retailing from unorganized retailing”, International Journal of 51
Exclusive Management Research, 1(1): 1–12.
Hino, H. (2010). “Antecedents of supermarket formats` Adoption and usage: A study
in context of non-western customers”, Journal of Retailing and Consumer Services,
17(1): 61–72.
Invest India. (2012). Retailing. [ONLINE] Available at: http://www.investindia.gov.in/
retailing-sector/. Accessed on 9th February 2016.
Jhamb, D. and Kiran, R. (2012a). “Emerging trends of organized retailing in India:
A shared vision of consumers and retailers perspective”, Middle-East Journal of
Scientific Research, 11(4): 481–90.
Jhamb, D. and Kiran, R. (2012b). “Trendy shopping replacing traditional format
preferences”, African Journal of Business Management, 6 (11): 4196–207.
Joseph, M., Soundararajan, N., Gupta, M. and Sahu, S. (2008). “Impact of organized
retailing on the unorganized sector”, Indian Council for Research on International
Economic Relations, 222: 1–235.
Kanabar, K. (2012). “Change in consumer behaviour in Surat with introduction of
Mall”, International Journal of Research in Finance and Marketing, 2(4): 1–20.
Khan, S.M.F.A., Rana, D. and Singh, H. (2014). “An Empirical Study of Organized
Retailing Strategies in developing customer loyalty, changing purchase decision
and developing satisfaction in Consumer of Indian Sub-Continent”, International
Journal of Multidisciplinary and Current Research, 2(4): 247–53.
Kumar, K.S. (2011). “A study on the strategies of unorganized retailers with reference to
consumer durables”, International Journal of Business and Management Tomorrow,
1(1): 1–13.
Manocha, S. and Pandey, A. (2012). “Organized retailing in India: Challenges and
opportunities”, International Journal of Business and Management Research, 2(3):
65–80.
Mittal, A. and Mittal, R. (2008). “Store choice in the emerging Indian apparel retail
market: An empirical analysis”, IBSU Scientific Journal, 2(2): 21–46.
Munjal, A., Kumar, A. and Narwal, P. (2011). “The sustainability of modern retail
via comparative analysis of organized and the unorganized sector”, International
Journal of Engineering and Management Sciences, 2(3): 156–62.
Pandya Amit, R. and Bariya Kameshvari, J. (2012). “A study on consumer behaviour
of organized and unorganized retail outlets in Vadodara city”, International Journal
of Engineering and Management Sciences, 3(4): 466–74.
Patel, H.D. (2015). Consumer Awareness and Potential of e-Retailing in South Gujarat
Region (Thesis). Gujarat: Veer Narmad South Gujarat University.
 Raut, M. and Dash, S.K. (2011). “The factors predicting buying behaviour in organized
Retail Marketing in
retailing: A study with special reference to malls in Noida and Greater Noida”,
India: Trends and International Journal of Business and Management Tomorrow, 1(3): 1–10.
Future Insights Ravilochanan, P. and Devi, B.S. (2012). “Analysis of customer preference in organized
retail stores”, International Journal of Trade, Economics and Finance, 3(3): 209–12.
Sane, V. and Chopra, K. (2014). “Analytical study of shopping motives of young
customers for selected product categories with reference to organized retailing
in select metropolitan select cities of India”, Procedia—Social and Behavioural
Sciences, 133: 160–68.
52 Singh, R. and Singh, J. (2015). “An empirical research on customers’ preference
towards organized and unorganized retail in Moradabad City”, International
Journal of Research in Finance and Marketing, 5(1): 35–51.
Sinha, P.K. and Banerjee, A. (2004). “Store choice behaviour in an evolving market”,
International Journal of Retail and Distribution Management, 32(10): 482–94.
Tiwari, R.K. and Abraham, A. (2010). “Understanding the consumer behaviour towards
shopping malls in Raipur city”, International Journal of Management and Strategy,
1(1): 1–14.
Vemaraju, S. (2011). “Changing waves in Indian retailing: Impact of customer’s
perception and CRM on Indian retailing in the changing business scenario”, ZENITH
International Journal of Multidisciplinary Research, 1(8): 535–51.
Vij, P. (2013). “The study and the analysis: an impact of organized retail on unorganized
retail in India”, EXCEL International Journal of Multidisciplinary Management
Studies, 3(7): 174–84.
Vikkraman, P. and Dineshkumar, U. (2012). “A study on the consumers’ brand
preference towards FMCG (Dental Care) Products with special reference to
organized retail stores in Erode”, European Journal of Economics, Finance and
Administrative Science, 50: 46–51.
 Inf luence of Nature of Product and
Frequency of Visit on Store Loyalty:
A Study of Uttarakhand
Deependra Sharma*
Associate Professor, Amity University, Gurgaon

Abstract
Purpose: A large population with continuous increasing purchasing power has made
India a cynosure for Indian and international retailers. But this scenario also poses
a challenge for retailers in maintaining customer loyalty. This paper addresses this
challenge by examining the influence of nature of product and frequency of visits on
store loyalty.
Design/Methodology: A questionnaire was designed and administered by self,
to collect data on store loyalty and other dimensions under discussion. Each of the
items on loyalty was evaluated on a five-point Likert scale. Mall intercept method
was used to collect the data. Three hundred and fifty-two respondents from various
cities of Uttarakhand were selected using a systematic sampling method out of which
250 respondents completed the valid information. Data was analysed using Factorial
Analysis of Variance (ANOVA).
Findings: Results showed that average Indian consumer are not frequent visitor to
organized stores and most of them were visiting for consumer care products rather than
for grocery or vegetables. It was also that neither product type nor frequency of visits
influences store loyalty. The interaction effect was also absent. These results are in
contradiction to prior studies.
Research Limitations/Future scope: There must be other factors like price, location,
convenience, etc. in addition to the nature of the product and the frequency of visit
responsible for store loyalty which should be studied in future research. Consumers in
this study were restricted to Uttarakhand only thus, the representation of sample might
have been limited.
Implications: The findings offers insight to the marketers as well academicians. The
study makes it evident that the behaviour of customers residing in towns has to be
studied in detail in order to identify their latent needs.

Keywords
Frequency of visit; Interaction effect; Nature of product; Organized retailing; Store
loyalty

1. Introduction
The Indian retail market in 2015 had an estimated value of USD 600 billion and is Retail Marketing in
India: Trends and
projected to reach up to USD 1 trillion by 2020 (IBEF, 2016). It has emerged as one
Future Insights
of the biggest employers, providing employment to not less than 35 million people. pp. 53–64
© Ambedkar University
* Corresponding Author: Deependra Sharma (dsharma@ggn.amity.edu)
 Further, the policy to boost foreign direct investment in multi-brand retailing has made
Retail Marketing in
India more attractive to overseas investors. Increasing purchasing power of middle
India: Trends and class is one of the many factors that are fuelling the growth engine of the retail sector
Future Insights in India. Rise in salaries, increasing nuclear family structure in urban areas, increased
role of women in jobs, availability of easy credit are other factors which have led not
only to the enhancement of the purchasing power of Indian customers but have also
influenced their preferences (Sharma and Madan, 2012). The customer approach is
slowly but surely shifting from thrift psyche to consumerism. The inclination is now
towards ease and better experience while shopping. This is made evident by the fact
54 that youth below the age of 30 is becoming highly brand conscious (Indian Retail
Market Embracing a New Trajectory, September 2014). The growth of this sector is
further fuelled by the new formats of the malls that are coming up quite rapidly.
With a populace of 1.2 billion whose purchasing power is increasing day by day
makes India one of the most attractive destinations not only for Indian retailers but for
international players as well, leading to a very stiff competition to the extent of rivalry,
among them. This scenario is welcoming for customers as they are having much better
options in terms of facilities, prices, product assortments, discounts, convenience. But
at the same time, it is posing a great challenge for retailers in retaining customers and
maintaining their loyalty.

1.1 Store Loyalty

The intensity of competition has made it very pertinent for retailers to understand the
underlying factors influencing consumers’ loyalty. It is interesting to note that despite
the fact that a number of studies have been conducted on this issue (Burford et al.
1971, Tidwell et al. 1992), researchers have not been able to develop any unanimous
understanding of the drivers of store loyalty. Semantically, loyalty means allegiance,
constancy/devotion or commitment. It has been argued by Fournier and Yao (1997) that
the development of the concept of “loyalty” within marketing research has changed
the interpretation of the word from its original semantic meaning. Developments in
marketing theories have led to the use of other terminologies to denote related aspects of
consumer behaviour, like “brand insistence”, “brand bias”, “brand commitment”, etc.
Mostly, in research, the word “retention” is used to depict the extent of customers with
a provider. Most marketing researchers are attempting to find out a more specific use
of the word “loyalty” but the journey still continues. Oliver (2001) viewed consumer
to be loyal if they continued to exhibit the same type of behaviour in situations
comparable to one they had previously encountered. It concludes that in the absence
of store commitment, repeat visiting behaviour is not due to store loyalty but is a result
of inertia. The significance of this finding was further proved by Dowling (2002) when
he established that if consumer’s patronage is not an outcome of store loyalty then
he may easily switch over to competitors. Lewis (2004) and Verhoef (2003) held a
different opinion and claimed that a loyal customer would always give priority to the
same store and visit it in all shopping actions. Thus, it can be assumed that the level
of consumer commitment may vary noticeably and there exists a continuum with true
store loyalty at one end and spurious store loyalty on another.
Various factors like assortment of products (EROĞLU, 2013), store image
(Korgaonkar et al., 1985), location-related variables (Hubbard, 1978), congruity
between the retailer and the self-image/self-concept (Pathak et al., 1974) had been
studied by the researchers. It had been found that these factors resulted in the enhanced
loyalty. Further, according to Reynolds et al. (1974) loyalty could be measured as Influence of Nature
of Product and
more number of shopping trips to a particular store as compared with other stores and Frequency of Visit on
established it as an indicator of loyalty. Store Loyalty:
In this study, the researcher had studied the influence of nature of products, i.e. A Study of
Uttarakhand
variety of products consumed used by the consumer in his daily routine like products
related to consumer care (soaps, hair oil, etc.), grocery (pulses, flour, rice, etc.), home
care products (phenyls, brooms, etc.) and vegetables and fruits. Frequency of visit in
this study had been operationalized as the number of times an individual visited store.
These two variables were considered for this study because the food and grocery
industry is worth US$ 39.71 billion and is expected to grow at a Compounded Annual 55
Growth Rate (CAGR) of 11% to US$65.4 billion by 2018. It accounts for around 31%
of India’s consumption basket (IBEF 2016A, 2016). Similarly, personal care market is
also growing at a rapid rate of 15% per annum (Jha 2011). The high volume of nature
of product motivated the researcher to study this variable on loyalty. Secondly, Indian
organized stores were ailing with the problem of low conversion rate despite the high
footfall (Sinha et al., 2002). The criticality of this issue led the frequency of visit to be
studied as an influencer on loyalty.

1.2 Significance of Study

Berry (1969) laid a lot of importance on understanding the concept of retail loyalty as
he found that customers were finding it intricate to make a distinction between the retail
stores and brands made available by retailers. Hartman and Spiro (2005) and Fullerton
(2005) explained customers retail loyalty as an affiliation between consumers and retail
establishments. It was similar to developing an association between customers and
brands so that brand loyalty is established (Ball et al., 2006). Reynolds et al., (2000)
along with Wong and Sohal (2003) suggested that such associations are important to
garner customer retail loyalty. Such relationships had the potential to shape the attitude
of consumers towards a particular retail store over another. Studies (Oliver, 1999;
Chaudhari and Holbrook, 2001) had found that loyalty which was set in consumer’s
attitude might be used to forecast about the present and future loyalty towards a brand
of preference. Relationships had emerged as an essential factor to earn customer
retail loyalty as well as customer brand loyalty. This establishes the inevitability of
developing a strong consumer–retail relationship so that retailers are able to enjoy
strong customer loyalty. Moreover, not many such studies have been conducted in such
smaller towns where the concept of organized retailing is gradually catching up. In
this paper, the issue of loyalty has been explored with respect to such customers. Thus,
through this study the author has made an attempt to fill this gap to some extent and
the findings may provide insights to the practioners as well as to the academicians to
understand the behaviour of the consumer.

2. Hypothesis Postulations
Uusitalo (2001) found that the consumer preferences of product attributes diverge
according to the nature of product and consumer choice was based on maximizing
utility from the product attributes which was dependent upon budgetary limits of the
consumer (Vishwanathan and Childers, 1999). Also, Broniarczyk et al. (1998a, b)
suggested that a breadth of assortment offered by the store led to store patronage and
this might be because of wider range offered more of the choices (Reibstein et al., 1975)
 and lesser of search costs (Hoch et al., 1999). With this background first hypothesis
Retail Marketing in
was postulated as:
India: Trends and H1: Nature of product category does not influence loyalty.
Future Insights Store loyalty and repeat visiting behaviour are treated as different entities. Repeat
visiting behaviour is the actual revisiting of the store and is widely used in loyalty
research despite the fact that it was very strongly criticized by Jacoby and Chestnut
(1978). East et al. (1995) had tried to operationalize store loyalty as the amount of
purchases made at a chosen store of a specified product category. But, neither
behavioural conceptualizations nor operationalizations are often adequate to elucidate
56 the occurrence of store patronage. This led East et al. (1995) to suggest that despite
the fact that repeat visiting behaviour is important for loyalty but at the same time
previous circumstances that had invoked such behaviour should also be considered.
In separate studies, Schapker (1966) and Nicholls et al. (2003) found that however,
the total number of supermarket shoppers patronizing a particular supermarket were
declining but consumers’ frequencies of visit were gradually increasing over the same
period. With this backdrop below mentioned null hypothesis has been theorized:
H2: Frequency of visit to the store does not influence store loyalty.
Researcher also intended to study the interaction effect hence, one additional
hypothesis was developed as:
H3: There is no interaction between nature of product category and frequency of visit
to the store.

3. Research Design
For the present study descriptive research was conducted with an objective to test
specific hypotheses. Formal and structured research process was implemented. Data
collected through large and representative sample was analysed quantitatively. This
segment also discusses how the data collection instrument was designed along with
sampling and data collection method. The study was carried out by the researcher with
the objective to find out the influence of nature of the product purchased and frequency
of visit to the store on store loyalty.

3.1. Measurement
Data on store loyalty and dimensions under discussion were gathered using self-
administered questionnaire. These questionnaire items were based on extensive review
of literature and insights generated during exploratory interviews. Items on loyalty
were evaluated using a five-point Likert scales. A sample of 30 subjects was used to
scrutinize the lucidity and connotation of items. The researcher has decided based upon
five-point Likert scale that item with the score of 30 will be discarded. The subjects
(every eleventh customer) were selected when they were making an exit from stores
(Vishal Mega Mart, Easy Day, 7/11, local Kirana stores of the region) after completing
their transactions.
The outcome was that no item was suggested to be dropped from the final
questionnaire. The final questionnaire had two parts namely Part A and Part B. Part
A contained questions seeking demographic information about the respondent. Part B
used five point Likert scale (1 – Strongly, 2 – disagree, 3 – Disagree, 4 – Can’t say,
agree, 5 – Strongly agree) to capture loyalty using seven measures as mentioned below:
 Influence of Nature
•  I plan to maintain my shopping at this store. of Product and
Frequency of Visit on
•  I will very likely come to shop at this store in the future. Store Loyalty:
•  I will frequently shop at this store in the future. A Study of
Uttarakhand
•  Shopping in this store is my first choice.
•  I intend to shop in this store again in future.
•  I will continue purchasing from the same brand of the store even if it is shifted
away from my home/office.
57
•  I will continue purchasing from the same brand of the store even if my home gets
shifted away from the present location of the store.

3.2 Validity Analysis

Content validity, construct validity and face validity were established by asking store
managers, shopkeepers, senior faculty members of researcher’s institute to evaluate
and appraise the items of the instrument with the objectives of the research.

3.3 Reliability Analysis

According to Hair et al. (1998), the lower acceptable value of Cronbach’s alpha is 0.70,
however, 0.60 is acceptable for exploratory research. Scale for this study had good
reliability with a value of 0.738.

3.4 Sampling and Data Collection

The primary data are collected between July and September 2014. As suggested by
Bush and Joseph (1985) mall intercept method is used for data collection. This method
facilitates to assess the latest perception of the customers about the stores (organized
as well as unorganized) they have visited just then. The questionnaire is being used for
data collection for which customer was intercepted during the exit either from retail
stores or from the counter in case of Kirana stores. Every eleventh visitor leaving the
store qualified as a respondent. These methods of sampling were used because it can
be used even when the composition of the sampling frame is not known (Malhotra and
Dash 2009).
342 respondents including males, females of all age groups from Dehradun,
Kashipur, Haldwani and Rudrapur filled the questionnaire. This sample size has been
derived from standard sampling table for problems involving sample proportions as
suggested by Nan Lin (1976). However, 102 questionnaires were discarded as they
did not provide sufficient information rendering them unusable; this resulted in an
actual sample size of 250 only. Data thus collected is coded and entered in SPSS
16.0 for analysis.

4. Data Analysis
Factorial ANOVA had been applied to analyse the effect of more than one independent
variable, i.e. frequency of visit and nature of products used on dependent variable,
loyalty (and also how these variables interact) (Fields, 2009).
 Before applying the test, data cleaning was carried out where it was found that there
Retail Marketing in
was neither any outlier nor any value was missing. Assumptions of ANOVA were also
India: Trends and tested.
Future Insights The assumptions under which the F statistic is reliable are data should be normally
distributed, the variances in each experimental condition need to be fairly similar,
observations should be independent, and the dependent variable should be measured on
an interval scale. In the present study observations are independent and the dependent
variable, i.e. loyalty has been measured on summated Likert scale which is interval
scale. However, data were found not to be normal as the total loyalty, D (250) = 0.00,
58 p-value < 0.05.

Table 1: Tests of Normality

Kolgomorov-Smirnov Shapiro-Wilk
Total- Statistic df Significance Statistic df Significance
loyalty
0.141 250 0.000 0.943 250 0.000

Researcher has used factorial ANOVA despite the violation of normality assumption
because it is a robust test, which means that it doesn’t matter much if we break the
assumptions of the test: the F will still be accurate. Glass et al. (1972) reviewed a lot
of evidence that suggests that F controls the Type I error rate well under conditions of
skewness, kurtosis, and non-normality.

Table 2: Levene’s Test of Equality of Error Variance

F  df1  df2 Significance

 1.525  15  234 .097
    Dependent Variable: Total Loyalty

As it is evident from Table 2, if Levene’s test is not significant (Significance in more

than 0.05) then the homogeneity of variance is assumed. To develop an authentic
instrument validity and reliability analysis have also been having carried out.

4.1 Hypothesis Testing

Data listed in Table 3 display the means, standard deviations and number of participants
falling under various categories. Out of 250 shoppers, 104 shoppers visit to store only
once in 15 days and 94 visit only once in 30 days, i.e. approximately 79% of shoppers
are visiting either once or twice in a month to store.
From Table 3, it may also be deduced that most of shopper’s, i.e. 58% go to retail
stores for purchase of consumer care products. Only 26% of shoppers prefer organized
stores for purchase of grocery and 10% for the purchase of home care products. Besides,
it as far as vegetables and fruit category is concerned only 6% of shoppers prefer to the
new format (organized store).
 Table 3: Descriptive Statistics Dependent Variable: Total Loyalty Influence of Nature
of Product and
Nature of Product Frequency of Visit Mean  Std. N Frequency of Visit on
Store Loyalty:
Purchased Deviation A Study of
Consumer care Daily 24.14 3.592 14 Uttarakhand

  Once in 15 days 24.46 3.863 61

  Once in a month 23.56 4.812 54
  Once in a week 25.8 4.362 15
  Total 59
24.23 4.282 144
Grocery Daily 22.33 8.327 3
  Once in 15 days 24.04 3.9 25
  Once in a month 23.08 3.851 25
  Once in a week 21.92 5.766 13
  Total 23.18 4.472 66
Homecare products Daily 25.5 3.536 2
  Once in 15 days 24.18 3.737 11
  Once in a month 25.11 3.14 9
  Once in a week 23 6.083 3
  Total 24.48 3.641 25
Vegetables and fruits Daily 24 - 1
  Once in 15 days 24.86 2.911 7
  Once in a month 24.83 3.71 6
  Once in a week 33 - 1
  Total 25.33 3.619 15
Total Daily 24 4.18 20
  Once in 15 days 24.36 3.76 104
  Once in a month 23.66 4.359 94
  Once in a week 24.19 5.468 32
  Total 24.04 4.254 250

Table 4 presents the most significant part of the output. It tells us whether any of the
independent variables have an effect on the dependent variable or not. The important
things to look at in the table are the significant values of the independent variables.
The first thing to notice is that there is no significant effect of frequency of a visit to
store (because the significance value of 0.0649 is greater than 0.05). The F-ratio is not
significant, indicating that frequency of the visit to the store did not influence store
loyalty. This means that overall, when we ignore what type of product the participant
purchased, frequency of the visit to the store did not influence store loyalty. Thus, the
null hypothesis that frequency of visits does not influence store loyalty is accepted.
 Table 4: Test of Between Subject Effects Dependent Variable: Total Loyalty
Retail Marketing in Source Type III Sum Degrees of Mean F Sig.
India: Trends and of Squares freedom Square
Future Insights

Corrected model 266.815 15 17.78 0.982 0.47

Intercept 38694.25 1 38694.25 2.14E 0
+03
Type of items purchased 110.969 3 36.99 2.042 0.10
60 from this store 
Frequency of visit to your 29.876 3 9.95 0.55 0.64
type of store
Type of items purchased 157.253 9 17.47 0.964 0.47
from this store * Frequency
of visit to your type of store
Error 4239.701 234 18.11    
Total 149035 250      
Corrected total 4506.516 249      

The next part of Table 4 tells us about the main effect of type of items purchased from
the store. This time also the F-ratio is not significant (p-value = 0.109, which is larger
than 0.05). This effect means that overall when we ignore frequency of visit made to
store, the type of item purchased by the participant did not influence the loyalty towards
the store that shopper had.
Thus, the null hypothesis that type of product purchased does not influence store
loyalty is accepted.
Finally, Table 4 tells us about the interaction between the frequency of the visit to
the store and type of items purchased from the store. The F-value is once again non-
significant (because the p value 0.470 is greater than 0.05). This means that dependent
variable, i.e. loyalty does not get influenced by either of the independent variables
namely the frequency of shoppers visits and the type of product purchased.
Thus, the null hypothesis that there is no interaction between the frequency of visits
and type of product purchased is accepted.

5. Discussion
As shown above in Section 4 only 26% of the respondents go to the organised retail
stores (organized) for grocery shopping. Moreover, 50 respondents out of total 66
respondents visit the stores either once either in 15 days or in 30 days. Similarly, only
10% of the respondents purchased home care products and in this case also most of them
visit the stores only once either in 15 days or in 30 days. It suggests that the average
shopper of Uttarakhand is not very enthusiastic for shopping these items from organized
stores. Based upon these observations, it may be inferred that purchasing such items are
perceived as a mundane activity and is not enjoyed by them. Another important aspect of
shopper behaviour that can be inferred is that average shopper has a habit of storing the
items and thus he buys products in bulk to the extent that they survive for 15–30 days.
This has an implication for the marketers in the sense that they should make the
products available in bigger pack sizes. In order to increase the volume of sales during
those limited frequency of visit they may offer special schemes or discounts on daily
or weekly basis because shoppers buy more than they plan to when stores feature Influence of Nature
of Product and
promotions (Neilsen, 2014) Frequency of Visit on
Further, it was observed that only 6% of the respondents purchased vegetables Store Loyalty:
from organized stores that mean major chunk would be buying vegetables from A Study of
Uttarakhand
the local hawkers. This empirical finding provides a very interesting and important
insight about the behaviour of Indian consumer. Generally, the scope of bargaining
in these organized stores is almost nil whereas while purchasing from local hawkers
they can bargain which is a typical behaviour of Indian shopper (Dawra et al., 2015).
The insight for the managers may be that they may fix some time slots when the
vegetables and fruits are sold at the rate lower than the market rates. This shall enhance 61
the footfall of the purchasers.
However, 144, i.e. 58% of the total respondents visited retail outlets for the consumer
care products. But, here also most of the respondents visited once either in 15 days or
in 30 days.
Managerial implication may be the new emerging aspirational behaviour of the
consumer living in smaller towns. This will open up a new market for them.
It was hypothesized in the current study that nature of product type and frequency
of visit that consumers make to store do not influence store loyalty. On empirically
testing the data collected pertaining to the above issues, it was found that neither
product type nor the frequency with which consumer visits store influence store
loyalty. These findings are contradictory to the generally accepted views as expressed
in studies by Koo and Dong-Mo (2003), Magi (2003), Miranda et al. (2005). As per
these studies in addition to other factors like location, ambiance, etc. product range
(the type of product), frequent buyers (frequency of visit) are the drivers of loyalty.
This contradictory finding with respect to Indian consumer behaviour residing in
small town is of critical significance for the organized retailers operating in such areas.
These practioners need to understand the unique needs of the customers. They cannot
be successful by implementing the same strategies or formats which they have been
adopting in other parts of the country or world to win customers loyalty.
The findings of this study shall be a word of caution for the managers. They need to
identify the other factors that may enable them to influence the loyalty of the customers
in their favor.

6. Limitations/Future Scope
Although this study provides new insights, but it is also having certain limitations.
First, the independent variables nature of the product and the frequency of visit to the
store were not intended to be only factors influencing loyalty. There are other factors
responsible for the development of store loyalty and should be studied in the future.
Factors like price, location, convenience were not included as independent variables.
It could be theorized that these issues would influence the store loyalty. The context
of shopping could also impact result, i.e. whether a consumer is visiting the mall in
search of a product or just for an experience. Consumers in this study were restricted to
Uttarakhand only. Respondents chosen for the sample were contacted at the exit doors
of their respective purchase stores. It was felt that on few occasions, respondents filled
up the questionnaire under a pressure of time as they were in a hurry. In short, not all
customers responded as per planning thus rendering some sampling error.
 7. Conclusion
Retail Marketing in The findings have presented a behavioural pattern of the consumers. It was found that
India: Trends and most of them were not the frequent visitors to the outlets and majority of them visited
Future Insights
stores for the products related to personal care. It showed that consumers were getting
more cautious about their looks and hygiene which is an indication of their increasing
aspirational nature. This study was also conceptualized to explore if nature of product
and frequency of visit to store influence the store loyalty. The results showed that
these independent variables in the study are not influencing store loyalty. These make
it mandatory for the practitioners to identify the factors that may influence store
62 loyalty. Moreover, these developments should also be observed by the academicians
so that they are able to capture the subtle changes occurring in consumer’s behaviour.

References
Ball, D., Coelho, P.S. and Vilares, M.J. (2006). “Service personalization and loyalty”,
The Journal of Services Marketing, 20(6):391–403.
Berry, L.L. (1969). “The component of department store image: A theoretical and
empirical analysis”, Journal of Retailing, 45(1):3–20.
Bloch, P.H., Ridgway, N.M. and Dawson, S.A. (1994). “The shopping mall as consumer
habitat”, Journal of Retailing, 70(1):23–42.
Bodapati, A.V. and Srinivasan, V. (2006). “The Impact of Feature Advertising on
Customer Store Choice”, Working Paper. Stanford Graduate School of Business,
Stanford School.
Broniarczyk, S.M., Wayne, D.H. and Leigh, M. (1998). “Consumers’ perceptions of the
assortment offered in a grocery category: The impact of item reduction”, Journal of
Marketing Research, 35(2):166–76.
Burford, R.L., Enis, B.M. and Paul, G.W. (1971). “An index for the measurement of
consumer loyalty”, Decision Sciences, 2(1):17–24.
Bush, A.J. and Joseph F.H., Jr. (1985). “An assessment of the mall intercept as a data
collection method”, Journal of Marketing Research, 22(2):158–67.
Chaudhari, A. and Holbrook, M.B. (2001). “The chain of effects from Brand trust and
Brand affect to Brand performance”, Journal of Marketing, 65(2):81–93.
Dawra, J., Katyal, K., Gupta, V. (2015). “Can you do something about the price? –
Exploring the Indian deal and bargaining-prone customer”, Journal of Consumer
Marketing, 32(5):356–66.
Dowling, G.R. (2002). “Customer relationship management: In B2C markets, often
less is more”, California Management Review, 44(Spring):87–104.
East, R., Harris, P., Wilson, G. and Lomax, W. (1995). “Loyalty to supermarkets. The
international review of retail”, Distribution and Consumer Research, 1:99–109.
EROĞLU, E. (2013). “Factors affecting consumer preferences for retail industry and
retailer selection using analytic hierarchy process”, KAU IIBF Dergisi, 4(6):43–57.
Fields, A. (2009). Discovering statistics using SPS. New Delhi: SAGE Publications.
Fournier, S.M. and Yao, J.L. (1997). “Reviving brand loyalty: A reconceptualization
within the framework of consumer brand relationships”, International Journal of
Research in Marketing, 14:451–72.
Fullerton, G. (2005). “The impact of brand commitment on loyalty to retail service
brands”, Canadian Journal of Administrative Sciences, 22(2):97–110.
Glass, G.V., Peckham, P.D. and Sanders, J.R. (1972). “Consequences of failure to meet Influence of Nature
of Product and
the assumptions underlying the fixed effects analysis of variance and covariance”, Frequency of Visit on
Review of Educational Research, 42(3):237–88. Store Loyalty:
Hair, J.F. Jr., Anderson, R.E., Tatham, R.L. and Black W.C. (1998). Multivariate Data A Study of
Uttarakhand
Analysis (5th ed.). Upper Saddle River, NJ: Prentice Hall.
Hartman, K.B. and Spiro, R.L. (2005). “Recapturing store image in customer-based
store equity: A construct conceptualization”, Journal of Business Research,
58(8):1112–20.
Hemalatha, K.G., Jagannathan, L. and Ravichandran, K. (2009). “Shopping Behaviour
in Malls in Globalized Economies”, Presented at the 3rd IIMA Conference on 63
Marketing Paradigms for Emerging Economies, Ahmedabad, January.
Hoch, S., Bradlow, E.T. and Brian, W. (1999). “The variety of an assortment”,
Marketing Science, 18(4):527–46.
Hsu, J. and Hung, W. (2005). “Packed coffee drink consumption and product
attribute preferences of young adults in Thailand”, Food Quality and Preference,
16(4):361–67.
Hubbard, R. (1978). “A review of selected factors conditioning consumer travel
behaviour”, Journal of Consumer Research, 5(June):1–21.
IBEF (2016A). Retrieved from http://www.ibef.org/industry/retail-india.aspx.
IBEF (2016). Retail, Retrieved from http://www.ibef.org/industry/indian-retail-
industry-analysis-presentation.
Jackson, S.A. (1996). “Toward a conceptual understanding of the flow experience in
elite athletes”, Research Quarterly for Exercise and Sport, 67(1):78–90.
Jacoby, J. and Chestnut, R.W. (1978). Brand Loyalty Measurement and Management.
Wiley: New York.
Jha, D.K. (2011). Personal care industry set to grow 15% in five yrs. Business Standards.
http://www.business-standard.com/article/companies/personal-care-industry-set-
to-grow-15-in-five-yrs-111120400039_1.html., Accessed on 15th June 2016.
Koo and Dong-Mo (2003). “Inter-relationships among store images, store satisfaction
and store loyalty among Korea Discount Retail Patrons”, Asia pacific Journal of
Marketing and Logistics, 15(4):42–71.
Korgaonkar, P.K., Lund, D., Price, B. (1985). “A structural equations approach toward
examination of store attitude and store patronage behaviour”, Journal of Retailing,
61(2):39–60.
Lewis, M. (2004). “The influence of loyalty programs and short-term promotions on
customer retention”, Journal of Marketing Research, 41(August): 281–92.
Magi, A.W. (2003). “Share of wallet in retailing: The Effects Of Customer Satisfaction,
Loyalty Cards, And Shopper Characteristics”, Journal of Retailing, 79(2):97–106.
Mägi, A.W. (2003). “Share of wallet in retailing: The effects of store satisfaction,
loyalty cards and shopper characteristics”, Journal of Retailing, 79(2): 97–106.
Malhotra, N., Dash, S. (2009). Marketing Research-An Applied Orientation. New
Delhi: Pearson Education.
Miranda, M.J., Konya, L. and Havrila, I. (2005). “Shoppers satisfaction levels are not
the only key to store loyalty”, Marketing Intelligence & Planning, 23(2):220–32.
Nan Lin, (1976). Foundation of Social Research. New York: McGraw Hill.
Neilsen, (2014) Understanding India’s FMCG Shopper Consumer (2014). Retrieved
from http://www.nielsen.com/in/en/insights/reports/2014/understanding-indias-
fmcg-shopper.html. Accessed on 15th June 2016.
 Nicholls, J.A.F., Li, F., Kranendonk, C.J. and Mandakovic, T. (2003). “Structural
Retail Marketing in
or cultural: An exploration into influences on consumers’ shopping behaviour of
India: Trends and country–specific factors versus retailing formats”, Journal of Global Marketing,
Future Insights 16(4):97–110.
Pathak, D.S., Crissy, W.J.E., Sweitzer, R.W. (1974). “Customer image versus the
retailers’ anticipated image”, Journal of Retailing, 50 (winter): 21–28.
Sinha, P.K., Banerjee, A., Uniyal, D.P. (2002). “Deciding where to buy: Store choice
behaviour of Indian shoppers”, Vikalpa, 27(2):13–28.
Sharma, D. and Madan, P. (2012). “Store choice and store loyalty: An investigation on
64 shopper’s behaviour towards organized versus unorganized retailers”, International
Journal of Business and Management Science, 5(2):119–35.
Tidwell, P.M., Horgan, D.D. and Kenny, C.T. (1992). “Brand character as a function of
brand loyalty”, Current Psychology, 11(4):347–53.
Oliver, R.L. (1999). “Whence customer loyalty?”, Journal of Marketing, 63(special
issue):33–44.
Oliver, S. (2001). Public Relations Strategy. London: Kogan Page.
Reibstein, D., Youngblood, S. and Fromkin H. (1975). “Number of choices as a factor
in consumer satisfaction: An empirical study”, Journal of Applied Psychology,
60:434–7.
Reynolds, K.E. and Arnold, M.J. (2000). “Customer loyalty to the salesperson and the
store: examining relationship customers in an upscale retail context”, Journal of
Personal Selling & Sales Management, 20(2):89–98.
Reynolds, F.D., Darden, W.R. and Martin, W.S. (1974). “Developing an image of the
store-loyal customer”, Journal of Retailing, 50(4):39–52.
Schapker, B.L. (1966). “Behaviour patterns of supermarket shoppers”, Journal of
Marketing, 30(4):46–9.
Shugan, S.M. (2005). “Brand loyalty program: Are they Shams?”, Marketing Science,
24(Spring):185–93.
Srivastava, K. and Sharma, N.K. (2011). “Consumer attitude towards brand extension
incongruity: The moderating role of need for cognition and need for change”.
Journal of Marketing Management, 28(2):5–6.
Uusitalo, O. (2001). “Consumer perceptions of grocery retail format and brands”,
International Journal of Retail Distribution & Management, 29(5):214–25.
Verhoef, P.C. (2003). “Understanding the effect of customer relationship management
efforts on customer retention and customer share development”, Journal of
Marketing, 67(October):30–45.
Vishwanathan, M. and Childers, T.L. (1999). “Understanding how product attributes
influence product categorization: Development and validation of fuzzy set-based
measures of gradedness in product categories”, Journal of Marketing Research,
36(1):75–94.
Wong, A. and Sohal, A. (2003). “Service quality and customer loyalty perspectives on
two levels of retail relationship”, Journal of Services Marketing, 17(5):495–513.
 Purchasing Fruits and Vegetables:
Role of Price and Store Characteristics
Srishty Garg1*, Shreshth Goyal2, Chanakya Purohit3,
Shaily Wadhwa4, Pankaj Priya5
PGDM Retail Management Student, Birla Institute of Management Technology,
1,2,3,4

Greater Noida
5
Associate Professor (Retail and Marketing), Birla Institute of Management
Technology, Greater Noida

Abstract
Purpose: The purpose of this article is to determine how perception of prices of
products and non-price-related factors specific to fruits and vegetables (F & V)
category affects the purchase behaviour of customers. As price changes on daily
and sometimes on half-day basis, the fortune of fruits and vegetables sector is
largely affected by the price competition an organized retail format faces with other
organized and unorganized sector in India. Additionally, non-price factors related
to store and category characteristics have a significant bearing on the purchase
decision in a modern retail.
Methodology: The study was conducted on a survey using self-administered
questionnaire which featured 300 responses conducted across six stores in Delhi–
NCR of a renowned retail store chain. The constructs identified using exploratory
factor analysis were category and store characteristics, and price fairness. The model
was developed using the loading of the constructs obtained from confirmatory
factor analysis.
Findings: Experiential survey and preliminary analysis revealed that the
characteristics of the category in tandem with the store characteristics and the price
fairness as perceived by the customers are the key influencers in their purchase
decision. The relevance of “store characteristics” is the most pertinent issue to
enquire as to why customers choose a specific store over others, whereas the effect
of display of merchandise would impact the price fairness significantly as customers
may perceive the prices of other items as being overrated to supplement the low
price of fruits and vegetables.
Originality/value: This is the first study of its kind in the fruits and vegetables
category in India in the realm of modern retail and will aid in better understanding
of customer purchase behaviour in a category having short shelf life and facing tough
competition from unorganized retail.

Keywords
Fruits and vegetables category, Price fairness, Store characteristics
Retail Marketing in
India: Trends and
Future Insights
* Corresponding Author: Srishty Garg (srishty.garg17@bimtech.ac.in) pp. 65–78
© Ambedkar University
 1. Introduction
Retail Marketing in In the emerging economies like India, the purchase decisions of the consumers are
India: Trends and largely affected due to significant change in the consumers’ socioeconomic, geographic,
Future Insights
and demographic proportions resulting in their shift of purchasing from the traditional
retail outlets to organized retail formats that are catering to the ever-evolving and
increasing needs and requirements of the consumers in a much efficient manner (Ali
et al., 2010; Prasad et al., 2009). With rapid urbanization coupled with higher living
standards and lifestyle, the per capita disposable income is increasing and has enabled
the customers to buy the products not just for the need but for the requirement of the
66 same (Ali et al., 2010, Deshingkar et al., 2003; Rao, 2000). Advancement in the food
technology and better education has enabled the consumers to demand better quality
products at affordable prices without compromizing with their health (Ali et al, 2010).
With the emergence of organized retail in the form of super markets and hyper
markets in India, customers are shifting their purchasing preferences from the
unorganized market for the food category. It has also increased the demand, quality,
and efficiency of the food supply chain (Ali et al., 2010, Umali-Deininger and
Sur, 2007, Chengappa et al., 2005, Mukherjee and Patel, 2005). The competitive
pricing strategies from this sector have immensely changed the way people have
adopted the modern retail format. The rise in income levels, especially of the
middle income group and the urban consumers has affected the consumption and
buying behaviour (Ali et al., 2010; Landes et al., 2004). Still there is a need to
identify to what extent customers are ready to adapt the changing pricing tactics
offered by modern retail outlets.
The value of the product purchased by the customer does not merely include the price
of the product. Its value is what the customer perceives to have attained out of products
purchased.Thus, it is important for retailers to price their product according to the value
perceived by the customers (Hamilton and Chernev, 2013; Martin, 2008; Anderson,
2005; Fagnani, 2001). Having significant knowledge about the price perceived by the
customer, the retailer can effectively position itself by providing them with the right
prices. The market condition and the customer requirements have witnessed significant
change over the years (Ruiz et al., 2013; Ali et al., 2010; Baltas, 2005; Shiu et al., 2004).
The requirements include inclination towards consumption of healthy food products,
convenience in the store, freshness and product quality, and store ambience (Ruiz et al.,
2013; Ali et al., 2010; Baltas, 2005; Shiu et al., 2004). All these factors determine the
actual perceived price of the products purchased by the consumer from the store.
Focusing on the fruits and vegetables category, there has been a significant change
in the way customers buy these products. Today, people look for quality as well as
convenience of buying, also keeping the price as one of the major factor for determining
their purchase decision in this category. Additionally, comparison with the already
prevailing unorganized sector in terms of pricing is a major issue to deal with for
the modern store retailers. Various promotional as well as bundle pricing techniques
are prominently used by the retailers to build their store image and attain customer
retention to the maximum extent possible. This has not only caused the unorganized
sector to loosen its knot over the share of consumers it caters to, but has also created
opportunities for many to enter the organized market and benefit from the same.
This study aims to understand the factors that positively influence the purchase
decision of customers in the fruits and vegetables category. Purchase decision is
influenced by pricing as well as non-price-related factors. Therefore, each factor is Purchasing Fruits
and Vegetables: Role
given due consideration, with price being the focal factor driving the final decision. of Price and Store
Characteristics
2. Literature Review
This section discusses the significance of store characteristics and price fairness in the
purchase of fruits and vegetables, specifically in the Indian context, based on relevant
studies conducted across the globe.

2.1 Store Characteristics 67

Indian retailers need to identify the factors that draw customers to the store. The overall
environment of the store is synonymous with store characteristics, which include
ambience of the store, level of services, assortment of goods, and merchandise available
in the store. They result in the emergence of mental maps among the customers. This
in store spatial information crafted in the customers’ mental space has been found
to ease customer orientation at point of sale (Ertekein and Pelton, 2015; Groeppel-
Klein and Bartmann, 2008). This in turn influences the purchase behaviour and the
price perception. The “experiential consumption” view of shopping as compared to
“problem solving” has gained predominance over the years. Balasubramaniam (2005)
states that the atmospherics of shopping environment created by store characteristics,
emerges as main driver of channel choice. As the store selection is the initial stage
of any purchase decision, the above statement acquires great significance. Store
choice behaviour is additionally characterized by psychological, behavioural, and
demographic factors which includes age, gender, marital status, etc. (Prasad et al.,
2010; Carpenter and Moore, 2006; Singha and Banerjee, 2004; Fox et al., 2004;
Sheth, 1983; Monroe and Guiltina, 1975). At the sensory level, consumers’ interaction
with store environment evoke feeling of pleasure and create a memorable shopping
experience, but Lunardo and Roux (2014) caution against overdoing it as it would
invoke the intended manipulative intent of the retailers. Therefore, retailers need to
develop a symmetric balance between the various elements of store while targeting a
specific segment.
Perception of store image, evolved from various store characteristics have
been observed to delineate a strong bearing on store patronage, store loyalty, as
well as share of wallet. The store characteristics (price, service, and convenience)
become dominant factors of customer satisfaction leading to purchase intention
when customer confidence takes a dip during slowdown of economy. The above
aspect is pertinent in the present context as Indian economy is undergoing a slow
down due to recurrent weak monsoon and impeding drought in many parts of the
country (Hunemann et al., 2015). Moreover, customers are likely to purchase more
products and attain higher level of satisfaction when store offers good ambience
and environment (Donavan et al., 1994). Customer acquisition and retention are the
prime goals for retailer and the same can be acquired through assortment of goods,
which is a key component of marketing mix (Hasan and Mishra, 2015; Oppewal
and Koelemeijer, 2005; Stassen and Shijder, 1999; Grewal et al., 1998; Kahn et
al., 1986). It has been inferred that stores having wider assortment are likely to
offer goods at lower prices in comparison to the stores having narrow assortment
of goods (Chernev and Hamilton, 2013; Chernev and Hamilton, 2009). Store
 characteristics—product assortment, price, in store services, interpersonal service
Retail Marketing in
quality lead to store satisfaction (Huddleston et al., 2009). Hasan and Mishra,
India: Trends and (2015) and Gummerson (1994) concluded that focus has been directed towards
Future Insights services along with goods present in the store in comparison to earlier focus which
was solely on goods and not on services. The stores offering high level of services
are correlated with high prices in the minds of consumer (Chernev and Hamilton,
2013; Zeithamal et al., 1990.)
Although price acts as a key motivator in shopping behaviour, but to sustain
customers patronage for a long-duration focus on creating a memorable shopping
68 experience for the customers is crucial (Oppewal and Timmermans, 1997).
H1: The store characteristics have positive influence on purchase behaviour.

2.2 Price Fairness

Fruits and vegetables category is largely commoditized, despite Indian market
displaying huge variety of F&V. Therefore, the retail price and product variety available
at the competing retailers impact the choice of retailers. But, the retail price and the
product line length is largely dictated by whole sale price (Richards and Hamilton,
2015). The retailer selling fruits and vegetables in India faces stiff competition from
the unorganized market in terms of price.
The cognitive aspect of price fairness refers to comparison of price with standard
and reference (Xia et al. 2004; Bolton et al., 2003). The customers have unfair price
perception after they observe difference in price being paid and the price being referred
(Xia et al., 2004). Customers feel betrayed by the seller for unfair price perception and
direct negative emotions towards the retailer (Xia et al., 2004). The price fairness
judgement is based on the comparative transaction and also the comparative parties
involved in the transaction (Xia et al., 2004). The price comparisons can be broadly
of two types—explicit and implicit. The explicit comparison tells about comparing
prices of the products with the range of prices and implicit comparison is comparison
with single price (Xia et al., 2004). Consumers entering into the retail outlet are driven
by the prices and incentives deals (Griffith et al., 2009; George and Chien, 2009;
Webster, 1965). The choice of products is characterized by in-store price search, where
customer compares and evaluates the price of products within the store and, store
deal proneness, where shopper search the products and compares the deal present in
multiple retail outlets (Collins et al., 2014). Since the major competition originates
from the unorganized sector, the standardized characteristics of some products in this
category attract customers to large stores as they are perceived to charge lower prices
due to their bulk purchasing (Rhodes, 2015). Retailers, as a strategy charge lower
prices on these standardized products and create an overall low-price image for all
its products. The resulting less effort on the part of the customers to indulge in price
comparison influences their purchase decision (Rhodes, 2015). As mentioned earlier,
though products in this category are of identical size, yet unit prices increase price
sensitivity of customers (Yao and Oppewal, 2015). Hence, retailers may also link
price discount to reduce unit price, thus encouraging customers to purchase in higher
quantity. This influences customers’ perception of net price offered by the retailers.
Therefore, customers’ perception of fair prices is linked to the net unit price being
offered by the retailer vis-a-vis the competition.
 In this article, the price fairness has been analyzed as customer perception of the Purchasing Fruits
and Vegetables: Role
prices being offered in the retail outlet in comparison to the competitors as well as the of Price and Store
local unorganized sector. Characteristics
H2: The fairness of price of merchandise positively affects the purchase behaviour.

2.3 Fruits and Vegetables Category

Purchase behaviour of customers for fruits and vegetables category (F&V) in
organized retail is witnessing slow and steady change. The organized retailing in
F&V is at its nascent stage and is likely to grow in the near future (Images Retail, 69
November 2014). Safal, an initiative by National Dairy Development Board (NDDB)
in 1988, was the first organized retail chain for F&V category. After that Reliance,
RPG Group’s Spencer, ABRL’s More, ITC choupal fresh, etc., ventured in India
which indicates rapid growth of the sector. The interest towards organized retailing for
the consumption of F&V has increased, in turn providing opportunities to the entire
supply chain providing fresh food to the market. Vertical and horizontal integration
between farmers and organized sector along with effective government policies will
result in success of horticulture sector in India (Surabhi, 2007). Owning to the various
reasons such as the use of traditional methods of farming, supply channel bottlenecks,
lack of market understanding among farmers, poor infrastructure, etc. farmer are
unable to maintain the quality of supplies therefore, the retailers restrict themselves
only to few farmers (Sinha and Thomas, 2012).
There can be multiple perspectives to analysing this category’s characteristics.
The most common perspective is of considering F&V as belonging to frequently
purchased category. Viewed from this perspective, shoppers tend to balance
between short-term and long-term preference as well as those of multiple consumers
in the household. Therefore, customers would look for variety in the assortment,
a perception largely dependent on the distinctiveness of the options provided,
proximity, and their shelf display (Braniarczyk et al., 1998). If perceived quality of
the merchandise is higher, customers would prefer less variety (Kwak et al., 2015).
F&V can alternatively be viewed as being part of functional food category, where
quality attributes include being safe, natural and healthy, and organoleptic attributes
include an appealing taste (Kraus, 2015). Taking cue from Doorn and Vernhoef
(2015) it can alternatively be viewed as a subset of “virtue” category of products.
They may be less gratifying and appealing in short term compared to “vice” category
(like wine and chocolates), but result in far less long-term negative outcomes. Hence,
customers’ response to product attributes (freshness and taste), assortment (bundling
of items to provide wholesome nutritional requirements), and packaging (conveying
health) would differ for this category. When health is a major concern, customers
tend to balance between the regular and healthy options, choosing between general
and known variety of fruits and vegetables, but this balancing behaviour is segment
specific (Trivedi et al., 2016). Hence, we hypothesize:
H3: Category characteristics influence the purchase of the F&V in the organized
retail format.
Hence, the conceptual framework depicting the purchase behaviour of fruits and
vegetables based on the combination of all three hypothesis H1, H2, H3 is as follows
( Figure 1)
 Retail Marketing in
India: Trends and
Future Insights
Store
Characteristics
H1

70 Purchase of Fruits H2
and Vegetables Price fairness

H3

Category
Characteristics

Figure 1: Conceptual framework for purchase behaviour of fruits and vegetables

3. Data and Methodology

This section describes the data collection process and the operationalization of variables
followed by data analysis. The analysis is based on the generation of descriptive
statistics followed by inferential statistics, the tools used being exploratory factor
analysis (EFA) and confirmatory factor analysis (CFA).

3.1 Operationalization of Variables

At the initial inception of the research, the questionnaire was equipped with six latent
variables, namely, store characteristics, purchase of fruits and vegetables, category
characteristics, price fairness, bundle pricing, and time saving and based on these latent
variables 41 measurable variables were articulated to collect the responses.
Survey was conducted using the self-administered questionnaire which was filled
by customers walking into a modern retail store to purchase fruits and vegetables. It
featured 300 responses, out of sample of 335 respondents across six stores in Delhi–
NCR of a renowned retail store chain during the period of 2015 October to 2016 January.
The responses were recorded on a five-point Likert scale (1 = strongly disagree to
5 = strongly agree).
The demographic profiles of the customers are recorded in Table 1. The data depicted
that out of 300 respondents, 63.33% were females and 36.67% were males. The majority
of the respondents belong to the age group of 40–50 (years). However, the occupation
and income group did not show emergence of any significant group.
 Table 1: Demographic Profiles Purchasing Fruits
and Vegetables: Role
Category Count (n) Percentage of Price and Store
Characteristics

Gender Male 110 36.67

Female 190 63.33
Age (in years) <25 70 13.33
25 – 40 110 23.33
40 – 50 80 36.67
>50 40 26.67 71

Occupation Service 60 16.67

Business 50 20
Self-employed 120 40
Other 70 23.33
Income Group <15,000 10 3.33
15,000–25,000 30 10
25,000–35,000 90 30
35,000–45,000 110 36.67
>45,000 60 20

3.2 Data Analysis

The collected data was analysed in an SPSS (Statistical Package for Social Science)
spreadsheet. Giving all the responses specific numeric weightages. Initial EFA
and CFA was run. The EFA is used to analyze the relationship between the devised
latent variables and the measured variables to identify the latent constructs as per the
loading of each measured variable. The EFA was run on 20 responses to construct the
measurement model using CFA.
On the basis of the EFA, four latent variables, namely, store characteristics (SC),
purchase of fruits and vegetables (PFV), category characteristics (CC), and price fairness
(PF) were identified as having a significant impact on the nine measured variables (Table
2).
After the selection of latent variables (factors) and the measured variables (items),
CFA was used to find the (i) loading of each item on the latent variables (factor),
(ii) covariance among the factors, and (iii) residual variances of the measured variables
(items) and the latent variables (factors).
In factor loading, the first observed variable is treated as a “reference indicator” with
its coefficient fixed to 1 to establish the metric of the corresponding factor and therefore
to identify the model. There were three latent variables (factors) in this model, resulting
in nine factor loadings that had to be estimated.
The covariance estimate for the latent variables (factors) was zero with reference to
each other signifying that there exists no correlation among the latent variables (factors).
Thus, the latent variables (factors) are independent of each other having no loading at all.
Table 3 indicates the residual variances of the measured variables and the latent variables.
 Table 2: Latent Variables and Measured Variables
Retail Marketing in Serial Latent Variables Measured Description
India: Trends and
number Variables
Future Insights
1 Store Characteristics Reason Most prominent reason
(SC) for buying from the store

Variety More variety in store

in comparison to
72 unorganized market
2 Purchase of Fruits Brand Importance of brand name
and Vegetable (PFV)
Promo Offer Frequency of promotional
offers in the store

3 Category Comp Visit Price comparison with the

Characteristics (CC) previous visit to the store
Average Ticket Average ticket size for
fruits and vegetables
purchase
4 Price Fairness (PF) Alternate Increase in price leads
Choice to purchase of alternate
choice
Price Price offered in the store
Satisfaction are satisfactory
Other Price of other products
Convenience available in the store are
satisfactory

Table 3: Residual Variances

Variances Estimate

Measured Variables Reason 1.263

(items)
Variety 0.208

Brand 0.291

Promo Offer 0.754

Comp Visit 0.513

Average Ticket 1.602

 Purchasing Fruits
Alternate Choice 0.905 and Vegetables: Role
of Price and Store
Price Satisfaction 0.518 Characteristics

Other Convenience 1.077

Latent Variables Store Characteristics 0.946
(factors)
Purchase of Fruits and 0.634
Vegetable 73
Category Characteristics 0.535
Price Fairness 0.155

The final estimates of CFA are shown in Table 4.

Table 4: Final Estimates

Latent Variable Estimate
SC Reason 1.00
Variety 0.627
PFV Brand 1.00
Promo Offer 0.657
CC Comp Visit 1.00
Average Ticket 0.694
PF Alternate Choice 1.00
Price Satisfaction 0.841
Other Convenience 1.423

The model fit indices are as follows (Table 5)

Table 5: Model Fit Indices

Indices CFI TLL D.F. Chi sqr RMSEA SRMR
(p-value 0.05)
Model values 1.00 1.06 27 0.510 0.491 0.043

All the standard model fit indices (Fornell and Larcker, 1981) meet the required
benchmarks and hence our proposed conceptual model is validated.
The confirmatory factor analysis for the above framework shown in Figure 1 is
depicted in Figure 2.
 Retail Marketing in 1.000
India: Trends and
Reason SC
Future Insights
0.63
Variety

Brand 1.000
PFV
Promo offer 0.66
74

Comp visit 1.000

CC
Average Ticket 0.69

Alternate
choice 1.000

Price 0.845 PF
satisfaction
-1.42
Other
convenience

Figure 2: CFA for F&V

The above results validate all the stated hypotheses (Table 6).

Table 6: Validation of Hypothesis

H1 Accepted
H2 Accepted
H3 Accepted

4. Managerial Implications
Retail strategy for the store should focus on identifying the key reason for the
customers opting for them over competitors through a customer feedback. In order to
convey price fairness, other related merchandise like oil, spices, and salad toppings
can be made available at affordable prices, thus saving the time and efforts of the
customers in one purchasing trip. The category characteristics demands that F&V
should be made the destination category of the store as this would ensure availability
of adequate resources for maintaining freshness, variety, and creating an element
of differentiation. Marketing communication should emphasize on the significance
of healthy life and the contribution of the store’s merchandise towards this end.
Merchandizing display should be able to differentiate between “regular” and “better
variety of merchandise” or may be introducing organic fruits and vegetables to ease
the purchase orientation of the different segment of customers walking into the store.
In store signage, planogram and more customized service from floor sales personnel
should aid in “memorable experience” for the customer thus increasing customer Purchasing Fruits
and Vegetables: Role
patronage. of Price and Store
Characteristics
5. Conclusions
For the fruits and vegetables product category store characteristics, and the price
fairness as perceived by the customers are the key influencers in their purchase
decision. When it comes to the first construct, store characteristics, the most pertinent
question is to enquire as to why customers choose a specific store over others. Though
variety of merchandise available at the store would be one key influencer but what
75
are the other factors responsible for the same. The pricing strategy followed by the
retailer invokes a sense of confidence among the customers. The “price fairness” as
reflected through the alternative choices at different price points is the key delineator
for this construct, coupled with the convenience of buying other related items under
one roof at an affordable price and the satisfaction derived from purchasing the
complete set of required merchandise per se. Here, it is important to note that the
negative loading implies that the set of related merchandise has to be a restricted one.
Displaying a range of merchandize would impact the price fairness significantly as
customers may perceive the prices of other items as being overrated to supplement
the low price of F&V. The category characteristics like freshness and variety result
in customer opting for a particular store over competitors and this is reflected in the
percentage of total purchase made in the store.

6. Scope for Further Research

Similar research in this area can be conducted for other category of products to explore
the characteristics that influence the purchase behavior of customers. The scope of
the study can also be increased to cover pan India and across different retail chains.
Category characteristics can be considered as a moderating variable as well as to
generalize the findings.

References
Ali, J., Kapoor, S. and Moorthy, J. (2010). “Buying behaviour of consumers for food
products in an emerging economy”, British Food Journal, 112(2):109–24.
Anderson, G. (2005). “Does target have an image problem?”, RetailWire.com.
Retrieved from http://www.retailwire.com/discussion/10893/does-target-have-an-
image-problem. Accessed on 7th September 2005.
Baltas, G. (2005), “Exploring consumer differences in food demand: A stochastic
frontier approach”, British Food Journal, 107(9):685–92.
Balasubramanian, S., Raghunathan, R. and Mahajan, V. (2005). “Consumers in
a multichannel environment: product utility and Channel Choice”, Journal of
Interactive Marketing, 19 (2):12–30.
Bolton, Lisa E., Warlop, Luk and Alba, Joseph W. (2003). “Consumer perceptions of
price (Un) fairness”, Journal of Consumer Research, 29(4):474–91.
Bromiarczyk, Susan M., Hoyer, W.D. and McAlister, L. (1998). “Consumers’
perceptions of the assortment offered in a grocery category: The impact of item
reduction”, Journal of Marketing Research, 35(May):166–76.
 Carpenter, J. and Moore, M. (2006). “Consumer demographics, store attributes, and
Retail Marketing in
retail format choice in the US grocery market”, International Journal of Retail and
India: Trends and Distribution Management, 34(6): 434–52.
Future Insights Chengappa, P.G., Lalith, A., Prasanna, R.K.K., Vijayalakshmi, D., Reddy, B.M.R.
and Joshi, P.K. (2005). “Emergence of organized retail chains in India during post
liberalization era”, in Paper Presented at the South Asia Regional Conference of
International Association of Agricultural Economists, Globalization of Agriculture
in South Asia, Hyderabad. Accessed on 23rd March 2005.
Chernev, A. and Hamilton, R. (2009). “Assortment size and option attractiveness in
76 consumer choice among retailers”, Journal of Marketing Research, 46:410–20.
Deshingkar, P., Kulkarni, U., Rao, L. and Rao, S. (2003). “Changing food systems in
India: Response-sharing and marketing arrangements for vegetable production in
Andhra Pradesh”, Development Policy Review, 21(5–6):627–39.
Doorn, J.V. and Verhoef, P.C. (2015). “Drivers of Barriers to organic purchase
behaviour”, Journal of Retailing 91(3):436–50.
Eertekin, S. and Pelton, L. (2015). “Navigating the retail environment: An exploratory
investigation of in-store mapping application”, International academy of Marketing
Studies Journal, 19(2):37–48.
Fox, E.J., Montgomery, A.L. and Lodish, L.M. (2004). “Consumer shopping and
spending across retail formats”, The Journal of Business, 77(52):526–60.
Fagnani, S. (2001). “Retailers told price image must be right”, Supermarket News,
Retrieved from http://supermarketnews.com/archive/retailers-told-price-image-
must-be-right. Accessed on 14th May 2001.
Fornell, C., Larcker, D.F. (1981). “Evaluating structural equation models with
unobservable variables and measurement error”, Journal of Marketing Research,
18(1):39–50.
Grewal, D., Monroe, K.B. and Krishnan, R. (1998). “The effects of price-comparison
advertising on buyers’ perceptions of acquisition value, transaction value, and
behavioural intentions”, Journal of Marketing, 62(2):46–59.
Groeppel-Klein, A. and Bartmann, B. (2008). “Anti clockwise or Clockwise? The
impact of store layout on the process of orientation in a discount store”, Proceedings
of European Advances in Consumer Research, 8:415–16.
Hamilton, R. and Chernev, A. (2013). “Low prices are just the beginning: Price image
in retail management”, Journal of Marketing, 77:1–20.
Hasan, A. and Mishra, S.K. (2015). “Drivers influencing shopping behaviour in retail
store”, The IUP Journal of Marketing Management, 14(3):7–36.
Huddleston, P., Whipple, J., Mattick, R.N. and Lee, S.J. (2009). “Customer satisfaction in
food retailing: Comparing specialty and conventional grocery stores”, International
Journal of Retail & Distribution Management, 37(1):63–80.
Hunnemann, D., Verhoef, P.c. and Sloot, L.M. (2015). “The impact of consumer
confidence on store satisfaction and SOW formation”, Journal of Retailing, 19
(3):516–32.
Kahn, B.E., Kalwani, M.U. and Morrison, D.G. (1986). “Measuring variety-seeking
and reinforcement behaviours using panel data”, Journal of Marketing Research,
23:89–100.
Kraus, A. (2015). “Development of functional food with the participation of the
consumer. Motivators for consumption of functional products”, International
Journal of Consumer Studies, 39:2–11.
Kwak, K., Duvvuri, S.D. and Russell, G.J. (2015). “An analysis of assortment choice Purchasing Fruits
and Vegetables: Role
in Grocery Retailing”, Journal of Retailing, 91(1):19–33. of Price and Store
Landes, M., Persaud, S. and Dyck, J.H. (2004). India’s poultry sector: Development Characteristics
and prospects. WRS-04-03, Economic Research Service. Washington DC: United
States Department of Agriculture.
Lunardo, R. and Roux, D. (2014). “In store arousal and consumer inferences of
manipulative intent in the store environment”, European Journal of Marketing,
49(5–6):646–67.
Martin, A. (2008). Whole foods looks for a fresh image in Lean times, The New York
Times, Retrieved from http://www.nytimes.comy2008/08/02/business/02food.htm. 77
Accessed on 2nd August 2008.
Mittal, S. (2007). “Can horticulture be a success story for India?”, Working Paper, No.
197, ICRIER (6 August 2007).
Monroe, K.B. and Guiltinan, J.P. (1975). “A path analytic exploration of retail store
patronage Influences”, Journal of Consumer Research, 2:19–28.
Mukherjee, A. and Patel, N. (2005). FDI in Retail Sector India, Vol. 21. New Delhi:
Academic Foundation.
Oppewal, H. and Koelemeijer, K. (2005). “More choice is better: Effects of assortment
size and composition on assortment evaluation”, International Journal of Research
in Marketing, 22(1):45–60.
Prasad, C.J. and Aryasri, A.R. (2011). “Effect of shopper attributes on retail format
choice behaviour for food and grocery retailing in India”, International Journal of
Retail and Distribution Management, 39(1):68–86.
Prasad, C.J.S. and Babu, S.S. (2009). “A study on role of consumerism in modern
retailing in India”, GITAM Journal of Management, 7(1):227–47.
Rao, S.L. (2000). “India’s rapidly changing consumer markets”, Economic and
Political Weekly, 35(40):3570–2.
Rhodes, A. (2015). “Multi product retailing”, Review of Economic Studies, 82:360–90.
Richards, T.J. and Hamilton, S. (2015). “Variety pass through: An examination of ready
to eat breakfast cereal market”, The Review of Economics and Statistics, 97(1):
166–79.
Ruiz, M.P.M., Palomino, P.R., Canas, R.M. and Resino, J.J.B. (2014). “Consumer
satisfaction and loyalty in private-label food stores”, British Food Journal,
116(5):849–71.
Shiu, E.C.C., Dawson, J.A. and Marshall, D.W. (2004). “Segmenting the convenience
and health trends in the British food market”, British Food Journal, 106(2):106–27.
Sinha, P.K., Thomas, S. (2012). “Organized retailing of horticultural commodities”,
W.P. No. 2012-12-03. http://www.iimahd.ernet.in/assets/snippets/
workingpaperpdf/11383928392012-12-03.pdf. Accessed on 3rd December 2012.
Sinha, P.K. and Banerjee, A. (2004). “Store choice behaviour in an evolving market”,
International Journal of Retail and Distribution Management, 32(10):482–94.
Sheth, J.N. (1983). “An integrative theory of patronage preference and behaviour”, in
Darden, W.R. and Lusch, R.F. (Eds.), Patronage Behaviour and Retail Management
(pp. 9–28). North Holland, New York, NY.
Stassen, P.J.C. and Snijder, B. (1999). “Results with spacing, tree training and orchard
maintenance in Young Avocado Orchards”, Revista Chapingo Serie Horticultura,
5:159–64.
 Trivedi, M., Sridhar, K. and Kumar, A. (2016). “Impact of healthy alternatives on
Retail Marketing in
consumer choice: A balancing Act”, Journal of Retailing, 92(1):65–82.
India: Trends and Umali-Deininger, D. and Sur, M. (2007). “Food safety in a globalizing world: opportunities
Future Insights and challenges for India”, Agricultural Economics, 37(Suppl. 1):135–47.
Xia, L., and Kent, B.M. (2004). “Comparative others, trust, and perceived price
fairness”, in Paper Presented at the Annual Conference of Society of Consumer
Psychology, San Francisco. Accessed on 20th February 2004.
Xia, Lan, Kent, B.M. and Cox, Jennifer L. (2004). “The price is unfair! A conceptual
framework of price fairness perceptions”, Journal of Marketing, 68:1–16.
78 Yao, J. and Oppewal, H. (2016). “Unit price increases Price sensitivity even products
are of identical size”, Journal of Retailing, 92(1):109–21.
Zeithaml, Valarie A., Parasuraman, A. and Berry, Leonard L. (1990). Delivering
Quality Service: Balancing Customer Perceptions and Expectations. New York:
The Free Press.
 A Study of Shopping Experience in
Selected Retail Centres in NCR
Naushadul Haque Mullick*
Associate Professor, Jamia Hamdard University, New Delhi

Abstract
Purpose: The purpose of this paper is to analyse the shopping experience at retail centres
in NCR Delhi. The article also throws light on the issues faced by the mushrooming of
malls in Indian metropolitan cities, which has further made their survival more difficult.
Design/Methodology/Approach: A consumer survey using a questionnaire with
a sample of size 750 is conducted. Descriptive statistics and Analysis of Variance
(ANOVA) methods are used to analyse the collected data.
Findings: The research advices the promoter to create a market with shopkeepers who
can provide the customer the right merchandise as per their tastes and likings. They
must also create an ambience in the malls so that apart from shopping the customers
can also enjoy with their family and children. They must not act as realtor, and position
their property according to the customer profile of the trade area. Emphasis should be
on better mall management and design to cater the aspirations to the trade area and
give better satisfaction and delight. These experiences then only be translated as USPs
for the malls and enhance their footfalls and business. The rentals must be set based
on the footfall. They must provide better facility, ambience and a clean environment
which would be liked by the customers. This will enhance the customer loyalty and
also motivate them and their family members, to come again and again. All these can
make a retail centre a successful brand.
Originality/value: To the best of the knowledge of author, this research represents
an attempt to investigate empirically the customer perceptions towards the shopping
experience at retail centers in NCR Delhi.

Keywords
Shopping malls, Brand, Transformation, Shopping habits, Image.

1. Introduction
In recent times, it is noticed that malls in India are facing a very uncertain future
because their numbers are rising but are not able to withstand the competition coming
up. Around 60% of the malls out of overall 255 operational at present in the country
in the top seven cities of India are facing an uncertain future as the customers have
deserted them based on various reasons (DNA, 2015). According to Jones Lang
LaSalle (JLL, 2008), National Capital Region (NCR), Delhi has around 75-83 malls
that are either performing average or are below average. Same is the scenario in other
metro cities of Mumbai (25-31 malls) and Bangaluru 927 malls. The disappointing Retail Marketing in
India: Trends and
performance of malls in NCR, Delhi is because of an oversupply (Business Today
Future Insights
2015) as most of the malls here were selling space instead of leasing. This adversely pp. 79–89
© Ambedkar University

*Corresponsing Author: N H Mullick (rnhmullick@jamiahamdard.ac.in)

 hit their footfalls as they thought shopping mall on a short-term basis and did not try
Retail Marketing in
to develop it on a long-term basis by providing their customers an experience. They
India: Trends and neither positioned their malls nor did they design it properly as regards their layout,
Future Insights location, as well as understanding their market segments. The retail planning is also
poor with a weak tenant mix (Levy and Weitz, 2007) and a poor management who have
not taken their business seriously. They must therefore evolve and change themselves
with the changing trends of the market and customers (Kirkup and Rafiq, 1994). They
must invest time and efforts to convert the mall space into a family destination where
everybody may aspire to come and enjoy further with memorable moments (Guy,
80 1994; Beyard and O’Mara, 1999).
There is extensive research in the literature related to the shopping malls in developed
countries but it is limitedly explored in the Indian context specifically relating to the
changing pattern of customer behaviour. The objective of this study is to explore the
factors that enhances the shopping experience. This study has been done in selected
shopping malls of NCR Delhi. Delhi NCR region has emerged as the country’s mall
capita with 95 operational malls but only 13 of them are doing good business whilst
others are just finding it hard to succeed (JLL, 2015).

2. Literature review
Today in metros the number of malls are increasing more than movie theatres and
are becoming a destination for entertainment. Bloch et al. (1994) explored the
recreational use of shopping malls. According to them two broad categories of
leisure activity may occur in a shopping mall, recreational shopping and traditional
recreation. They identified seven dimensions of shopping malls that collectively
explain consumers’ motives for visiting malls. These dimensions are: aesthetics,
escape, flow, exploration, role enactment, social and convenience, and are briefly
discussed below. The mall itself offers experiences that are consumable beyond the
products and services available for sale within the mall. From their inception malls
have offered patrons the advantage of climatic comfort and freedom from the noise and
traffic that categorizes other shopping venues. Mall planners are devoting increasing
resources to environmental and architectural aspects of the mall. According to Lui
(1997), modern mall interiors have evolved from ‘‘comfortable’’ to architecturally
rich and sophisticated design elements. Interior design actually continues the mall’s
image-fostering process (Loudon and Bitta, 1993). Design features (e.g. high
ceilings, flooring/carpeting, architecture, interior landscaping, store layout), as well
as physical facilities (elevators, air-conditioning, and washrooms) impact assessments
by consumers. Architectural elements are being used by developers to enhance
the mall interiors and satisfy consumer-seeking sensory stimulation. One recent
study showed that architectural design had the strongest positive influence on mall
excitement, whilst interior de´cor had the strongest positive effect on desire to stay
(Wakefield and Baker, 1998). This same study also revealed that music and layout
were positively related to mall excitement and desire to stay. Hence, the mall and store
environment are not only about manipulating architectural design and interior layout
but also includes the use of space and the choice of surroundings, colors, aromas,
and sound. Consumers broadly evaluate malls in terms of their intangibles, including
music, colors, scents, and lighting called ‘‘atmospherics’’. Research on atmospherics
indicates: that light colors impart a feeling of spaciousness and serenity while bright
colors create excitement (Solomon, 1994). Additionally, some malls have successfully
used restful music and warm color schemes to encourage people to linger (Olson and A Study of Shopping
Experience in
Peter, 1994). More generally, shopping malls are trying to become more conducive to Selected Retail
sensual (aesthetic) shopping by offering on-premises features such as bakeries, which Centres in NCR
fill the air with warm, homey scents (Underhill, 1999). Atmospheric features are an
extension of product display and are chosen to modify buyers’ knowledge and mood,
thereby affecting behaviour, and to enhance the mall or store image to differentiate it
from that of other malls.

3. Research Methodology
81
In Delhi NCR 10 shopping malls (new and old both) were selected from the available
malls on the basis of size, type of anchor/specialty store/multiplex, availability of
branded showrooms, food-court, location, footfalls etc. A sample size of 750 was
divided equally among the 10 selected malls (see Table 1) where importance and
weight age were given to different customer categories of varied age/ income groups
coming for shopping/ recreation on different days and timings. Data was collected from
consumers through mall intercept survey based on convenience. Every mall in NCR
Delhi was given equal weight and also represented an equal population.

Table 1: Selected Malls in NCR Delhi

S. City Name of the Shopping Mall Built up Area (sq. ft) (total
No. area may be different)
1 New Delhi Ansal Plaza, South Delhi 170,000
2 New Delhi City Walk, South Delhi 1,300,000
3 New Delhi TDI Mall, West Delhi 120,000
4 New Delhi City Square Mall, West Delhi 90,000
5 Noida Great India Place 1,500,000
6 Noida Center Stage Mall 3,50,000
7 Ghaziabad Pacific Mall 500,000
8 Ghaziabad Shipra Mall 450,000
9 Gurgaon Sahara Mall 250,000
10 Gurgaon Ambience Mall 480,000

3.1 Image of Shopping Malls under Study

The preference for the mall depends on its image (based on the functional and emotional
attributes of the selling point) (Francisco, 1996) and is significantly related to the
choice adopted (Howell and Rogers, 1980; Hauser and Koppelman, 1979). It may be
because of its utilitarian (which satisfies basic psychological needs) versus hedonic
values (which involve fun, gratification and pleasure). The utilitarian involves an
attempt to reduce needs arising from state of deprivation, whereas hedonism involves
pleasure seeking rather than avoidance (Campbell, 1987). The consumers may be
drawn because of existence of a special store that appeals to them (Nevin and Houston,
1980). It may be in the form of an anchor store, which provides mass merchandise or
 a departmental store which draws a large number of customers. Non anchors can
Retail Marketing in
also serve as super performers having a high drawing power (Anderson, 1985).
India: Trends and Agglomeration of diverse retailers in shopping centres increases the attractiveness
Future Insights for consumer shopping (Kimball, 1991) and also offer “one stop for all needs” to
functional shoppers. Convenience and emotional benefits are identified as another
factors influencing the purchase decisions (Babin et al., 1994). It is a fact that
consumers shop not only for goods and services but also for experiential and
emotional reasons (Babin et al., 1994; Tauber, 1972; Westbrook and Black, 1985).
The mall itself offers experiences which are consumable and the mall managers
82 create special events based on the trends in the form of home improvement
expos, walking clubs, art exhibits, health screenings, auto shows and live music
(Christman, 1988). There are three important elements size/distance, image and
preference which are considered by consumers in their analysis of a shopping
mall attractions. Some shoppers are attracted for purely economic reasons, others
attracted for purely emotional reasons, whilst multiple shoppers (Stoltman et al.,
1991; Ghosh, 1986) have a combination of these motives. Among other emotional
reasons, recreational activities (Bloch et al., 1994), search for ideas (Jarboe and
McDaniel 1987) will have a combination of these motives. Among other emotional
reasons, recreational activities (Bloch et al. 1994), search for ideas (Jarboe and Mc-
Daniel, 1987), the consumers feelings about particular stores (Meoli et al., 1991),
impulse, etc., stand out. The image therefore of a shopping mall is based on the
shopping environment (SE) which exists inside the mall like the spacious shopping
provided in the mall, its organized layout, good displays, crammed merchandise,
better lighting with a bright surrounding. The respondents judged the malls on
these parameters and their scores are calculated. The same is done in regards to
the product-promotion-price (P-P-P) factors. The parameters in P-P-P factors are
the type of products sold in the different stores of the malls, prices and promotions
carried by the shopkeepers to enhance sales. The customers who visited the malls
responded to the questionnarie based on their experiences and visualizations. Cross
analysis of all the 10 malls chosen for study is conducted on the two parameters-
shopping environment (SE) and product-promotion-price (P-P-P) factors. The
customers were asked about these factors and based on the responses collected
on a five point scale we calculated the average mean and standard deviation for
each of the mall. The average mean recorded for 10 selected malls on shopping
environment factor was calculated to be 2.84 whereas on product- promotion-price
factor it was 3.10 on a five point scale. On the factor SE, Great India Place, Noida
recorded the highest mean (3.02) and Ambience Mall recorded the lowest mean
(2.68). This shows that Great India Place in Noida provides spacious shopping,
have a good layout, better displays, and provide an ambience which is liked by the
customers. The standard deviation is the lowest (0.70) for Ansal plaza and highest
for Ambience mall (0.89) The recorded standard deviation in the scores signifies
the consistency maintained by the particular mall in its shopping environment
and the product-price-promotion factors as visualized by its customers with whom
interviews were done. In the P-P-P factor the highest mean was recorded for
Sahara Mall, Gurgaon as well as Centre Stage Mall, Noida (3.16) (see Table 2
and 3) and the least by Ambience Mall (2.99) whereas the average is recorded as
(3.10). This shows that the customers at Sahara Mall got better buys with better
promotions and were happy with the offers and the products in regards to the price
charged. Ambience Mall had the lowest P-P-P factor and a high standard deviation. A Study of Shopping
Experience in
This shows variance in the likings of its customers. It might have been because of its Selected Retail
positioning as a gaming centre and hence the young ones certainly were attracted with Centres in NCR
better experience and liked its grandness but because of less promotions available most
of the customers did not gave high scores in regards to the parameters judged. In P-P-P
factor, the standard deviation recorded was the lowest for the Pacific Mall (0.51) and
highest for the City walk (0.63) whereas the average was (0.55). The most consistent
mall based on this factor was Centre stage mall which recorded a mean of (3.16) with
a standard deviation (0.56) whereas the average standard deviation of all the selected
10 malls is 0.55. The lowest recorded was for Ambience Mall with a mean (2.99) and 83
a standard deviation (0.58) (see Table 2 and 3). The customer perception for all the
selected malls on the basis of shopping environment (SE) the mean is ranging from 2.68
to 3.02 with a standard deviation ranging from 0.53 to 0.91. In product-promotion-price
(P-P-P) factor the mean is ranging from 2.99 to 3.16 and standard deviation ranging
from 0.49 to 0.63 (see Table 2 and 3). This signifies that the image of the shopping
mall is perceived on the basis of both shopping environment and product-promotion-
price and is most consistent for Ansal plaza if we compare both the factors where
the mean recorded is (2.95) with a standard deviation (0.70) and P-P-P mean (3.14)
with a standard deviation (0.53) whereas for other malls both the factors are varied
both in mean and standard deviation (see Table 2 and 3).This signifies that the malls
which have been old (Ansal plaza) are still liked more by consumers in terms of better
shopping environment and malls like Great India Place and Centre Stage Mall in Noida
are graded better in terms of P-P-P factor as they are coming with lots of promotions to
attract the crowd. Even the Great India Place which has been established late are getting
better acceptance as it is very spacious. It also has a multiplex and an amusement park,
to provide full entertainment for the whole family (Children, grownups and parents).
It is difficult to say that there is a significant difference among the average value of
the different factors of the shopping mall image. To know whether the differences in
mean values are significant the analysis of variance (ANOVA) is conducted. The null
hypothesis postulates that there is no significant difference in the average value (mean
value) of different factors of the shopping mall image and the alternate hypothesis is
at least one factor is having significant difference in the average value from the other
factors of shopping mall image.

Table 2: Shopping Malls Under Study

Shopping Mall SE P-P-P
Great India Place, Noida Mean 3.02 (Highest) -
Ambience Mall, Gurgaon Mean 2.68 (Lowest) 2.99 (Lowest)
Std. Dev 0.89 (Highest) 0.58
Ansal Plaza, Delhi Mean 2.95 3.14 (2nd highest)
Std. Dev 0.70 (Lowest) 0.53
Sahara Mall, Gurgaon Mean 2.84 3.16 (Highest)
Std. Dev 0.58 0.57
Centre Stage Mall, Noida Mean - 3.16 (Highest)
Std. Dev - 0.51 (Lowest)
 Std. Dev - 0.63 (Highest)
Retail Marketing in Highest for all 10 malls Mean 3.02 3.16
India: Trends and
Future Insights Std. Dev 0.91 0.63
Lowest for all 10 malls Mean 2.68 2.99
Std. Dev 0.53 0.49
Average for all 10 malls Mean 2.84 3.10
Std. Dev 0.76 0.55
84
Table 3: Image of Shopping Malls Under Study
Shopping Mall SE P-P-P
Ansal Plaza Mean 2.95 3.14
N 66 66
Std. Dev 0.70 0.53
City Walk Saket Mean 2.74 3.12
N 64 64
Std. Dev 0.81 0.63
TDI Mall Rajagarden Mean 2.82 3.10
N 68 68
Std. Dev 0.91 0.57
City Square (Life Style) Mean 2.83 3.12
Raja Garden N 66 66
Std. Dev 0.74 0.49
Total (4 Delhi Malls) Mean 2.83 3.12
N 264 264
Std. Dev 0.79 0.55
Great India Place Mean 3.02 3.05
N 75 75
Std. Dev 0.84 0.57
Center Stage Mall Mean 2.80 3.16
N 68 68
Std. Dev 0.53 0.56
Total (2 Noida Malls) Mean 2.91 3.11
N 143 143
Std. Dev 0.71 0.56
Pacific Mall Mean 2.87 3.06
N 64 64
Std. Dev 0.80 0.51
 A Study of Shopping
Shipra Mall Mean 2.85 3.08 Experience in
N 68 68 Selected Retail
Centres in NCR
Std. Dev 0.72 0.52
Total (2 Ghaziabad Malls) Mean 2.86 3.07
N 132 132
Std. Dev 0.75 0.51
Sahara Mall Mean 2.84 3.16
N 67 68 85
Std. Dev 0.58 0.57
Ambience Mall Mean 2.68 2.99
N 75 75
Std. Dev 0.89 0.58
Total (2 Gurgaon Malls) Mean 2.76 3.07
N 142 142
Std. Dev 0.76 0.58
Total (10 Malls) of NCR Delhi Mean 2.84 3.10
N 681 682
Std. Dev 0.76 0.55

3.2 Hypothesis for Factors of Mall Image

H0: There is no significant difference in the average value (mean value) of different
factors of shopping mall image.
H1: There is at least one factor having significant difference in the average value from
the other factors of shopping mall image.
In the hypothesis mentioned above, we have discussed the various factors of the
mall image, the SE and the P-P-P factors. The hypothesis therefore considers the mall
image in the minds of customers in these malls. The result dipicts that there is no
significant difference in regard to the average value of different factors of shopping
mall image in the minds of consumers for these malls.

Table 4: Analysis of Variance (ANOVA)

Source of
Variation SS df MS F P-value F critical
Rows 0.2513 10 0.0251 4.211 0.000137484 1.968
Columns 4.4724 7 0.6389 107.054 8.01057E-35 2.143
Error 0.4177 70 0.0059      
Total 5.1415 87        

The Table 4 signifies the same and shows that the null hypothesis is accepted with
p-value = 0.000137484. So, there is no significant difference in average values among
the mall image factors of customers in these malls.
 4. Discussion
Retail Marketing in The analysis conducted to explore the the mall image based on the shopping environment
India: Trends and and P-P-P factor signifies that the malls could not succeed only as a realty. The success
Future Insights
lies in how they are maintained and quality of management practices. The data
depicts that among the older malls Ansal Plaza is still known, but requires revamping
to meet the changing shopping experience demands of the customer. This could be
done by planning more events and promotion campaigns, changing the ambience
by refurbishing its facilities and also enhancing the quality of its mall management.
Customers today are getting more attracted to Great India Place and Ambience Mall
86 because of the facilities provided as well as better positioning of the mall. Services
play important role in the success of a mall therefore various events have to be planned
at the mall, so that the consumers from the trade area are attracted. Mall layout and
displays, choices of merchandise, lighting, ambiance should be planned such that mall
can offer better shopping experience to its customers and ensure their revisits. Apart
from this the mall should provide the type of product required by their customers who
are visiting these malls regularly, with better valued buys as well as promotions. Then,
only the customer will be happy as they would be satisfied and this experience will be
remembered by them always. The general disinterest we find in customers is because
of less differentiation offered by the malls. The consumers do not see any newness,
fascination or change in their approach. The customer seems to be unhappy with the
mall planning and management. The shopping mix offered by the malls is also found
to be weakly designed. The mall management and planning needs to be evolved with
the changing expectations of the customers. The asset owners in the mall has to keep a
close watch on their tenant’s performance and also take various measures to ensure that
customers are able to find the right products according to their expectations. Another
reason for the bad performance of malls can be attributed to the fact mall owners sell
out the shopping space instead of leasing it. Setting a mall is easy but running it is the
real challenge. It needs a better understanding of the customer as well as the market
and it has to be made profitable to all the stakeholders. The establishment costs of
malls have gone up and the margins are low. This is a business which requires patient
capital, a thorough understanding of the customer and a willingness to experiment new
things. It is therefore important for the management to take the ownership of the mall
management and must actively plan and implement new ideas with an open mind set.

4.1 Sharing of expenses between the retailer and mall must be undertaken
In this situation, a fixed fee is paid by all the retailers to the mall developer. This fee is
over and above the rentals being paid by them. The strategic team is held accountable
and justifies further for the footfalls to be achieved based on the events planned by
them around the year. These events are held in consultation with the retailer.

4.2 Strategy of financial collaboration through revenue sharing

The mall developer gets a share of the revenues of the retailers during a specific
promotion. The mall owners plans specific a promotion and also execute it. The
promotion campaign is planned such that footfall increases due to promotion, leading
to higher retailer revenues.
4.3 Practical implications A Study of Shopping
Experience in
The conditions prevalent today are an eye opener to all the promoters and managers Selected Retail
of the shopping mall and their prime concern is to beat the competition and emphasize Centres in NCR
on better mall and facility management. This research based on primary as well as
secondary data explored the factors important for creating shopping experience for
the customers in the mall of Delhi NCR. The findings will be helpful to the promoters
operating the malls/who intend to set up or manage a new mall/are related in its
management / have plans to venture/run this type of business.
87
4.4 Future work
The study explored the image of the shopping malls in Delhi NCR based on shopping
experience and P-P-P factors. Further the research could be extended to include more
variable like ambience, aesthetics, interiors, atmospherics store layout and space, etc.
Further the researchers could explore the variables under study including malls over a
wider geographical boundary fo the country.

4.5 Limitations
This research has been confined to NCR Delhi only but for a broader understanding it
is necessary that the research and findings are drawn based on different metro cities to
have a better analysis about the trends and expectations of consumers.

5. Conclusion
The mall developers must therefore understand the situation as well as the competition
prevailing in markets. They must research the area as well as the aspiration of the
consumers falling in the trade area before selecting the location for the shopping mall.
They must therefore study the malls operating at present, their formats, and customers
visiting these malls and identify the gaps to strategize themselves and position
their mall with a better Unique Selling Proposition (USP) which will help them to
differentiate their mall further. They must create a better retail mix after studying the
area and advise retailers to provide a better product mix at a better value (Singh, 2005;
Prayag, 2006). They must create an anchor/specialty/multiplex/amusement centre
which is an aspiration among the probable customers of the trade area. This will then
help the shopping malls to attract more footfalls. Shopping malls cannot be successful
only through design/infrastructure but for a mall promoter the challenge starts only
after the opening of the mall as the critical point in the success of the mall is not only
the physical aspects but also the mall management. Running of the mall is the crux and
this leads to the success or failure. This is possible only if a proper retail mix is devised
as per the expectations of the customers. The facilities in the mall have to be built
and managed comparable to the best practices in the industry. It is important for the
promoters to understand the expectations of a particular consumer segment for which
the mall is positioned. The expectations have to be fulfilled by creating an interest
among its consumers through various sales promotions/events which are organized
regularly for attracting more footfall.
 References
Retail Marketing in Anderson, P. (1985). “Association of shopping center anchors with performance of
India: Trends and nonanchor specialty Chain’s Stores”, Journal of Retailing, 61(2):61–74.
Future Insights
Babin, B., Darden, W. and Griffin, M. (1994). “Work and/or fun: Measuring hedonic
and utilitarian shopping value”, Journal of Consumer Research, 20:644–56.
Bloch, P.H., Nancy, M.R. and Dawson, S.A. (1994). “The shopping mall as a consumer
habitat”, Journal of Retailing, 70(1):23–42.
Beyard, M., and O’Mara, P. (1999). Shopping Center Development Handbook.
Washington: Urban Land Institute.
88 Campbell, C. (1987). The Romantic Ethic and the Spirit of Modern Consumerism. New
York: Basil Blackwell.
Christman, E. (1988). “Mixing entertainment retailing”, Shopping Center Today, 1:4–5.
Das, A. (2007). Mall Management. Delhi:Taxmann Allied Services (Pvt.) Ltd.
Francisco, J.M.R. (1996). “Image of suburban shopping malls and two-stage versus
uni - equational modelling of the retail trade attraction - an empirical application”,
European Journal of Marketing, 33(5/6):512–29.
Ghosh, A. (1986). “The value of a mall and other insights from a revised central place
model”, Journal of Retailing, 62(1):79–97.
Guy, C. (1994). The Retail Development Process: Location, Property and Planning.
London: Routledge.
Hauser, J.R. and Koppelman, F.S. (1979). “Alternative perceptual mapping techniques:
Relative accuracy and usefulness”, Journal of Marketing Research, 16:495–506.
Howell, R. and Rogers, J.D. (1980). “Research into shopping mall choice behaviour”,
Advances in Consumer Research, Monroe, K. Ann Arbor: Association for Consumer
Research, 8:671–81.
Jarboe, G. and McDaniel, C. (1987). “A profile of browsers in regional shopping
malls”, Journal of the Academy of Marketing Science, 15(1):46–53.
Jones, L.L.S (2008). Upcoming Malls 2008 and Beyond. Published by Jones Lang
LaSalle Meghraj Consultancy Firm.
Kimball, W. (1991). “Recent trends in the shopping center market”, The Appraisal
Journal, 59(3):382–94.
Kirkup, M.H. and Rafiq, M. (1994). “Managing tenant mix in new shopping centres”,
International Journal of Retail and Distribution Management, 226:29–37.
Levy, M. and Weitz, B. (2007). Retailing Management. New Delhi:Tata McGraw-Hill,
242–69.
Loudon, D.L. and Della, B.A.J. (1984). Consumer behaviour: Concepts and
applications. New York: McGraw-Hill.
Lui, K.F. (1997). Shopping Behaviour in Kuala Lumpur Shopping Malls. University
Putra Malaysia.
Meoli, J., Feinberg, R.A. and Westgate, L. (1991). “A reinforcement-affect model of
mall patronage”, in Holman, H.R. and Solomon, M.R. (Eds), Advances in Consumer
Research, Provo, U.S.A.: Association for Consumer Research, 18:444–50.
Nevin, J. and Houstan, M. (1980). “Image as a component of attraction to intraurban
shopping areas”, Journal of Retailing, 56:59–77.
Olson, J.C. and Peter, J.P. (1994). Understanding Consumer Behaviour. Burr Ridge,
IL: Richard D. Irwin, Inc.
Prayag, A. (2006). Prestige Group to Invest Rs.2500 cr in Malls. www. A Study of Shopping
Experience in
thehindubusinessline.com/2006/09/06/stories/2006090602570500.htm, Business Selected Retail
line, Accessed on 1st June 2016. Centres in NCR
Singh, S. (2005). Surviving Competitive Times. www.timesofindia.indiatimes.com/
articleshow/1048820.cms, Times of India, Accessed on 1st June 2016.
Solomon, M.R. (1994). Consumer Behaviour. London: Allyn & Bacon.
Stoltman, J.J., Gentry, J.W. and Anglin, K.A. (1991). “Shopping choices: The case of
mall choice”, in Holman, R.H. and Solomon, M.R. (Eds.), Advances in Consumer
Research, Provo, U.S.: Association for Consumer Research, 18:434–40.
Tauber, E.M. (1972). “Why Do People Shop”, Journal of Marketing, 36(October):46–59. 89
Underhill, Paco (1999). Why we buy : The science of shopping. New York: Simon &
Schuster.
Wakefield, K.L. and Baker, J. (1998). “Excitement at the Mall: Determinants and
Effects on Shopping Response”, Journal of Retailing, 74(4):515–39.
Westbrock, R. and Black, W. (1985). “A motivation-based shopper typology”, Journal
of Retailing, 61(1):78–103.
 Optimal Advertisement Planning
on Web considering Time Window
Concept
Sugandha Aggarwal1*, Arshia Kaul2, Anshu Gupta3,
Prakash Chandra Jha4
1
Assistant Professor, School of Business, Galgotias University,
Greater Noida
2
Research Scholar, Department of Operational Research,
University of Delhi, Delhi
3
AssistantProfessor, SBPPSE, Ambedkar University, Delhi
4
Professor, Department of Operational Research, University of Delhi, Delhi

Abstract
Online advertising is increasingly becoming an important element of marketing
mix. The wider reach of internet advertising, efficiency, ease of targeting, and
measurement of effectiveness has made it even more popular among e-tailers.
Several web publishers provide free of cost web content to the internet users and in
turn earn major part of their revenue through display banners available for their web
portals for advertisements. Advertisers bid for these display banners with different
costs specifying location, size, time and frequency preferences. Web publishers seek
to select the advertisement bids in such a way that their revenue is maximised with
efficient utilization of the advertising space satisfying the advertiser’s preferences.
Findings of some studies in the literature suggest appropriate timing of advertising
on internet is an important measure of advertisement effectiveness especially for
e-tailers who raise advertising bids targeted to promote specific sales/discounts
during specific days/hours. The optimization models available in the literature for
determining the placement schedule of advertisements on display banners limitedly
considers the advertiser’s time preference. In this paper, we propose a zero-one linear
programming model to determine the optimal placement schedule of advertisements
for online portals considering advertisers’ time window, location and frequency
preferences. A numerical illustration is presented to validate the proposed model.

Keywords
Web advertisement, Mathematical programming, Time window, E-tailing

1. Introduction
Internet though evolved as a source of information and communication has become an
important tool for businesses. It is rapidly transforming the way companies carry out
Retail Marketing in
business activities and communicate with its customers. With the popularity of social
India: Trends and
Future Insights
pp. 90–102
© Ambedkar University * Corresponding Author: Sugandha Aggarwal (sugandha_or@yahoo.com)
media, increase in options for internet access points and decrease in cost of data usage, Optimal
Advertisement
the number of internet users is increasing worldwide (McKinsey and Company, 2015). Planning on Web
Internet is recognized as a medium of mass communication of the present generation considering Time
in the business world. It provides business an ability to reach a wider and diverse Window Concept
audience from all around the world efficiently. Online advertising is an important way
businesses connect to its potential customers especially in retail domain among other
mediums like affiliated marketing, content marketing, etc. The enormous scale of the
internet, diversity of advertising networks, ease of targeting, cost efficiency, ease of
measuring the advertising effectiveness makes it a popular medium for advertising.
It is expected the size of online advertising market in India will touch US$ 538.09 91
million in 2015 from US$ 413.92 million in 2014. Spending on display advertisement
follow search advertising (contributing 38% of total online advertisement spending)
with 29% of total online advertisement spending (IBEF, 2016).
E-tailing has become a strong non-store retail channel over the 2010–15 period
(Euromonitor, 2016). The sales value of this channel has increased at 65% compounded
annual growth rate (CAGR) over this period and by 140% in 2015. With the growth
of e-tailing channel and increasing popularity of online advertising, it is increasingly
becoming an important and largest beneficiary of e-tailers promotional mix. On the
other hand, online display advertising offers avenues for earning to the web publishers.
It accounts for a large proportion of revenue earned by web publishers. It is imperative
for them to use their advertising space judiciously so that they can maximize their
revenue. Advertisers bid for the space available for advertisements (Adler et al.,
2002). The cost bids could vary according to the location, size and type of content,
time period, and duration and frequency of advertisements. Different format of display
advertisements exist on the web such as the banner advertisements, pop-up, or pop-
under advertisements etc. (Andrea, 2015). This study focus on the optimal placement of
advertisements on display banners. The proposed formulation considers an important
concept of time window preference by the advertisers.
Several studies in the literature address the problem of optimal placement of
advertisements on web banners under different scenarios and assumptions. Detailed
literature review is presented in the next section. E-tailers frequently launch promotion
campaigns targeted to promote specific sales or discounts during specific days/hours.
In such a situation while bidding for advertisements on web banners they also specify
preference of time(time window) for the advertisements. Advertisement preference
during heavy traffic hours forms another reason for stating the time preference. In the
literature several researchers has considered the time window constraints in optimizations
related to the placement of advertisements on television media. However, only a few
studies have considered this aspect for online display advertising (Gregory, 2015).
In this paper, we propose a mathematical optimization model for the optimal
placement of advertisements on web banners considering the time window constraints
specified by the advertisers in addition to the other technical and minimum-maximum
frequency constraints. A case study is presented to illustrate the model application.

2. Literature Review
Many authors have worked upon the models concerning web advertisement planning.
There are different objectives while considering such planning viz. maximization
of revenue, optimization of space available for advertising and the minimization of
cost of advertising. The study (Adler et al.,2002) discusses a model for placement of
 advertisements in different time slots on a banner to minimize the maximum fullness.
Retail Marketing in
The model is solved under the frequency constraints, size of advertisement and
India: Trends and frequency of advertisements in slots. A 2-approximation method is used to solve the
Future Insights model. Dawande et al. (2003) proposed the MAXSPACE and MINSPACE problem for
advertisement placement on a banner similar to (Adler et al., 2002) and proposed largest-
size-least-full and linear programming relation method to solve the models. Kumar
et al., (2007) discussed revenue optimization model for placement of advertisements
based on the click behaviour of the end user. Knoops et al. (2009) proposed a model
for the placement of advertisements on a pixelated web banner and proposed heuristic
92 methodology to solve the model. Boskamp et al.(2011) improved the heuristics given
by Knoops et al.(2009) and further gave a comparative analysis of different heuristic
methods. Kumar et al. (2006) assumed one dimension of the rectangular banner is fixed
for all advertising bids. Gupta et al. (2011) allowed the advertiser’s to bid for rectangular
dimension instead of single dimension and proposed a revenue optimization model
for scheduling of multiple advertisements on several display banners over a planning
horizon. Gupta et al. (in press) discussed optimal placement of advertisements a single
pixelated banner and then extended the model for the case of multiple banners.
In the literature discussed so far there is limited mention of the time window
preference in display banner advertisement scheduling. The concept of time preference
for placement of advertisements has been catered extensively in the optimal placement
of advertisements in the television media. For instance, Mihiotis and Tsarkis (2004)
gave a mathematical model for placement of advertisements at particular time locations
in multiple programmes during the planning horizon with objective of maximizing
the viewership under limited budget. Bollpragada et al. (2004) discussed a model to
minimize the distance (between actual and ideal) of airing of multiple copies of the same
advertisements in time breaks between programs subject to other system constraints.
Ghassemi and Alaei (2013) gave a mathematical model to maximize revenue for the
television channel by placement of advertisements in between programs aired at prime
time slot.
The concept of apt time window for advertisers has been considered to a limited
extent while considering planning for advertisement placement on the web. Kumar
et al. (2009) discussed effect of the time of access of the content on the web by the web
users on online marketing strategies. The results showed that there is heterogeneity in
the request for Internet content on weekdays and weekend. The marketing strategies
could capture this heterogeneity by choosing differential penetration strategies on the
web. Time window preference in advertisement purchasing is possibly a way to handle
the situation. Lu et al. (2009) proposed a mathematical model for optimal placement
of advertisements on multiple web banners under time window preferences by the
advertisers with an objective to maximize the advertisement space utilization. Truong
et al. (2010) conducted an empirical study on the basis of in-depth interviews from
industry personnel to determine how advertisers must react to online advertising. The
results suggest there is high relevance of time in the delivery of advertisement messages.
The results of the study conducted by (Gregory, 2015) suggest similar importance of
timing of advertising messages by the retail industry and e-tailers in particular.
These studies suggest advertising at an appropriate time is an important element
of online marketing strategy and firms are increasingly considering advertising their
products and specific promotions at appropriate time. Time window preferences are
made by the advertisers while biding for the advertising space. As discussed earlier
very limited studies consider the time window restrictions by the advertisers in the Optimal
Advertisement
optimization models for determining the placement schedule of advertisements on Planning on Web
display banners. The optimization model proposed in this study considers the aspect of considering Time
time window preference by the advertiser’s in addition to the other constraints discussed Window Concept
in the literature with an objective of revenue optimization for the web publisher.

3. Model Formulation
Web banners are rectangular spaces on a website sold for advertising by the web
publishers. Advertisements appear on these banners as images that a website visitor
93
views on visiting a particular webpage. If the website visitors click on a particular
advertisement they are directed to the advertiser’s website. A website usually has
multiple banners of different sizes located at different positions on several webpages.
Advertisers compete for this advertisement space offering different cost bids depending
on size and location of the banner and time preferences.
The web publishers could use an optimization routine to optimally allocate the
available space between the competing advertisers and maximize their revenue. The
revenue optimization model for optimal placement of advertisements is subjected to two
types of constraints – technical and requirement constraints. The technical constraints
include capacity constraints, constraints like maximum one allocation at any instant
of time on any banner etc. The requirement constraints include min-max frequency
constraints and time window preference constraints. The following notations are used
for model formulation.

Notation

i : index representing webpages (i = 1, 2,..., m)

j : index representing rectangular slots on webpages (j =1,2,...,ni )
k : index representing advertisers (k =1,2,...,K )
t : index representing time units (t =1,2,..,T )
Cijk : cost bid of k th advertiser for j th rectangular slot of i th webpage
Sij : set of advertisers competing for j th rectangular slot of i th webpage
wk : m  inimum time unit frequency specified by kth advertiser to appear in any
rectangular slot
Wk : maximum time units bid by kth advertiser to appear in any rectangular slot
D  : total number of rectangular slots over a planning horizon
(number of rectangular slots on all webpages x planning horizon)
[ak , bk ]: kth advertiser’s time window preference

1, if k th advertiser is chosen to be placed on j th


xijkt =  slot of i th webpage at t th time unit
0, otherwise

1, if k th advertiser is placed on j th

zijk =  slot of i th webpage
0, otherwise

 The objective function to maximize the revenue generated by placement of
Retail Marketing in
advertisements over a planning horizon is formulated as follows
India: Trends and m ni T
Future Insights Max R = ∑ ∑ ∑ ∑ Cijk xijkt (1)
i =1 j =1 k ∈Sij t =1

Here, T represents the total number of time units available during the planning
period. The number of time units is defined by dividing the planning horizon into time
units of equal duration. For example, assuming the planning period to be one week and
one time unit equivalent to an hour, the total time units over the planning horizon will
94 be 168 units (=7×24).
Total number of allocations that could be made over the planning horizon couldn’t
exceed the total number of slots available (D). This constraint is defined mathematically
as follows
m ni T

∑∑ ∑ ∑ x
i =1 j =1 k ∈Sij t =1
ijkt ≤ D (2)

Constraint (3) ensures that not more than one advertisement is placed on any
rectangular slot at a particular time unit on a banner.

∑x
k ∈Sij
ijkt ≤ 1 ∀i , j , t (3)

Advertisers may specify the minimum number of time units an advertisement

should continue to appear if selected on a banner, in order to ensure continuity of
visibility of the advertisement at a position. On the other hand, due to the budgetary
limitations there exists an upper bound on the number of bids raised over the planning
horizon.To ensure the advertiser’s bound restrains following min and max frequency
constraints are imposed.
T

∑x
t =1
ijkt ≥ wk zijk ∀i , j , k ∈ Sij (4)

m ni T

∑∑∑ x
i =1 j =1 t =1
ijkt ≤ Wk ∀k ∈ Sij (5)

∑z
k ∈Sij
ijk ≥ 1 ∀i , j (6)

The constraint of time window preference over the planning horizon set by the
advertisers is expressed mathematically as
α k −1

∑x
t =1
ijkt = 0 ∀i , j , k ∈ Sij (7)
T

∑
t = β k +1
xijkt = 0 ∀i , j , k ∈ Sij (8)

The complete mathematical formulation of the advertisement placement problem is

given as follows
m ni T
Max R = ∑ ∑ ∑ ∑ Cijk xijkt
i =1 j =1 k ∈Sij t =1

Subject to
T

∑x
t =1
ijkt ≥ wk zijk ∀i , j , k ∈ Sij
m ni T

∑∑∑ x
i =1 j =1 t =1
ijkt ≤ Wk ∀k ∈ Sij
 m ni T
Max R = ∑ ∑ ∑ ∑ Cijk xijkt
i =1 j =1 k ∈Sij t =1
Optimal
Subject to Advertisement
T Planning on Web
∑x
t =1
ijkt ≥ wk zijk ∀i , j , k ∈ Sij considering Time
Window Concept
m ni T

∑∑∑ x
i =1 j =1 t =1
ijkt ≤ Wk ∀k ∈ Sij

m ni T

∑∑ ∑ ∑ x
i =1 j =1 k ∈Sij t =1
ijkt ≤D
95
∑x
k ∈Sij
ijkt ≤ 1 ∀i , j , t

∑z
k ∈Sij
ijk ≥ 1 ∀i , j

α k −1

∑x
t =1
ijkt = 0 ∀i , j , k ∈ Sij
T

∑
t = β k +1
xijkt = 0 ∀i , j , k ∈ Sij

The optimization model formulated above is a zero-one linear programming model.

Branch and bound zero-one programming algorithm is used to solve the model using the
optimization software LINGO 11.0.

4. Numerical Illustration
The model validity is established through a case study. Consider a website on which
multiple rectangular display banners are available for advertising spread over several
webpages. In order to obtain maximum revenue, website publisher looks for optimum
placement of advertisements from multiple advertisers with different cost bids. These
advertisers may include e-tailers, service providers, etc. In this section we solve an
optimal advertisement placement and scheduling problem of a website publisher over
a planning horizon of one week.

4.1 Data Description

The time period for which an advertisement appears on a display banner is divided
into 24 time units spanning over a day. Thus, there are in total 168 (=24×7) time
units in the planning period. The scheduling is to be carried out for a total of eight
display banners spread over three webpages. Bids are raised by forty advertisers
(k =40) with different costs. Following are the competing sets of advertisers for
different display banners over the planning horizon.

S11 = {1, 2, 4, 5, 8, 9,12,14,16,18,19, 20, 22, 25, 27, 28, 30, 32, 33, 34, 35, 37, 38, 39, 40}
S21 = {2, 4, 7, 8,10,12,14,15,16,17, 20, 21, 23, 24, 26, 27, 28, 30, 31, 32, 35, 36, 37,40}
S31 = {1, 3, 4, 6, 7, 8,11,12,13,14,15,17,19, 21, 22, 25, 26, 27, 29, 30, 32, 33, 34, 36, 38, 39, 40}
S12 = {1, 2, 3, 5, 8, 9,10,13,15,16,18, 20, 21, 22, 23, 25, 26, 28, 29, 30,332, 35, 36, 38, 39, 40}
S22 = {1, 3, 4, 5, 6, 7, 8,10,11,12,13,16,19, 21, 22, 24, 27, 28, 29, 30, 31, 32, 34, 36, 38, 40}
S13 = {1, 3, 5, 7, 8,11,13,15,18, 20, 22, 23, 25, 26, 27, 28, 30, 32, 36, 39, 40}
S23 = {2, 4, 5, 6, 7, 9,12,13,15,16,18, 20, 22, 24, 26, 28, 29, 30, 31, 34, 36, 37, 40}
S33 = {1, 2, 4, 6, 8,10,12,14,15,17,19, 21, 23, 25, 26, 27, 29, 31, 33, 35, 36, 38, 40}
 S11 = {1, 2, 4, 5, 8, 9,12,14,16,18,19, 20, 22, 25, 27, 28, 30, 32, 33, 34, 35, 37, 38, 39, 40}
S21 = {2, 4, 7, 8,10,12,14,15,16,17, 20, 21, 23, 24, 26, 27, 28, 30, 31, 32, 35, 36, 37,40}
S31 = {1, 3, 4, 6, 7, 8,11,12,13,14,15,17,19, 21, 22, 25, 26, 27, 29, 30, 32, 33, 34, 36, 38, 39, 40}
S12 = {1, 2, 3, 5, 8, 9,10,13,15,16,18, 20, 21, 22, 23, 25, 26, 28, 29, 30,332, 35, 36, 38, 39, 40}
S22 = {1, 3, 4, 5, 6, 7, 8,10,11,12,13,16,19, 21, 22, 24, 27, 28, 29, 30, 31, 32, 34, 36, 38, 40}
S13 = {1, 3, 5, 7, 8,11,13,15,18, 20, 22, 23, 25, 26, 27, 28, 30, 32, 36, 39, 40}
S23 = {2, 4, 5, 6, 7, 9,12,13,15,16,18, 20, 22, 24, 26, 28, 29, 30, 31, 34, 36, 37, 40}
Retail Marketing in S33 = {1, 2, 4, 6, 8,10,12,14,15,17,19, 21, 23, 25, 26, 27, 29, 31, 33, 35, 36, 38, 40}
India: Trends and
Future Insights Table 1 gives the advertising cost bids raised by the advertisers (cost bid zero implies
the advertiser has not bid for that location) depending on the banner location, position,
and time window preferences.

Table 1: Advertising Cost Bids

96 k C11k C12k C13k C21k C22k C31k C32k C33k

1 848 0 597 664 493 620 0 309
2 957 749 0 729 s0 0 463 363
3 0 0 642 691 505 612 0 0
4 992 617 418 0 509 0 507 367
5 844 0 0 634 443 641 499 0
6 0 0 442 0 519 0 585 333
7 0 611 664 0 491 674 584 0
8 935 607 641 661 450 630 0 361
9 909 0 0 699 0 0 579 0
10 0 791 0 794 407 0 0 347
11 0 0 451 0 510 603 0 0
12 886 619 542 0 485 0 471 387
13 0 0 651 744 401 604 567 0
14 800 675 410 0 0 0 0 385
15 0 763 420 714 0 658 433 343
16 970 797 0 793 505 0 526 0
17 0 755 587 0 0 0 0 349
18 838 0 0 758 0 693 437 0
19 999 0 441 0 589 0 0 387
20 869 707 0 763 0 665 525 0
21 0 653 426 619 443 0 0 348
22 958 0 626 789 406 688 495 0
23 0 632 0 738 0 663 0 333
24 0 775 0 0 549 0 577 0
 Optimal
25 830 0 534 666 0 692 0 364 Advertisement
Planning on Web
26 0 681 663 699 0 655 560 345 considering Time
Window Concept
27 810 703 524 0 489 614 0 347
28 814 676 0 701 427 700 533 0
29 0 0 426 768 440 0 0 364
30 973 720 605 637 490 683 531 0
97
31 0 744 0 0 491 0 511 389
32 931 618 497 663 543 611 0 0
33 909 0 561 0 0 0 0 377
34 926 605 674 0 540 0 449 0
35 996 721 0 628 0 0 0 317
36 0 626 458 786 431 685 549 381
37 852 634 0 0 0 0 459 0
38 874 0 477 674 495 0 0 386
39 979 0 658 794 0 694 0 0
40 829 661 519 610 441 643 580 375

The minimum and maximum time unit specifications and time window preference
data for various competing advertisements are given in Table 2. It may be noted from
the table that some of the advertisers’ may not give time window preference in that
case their time window preference is taken as the whole planning horizon. Similarly,
an advertiser mayn’t have restriction on minimum time units.

Table 2: Frequency and Time Window Preference Data

k wk Wk [αk,βk] k wk Wk [αk,βk]
1 7 60 [96,168] 21 8 48 [24,144]
2 11 54 [24,168] 22 10 60 [24,144]
3 10 54 [24,144] 23 9 60 [24,144]
4 8 60 [48,120] 24 11 36 [1,168]
5 12 48 [1,144] 25 15 60 [1,168]
6 11 54 [24,168] 26 12 90 [1,144]
7 13 54 [1,168] 27 10 42 [1,144]
8 6 54 [1,96] 28 9 60 [24,168]
9 11 54 [1,120] 29 11 60 [24,144]
 10 10 48 [1,120] 30 8 60 [24,120]
Retail Marketing in
India: Trends and
11 8 42 [72,168] 31 10 54 [1,120]
Future Insights
12 9 54 [48,168] 32 7 60 [72,168]
13 13 60 [1,168] 33 15 48 [1,168]
14 17 54 [1,168] 34 10 42 [24,144]
15 12 90 [24,144] 35 8 48 [1,144]
98 16 9 48 [1,96] 36 10 90 [24,120]
17 10 54 [48,168] 37 8 30 [24,144]
18 8 36 [24,144] 38 10 36 [1,168]
19 7 54 [24,168] 39 9 48 [24,144]
20 10 66 [1,168] 40 14 54 [1,168]

4.2 Results and Discussions

The proposed model is solved with data described above using branch-and-bound
zero-one linear programming module in LINGO 11.0 on a Intel(R) Core(TM)
i5-4210U CPU @1.70GHz, 8 GB RAM system. Table 3 shows the results of
advertisement scheduling for the first day. The advertisement placement schedule for
the rest of the six days is shown in Appendix A in Figures 1 and 2.

Table 3: Optimal Advertisement Schedule for First Day

Time Webpage 1 Webpage 2 Webpage 3
unit Slot 1 Slot 2 Slot 3 Slot 1 Slot 2 Slot 1 Slot 2 Slot 3
1 A35 A16 A26 A10 A27 A25 A9 A31
2 A35 A24 A7 A10 A27 A25 A9 A14
3 A35 A10 A7 A10 A27 A25 A40 A14
4 A35 A16 A26 A10 A27 A25 A9 A31
5 A35 A16 A26 A10 A27 A25 A40 A31
6 A35 A16 A7 A10 A27 A25 A9 A31
7 A35 A10 A26 A10 A27 A25 A9 A31
8 A35 A16 A26 A10 A27 A25 A9 A14
9 A35 A16 A26 A10 A27 A25 A40 A38
10 A35 A16 A7 A10 A27 A25 A9 A31
11 A35 A10 A13 A10 A27 A25 A9 A31
12 A35 A24 A26 A10 A27 A25 A40 A31
13 A35 A16 A26 A10 A27 A25 A9 A14
14 A35 A16 A7 A10 A27 A25 A7 A38
 Optimal
15 A35 A16 A26 A10 A27 A25 A40 A31 Advertisement
Planning on Web
16 A35 A16 A26 A10 A27 A25 A9 A31 considering Time
Window Concept
17 A35 A10 A26 A10 A27 A25 A9 A31
18 A35 A16 A7 A10 A27 A25 A40 A38
19 A35 A16 A13 A10 A27 A25 A9 A38
20 A35 A16 A26 A10 A27 A25 A9 A31
21 A35 A10 A26 A10 A27 A25 A9 A31 99
22 A35 A16 A13 A10 A27 A25 A40 A31
23 A35 A24 A26 A10 A27 A25 A7 A31
24 A35 A15 A26 A36 A19 A25 A9 A14

The web publisher could obtain revenue of `906,954 following the placement
schedule of advertisement generated by the proposed model. Among the all advertiser
bids, advertisements given by advertiser’s A1, A5, A8, A11, A17, A21, A23, A29, A30,
A32, A33, A37 remains unallocated. The advertisements remaining from the placement
schedule may be considered in the next planning horizon if the advertisers are willing
to wait or otherwise may remain unallocated.

5. Conclusion
A zero-one linear programming model is developed in this study to determine the
optimal placement schedule of advertisement on several interlinked webpages of a
web portal over a planning horizon. The model optimizes the web publisher’s revenue
with efficient utilization of the advertising space such that the various preferences
related to the location, frequency and time window are satisfied. Time window
preference which is very important from the point of view of the advertiser’s was
limitedly addressed in the literature is incorporated in the model formulation. A case
study is discussed to present the model application and establish model validity.
The solution is obtained using branch and bound algorithm implemented using
optimization software LINGO and results provide best possible trade-off meeting
the goals of both the stakeholders. The model can further be extended to include
multiple objectives such that revenue is maximized and the space utilized by the
advertisements in minimized. The revenue function may also include the penalty
cost publisher may need to pay to the advertisers if their advertisements remain
unscheduled in the planning period. 

References
Adler, M., Gibbons, P.B. and Matias, Y. (2002). “Scheduling space-sharing for internet
advertising”, Journal of Scheduling, 5(2):103–19.
Andrea (2015). The Three Types of Banner Ads You Should Know About. https://
www.20dollarbanners.com/resources /the-three-types-of-banner-ads-you-should-
know-about. Accessed on 13th January 2016.
Boskamp, V., Knoops, A., Frasincar, F. and Gabor, A. (2011). “Maximizing revenue
with allocation of multiple advertisements on a Web banner”, Computers &
Operations Research, 38(10):1412–24.
 Bollapragada, S., Bussieck, M.R. and Mallik, S. (2004). “Scheduling commercial
Retail Marketing in
videotapes in broadcast television”, Operations Research, 52(5):679–89.
India: Trends and Dawande, M., Kumar, S. and Sriskandarajah, C. (2003). “Performance bounds of
Future Insights algorithms for scheduling advertisements on a web page”, Journal of Scheduling,
6(4):373–94.
Euromonitor (2016). http://www.euromonitor.com/india. Accessed on 25th January
2016.
Ghassemi Tari, F. and Alaei, R. (2013). “Scheduling TV commercials using genetic
algorithms”, International Journal of Production Research, 51(16):4921–29.
100 Gupta, A., Manik, P., Aggarwal, S. and Jha, P.C. (2011). “Optimal advertisement
planning on online news media”, in Handa, S.S., Shankar, U. and Chakraborty A.K.
(Eds.), Proceedings of International Congress on Productivity, Quality, Reliability,
Optimization and Modelling, New Delhi: Allied Publishers Pvt. Ltd., 2:963–78.
Gupta, A., Aggarwal, S., Kaul, A. and Jha, P.C. (in press). “Optimal placement of
advertisements on a pixelated web banner”, Journal of Information and Optimization
Science.
Gregory, J. (2015). The Internet of Things: Revolutionizing the Retail Industry.
https://www.accenture.com/_acnmedia/Accenture/Conversion-Assets/DotCom/
Documents/Global/PDF/Dualpub_14/Accenture-The-Internet-Of-Things.pdf.
Accessed on 28th January 2016.
IBEF (2016). http://www.ibef.org/industry/advertising-marketing-india.aspx. Accessed
on 25th January 2016.
Knoops, A., Boskamp, V., Wojciechowski, A. and Frasincar, F. (2009). Single pattern
generating heuristics for pixel advertisements. Springer:Berlin Heidelberg, 415–28.
Kumar, S., Dawande, M. and Mookerjee, V.S. (2007). “Optimal scheduling and
placement of internet banner advertisements”, Knowledge and Data Engineering,
IEEE Transactions on, 19(11):1571–84.
Kumar, S., Jacob, V.S. and Sriskandarajah, C. (2006). “Scheduling advertisements on
a web page to maximize revenue”, European Journal of Operational Research,
173(3):1067–89.
Kumar, C., Norris, J.B. and Sun, Y. (2009). “Location and time do matter: A long tail
study of website requests”, Decision Support Systems, 47(4):500–507.
Lu, Y.T., Lin, B.M. and Fang, K.T. (2009). “Scheduling of Banner Advertisements
subject to Time Windows”, Proceedings of 41st International Conference on
Computers and Industrial Engineering.
McKinsey and Company (2015). Global Media Report. https://www.mckinsey.com/.../
media/McKinsey/.../Media%20and%20Entertainment/. Accessed on 20th January
2016.
Mihiotis, A. and Tsakiris, I. (2004). “A mathematical programming study of advertising
allocation problem”, Applied Mathematics and Computation, 148(2):373–79.
Truong, Y., McColl, R. and Kitchen, P. (2010). “Practitioners’ perceptions of advertising
strategies for digital media”, International Journal of Advertising, 29(5):709–25.
 Appendix A Optimal
Advertisement
Planning on Web
Webpage 1 Webpage 2 Webpage 3 Webpage 1 Webpage 2 Webpage 3
Time unit Time unit considering Time
Slot 1 Slot 2 Slot 3 Slot 1 Slot 2 Slot 1 Slot 2 Slot 3 Slot 1 Slot 2 Slot 3 Slot 1 Slot 2 Slot 1 Slot 2 Slot 3
Window Concept
25 A35 A10 A26 A22 A34 A28 A6 A38 61 A2 A16 A26 A36 A4 A28 A9 A14
26 A2 A15 A7 A36 A34 A18 A6 A31 62 A39 A15 A13 A22 A4 A28 A6 A31
27 A19 A16 A26 A36 A34 A25 A40 A31 63 A19 A16 A26 A36 A4 A25 A40 A12
28 A2 A16 A13 A22 A6 A18 A6 A31 64 A39 A16 A7 A36 A4 A18 A9 A38
29 A35 A15 A7 A36 A34 A28 A40 A14 65 A2 A24 A26 A22 A4 A28 A9 A12
30 A19 A16 A26 A36 A19 A22 A6 A38 66 A19 A10 A26 A36 A4 A18 A6 A31 101
31 A39 A10 A26 A36 A34 A28 A9 A31 67 A2 A15 A13 A36 A4 A25 A40 A14
32 A2 A16 A26 A22 A34 A18 A9 A31 68 A35 A15 A26 A22 A4 A28 A9 A31

33 A39 A15 A7 A36 A34 A25 A9 A31 69 A35 A16 A26 A36 A3 A22 A7 A12
34 A39 A16 A26 A36 A34 A28 A6 A14 70 A39 A16 A13 A36 A4 A18 A40 A31
35 A2 A16 A26 A22 A19 A25 A40 A38 71 A2 A24 A7 A22 A4 A28 A6 A12
36 A39 A24 A13 A36 A34 A18 A9 A31 72 A39 A15 A26 A36 A4 A36 A9 A38
37 A19 A10 A7 A36 A34 A22 A9 A31 73 A39 A10 A26 A36 A34 A25 A6 A14
38 A35 A15 A26 A22 A34 A18 A40 A31 74 A39 A16 A26 A36 A4 A18 A40 A12
39 A2 A16 A26 A36 A34 A28 A6 A38 75 A2 A15 A7 A22 A4 A25 A9 A31
40 A35 A16 A26 A36 A19 A28 A6 A38 76 A19 A16 A26 A36 A4 A18 A9 A12
41 A39 A15 A7 A36 A34 A25 A40 A31 77 A35 A16 A26 A36 A19 A28 A6 A38
42 A39 A16 A26 A22 A34 A18 A7 A31 78 A2 A16 A13 A22 A4 A28 A40 A31
43 A19 A15 A26 A36 A34 A25 A9 A31 79 A39 A10 A7 A36 A4 A25 A9 A12
44 A2 A10 A13 A36 A34 A18 A9 A14 80 A39 A15 A26 A36 A4 A36 A9 A38
45 A2 A16 A13 A22 A19 A28 A6 A38 81 A35 A15 A26 A22 A4 A18 A40 A31
46 A35 A15 A26 A36 A34 A28 A40 A31 82 A39 A10 A26 A36 A4 A28 A6 A12
47 A39 A16 A26 A36 A34 A25 A9 A31 83 A2 A16 A7 A36 A34 A25 A6 A31
48 A39 A16 A7 A22 A4 A18 A9 A38 84 A39 A15 A26 A36 A4 A28 A9 A14
49 A2 A15 A26 A36 A34 A18 A6 A38 85 A19 A16 A26 A22 A4 A28 A40 A31
50 A39 A10 A26 A36 A34 A22 A40 A14 86 A35 A16 A7 A36 A4 A18 A9 A12
51 A35 A16 A26 A36 A4 A28 A6 A12 87 A2 A16 A26 A36 A4 A28 A9 A38
52 A39 A24 A7 A22 A6 A28 A9 A31 88 A39 A15 A13 A22 A4 A25 A6 A12
53 A19 A16 A26 A36 A4 A25 A9 A38 89 A2 A16 A26 A36 A4 A28 A40 A31
54 A2 A15 A13 A36 A3 A18 A9 A31 90 A35 A15 A7 A36 A4 A18 A9 A14

55 A35 A15 A26 A22 A4 A28 A40 A12 91 A39 A16 A26 A22 A6 A36 A7 A31
56 A39 A16 A7 A36 A4 A25 A6 A31 92 A19 A15 A26 A36 A4 A18 A6 A38
57 A2 A10 A26 A36 A4 A28 A9 A12 93 A39 A16 A26 A36 A4 A28 A40 A31
58 A39 A15 A26 A22 A19 A18 A7 A38 94 A2 A10 A13 A36 A4 A25 A9 A12
59 A39 A16 A26 A36 A4 A25 A40 A12 95 A35 A15 A26 A22 A19 A22 A9 A12
60 A35 A10 A7 A36 A34 A18 A6 A31 96 A39 A16 A13 A36 A4 A18 A9 A31

Figure 1: Optimal Advertisement Schedule for Day 2-4

 Webpage 1 Webpage 2 Webpage 3 Webpage 1 Webpage 2 Webpage 3
Time unit Time unit
Slot 1 Slot 2 Slot 3 Slot 1 Slot 2 Slot 1 Slot 2 Slot 3 Slot 1 Slot 2 Slot 3 Slot 1 Slot 2 Slot 1 Slot 2 Slot 3
Retail Marketing in
97 A35 A15 A26 A36 A4 A28 A6 A14 133 A35 A15 A26 A22 A34 A25 A40 A38
India: Trends and
Future Insights 98 A39 A15 A7 A22 A4 A18 A40 A38 134 A2 A15 A13 A22 A19 A18 A40 A12
99 A2 A10 A26 A36 A4 A36 A6 A31 135 A39 A15 A26 A22 A34 A28 A6 A38
100 A2 A15 A26 A36 A4 A25 A9 A12 136 A39 A15 A26 A22 A34 A28 A40 A12
101 A19 A10 A26 A22 A4 A22 A9 A12 137 A19 A15 A26 A22 A34 A28 A6 A14
102 A39 A15 A7 A36 A4 A18 A40 A31 138 A2 A15 A7 A22 A34 A18 A6 A12
103 A39 A15 A26 A36 A4 A25 A6 A38 139 A35 A15 A26 A22 A19 A25 A40 A12
102 104 A2 A15 A13 A22 A4 A28 A40 A12 140 A39 A15 A26 A22 A34 A28 A6 A38
105 A35 A10 A26 A36 A4 A28 A9 A14 141 A39 A15 A13 A22 A34 A25 A7 A12
106 A39 A15 A7 A36 A4 A18 A9 A12 142 A39 A24 A7 A22 A34 A28 A40 A14
107 A39 A24 A26 A36 A4 A18 A7 A31 143 A2 A15 A26 A22 A34 A18 A6 A12
108 A39 A10 A26 A22 A4 A25 A6 A12 144 A39 A15 A26 A22 A34 A28 A40 A12
109 A2 A15 A26 A36 A4 A28 A40 A31 145 A2 A24 A13 A20 A19 A28 A6 A38
110 A35 A15 A7 A36 A3 A28 A6 A12 146 A2 A24 A7 A20 A19 A28 A40 A12
111 A19 A15 A26 A22 A4 A25 A9 A38 147 A2 A24 A13 A20 A19 A25 A6 A14
112 A2 A10 A26 A36 A4 A18 A9 A31 148 A2 A24 A7 A20 A19 A28 A40 A12
113 A39 A15 A13 A36 A4 A18 A40 A14 149 A19 A24 A13 A20 A19 A28 A40 A38
114 A35 A10 A7 A22 A4 A25 A6 A31 150 A2 A24 A7 A20 A19 A25 A6 A12
115 A39 A15 A26 A36 A4 A28 A9 A38 151 A2 A24 A13 A20 A19 A28 A40 A14
116 A2 A24 A26 A36 A4 A28 A9 A31 152 A2 A24 A7 A20 A19 A28 A6 A12
117 A19 A15 A26 A22 A4 A28 A40 A12 153 A2 A24 A13 A20 A19 A25 A6 A38
118 A2 A10 A13 A36 A4 A36 A9 A12 154 A2 A24 A7 A20 A19 A28 A40 A12
119 A35 A10 A26 A36 A4 A18 A6 A31 155 A2 A24 A13 A20 A19 A28 A6 A12
120 A39 A24 A26 A36 A4 A18 A9 A12 156 A2 A24 A7 A20 A19 A25 A7 A12
121 A39 A15 A13 A22 A34 A25 A6 A38 157 A19 A24 A13 A20 A19 A28 A40 A38
122 A2 A15 A7 A22 A34 A25 A40 A12 158 A2 A24 A7 A20 A19 A28 A6 A14
123 A39 A15 A26 A22 A19 A28 A6 A38 159 A2 A24 A13 A20 A19 A25 A40 A12
124 A35 A15 A26 A22 A19 A28 A40 A12 160 A2 A24 A7 A20 A19 A28 A6 A12
125 A39 A15 A26 A22 A34 A18 A6 A14 161 A2 A24 A13 A20 A19 A28 A40 A38
126 A2 A15 A7 A22 A34 A28 A7 A12 162 A2 A24 A7 A20 A19 A25 A6 A12
127 A19 A15 A26 A22 A34 A25 A40 A12 163 A2 A24 A13 A20 A19 A28 A40 A12
128 A35 A15 A26 A22 A34 A18 A6 A38 164 A19 A24 A7 A20 A19 A28 A40 A12
129 A2 A15 A26 A22 A19 A22 A40 A12 165 A2 A24 A13 A20 A6 A25 A6 A38
130 A39 A15 A7 A22 A34 A28 A6 A14 166 A2 A24 A7 A20 A19 A28 A40 A12
131 A39 A24 A13 A22 A34 A28 A40 A12 167 A2 A24 A13 A20 A19 A28 A6 A12
132 A39 A15 A26 A22 A34 A18 A6 A12 168 A2 A24 A7 A20 A19 A25 A40 A12

Figure 2: Optimal Advertisement Schedule for Day 5-7

 An Interpretive Structural Modelling
Approach for Analysing the Enablers
towards Adoption of Initiatives for a
Sustainable Supply Chain
Jyoti Dhingra Darbari1*, Vernika Agarwal2
1,2
Research Scholar, Department of Operational Research, University of Delhi, Delhi

Abstract
Sustainable growth has emerged as a primary concern for the electronics industry in
the last few years, making supply chain members rethink about their ultimate goals
and redesign their strategies. This paper focuses on developing a framework which
can act as a roadmap for Indian retailers especially in the electronic sector looking
for possibilities of inclusion of sustainable initiatives into their corporate goals while
complying with global sustainability standards. Though Indian retailers face many
challenges in emulating global sustainability practices, but recognizing the broad
spectrum of enablers of sustainability within their own landscape can strengthen
their position in ensuring its effective implementation and in building a trustworthy
relationship with manufacturers, suppliers and consumers. Identification and analysis
of the enablers by researchers can help practitioners ease the process of adoption of
these practices and increase its efficacy. The purpose of the study is to provide an
analysis of 11 enablers identified from an exhaustive literature survey which would
help Indian retailers in identifying key dominant areas for improving sustainability of
their supply chain. To achieve this, Interpretive Structural Modelling (ISM) technique
is utilized to extract a structural hierarchy for understanding the association between
the suggested enablers and their level of impact on the environment and society.
The ISM approach is utilized for identification of key enablers which can guide the
electronic retailers to focus on the most imperative enablers on their journey towards
sustainability.

Keywords
ISM, Electronic Retailers, Sustainability, Enablers

1. Introduction
Depletion in Earth’s finite reserves because of rising global resource consumption has
led to severe repercussions on the quality of human life. The retail industry which
predominantly relies on the energies drawn from natural resources is under tremendous
burden to transform its supply chain practices so as to improve its resource efficiency.
The electronics retail industry plays a significant role in providing people with basic Retail Marketing in
India: Trends and
amenities to the most technologically advanced products (Mohamed and Daniel, 2012).
Future Insights
pp. 103–116
* Corresponding Author: Jyoti Dhingra Darbari (jydbr@hotmail.com) © Ambedkar University
 It is also a provider of livelihood for a large population of the country (Accha, 2013).
Retail Marketing in
The scarcity of resources coupled with increased consumer demand has severely
India: Trends and affected their business because of consequent rise in costs and supply chain risks.
Future Insights The pressure has manifested in global retailers focusing on energy conservation,
waste and emission reduction, minimizing wastage in packaging and promoting
environmentally friendly products (McGoldrick, 2002). According to the United
Nations Environment Programme Finance Initiative, sustainable development can
be attained by constructive interaction between economic stability, societal growth and
environmental preservation so as to take care of the welfare of the present and future
104 generations.
In the context of Indian retailers, there is an emergent need to reconsider the
vision of sustainability and undertake sustainability measures within an organized
retail sector. The Indian retail market is ranked among the top 10 largest in the world
and has huge potential for future growth. With significant forthcoming investments
from global retailers in the pipeline, the Indian retail sector is positioned for major
expansion and economic growth. This has also necessitated the adoption of business
strategies by Indian retailers which are aimed at long-term environmental and social
benefits in addition to just economic paybacks. According to the report of Prasad et al.
(2014) “Fast-growing middle classes in developing countries such as India and China
are driving demand for more transportation, energy, food and consumer goods—
everything from tablet computers to cars... with so many more chasing the “good
life”, there is certain to be greater pressure on already stressed natural resources and
ecosystems”. The Retailers Association of India-Retail and Consumer Industry report
identified climate change, waste and supply chain as three major sustainability issues
the retailers are confronted with.
Even though the importance of sustainability is recognized in the Indian retail
sector but unlike the global retailers, sustainability practices are not essentially the core
considerations of Indian retailers. However, they do acknowledge the gap between
their understanding and willingness to promote sustainability. Manufacturers are
obligated under law to be committed towards sustainable growth, therefore they can be
mutually aligned with the retailers to work towards sustainability (Darbari et al., 2015).
Though few consumers are also now more proactively involved in understanding the
impact of their buying decisions on the environment and the society, but majority
of consumers in India are not very receptive towards taking the economic burden
of sustainability initiatives as it leads to increased prices of products and services.
Retailers provide the crucial link between the manufacturers and the consumers and
therefore their influencing power can be positively exploited to orient customers
towards sustainability awareness (Ramanan and Ramanakumar, 2014). At a strategic
level, the retailers can think of innovative approaches for integrating the concept
of sustainability into their business model so as to balance economic growth along
with social and environmental development. Though in an effort to bridge the gap,
sincere efforts are being put by major Indian retailers, nevertheless there are various
impediments faced by retailers such as investor disconcert, increased expenses,
competitive risks, customer engagement and stakeholder disinterest. In a recent study
by Ramanan and Ramanakumar (2014), the challenges for achieving sustainability
in India’s retail have been highlighted as: variable demands across various regions in
the country, cost efficiency to cater to lower prices as desired by Indian consumers,
absence of strong infrastructure system to deliver to consumers in remote areas, supply
chain expertize and manpower availability, presence of multiple intermediaries, An Interpretive
Structural Modelling
and integration with suppliers. The scope and scale of influence of sustainable Approach for
operations undertaken across their supply chain can be achieved by actively involving Analysing the
manufacturers, consumers, employees, investors, NGO’s and the government. Seeking Enablers towards
Adoption of
the support of various stakeholders is undoubtedly very important for a significant Initiatives for a
push towards sustainability (Seuring and Müller, 2008). Sustainable Supply
Retailers can adopt sustainability initiatives because of various factors such as Chain
reducing costs, enhancing their brand image, employee retention, pressure from
legal authorities and social organizations, consumer relationship, long-term profits
(Mathiyazhagan et al., 2013; Luthra et al., 2014). The primary analysis of these factors 105
is useful to understand their levels of importance and accordingly the retailers can
focus on the most influential factors. The purpose of the study is to firstly identify the
factors (enablers) that drive Indian electronics retailers towards adoption of sustainable
practices and secondly to analyse the enablers for deriving the key dominant areas for
improving sustainability. The Interpretive Structural Modelling (ISM) methodology is
employed to derive the dominant enablers for implementing sustainability initiatives in
the Indian retail sector. From the extensive literature surveyed, it has been observed that
many researchers have analyzed the enablers for achieving a sustainable supply chain
but no research has addressed the study from the retailer’s perspective. The present
research covers this gap by analyzing the enablers, seeking their interrelationships and
recognizing the leading enablers which can strengthen the retailers in implementing a
sustainable supply chain.
The rest of the paper discusses the list of identified enablers in Section 2, broadly
describes the ISM methodology adopted in Section 3, and concludes the paper while
deliberating on the findings in Section 4.

2. Enablers for adoption of sustainability initiatives

To analyze the enablers for adopting sustainability initiatives by retailers, enablers are
identified from (1) the Ipsos M. (2007) which is based on an online study and in-depth
interviews with experts in the area of retail and sustainability, (2) the study on the
Nordic retail trade (http://eng.mst.dk/media/mst/68977/barriers.pdf, http://eng.mst.dk/
media/mst/68978/drivers.pdf) which identifies the barriers and enablers from existing
literature about European retailers and interaction with Nordic retailers and (3) Prasad
et al. (2014) which provides an insight into enablers for environmental sustainability in
the Indian retail scenario. A total of 11 enablers were shortlisted (as shown in Table 1)
from a comprehensive list obtained from the above mentioned literature review so as to
encompass sustainability in the Indian retail scenario.

Table 1: Enablers for Sustainability

Enabler
E1 Brand trust and reputation
E2 Reduction of cost
E3 Management of scarce natural resources use
E4 Regulatory pressure
E5 Growing customer awareness/demand
 E6 Investor/stakeholder support
Retail Marketing in
India: Trends and
E7 Employee engagement/concerns
Future Insights E8 Personal motivation
E9 Opportunity to enter green market
E10 CSR
E11 Market Competence
106
3. Interpretive Structural Modelling (ISM) Approach
Warfield (1974) proposed ISM methodology for the purpose of defining systematic
model from complicated models which are often unclear in nature by decomposing
such problems into several sub systems. In this approach, the contextual relationships
are developed for the subsystems using interactions with the decision makers. A
structural hierarchy is formed using the order and direction between the sub systems.
ISM has been used for modeling of complex problems in the field of green supply chain
management (Diabat and Govindan, 2011; Mathiyazhagan et al., 2013; Govindan et
al., 2013; Dubey et al., 2015), packaging industry (Ravi, 2015) and sustainable supply
chain (Al Zaabi et al., 2013; Jia et al., 2015). The methodology can be summarized by
the steps mentioned below:
Step 1: Identification of enablers
Step 2: A structural self-interaction matrix (SSIM) is constructed such that its (i,j)th
element represents the pairwise relationship between the enablers Ei and
Ej.
Step 3: The reachability from SSIM is derived in two stages: first, a binary matrix
is obtained having 0 and 1 accordingly if the enabler “is being led by” or
“is leading to’’; second, transitivities are incorporated in the binary matrix.
Step 4: Each enabler in the reachability matrix is assigned to a level which is
determined by partitioning the matrix based on level of impact of the
enablers.
Step 6: The reachability matrix is rearranged to generate the conical matrix by
clustering enablers appearing at the same level.
Step 6: Directed graph is drawn from the conical matrix based on the contextual
relationships with nodes representing enablers and the transitivities are
removed.
Step 7: ISM model is derived from the diagraph.

3.1 Structural Self-Interaction Matrix (SSIM)

Each entry mij of the SSIM matrix M = (mij ) gives the direction among the enablers
Ei and Ej and is represented by using one of the four symbols: V, A, X and O which
are chosen as per the following relation between the enablers: (the sign represents
“influences’’)
“V’’ if Ei → Ej;
“A’’ if Ej → Ei;
“X” if Ei → Ej and Ej → Ei;
“O’’ if neither Ei → Ej nor Ej → Ei;
 The SSIM for the enablers of sustainable retailing is given in Table 2. Table 2 An Interpretive
Structural Modelling
reveals that “Brand trust and reputation’’ (E1) will help to improve “Growing customer Approach for
awareness/demand’’ (E5), so m15 is represented by “V’’. For enablers “Reduction of Analysing the
cost’’ (E2) and “Personal motivation’’ (E8), E8 will improve E2 so m28 is represented as Enablers towards
Adoption of
“A’’. “Regulatory pressure’’ (E4) and “Market competence’’ (E11) are unrelated so “O’’ Initiatives for a
is given for m4 11. Sustainable Supply
Chain
Table 2: SSIM
E11 E10 E9 E8 E7 E6 E5 E4 E3 E2
107
E1 O A O O A O V O A O
E2 V O O A O O V O O
E3 O V O O O A O A
E4 O V O O O V O
E5 O O V O O O
E6 O V V V V
E7 O X O A
E8 O O V
E9 O A
E10 V

3.2 Reachability matrix (RM)

Initial RM represented as R1 = (rij1) is build from M = (mij) in two steps. Firstly, a binary
matrix is made using SSIM, which is known as the initial RM. This transformation
is made by substituting 1 or 0 for the four symbols used according to the rules given
below:
1. The rij element in matrix R1 is taken as 1 if the corresponding element in matrix
M is “V’’ and then rji element takes value 0.
2. The rij element in matrix R1 is taken as 0 if the corresponding element in matrix
M is “A’’ and then rji element takes value 1.
3. The rij element in matrix R1 is taken as 1 if the corresponding element in matrix
M is “X’’ and then rji element also takes value 1.
4. The rij element in matrix R1 becomes 0 if the corresponding element in matrix
M is “O’’ and then rji element also takes value 0.
5. The rii element in matrix R1 is taken as 1.
The initial RM so obtained is shown in Table 3.

Table 3: Initial RM
E1 E2 E3 E4 E5 E6 E7 E8 E9 E10 E11
E1 1 0 0 0 1 0 0 0 0 0 0
E2 0 1 0 0 1 0 0 0 0 0 1
E3 1 0 1 0 0 0 0 0 0 1 0
E4 0 0 1 1 0 1 0 0 0 1 0
 E5 0 0 0 0 1 0 0 0 1 0 0
Retail Marketing in
India: Trends and E6 0 0 1 0 0 1 1 1 1 1 0
Future Insights
E7 1 0 0 0 0 0 1 0 0 1 0
E8 0 1 0 0 0 0 1 1 1 0 0
E9 0 0 0 0 0 0 0 0 1 0 0
E10 1 0 0 0 0 0 1 0 1 1 1
108
E11 0 0 0 0 0 0 0 0 0 0 1

Next, we incorporate transitivities to attain the final RM denoted by R2 = (rij2) as

illustrated in Table 4.

Table 4: Final RM
Driver
E1 E2 E3 E4 E5 E6 E7 E8 E9 E10 E11
Power
E1 1 0 0 0 1 0 0 0 1 0 0 3
E2 0 1 0 0 1 0 0 0 1 0 1 4
E3 1 0 1 0 1 0 1 0 1 1 1 7
E4 0 0 1 1 1 1 1 1 1 1 1 9
E5 0 0 0 0 1 0 0 0 1 0 0 2
E6 1 1 1 0 1 1 1 1 1 1 1 10
E7 1 0 0 0 1 0 1 0 1 1 1 6
E8 1 1 0 0 1 1 1 1 1 0 1 8
E9 0 0 0 0 0 0 0 0 1 0 0 1
E10 1 0 0 0 1 0 1 0 1 1 1 6
E11 0 0 0 0 0 0 0 0 0 0 1 1
Dependence
6 3 3 1 9 3 6 3 10 5 8
Power

Table 4 also highlights for each enabler, its driving and dependence power which
depicts the number of enablers “it leads to” and “is led by”, respectively.

3.3 Level Partitions

To derive the top (first) level of the hierarchical structure, for each enabler of
sustainability in retail sector its reachability and antecedent sets (RS and AS) are
derived from the final RM (R2).
For ith enabler, the column represented by RS as shown in Table 5 consists of
enablers it influences and the column AS consists of enablers influencing it (Warfield,
1974). Consequently, the intersection of the two columns are obtained as represented
by column RS∩AS. Enablers with RS = RS∩AS are assigned Level I, for they An Interpretive
Structural Modelling
cannot enable any other above their own. Table 5 shows the level partitions in which Approach for
“Opportunity to enter green market (E9)” and “Market competence (E11)” are found Analysing the
at Level I. Enablers towards
Adoption of
Initiatives for a
Table 5: Iteration 1 Sustainable Supply
Chain
RS1 AS1 RS1∩ AS1 Level
E1 1,5, 9 1,3,6,7,8,10 1
E2 109
2,5,9 2,6,8 2
E3 1,3,5,7,9,10 3,4,6 3
E4 4,3,5,6,7,8,9,10 4 4
E5 5,9 1,2,3,4,5,6,7,8,10 5
E6 1,2,3,5,6,7,8,9,10 4,6,8 6,8
E7 1,5,7,9,10 3,4,6,7,8,10 7,10
E8 1,2,5,6,7,8,9,10 4,6,8 6,8
E9 9 9 9 I
E10 1,5,7,9,10 3,4,6,7,10 7,10
E11 11 11 11 I

To proceed further, remaining enablers are considered (E9 and E11 excluded) and
their RS, AS and RS∩AS are determined. Table 6 depicts that the second iteration
leads to assignment of “Growing customer awareness/demand (E5)” in the second
level.

Table 6: Iteration 2
RS2 AS2 RS2∩ AS2 Level
E1 1,5 1,3,6,7,8,10 1
E2 2,5 2,6,8 2
E3 1,3,5,7,10 3,4,6 3
E4 4,3,5,6,7,8,10 4 4
E5 5 1,2,3,4,5,6,7,8,10 5 II
E6 1,2,3,5,6,7,8,10 4,6,8 6,8
E7 1,5,7,10 3,4,6,7,8,10 7,10
E8 1,2,5,6,7,8,10 4,6,8 6,8
E10 1,5,7,10 3,4,6,7,10 7,10

Enablers chosen for the first and second level are henceforth not considered for
the determining the third level. The procedure is repeated for the remaining eight
 enablers. “Brand trust and reputation” (E1) and “Reduction of Cost” (E2) get assigned
Retail Marketing in
in the third level as represented by Table 7.
India: Trends and
Future Insights Table 7: Iteration 3
RS 3
AS3 RS3∩ AS3 Level
E1 1 1,3,6,7,8,10 1 III
E2 2 2,6,8 2 III
E3 1,3,7,10 3,4,6 3
110
E4 4,3,6,7,8,10 4 4
E6 6,1,2,3,7,8,10 4,6,8 6,8
E7 7,1,10 3,4,6,7,8,10 7,10
E8 1,2,6,7,8,10 4,6,8 6,8
E10 1,7,10 3,4,6,7,10 7,10

Proceeding like this, the iterations continue till each enabler is assigned a level.
The 11 enablers are partitioned into seven levels in six iterations. Tables 8–10 show
the results of iterations 4–6.

Table 8: Iteration 4
RS4 AS4 RS4∩ AS4 Level
E3 3,7,10 3,4,6 3
E4 4,3,6,7,8,10 4 4
E6 6,3,7,8,10 4,6,8 6,8
E7 7,10 3,4,6,7,8,10 7,10 IV
E8 6,7,8,10 4,6,8 6,8
E10 7,10 3,4,6,7,10 7,10 IV

Table 9: Iteration 5
RS5 AS5 RS5∩ AS5 Level
E3 3 3,4,6 3 V
E4 4,3,6,8 4 4
E6 6,3,8 4,6,8 6,8
E8 6,8 4,6,8 6,8 V

Table 10: Iteration 6

RS6 AS6 RS6∩ AS6 Level
E4 4 4 4 VII
E6 - 4 - VI
 “Employee engagement/concerns” (E7) and “CSR” (E10) are assigned Level An Interpretive
Structural Modelling
IV, “Management of scarce natural resources use” (E3) and “Personal motivation” Approach for
(E8) are in Level V, “Investor/stakeholder support” (E6) at Level VI and finally Analysing the
“Regulatory Pressure” (E4) is positioned at the last level. These levels highlight the Enablers towards
Adoption of
hierarchy of the ISM model, help in identifying the influencing behaviour of each Initiatives for a
enabler and consequently aid in positioning of the nodes of the digraph. Sustainable Supply
Chain

3.4 Conical Matrix

The reachability matrix is rearranged to generate the Conical Matrix (CM) by clustering 111
enablers appearing at the same level as shown in Table 11. The enablers are rearranged
in order of the levels with enablers in Level I appearing at the top and enabler in Level
VII appearing in the last.

Table 11: Conical Form of RM

E9 E11 E5 E1 E2 E7 E10 E3 E8 E6 E4
E9 1 0 0 0 0 0 0 0 0 0 0
E11 1 1 0 0 0 0 0 0 0 0 0
E5 1 0 1 0 0 0 0 0 0 0 0
E1 1 0 1 1 0 0 0 0 0 0 0
E2 1 1 1 0 1 0 0 0 0 0 0
E7 1 1 1 1 0 1 1 0 0 0 0
E10 1 1 1 1 0 1 1 0 0 0 0
E3 1 1 1 1 0 1 1 1 0 0 0
E8 1 1 1 1 1 1 0 0 1 1 0
E6 1 1 1 1 1 1 1 1 1 1 0
E4 1 1 1 0 0 1 1 1 1 1 1

The transitivities incorporated earlier in the RM for generating the levels are now
removed and rearranged in order of the levels to derive the final conical matrix given
in Table 12. A diagraph is obtained using the final conical form which represents the
enablers and the relationships in terms of nodes and edges.

Table12: Conical form of RM without transtivities

E9 E11 E5 E1 E2 E7 E10 E3 E8 E6 E4
E9 1 0 0 0 0 0 0 0 0 0 0
E11 1 1 0 0 0 0 0 0 0 0 0
E5 1 0 1 0 0 0 0 0 0 0 0
E1 0 0 1 1 0 0 0 0 0 0 0
 E2 0 1 1 0 1 0 0 0 0 0 0
Retail Marketing in
India: Trends and
E7 0 0 0 1 0 1 1 0 0 0 0
Future Insights E10 1 1 0 1 0 1 1 0 0 0 0
E3 0 0 0 1 0 0 1 1 0 0 0
E8 1 0 0 0 1 1 0 0 1 0 0
E6 1 0 0 0 0 1 1 1 1 1 0
112 E4 0 0 0 0 0 0 1 1 0 1 1

Market Opportunity to enter

Competence (E11) green market (E9)

Growing customer
awareness/demand (E5)

Reduction of Brand trust and

cost (E2) reputation (E1)

Employee
CSR (E10)
engagement/concerns (E7)

Personal motivation Management scarce

(E3) natural resources (E8)

Investor/stakeholder
support (E6)

Regulatory pressure
(E4)

Figure 1: ISM-based Model

3.5 The Structural Model

The structural model is generated with the aid of the diagraph obtained from the conical
matrix. The diagraph is constructed with the enablers as its nodes and the direction
from node i to j (i→j) representing the relationship “Ei influences Ej”. The next step is
to convert the diagraph into an ISM model with the statements replacing the nodes of
the diagraph as Figure 1 demonstrates.
3.6 MICMAC Analysis An Interpretive
Structural Modelling
MICMAC (Matrice d’Impacts croises-multiplication appliqúe an classment (cross- Approach for
impact matrix multiplication applied to classification)) analysis essentially classifies Analysing the
Enablers towards
the enablers into autonomous, dependent, linkage and independent categories, Adoption of
depending upon their “influencing” ability and “being influenced by” ability (Mandal Initiatives for a
and Deshmukh 1994). Table 4 is utilized for the classification and the 11 enablers are Sustainable Supply
Chain
accordingly positioned in one of the four quadrants as shown in Figure 2. Quadrant I
representing autonomous enablers having low driver and low dependence power, have
least connections with the other enablers. Quadrant II represents the second category
of dependent enablers having low ability to drive/influence other enablers but are 113
driven/influenced by a high number of enablers. The linkage enablers having the
ability to both influence and being influenced by many others are shown in Quadrant
III. Any change in these enablers will affect others and vice versa and therefore they
are termed as “unstable” in nature. The most important is quadrant IV, which include
the independent enablers having high driving but low dependence ability. As they have
the power to influence many others but get affected by very few enablers, therefore
they are termed as the “key enablers”.

Driving E6
10
Power
9 E4
8 E8
7 E3
6 E10 E7
5
4 E2
3 E1
2 E5
1 E11 E9

1 2 3 4 5 6 7 8 9 10
Dependence
Power
Figure 2. Classification of Enablers

4. Discussion and Conclusion

The pressing global demand for preserving the environment and social upliftment has
catalyzed the retail sector towards focusing on business strategies, which resonate
sustainability across their value chain and result in positive ecological, social and
financial benefits. However, in the Indian retail sector, it is challenging to emulate
 global sustainability practices and implement sustainable practices at the national
Retail Marketing in
level. Nonetheless, recognizing the broad spectrum of enablers of sustainability within
India: Trends and their own landscape can strengthen the position of the retailers in ensuring effective
Future Insights implementation of sustainability initiatives. To achieve the purpose, the present
research aims to seek the enablers, study the interrelationships between the enablers
and recognize the leading enablers which can aid the retailers in implementing a
sustainable supply chain. For creating a structural model exhibiting the contextual
relationship of the enablers and understanding the levels of their impact, the ISM
methodology is utilized in the study which has resulted in the following observations/
114 interpretations:
The MICMAC analysis shows that out of the 11 enablers, only “Reduction of Cost”
is autonomous (4,3) and has not much impact on the drive towards sustainability.
Four identified as dependent which are driven highly by others, are Brand trust and
reputation (3,6), Growing customer awareness/demand (2,9), Opportunity to enter
green market (1,10) and Market Competence (1,8). Employee engagement/concerns
(6,6) is identified as the only linkage variable which may unstablize the system. The
rest of the enablers such as CSR (6,5), Management of scarce natural resources use
(7,3), Personal motivation (8,3), Regulatory pressure (9,1) and Investor/stakeholder
support (10,3) form the independent category which must be relied upon significantly
for adopting sustainability initiatives in the retail sector. Many retail sectors are
skeptical towards achievement of sustainability goals but focusing on the above five
key enablers can guide the retail industry in taking action in the right direction for an
effective implementation of the goals.
The pattern of influence between the enablers is demonstrated by the digraph
(Figure 1). The implication resulting from the figure is that in case of Indian
electronic retail scenario, regulatory pressure and investor/stakeholder support are
the most imperative and essential enablers as they appear in the last two levels
of the ISM hierarchy. Sustainability practices within the retail sector must be
promoted by the Indian government through established regulatory bodies. Extra
benefits in the form of financial incentives can be offered to retailers who support
sustainability programmes. This will help in drawing support from the investors
which is necessary for bearing the cost implications. It will also surely lead to
commitment from the stakeholders so that every member of the retail supply chain
works towards the common target of achieving sustainability. On the other hand,
“Market competence” and “Opportunity to enter green market” having appeared
on the top of hierarchy are enablers with least importance/impact. These enablers
can initially be important and encouraging reasons for a retailer to act sustainably
but in order to compete in the global world, larger focus should be on the other
enablers which directly or indirectly influence these. For instance, emphasis on
increasing customer awareness towards green products will lead to expansion of
the green market thereby increasing the opportunities for retailers to enter the green
market. The ISM model obtained in the study therefore presents a practical scenario
to Indian electronic retailers which can help them to prioritize their strategies
better in their course of adopting sustainability practices for enhancing the overall
performance of the supply chain. The conclusions resulting from the findings can
be modified to be applied to realistic situations.
References An Interpretive
Structural Modelling
Accha, M. (2013). FE@CAMPUS MASTERMIND: Response by MahavirAccha to Approach for
question for Jan 7-13. The Indian Express. Analysing the
Enablers towards
Al Zaabi, S., Al Dhaheri, N. and Diabat, A. (2013). “Analysis of interaction between Adoption of
the barriers for the implementation of sustainable supply chain management’’, The Initiatives for a
International Journal of Advanced Manufacturing Technology, 68(1–4):895–905. Sustainable Supply
Chain
Darbari, J.D., Agarwal, V. and Jha, P.C. (2015), “Fuzzy optimization approach to supply
chain distribution network for product value recovery’’, in Proceedings of Fourth
International Conference on Soft Computing for Problem Solving (pp. 491–504),
India: Springer. 115
Diabat, A. and Govindan, K. (2011). “An analysis of the drivers affecting the
implementation of green supply chain management”, Resources, Conservation and
Recycling, 55(6):659–67.
Dubey, R., Gunasekaran, A., Wamba, S.F. and Bag, S. (2015). “Building theory of green
supply chain management using total interpretive structural modeling (TISM)”,
IFAC-Papers On Line 48(3):1688–94.
Govindan, K., Kannan, D., Mathiyazhagan, K., Jabbour, A.B.L.D.S. and Jabbour, C.J.C.
(2013). “Analysing green supply chain management practices in Brazil’s electrical/
electronics industry using interpretive structural modelling”, International Journal
of Environmental Studies 70(4):477–93.
Ipsos, M. (2007). Sustainability Issues in The Retail Sector. Ipsos MORI Reputation
Centre, p. 76.
Jia, P., Diabat, A. and Mathiyazhagan, K. (2015). “Analyzing the SSCM practices in
the mining and mineral industry by ISM approach”, Resources Policy 46:76–85.
Kusuma, B., Prasad, N.D. and Rao, M.S. (2013). “A study on organized retailing and
its challenges and retail customer services”, Innovative Journal of Business and
Management, 2(5):97–102.
Luthra, S., Qadri, M.A., Garg, D. and Haleem, A. (2014). “Identification of critical
success factors to achieve high green supply chain management performances
in Indian automobile industry”, International Journal of Logistics Systems and
Management 1, 18(2):170–99.
Mandal, A. and Deshmukh, S.G. (1994). “Vendor selection using interpretive structural
modeling (ISM)”, International Journal of Operations and Production Management,
14(6):52–59.
Mathiyazhagan, K., Govindan, K., NoorulHaq, A. and Geng, Y. (2013). “An ISM
approach for the barrier analysis in implementing green supply chain management”,
Journal of Cleaner Production, 47:283–97.
McGoldrick, P. (2002). Retail Marketing. Berkshire: McGraw-Hill.
Mohamed, M.E.J.R.I. and Daniel, D.W. (2012). “Analysis of retailers’ communication
approaches in sustainability and social responsibility reports”, International Journal
of Marketing Studies, 4(2):30.
Prasad, B., Tapsall, P. and Simlai, N. (2014). Global Practices in Promoting
Environmental Sustainability: A Roadmap for Indian Retail WWF-India. Accessed
on 19th February 2016.
Ramanan, C.J. and Ramanakumar, K.P.V. (2014). “Sustainability in India’s Retail”,
IOSR Journal of Business and Management (IOSR-JBM), 16(1):118–21.
Ravi, V. (2015). “Analysis of interactions among barriers of eco-efficiency in electronics
packaging industry”, Journal of Cleaner Production, 101:16–25.
 Retailers Association of India-Retail and Consumer Industry Report –Strategic issues
Retail Marketing in
for Retail CEOs – Perspectives on operating in India’s retail sector by PWC.
India: Trends and Seuring, S. and Müller, M. (2008). “From a literature review to a conceptual framework
Future Insights for sustainable supply chain management”, Journal of Cleaner Production,
16(15):1699–1710.
Warfield, J.N. (1974). “Developing interconnection matrices in structural modeling”,
Systems, Man and Cybernetics, IEEE Transactions on, 1:81–87.

116
 A Fuzzy Multi-Criteria Optimization
Model for Allocating SKU and
Suppliers in SC System
Kanika Gandhi1*, Kirit Goyal2, Abhinav Jha3
1
Assistant Professor, Bhavan’s Usha & Lakshmi Mittal Institute of Management,
New Delhi
2,3
Consultant, Gazelle Information Technologies, New Delhi

Abstract
Supply chain stakeholders are increasingly paying attention to the optimal design of
their supply chains because of several reasons like increasing production cost, reducing
product life cycles, shrinking resources, and environmental sustainability. There has
been greater emphasis on environmental concerns whilst designing the supply chains
because of emerging government legislations in this domain and pressure from society.
As a result, supply chain partners need to analyse their operations more critically. This
study proposes a strategic decision-making model considering the operational costs
caused by coordination and optimization of the sustainable supply chain design to satisfy
the demand at retailers. In the study, an integrated supplier selection, procurement,
inventory control and transportation model is discussed that helps in evaluating the
suppliers, determining optimum quantity to procure, choosing transportation vehicle
type along with managing environmental issues, obtaining optimal stock keeping units
(SKU) and safety stock for each product category to fulfil a specified service level
for retailers at minimum cost for the next planning horizon. The model demonstrates
that how demand at retailer drives the full supply chain coordination and selection of
distribution centre. The model has been validated through a case study.

Keywords
Credibility, Fuzzy analytical network process, Travelling salesman models, Stock
keeping units; service level

1. Introduction
Effective supply chains must be flexible and responsive to the changing dynamics in
the market place, in manufacturing and technology, and in consumer expectations. But,
change must be planned and based on today’s demands and tomorrow’s opportunities
and risks (USAID, 2014). Supply chain optimization is a powerful, practical tool that
can improve performance now and position supply chains for the future. The supply
chain performance of any organization is affected by its suppliers’ environmental,
economical and their credibility performance. Selecting green suppliers is a strategic
decision in order to be more competitive in today’s global market. Environmental Retail Marketing in
India: Trends and
Future Insights
pp. 117–129
* Corresponding Author: Kanika Gandhi (gandhi.kanika@gmail.com) © Ambedkar University
 sustainability of a supply chain depends on the purchasing strategy of the supply
Retail Marketing in
chain members. Selecting and evaluating suppliers involves several quantitative and
India: Trends and qualitative criteria. Mostly the literature have focused on cost, quality, lead time, etc.
Future Insights issues but not enough importance have been given to carbon emission, operational cost
for supplier evaluation in forward supply chain management (Shaw et al., 2012). On
the other side, integration of many partners in supply chain network can also help in
optimizing the supply chain performance. In the globalized world, supply chain can be
extremely complex. For example, it may have an intricate network structure involving
an arbitrary number of firms, each firm may have private information about its own
118 cost and demand forecast, and the actions taken by firms may not be observable or
verifiable. Therefore, integration and collaboration of supply chain entities for
common objectives and constraints becomes an important area of research. Specially,
collaboration between retailers and supply chain for a common objective can help in
improving performance in terms of sales, stocks and future demand etc. When retailers
shares the plan with their suppliers, the suppliers are able to manage their supplies in a
better way which helps in reducing the risk of rejection and provides more consistency
to the retailers. Though collaboration between these two important entities is still a
new concept, as many are cautious for sharing sentitive information like demand data
and with competition, paranoia about confidential data getting into the public domain
makes a lot of sense for the retailers.
Supply Chain Management (SCM) and integration are issues which have
encouraged great amount of research in recent years. (Diabat et al. 2009) formulated a
mixed integer programming (MIP) for an organization to design their optimal supply
chain network whilst meeting their carbon cap. Abdallah et al. (2012) analysed the
impact of carbon emissions on supply chain network design and supplier selection
using Life Cycle Assessment approach. Chaabane et al. (2012) considered the impact
of carbon emissions on sustainable closed loop supply chain (CLSC) network by
evaluating the tradeoffs between economic and environmental objectives. Diabat et
al. (2013) considered the issues of facility location problem in CLSC with trading of
carbon emission and procurement cost. Fahimnia et al. (2013) proposed a MIP model
for a CLSC in which impact of carbon emission is measured based on the influence
of forward and reverse supply chain. During the SCM coordination, organizations
select suitable suppliers based on many criteria to offer more competitive products with
lessening internal costs. Each organization has a large number of suppliers and each
supplier has its own product strategy to remain competitive with contrast customer
demands and preferences. Most of these research studies have concentrated on finding
out the best supplier on the basis of many attributes to supply all required products. Multi-
attribute decision making (MADM) is a methodology of finding the most favourable
alternative from the given set of alternatives. Numerous multi-criteria decision-making
methods have been proposed to select suppliers such as Data Envelopment Analysis
(DEA), Analytical Hierarchy Process (AHP), Analytic Network Process (ANP)
etc. Golmohammadi and Mellat-Parast (2012) applied an integrated fuzzy pair-
wise comparison matrix and Grey Relational Analysis (GRA) to develop a supplier
selection model by taking criteria such as price, quality, delivery, transportation cost
and technology. Azadi et al. (2015) proposed a fuzzy DEA model for the evaluation
of efficiency and effectiveness of suppliers in sustainable supply chain management
context. Hashemi et al. (2015) integrated green supplier selection approach with
analytic network process and improved Grey relational analysis. Hussain et al. (2016)
applied an ISM-ANP integrated framework for evaluating alternatives for sustainable A Fuzzy Multi-
Criteria Optimization
supply chain management. Model for Allocating
Transportation is undoubtedly one of the most important issues in the scientific SKU and Suppliers in
logistics because of the generation of high costs. Thus, this issue should be cautiously SC System
considered because it is directly related to the economic development of the nation.
Many researchers have addressed this issue in the literature. Jha et al. (2012) proposed
a model of minimizing transportation cost of a joint inventory location model using
modified adaptive differential evolution algorithm. Jha and Shanker (2013) proposed
single vendor multi-buyer integrated production inventory model with controllable lead
time and service level constraints. Optimal distribution of products from one stage to 119
another is a critical factor to manage environmental concerns like carbon emission.
Travelling salesman problem (TSP) is considered appropriate for the distribution of
products optimally. In TSP, salesmen find the shortest tour in such a way that all retail
stores are visited exactly once to minimize the total cost and carbon emission of the
vehicle. TSP is perhaps the most well-known and broadly studied problem in the area of
combinatorial optimization. A number of researchers have studied the problem of TSP.
Li (2014) proposed to solve a 2-objectives and 3-objectives dynamic multi-objective
TSP using a parallel search system. Luo et al. (2014) proposed a new variant of the
NSGA II algorithm (INSGA-II-MOTSP) for the solution of the multi-objective TSP.
This algorithm used a layer strategy in order to avoid the production of unnecessary
Pareto fronts.
Supply chain optimization problems have extensively been studied during the past
decade. In addition to other problems such as uncertain demands, multi-objective
problems etc., quantity discounts are also studied regarding the case of supplier selection
problem. Quantity discounts are a general and helpful policy for suppliers in order to
promote their products. If quantity discounts are offered by the suppliers, retailers can
acquire products at a lower unit price by ordering the quantity which is more than a
certain value. Mansini et al. (2012) proposed an integer programming based heuristic
to solve the model with quantity discount and truckload shipping problem. In order to
fulfil service level to meet customer’s order and delivery needs, safety stock is required
throughout the supply chain network. An organization’s safety stock is highly influenced
by demand and lead time. So to determine safety stock, there must be a significant body
of knowledge. Humair et al. (2013) improved upon existing models by accounting for
lead-time variability, particularly in multi-echelon supply chain networks. Boute et al.
(2014) discussed an analytical approach for safety stock calculation when correlation
between demand and lead time is a consequence of auto-correlated demand.
This study proposes a strategic decision-making model considering the operational
costs due to coordination and optimization of the sustainable supply chain management.
In this paper, an integrated supplier selection, procurement, inventory control and
transportation model is discussed to evaluate performing suppliers, procured quantity,
choosing transportation vehicle type along with managing environmental issues, obtain
optimal stock keeping units (SKU) and safety stock for each product category to fulfil
a specified service level as well as each of the locations at minimum cost for the next
planning horizon. Demand from retailers is an important component that changes
the decision of full supply chain. In the study, information on retailer’s demand
disturbs the requirement at warehouse and distribution centres, therefore, deviation
takes place in the demand data at retailer’s side, that affects important decisions like
procurement quantity, inventory and transportation. Further, at the end of each period,
 the current solution is put to evaluate possible deviations from previous fixed target
Retail Marketing in
and a modified solution is obtained. A data set from a realistic situation is presented to
India: Trends and demonstrate the effectiveness of the proposed model. The proposed approach can handle
Future Insights a realistic situation when there is information vagueness related to inputs. The model is
executed on Optimization Software Lingo, version 11.0 and provided us a compromized
solution for minimizing cost and carbon emission. Before executing the model, Fuzzy
Analytical Network Process (FANP) is used to select suppliers on the basis of their
environmental, economical and credibility performance.

120 2. Model Description and Methodology

In the current article, we present coordination strategy among multi-echelon supply
chain for three product category, i.e. I – non-perishable consumable, II – perishable
consumable and III – usable among suppliers, distribution centres, warehouses to fill
the requirements of adjoined retails stores.

Suppliers TSP for

for multi product clusters
Distribution centres Warehouses for Retailstores for all
categories, Suppliers
for Product Category Product Category I product categories
election as per
I & III, SKU as per & III, SKU as per
credible, economic
service level service level
and environmental
attributes

Transportation Product Category II

Figure 1: Flow Diagram of Supply Chain Network

For each product category, many suppliers are available who can transfer goods to
distribution centres. However as, product category II, i.e. perishable consumable
products cannot be stored at distribution centre; hence ordered quantity of this category
is to be transported to retail stores directly. The distribution centres have capacity to store
product category I and III in big size, therefore it can be considered as main warehouse
for the warehouses connected to them. These warehouses are further adjoined with
many retail stores. Here, warehouses and a distribution centre (DC) are grouped on
the basis of minimum distance to be covered among them. In the coordination process,
supply chain partners need to analyse their operations such as supplier selection,
procurement, inventory management, transportation, and warehousing activities. We
consider the scenario in which there are multiple suppliers in the market for each product
category and best supplier is to be evaluated on the basis of many attributes. For each
supplier, we have their credibility data that include past delivery time data, the quality
they have offered, capacity, consistency, competency and a price per product. On the
environmental side, supplier’s carbon emission and carbon credits are key areas to look
after. In the study, FANP is applied for selecting the appropriate supplier, addressing
carbon emission, credibility and economic aspects. The calculated weight for each
supplier is used in the mathematical model to select a supplier with weight more than
the pre-specified threshold. At the core of inventory management is stocking control,
which ensures that the right amount of stock is available to support the company’s
targeted fill rate in the market at minimum cost. 98% service level is specified by the
companies so that customers across the supply chain are served in time. The service
level percentage specified by the company is taking care of the demand deviations at
retail stores. Transportation activities play a vital role in the effective management of
a supply chain. In addition to being major contributor for accomplishment of service A Fuzzy Multi-
Criteria Optimization
level, it has an immense impact on overall carbon emission of the supply chain. Model for Allocating
But finding the optimal balance among these factors is not easy, especially because SKU and Suppliers in
of the vast global market size. In the course of model discussion, the transportation SC System
took place at many stages like, from suppliers to distribution centres, distribution
centres to warehouses and further to retail stores. At each stage, transportation cost
is involved and has to be borne by the company. Hence, analysing and optimizing the
transportation process becomes extremely crucial. At the time of transportation from
distribution centre to warehouses, distribution centre is selected on the basis of demand
from the clustered warehouse group and one distribution centre can be connected with 121
more than one warehouse cluster. This shows that each distribution centre has capacity
to fulfil the demand of connected clusters. Further, to route the quantity in each cluster,
TSP is used.

2.1 Assumptions, Sets, Parameters and Decision Variables

Initial inventory at all the distribution centres and the warehouses is zero; shortages
are not allowed; safety stock has been considered at the distribution centres and
warehouses.
Sets: i=product i=1...P; j=supplier j=1,..J; t=time period t=1,...,T; m=distribution
centre m=1,...,M; y=warehouse y=1,...,Y; r=retail store r=1,..,R; s=cluster s=1,...,S;
f= vehicle load level f=1,..,F; u=carbon emission break u=1,..,U; c=product category
c=1,...,C.
Parameters: hcimt: per unit inventory holding cost of the ith product of product
category c at the mth distribution centre (DC) during the tth time period; PCcijt:
procurement cost of the ith product of product category c at the jth DC during the
tth time period; dcijt: discount factor on procured quantity as per the shelf life; ηct:
binary variable if the product category is consumable or usable; βct: binary variable if
the product category is perishable consumable or non-perishable consumable; h’cimt:
per unit inventory holding cost of safety stock of the ith product of product category
c at the mth DC during the tth time period; z(1-α) : service level or fill rate; TCjmt:
transportation cost per weight from the selected suppliers to DC; OCm: operating
cost of mth distribution centre; Hciyt and H’ciyt: per unit holding and safety stock costs
of the ith product of product category c at the rth retail store during the tth time
period; DTabms and Tms: distance and transportation cost per km between the nodes a
and b belonging to the sth cluster connected to the mth distribution centre resp.; Dciyrt:
demand of the ith product of product category c at the rth retail store during from
warehouse y the tth time period; Dcijrt: demand of the ith product of product category
c at the rth retail store from warehouse y during the tth time period; TCcijrt and TCciyrt:
transportation cost per weight from supplier to retail store or warehouse to retail
store respectively; Cojmt: carbon emission value from supplier to distribution centre;
Cofumst: carbon emission value of fth vehicle load level for sth cluster connected to the
mth distribution centre in tth time period. SLcijt: Shelf life of the product; TLcijt: total
life of the product; WEcijt: normalized weight obtained from FANP of each supplier;
Capcijt: Capacity at supplier j; wci: weight per product per category; LTcimyt: Lead time
to deliver from distribution centre to warehouse and σLTcimyt is its standard deviation;
σQcimyt: standard deviation in demand from warehouse to distribution centre; CAPm:
capacity at distribution centre; Ps: total number of nodes in the sth cluster; Bfumst: load
threshold beyond which a particular vehicle type is used; LTciyrt: lead time to deliver
 from warehouse to retail store and σLTciyrt is its standard deviation; σDciyrt: standard
Retail Marketing in
deviation in demand from retail store to warehouse; Capcirt: capacity at retail store.
India: Trends and Decision Variables: Xcijt: Quantity procured from supplier j; Vcijt: binary variable
Future Insights if jth supplier is chosen; Rcijt: binary variable if shelf life of the product is less than by
total life; Icimt: inventory level at DC; SScimt: safety stock at DC; ϕjmt: weighted quantity
to be transported from supplier to DC; αm: binary variable if mth DC gets operational;
Gabms: 1, If vehicle travels from node a to node b belonging to sth cluster connected
to mth DC and otherwise zero; Gms: 1, if mth DC is connected to sth cluster, or 0
otherwise; ISciyt: inventory level at warehouse; SYciyt: safety stock at warehouse; Zfumst: 1,
122 if fth vehicle as per load gets activated for transporting weighted quantity from DC m
to cluster s in time period t or 0 otherwise; Kfumst: 1, if uth carbon emission break gets
activated out of fth activated vehicle or 0 otherwise; ea and eb are positive values that
ensures no sub-routing in travelling salesman; A: number of nodes.

3. Model Formulation
The model in the article develops a green supply chain design that incorporates the
cost of procurement, safety stock cost at 98% service level, inventory carrying cost
and carbon emissions value, transportation cost into the objective function. The goal
of the model is to simultaneously minimize procurement, inventory and logistics
costs along with the environmental concerns of carbon emissions by strategically
connecting DC with the clusters of warehouses.
The first objective function is the combination of procurement cost for all the
three product categories, holding and safety stock costs at DC and warehouses, and
transportation cost from one stage to another.

{ }
T J P C
Min Z1 = ∑ ∑ ∑ ∑ PCcijt X cijtVcijt ηct + (1 − ηct ) βct + (1 + βct ) dcijt Rcijt 
t =1 j =1 i =1 c =1
T M P C T M P C T M J
+ ∑ ∑ ∑ ∑ hcimt I cimt + ∑ ∑ ∑ ∑ hcimt
’
SScimt Z(1− α ) cimt + ∑ ∑ ∑ TC jmt φ jmt
t =1 m =1 i =1 c = 1 t =1 m =1 i =1 c =1 t =1 m =1 j =1
c≠2 c≠2
M S M A A T Y P C
+ ∑ OCm α m + T * ∑ ∑ ∑ ∑ DTabmsGabms GmsTms + ∑ ∑ ∑ ∑ H ciyt ISciyt
m =1 s =1 m =1 b = 0 a = 0 t =1 y =1 i =1 c = 1
c≠2
T Y P C T R Y P C
+ ∑ ∑ ∑ ∑ H ciyt
’
SYciyt Z(11− α) ci y t + ∑ ∑ ∑ ∑ ∑ Dciy t ci TCciy t
t =1 y =1 i =1 c = 1 t =1 =1 y =1 i =1 c =1
c≠2 c≠2
T R J P
+ ∑ ∑ ∑ ∑ ∑ Dcij tVcijt ci TCcij t (1)
t =1 = 1 j =1 i =1 c = 2

Second objective minimizes total carbon emission on the basis of vehicle load and
carbon emission value
T M J F U M S T
Min Z 2 = ∑ ∑ ∑ Co jmt φ jmt + ∑ ∑ ∑ ∑ ∑ Co fumst Z fumst K fumst (2)
t =1 m =1 j =1 f =1 u =1 m =1 s =1 t =1

Following two equations helps in selecting supplier on the basis of weights obtained
from FANP and ensure that only one supplier will be selected.
WEcijt ≥ Vol *Vcijt ∀c ≠ 2, i , j , t (3)
 J A Fuzzy Multi-
∑ Vcijt = 1 ∀c ≠ 2, i, t
j =1
(4) Criteria Optimization
Model for Allocating
SKU and Suppliers in
The next equation activates discount factor as per the shelf life and total life of the SC System
product.
SLcijt ≥ 0.8TLcijt Rcijt ∀c ≠ 2, i , j , t (5)
Following three equations explain about capacity at supplier and calculation of
weighted quantity.
123
Capcijt ≥ X cijtVcijt ∀c ≠ 2, i , j , t (6)
M
X cijt = ∑ X cijmt ∀c ≠ 2, i , j , t (7)
m =1

I C
φ jmt = ∑ ∑ wci X cijmt ∀j , m, t (8)
i =1 c = 1
c≠2

The two equations show inventory balancing with zero inventory level in first period.
J Y
I cimt = I cim( t −1) + ∑ X cijmt − ∑ Qcimyt ∀c ≠ 2, i , m, t > 1 (9)
j =1 y =1

T J T Y T

∑I
t =1
cimt + ∑ ∑ X cijmt ≥ ∑ ∑ Qcimyt ∀c ≠ 2, i , m
j =1 t =1 y =1 t =1
(10)

Safety stock calculation is shown by next equation.

Y
SScimt = ∑ ( LT
y =1
cimyt σ 2Qcimyt + Qcimyt
2
σ 2LT cimyt ) ∀c ≠ 2, i , m, t (111)

Following equation helps in taking decision to open a DC as per demand and capacity.
C P Y T
CAPm ≥ 0.7∑ ∑ ∑ ∑ Qcimyt α m ∀m (12)
c =1 i =1 y =1 t =1
c≠2

∑α
m =1
m =1 (13)
y ∈s

Equation (14) calculates weighted quantity to be transported from DC to clustered

suppliers.
Y
WQmst = ∑ wci Qcimyt Gms ∀c ≠ 2, i , m, s, t (14)
y =1
y ∈S

Next, set of equations are the travelling salesman problem equations which directly
create the shortest distance path among warehouses in a particular cluster and also
connects it to a particular DC.
A

∑G
a =1
abms = 1 ∀b < Ps , m, s, a ≠ b (15)
 A

Retail Marketing in
∑G
b =1
abms = 1 ∀b < Ps , m, s, a ≠ b (16)
India: Trends and
Future Insights A A

∑ Gabms = ∑ Gbams
a =1 a =1
∀b < Ps , m, s, a ≠ b (17)

M A

∑G ∑G
m =1
ms
a =1
abms = 1 ∀s, b, a ≠ b (18)

124 ea − eb + Ps Gabms ≤ Ps − 1 ∀m, s, a ≠ 1, a, b < Ps , b ≠ 1, a ≠ b (19)

Following three equations check on choosing a vehicle with optimum load and
minimum carbon emission.

WQmst ≥ B fumst Z fumst ∀f , u, m,s, t (20)

F

∑Z
f =1
fumst = 1 ∀u, m, s, t (21)

U F

∑∑Z
u =1 f =1
fumst K fumst = 1 ∀m, s, t (22)

Next two equations show inventory balancing at the warehouse, keeping zero inventory
in first period.
M R
ISciyt = ISciy (t −1) + ∑ Qcimyt α m − ∑ Dciyrt ∀t > 1, c ≠ 2, i , y (23)
m =1 r =1
y ∈s
T M T R T

∑ IS
t =1
ciyt + ∑ ∑ Qcimyt α m ≥ ∑ ∑ Dciyrt
m =1 t =1 r = 1 t =1
∀c ≠ 2, i , y (24)
y ∈s

Equation (25) calculates safety stock at warehouse.

R
SYciyt = ∑ ( LT
r =1
ciyrt σ 2Dciyrt + Dciyrt
2
σ 2LT ciyrt ) ∀c ≠ 2, i , y, t (255)

Equation (26) ensures that quantity received from warehouse and supplier will be
within capacity limits.
Y J

∑D
y =1
ciyrt + ∑ DcijrtVcijrt ≤ Capcirt
j =1
∀c , i , r , t (26)

X cijt , I cimt , SScimt , φ jmt , ISciyt , SYciyt ≥ 0;

Vcijt , Rcijt , α m , Gabms , Gms , Z fumst , K fumst are binary

4. Solution Algorithm

4.1 Fuzzy ANP – Define the Criteria for Supplier Selection

For the evaluation process of the suppliers, we have their credibility data that include
past delivery time data (DT), the quality they have offered (Q), capacity (Cap),
consistency (Con) and competency (Com). Here, product category 1 is supplied by A Fuzzy Multi-
Criteria Optimization
first four suppliers (S1, S2, S3 and S4), product category 2 is supplied by supplier no. Model for Allocating
6, 7 and 8 and product category 3 is supplied by supplier no. 9, 10 and 11. In the second SKU and Suppliers in
stage, goal programming approach is discussed. SC System

4.2 Fuzzy ANP – Calculate the Priorities of the Criteria

After the first step, paired comparison for the priorities of the convenience store is
performed and the comparison results are combined by geometric mean. As priorities
for each attribute may differ, therefore fuzzy values for the priorities helped in reaching 125
at a crisp priority value. In the process, three decision makers have participated
and triangular fuzzy number is used to obtain one value. In the same way, paired
comparisons for the priorities of the suppliers are performed. The elements in a cluster
are compared by applying Saaty’s 1–9 scales according to their influence on an element
in another cluster which they are connected to or on elements in their own cluster.
The inconsistency ratio for each comparison matrix is to be obtained so the most
consistent value for the entries can be determined. The inconsistency measure is useful
for identifying possible errors in judgements as well as actual inconsistencies in the
judgements themselves. In general, the consistency ratio should be less than 0.1. The
inconsistency value is considered in all stages whilst doing the pairwise comparison.
For tangible criteria, real quantitative data are used in ANP to improve the system’s
consistency. After all the cluster and node comparisons, the weights of the clusters
and nodes (cluster matrix and weighted super matrix) are calculated. The weighted
supermatrix is obtained by multiplying the elements of the unweighted supermatrix
by the appropriate cluster weight. The unweighted supermatix, weighted supermatrix
and limit supermatrix for both the products were calculated. Following table shows
normalized values for the product category 1.

Table 1. Normalized Values of Supplier for Product Category I

Supplier 1 Supplier 2 Supplier 3 Supplier 4
0.21 0.13 0.48 0.17

4.3 Goal Programming Approah (Charnes and Cooper 1997)

Step 1: Solve the mathematical model keeping one objective at a point and the values
of Z1* and Z2*.
Step 2: Min Z1 and Min Z2 s.t. Z1≥Z1*; Z2≥Z2*; and all the constraints. This problem
provides infeasible solution.
Step 3: Min η-ρ s.t. constraints’ LHS+η-ρ=RHS.
Step 4: Min η-ρ s.t. constraints’ LHS+η-ρ=RHS; Z1+η1-ρ1=Z1* and Z2+η2-ρ2=Z2*. The
above process helps in reaching at a compromized solution, which creates a
trade-off between objectives also.

5. Case Study
The model discussed in the paper is validated on the case problem of a convenience
store company that operates like a retail store for perishable consumable, non-
perishable consumable and usable goods. As per the available information, for each
product category, some old suppliers are associated with the company. The company
 also has some options to open new distribution centers. Further, a number of
Retail Marketing in
warehouses already exist near the retail stores. The scenario discusses the movement
India: Trends and of goods from supplier to each activated DC, further the company already has
Future Insights warehouses and retail stores data region wise, which helped a lot whilst discussing
the case and mathematical model. The main aim in the case is to develop a pathway
for the company to procure optimal quantity minimizing inventory, maintaining
safety stock at 98% service level, keeping transportation cost and emission of carbon
to minimum such that constraints like capacity, vehicle type, shelf life, deviations in
demand and lead time etc. are satisfied. In the full process, the cost should be optimal
126 and the process should be able to accept the demand and its deviations’ data from the
retail stores.

Table 2. Demand in Period 1

Product
Retail Store PC1 PC2 PC3
R1 52 24 29
R2 32 41 67
R3 43 21 52
R4 32 42 36
R5 53 32 63
R6 27 54 43
R7 25 67 42
R8 46 24 54
R9 45 59 46

Weight of the products vary from 250 g to 1.5 kg. Lead time for delivery varies
from 1 day to 2 days with the standard deviation of approx 10%. On the other
side demand deviation is also approxmimately 10%. Holding cost at DC and
warehouses varies from `7 to `10 per item. Procurement cost and transportation
cost contribute major portion of the total cost. Procurement cost varies from `35 to
`245, which is also dependent on the product category. Transportation is to take place
from selected supplier to DC, DC to group warehouses and further to retail stores,
which is considered as per the DC distant from the connected warehouses, weight load
from supplier to DC and warehouse to retail store. The cost per kilometer from first DC
is Rs12; from second DC is Rs12.5 and from third and fourth DC is Rs13. Variation in
cost takes place as per the distances among all the nodes in each cluster. Third supplier
for first product category, second supplier for the second product category and third
supplier for the third product cateogy is chosen, it helps in keeping the procurement
and transportation cost minimum with least possible carbon emission.
Minimizing carbon emission is the second important objective for the company, for
which carbon emission varies as per vehicle type. Company employs heterogeneous
vehicle type in terms of load as well level of carbon emission. The model checks both
the levels, i.e. firstly, a truck type is chosen as per the load to be transported from the
warehouse to a particular cluster, and in the next level, a truck with a specific carbon
emission is selected from the multiple carbon emission level for each truck type.
5.1 Results and analysis A Fuzzy Multi-
Criteria Optimization
High product cost is leading high procurement cost in the total cost. Resulting cost Model for Allocating
aspiration level as `31,816,141 and carbon emission aspiration level as 12,523 from SKU and Suppliers in
SC System
step 1 of goal programming approach that helps in creating a trade off between the two
objectives. In the final solution, the cost and carbon emission values are a bit higher
than the aspired values. The total cost is `32,966,424 and carbon emission value is
13,594. In the proposed green supply chain network, reducing carbon emission with
some target value becomes really essential. Initially, we understood the transportation
framework of the company, which provided us the idea of carbon emission values.
The repeat movement at the same location for different warehouses is creating 127
environmental issues. The carbon emission value provided by the company on the
basis of their older transportation framework is approximately. 14,910. The proposed
model gives the trade-off between the two objectives, i.e. minimize cost as well carbon
emission values. It is observed from the results that the trade-off carbon emission value
is 13,594, which is approximately 10% lower than the company’s exiting value. From
the model results, it is observed that the company shall be able to fulfil the demand
and a very small quantity of safety Stock shall be required at retail stores keeping 98%
service level. The safety stock level is obtained to be 2 units to 5 units per article. DC2
is activated for the warehouses of first region and DC3 is selected for the second region.
The route within each region connecting warehouses to be covered in route using TSP
model are also obtained. The route between DC2 and first region is: start from DC2
then moves to Y4 further in a sequence Y2, Y1, Y3 and returns to DC. Route of DC3 is:
start from DC3 then in a sequence connected like Y7, Y5, Y6, Y8.

6. Conclusion
This study analyses an integrated procurement and transportation planning problem
with carbon emissions calculations. The model minimizes the combined expense
associated with the cost of procurement, holding and safety stock. Another important
aspect is transportation from supplier to DC and further to warehouses. Travelling
salesman problem helped in creating shortest route among connected warehouses and
DC. In the case of multi-warehouses which have been spread region wise, transporting
goods to each warehouse individually becomes expensive, hence transportation has
been done region wise. The information sharing between the supply chain and the
retailers helps them in receiving the demanded quantity in time that further creates a
positive environment at retail stores kepping zero shortages. The retailer prespecifies
the quality requirements that helps the model in specifying its own quality
specifications and selects best performing suppliers. Heterogeneity in vehicle type
is also an important aspect and opens many options to transport weighted quantity.
In the study, carbon emission is an important aspect considered for reducing it from
the current level by choosing appropriate vehicle type. Therefore, heterogeneity in
vehicle does not take place only for load but also for carbon emission. Each vehicle
type is considered to have distinct per vehicle capacities as well as emissions
generations. In particular, each vehicle type is assumed to generate a specific amount
of emissions because of its empty vehicle weight. The rates of emissions generated
because of the loads of the vehicles depend on the vehicle type.
The proposed work is dealing with many product categories like perishable, non-
perishable and usable and for each category, one supplier is chosen from many on the
 basis of their credibility. Many credibility attributes were selected from literature and
Retail Marketing in
weight of each supplier is obtained using FANP. The proposed model is bi-objective in
India: Trends and nature with constraints like inventory balancing, warehouse capacity, travelling salesman
Future Insights and load transportation thresholds for choosing vehicle. Creating coordination among
many entities of supply chain is a complex problem. Solving it with a mathematical
model is very difficult and leads to infeasibility due to contradicting objectives. Thus,
goal programming approach is used to generate a trade-off between the objectives with
respect to the constraints.

128 References
Abdallah, T., Farhat, A., Diabat, A. and Kennedy, S. (2012). “Green supply chains with
carbon trading and environmental sourcing: Formulation and life cycle assessment”,
Applied Mathematical Modelling, 36:4271–85.
Azadi, M., Jelodar, M.J., Saen, R.F. and Mirhedayatian, S.M. (2015). “A new fuzzy
DEA model for evaluation of efficiency and effectiveness of suppliers in sustainable
supply chain management context”, Computers & Operations Research, 54:274–85.
Boute, R.N., Disney, S.M., Lambrecht, M.R. and Houdt, B.V. (2014). Coordinating
lead times and safety stocks under auto-correlated demand”, European Journal
Operational Research, 232(1):52–63.
Chaabane, A., Ramudhin, A. and Paquet, M. (2012). “Design of sustainable supply
chains under the emission trading scheme”, International Journal of Production
Economics, 135:37–49.
Charnes, A. and Cooper, W.W. (1997). “Goal programming and multiple objective
optimizations”, European Journal of Operational Research, 1:39–54.
Diabat, A. and Simichi-Levi, D. (2009). “A carbon-capped supply chain network
problem”, IEEE International Conference on Industrial Engineering and
Engineering Management, 523–7. DOI:10.1109/IEEM.2009.5373289
Diabat, A., Abdallah, T., Al-Refaie, A., Svetinovic, D. and Govindan, K. (2013).
“Strategic closed-loop facility location problem with carbon market trading”, IEEE
Transactions on Engineering Management, 60(2):398–408.
Fahimnia, B., Sarkis, J., Dehghanian, F., Banihashemi, N. and Rahmanm, S. (2013).
“The impact of carbon pricing on a closed-loop supply chain: An Australian case
study”, Journal of Cleaner Production, 59:210–25.
Golmohammadi, D. and Mellat-Parast, M. (2012). “Developing a Grey-based decision-
making model for supplier selection”, International Journal Production Economics,
137:191–200.
Hashemi, H.S., Karimi, A. and Tavana, M. (2015). “An integrated green supplier
selection approach with analytic network process and improved Grey relational
analysis”, International Journal of Production Economics, 159:178–91.
Humair, S., Ruark, J.D., Tomlin, B. and Willems, S.P. (2013). Incorporating stochastic
lead times into the guaranteed service model of safety stock optimization”,
Interfaces, 43(5):421–34.
Hussain, M., Awasthi, A. and Tiwari, M.K. (2016). “An ISM-ANP integrated
framework for evaluating alternatives for sustainable supply chain management”,
Applied Mathematical Modelling, 40:3671–87.
Jha, A., Somani, K., Tiwari, M.K., Chan, F.T.S. and Jude-Fernandes, K. (2012).
“Minimizing transportation cost of a joint inventory location model using modified
 adaptive differential evolution algorithm”, International Journal of Advanced A Fuzzy Multi-
Criteria Optimization
Manufacturing Technology, 60:329–41. Model for Allocating
Jha, J.K. and Shanker, K. (2013). “Single-vendor multi-buyer integrated production SKU and Suppliers in
inventory model with controllable lead time and service level constraints”, Applied SC System
Mathematical Modelling, 37(4):1753–67.
Li, W. (2014). “Aparallel search system for dynamic multi-objective traveling salesman
problem”, Journal of Mathematics and System Science, 4:295–314.
Luo, Y., Liu, M., Hao, Z. and Liu, D. (2014). “An improved NSGA-II algorithm for
multi-objective traveling salesman problem”, TELKOMNIKA Indonesian Journal
of Electrical Engineering, 12(6):4413–18. 129
Mansini, R., Savelsbergh, M.W.P. and Tocchella, B. (2012). “The supplier selection
problem with quantity discounts and truckload shipping”, Omega – The International
journal of Management Science, 40(4):445–55.
Shaw, K., Shankar, R., Yadav, S.S. and Thakur, L.S. (2012). “Supplier selection using
fuzzy AHP and fuzzy multi-objective linear programming for developing low
carbon supply chain”, Expert Systems with Applications, 39:8182–92.
USAID | DELIVER PROJECT, Task Order 4, (2014). Optimizing Supply.
 Performance Assessment of 52
Countries Across the Globe in Retail
Sector and Ranking Based on TOPSIS
Seema Gupta1*, Chandra Prakash Bhatt2
Research Scholar, School of Mathematics, Devi Ahilya University, Indore
1

2
Head, Corporate Strategy, Ecopreneurs Business and Health Management (P)
Limited, Gurgaon

Abstract
There are many approaches and methods for performance assessment and ranking
of the countries across the globe in retail trade. These assessments are usually given
on individual category basis such as based on employment in retail sector or retail
sales as proportional of Gross Domestic Product (GDP). The current study tries to
rank the countries in retail sector on multi-criteria basis for different categories of
sales. The Multi-Criteria Decision Making (MCDM) approach used here is Technique
for Order Preference by Similarity to Ideal Solution (TOPSIS). It takes into account
different categories parameters with simple modelling. The TOPSIS consider ideal
and anti-ideal solution from the given data set and evaluate the performance based on
distance function. This paper discusses a methodology for assigning single ranking
for different categories of data thereby filling the gap of different rankings based on
parametric and statistical data.

Key words
Performance assessment and ranking, MCDM, TOPSIS, Ideal and anti-ideal solution,
Distance function

1. Introduction
Retail is defined as the act of selling goods and/or services directly to consumers
or end customer by means of different channels. According to business dictionary
a wholesaler or supplier is one who normally trade goods to another business
whereas a retailer is any business or a person which trade goods to customer. There
are several categories of retail. A retail sale is defined as an aggregated measure of
the sales of retail goods and/or services over a defined time period. Retail trade can
be categorized into many ways. One of the most popular ways is to categorize
as grocery and non-grocery retail trade. According to Euromonitor reports,
grocery retail is further classified into hypermarkets, supermarkets, discounters,
small grocery retailers, food and/or drink, tobacco specialist and other grocery
retailers. Similarly the non-grocery retail is classified into mixed retailers, health
Retail Marketing in and beauty specialist retailers, clothing and footwear specialist retailers, home and
India: Trends and
garden specialist retailers, electronics and appliance specialist retailers, leisure and
Future Insights
pp. 130–143
© Ambedkar University
* Corresponding Author: Seema Gupta (seemadavv@gmail.com)
personal goods specialist retailers and other non-grocery retailers (Euromonitor Performance
Assessment of 52
International Handbook, 2014). Countries Across
Retail sales data is available in several categories for countries and usually the Globe in Retail
ranking is given on the basis of overall highest retail trade simply by adding all Sector and Ranking
based on TOPSIS
categories’ value. Such ranking methods are not able to consider effect of different
categories and sub-categories and may not give the insight of what is happening
in individual categories. The present study aims to evaluate the performance of
different countries in retail sales, category-wise and thereby provide more scientific
ranking then existing. It provides ranking of 52 countries across the globe in grocery
and non-grocery retail sales categories. It then evaluates performance and assigns 131
ranking by combining both categories. Multi-criteria decision-making approach is
used for accumulating each category’s effect to provide a better visualization of
trends in retail trade.
Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) is one
of the multi-criteria decision-making approach for evaluating and raking different
alternatives. TOPSIS was first conceptualized by Yoon (1980) and Hwang and Yoon
(1981). Its basis is to find an alternative having shortest Euclidian distance from
the ideal solution and largest Euclidian distance from the anti-ideal solution. The
criteria are divided into benefit and cost. An ideal solution maximize the benefit and
minimize the cost, whereas an anti-ideal solution maximize the cost and minimize
the benefit.
This study develop ranking of countries across the globe based on their retail trade
using MCDM approach TOPSIS. The rest of the paper is arranged in the following
way. Review of the literature is presented in the section 2. Section 3 explains the
TOPSIS methodology and its working rule. Section 4 describes the data used in the
study. Analysis and results are discussed in the section 5. The study is concluded in
section 6.

2. Literature Review
Multi-Criteria Decision Making (MCDM) methods are useful in assessing and
ranking set of alternatives having similar or different parameters and widely applied
to diverse industries by the researchers and professionals. Among numerous Multi-
Criteria Decision Approach (MCDA)/MCDM methods developed to solve real-world
decision problems, the TOPSIS continues to work satisfactorily across different
application areas (Behzadian et al. 2012). It is also being used with other techniques
widely in the literature for example Bottani and Rizzi (2006) given the fuzzy TOPSIS
methodology to give multi-attribute approach for the selection and ranking of the
most suitable Third Party Logistics (3PL) service provider.
TOPSIS is one of the simplest and powerful techniques for evaluating and ranking
a set of possible alternatives according to their distances from ideal and anti-ideal
solution. Notable work has been done in developing this technique to the present
stage by Chen and Hwang (1992) and Lai et al. (1994). Unlike the other mutli-criteria
decision-making approaches such as Analytical Hierarchy Process (AHP) and Analytical
Network Process (ANP), one of the advantages of the TOPSIS is that it don’t require
pair-wise comparisons. The technique is widely used in many fields, including tourism
destination evaluation, financial performance evaluation, supplier selection, location
selection, company evaluation, machine selection, university ranking and many more.
 According to Donthu and Yoo (1998), the present techniques for retail trade
Retail Marketing in
analysis are controversial because of difficulties in differentiating the level of
India: Trends and retail services. They have used Data Envelopment Analysis (DEA) technique for
Future Insights performance evaluation for store level retail productivity analysis. The DEA calculates
the efficiency score of different entities under consideration based on weighted sum of
multiple outputs to multiple inputs.
In some of the most recent works (Marieno and Remirez-Nafarrate, 2016;
Touzani et al., 2016; Maruyama et al., 2016; Wang et al., 2016; Babin et al., 2016,
etc.) different aspects of retail is being evaluated using different methodologies.
132 For example, Marieno and Remirez (2016) proposes combination of a spatial
interaction model and simulation approaches for the evaluation of retail
connections. They also analyzed the shopping behaviour of consumer based on
store sales data. The study demonstrates an application based on retail stores and
household expenditure data of Mexico to validate the results. Touzani et al. (2016)
work upon the stress factor in retail sector. The study is based on the Tunisian
region using employee’s occupation data. This study is based on the occupation
data of the Tunisian region, a developed economy, in contrast to most of the other
studies which are conducted in the Western countries. Primary retail sales data are
collected by interviewing home furnishing stores employees characterizing three
categories of stress.
Among various studies in food retail systems, the latest study conducted in
China by Maruyama et al. (2016) finds demand side as well as supply side factors.
Three cities of China are being surveyed for identifying factors affecting the
consumer decisions. The study focuses on traditional v/s modern retail format.
It further explores the regional differences in consumers’ shopping behaviour.
Huang et al., (2009) used different performance evaluation techniques for ranking
70 Chinese retailers based on different categories of retails. Tang et al., (2016)
also work in environmental impacts in retail supply chain. Several studies in the
literature addresses the retail sector as well as ranking of different regions based on
different aspect, but to the best of our knowledge no existing study have attempted
to rank different countries based on retail trade. The novelty of this study is the
use of TOPSIS MCDM methodology for developing ranking of several countries
based on retail trade.

3. Methodology
For application of TOPSIS methodology for ranking of different alternatives, each
alternative is required to be measured on a common set of criteria and each criterion
should be measured in term of cost or benefit. For example, five bank branches can
be ranked according to their working and revenue. Another example could be the
case of finding best and next best retailer in an area. These alternatives need to be
evaluated on the basis of the given set of criteria. The criteria for bank example could
be number of employees, number of accounts, working hours, proximity to a place,
branch manager’s qualification, etc. In the example of retailers’ case criteria can be
number of stock keeping units, turnover, footfall and type of products sold, etc. As
given in Chen and Hwang, (1992) and Lai et al., (1994) there are some assumptions to
be made before developing mathematical formulation of the technique.
3.1 Assumptions Performance
Assessment of 52
1. E ach parameter/criteria has a monotonic increasing or monotonic decreasing Countries Across
pattern. the Globe in Retail
Sector and Ranking
2. There are weights attached to different criteria. based on TOPSIS
3. If there are any subjective perceptions, it can be converted to number using
appropriate scale.
For example if qualification is used as raking parameter then using an appropriate
scaling method, observations should be converted to numerical value.
133
3.2. Algorithm
The following algorithm is used for computing the rankings
Step 1: Identify the set of alternatives which needs to be evaluated. Also, identify
or decide upon the set of criteria against which these alternatives will be
evaluated.
Step 2: S egregate the different criteria into benefit and cost under the condition of
which one is positively affecting the evaluation and which one is negatively
affecting the evaluation of the alternatives.
Step 3: Write the quantitative values against each alternative and criteria. If there
are qualitative values, then use an appropriate scale to convert them into
quantitative data.
Step 4: Find the ideal and anti-ideal solution for the given data set. Ideal solution
consists of the maximum values of benefit criteria and minimum values for
the cost criteria. For anti-ideal solution the minimum of benefit criteria and
maximum of cost criteria values are to be taken.
Step 5: F ind the distance matrices for ideal and anti-ideal solution, which consist of
the sum of square of distances from the ideal and anti-ideal solution for each
alternative.
Step 6: U se the relative closeness Index formula to calculate the Relative Closeness
Index (RCI) value.
Step 7: Rank the alternatives from top to bottom as according to their RCI value from
largest to smallest.
Mathematically, say there are m number of entities and n number of criteria. Weights
to these criteria are assigned by the decision maker, say w1 , w2 ,…….wn . If there is
no priority to the criteria, weights are taken as unit value.
The m × n matrix A contains the values of each alternative against each criteria
expressed in numbers.

 a11  am1 
A =     
 an1  amn 
where the value a11 represents evaluation of alternative 1 against criteria 1. am1 represents
evaluation of alternative 1 against criteria m and so on. If the values are measured on
different scale they are first normalized to get balanced parametric value. First, for each
column the value rj is calculated using the following equation
n (1)
rj = ∑aij , j = 1, 2, … m
i =1
 Then, column wise each value is divided by respective rj value and the normalized
Retail Marketing in
matrix is formed. So matrix A becomes
India: Trends and
Future Insights
 r11  rm1 
A =     
 rn1  rmn 
where rij = aij / rj (2)

134 Then, weights are multiplied column wise. Thus, we get

xij = wj × rij, i = 1,2,...n, j = 1,2,...m (3)

 x11  x1m 
A =     
 xn1  xmn 
For ideal solution x = ( x1 , x2 , … xm ) highest value
is selected for benefit
criteria and lowest value is selected for cost criteria. For anti-ideal solution
( )
x * = x1* , x2* ,… xm* lowest value is selected for benefit criteria and highest value
is selected for cost criteria. Note that if there are only benefit criteria, then the ideal
solution consists of all the highest values and anti-ideal solution consists of all lowest
values. For all the cost criteria case, the reverse has to be taken.
Then, the distances di and di* are calculated as
m

∑(x )
2
di = ij − xi , i = 1, 2, … n (4)
j =1

And
m

∑ (x )
2
di* = ij − xi* , i = 1, 2, … n (5)
j =1

Next for each alternative, Index of relative closeness to the ideal solution ci is
calculated as
di*
ci = (6)
di + di*
Alternatives are ranked based on ci values. If di* value is 0 then ci value is 0 and if di
value is 0 then ci value is 1 (since off course in this case di* value will be non-zero). Thus,
overall best alternative will be one having ci value 1 or close to 1. Hence, closer the value
of ci to 1, higher the ranking of respective alternative.

4. Data and Analysis

The retail sales data (in USD) for the year 2011 under different sub-categories in grocery
and non-grocery category have been taken from Euromonitor International Handbook
(2014). Here, different countries are alternatives and set of criteria are different sales Performance
Assessment of 52
category. Figure 1 illustrates the division and sub-divisions in retail sales taken for the Countries Across
study, which represents the set of criteria for evaluation and ranking of countries. the Globe in Retail
Sector and Ranking
based on TOPSIS

135

Figure 1: Category and Sub-category of Retail Sales.

Different alternatives are 52 countries for which retail sales data is available.
These countries are evaluated on the basis of retail sales data. As we know that a
country will be better performer in retail sector, if its retail sales are more. Hence,
higher the sales, better the ranking of any country. Three step analysis is being
carried out for ranking. First step consists of evaluation on the basis of grocery
retail sales criteria. Second step consists of evaluation on the basis of different
sub-categories of non-grocery retail sales data. Third step consists of evaluation on
the basis of combined criteria of grocery and non-grocery retail sales data. Since
more the sales, higher the ranking and we have all criteria as sales values in US
Dollar under different retail categories, therefore it is an all benefit criteria case.
For each of the three steps, highest value of each criterion forms the ideal solution
and least value of each criterion forms the anti-ideal solution.
 Tables 1 provides the ideal and anti-ideal solution for grocery retail sales data. It
Retail Marketing in
define the range (highest and lowest value) for each of the categories.
India: Trends and
Future Insights Table1: Ideal and Anti-ideal solutions for Grocery Retail Sales in US Dollar
Food and/
Small or Drink Other
Hyper- Super- Grocery Tobacco Grocery
Criteria markets markets Discounters Retailers Specialist Retailers
136 Ideal
Solution 269,876.3 332,737.7 84,837.2 228,922.3 70,710.2 147,976.3
Anti-Ideal
Solution 0 732.5 0 895.8 211.1 56.9
For all selected 52 countries, first the retail sales data in grocery retail sales category
are analysed for finding highest and lowest values. For example, under hypermarkets
sub-division of grocery retails sales category, the highest value was found as USD
269,876.3 for USA and under discounter’s sub-division, Germany has highest sales
as USD 84,837.2. These values form components of ideal solution. Hence, all the
highest values against each sub-division are found and substitute in a row to form
ideal solution for grocery retails sales category. Next, we find lowest sales figure
in hypermarket segment among all the 52 countries and substitute it as first entry
of anti-ideal solution for grocery retail sales category. Thus, the value 0 in second
column of Table 1 represents that there is at least one country with zero sales figure in
hypermarkets among 52 considered countries. By taking the minimum sales figure in
each sub-division, we get anti-ideal solution for grocery retail sales category.
The above process is repeated for non-grocery retail sales category sub-divisions.
The ideal and anti-ideal solution for non-grocery retail sales category is shown in
Table 2.

Table 2: Ideal and Anti-ideal Solutions for Non-grocery Retail Sales in US Dollar
Leisure
Health Clothing Home Electronics and
and and and and Personal Other
Beauty Footwear Garden Appliance Goods Non-
Mixed Specialist Specialist Specialist Specialist Specialist grocery
Criteria Retailers Retailers Retailers Retailers Retailers Retailers Retailers
Ideal
402,091.1 265,571.7 186,343.6 320,585.8 114,869.6 150,146.6 97,408.7
Solution
Anti-
ideal 132.9 1030.4 729.7 914.2 488.9 917 61.1
Solution

Then, we find the distances for each country from the ideal and anti-ideal solution
using the formula as given in equations (4) and (5) to form a distance matrix. Here, the
distances represent the deviation from the highest and lowest values in retail sales. In
the next step, we calculate the square of distances and sum up these values to get D+
as distance value from ideal solution and D− as distance value from anti-ideal solution. Performance
Assessment of 52
These steps are repeated for each of the category. The results are listed in Table 3. For Countries Across
example, consider Argentina whose grocery retail sales figures in USD under different the Globe in Retail
sub-divisions are 5805.5 (hypermarkets), 10,650.9 (supermarkets), 1021.6 (discounters), Sector and Ranking
based on TOPSIS
26,053 (small grocery retailers), 7865.1 (food and/or drink tobacco specialist retailers),
5385.9 (other grocery retailers). Using values in ideal solution row of Table 1 and
formula given in equation (4), we find the distance D+ for Argentina as = 2.46E+11.
Similarly, for other countries distances are calculated, shown in Table 3.

Table 3: Country-wise Distance from Ideal and Anti-ideal Solution for Grocery 137
Retail Sales and Non-grocery Retail Sales Categories
Non-grocery Retail Sales
Country Grocery Retail Sales Distances Distances
D+(Distance D−(Distance D+(Distance D−(Distance
from Ideal from Anti-Ideal from Ideal from Anti-Ideal
Solution) Solution) Solution) Solution)
Argentina 2.46E+11 8.53E+08 3.97E+11 2.69E+08
Australia 2.2E+11 5.34E+09 3.61E+11 1.97E+09
Austria 2.58E+11 1.87E+08 3.93E+11 4.48E+08
Belgium 2.48E+11 5.86E+08 3.94E+11 3.55E+08
Brazil 2.2E+11 2.97E+09 3.31E+11 6.81E+09
Bulgaria 2.68E+11 2,859,630 4.12E+11 1,204,946
Canada 2.2E+11 3.12E+09 3.18E+11 6.42E+09
Chile 2.6E+11 98033292 4.03E+11 78,791,077
China 9.95E+10 8.08E+10 1.64E+11 7.35E+10
Columbia 2.5E+11 7.67E+08 3.97E+11 3.2E+08
Czech Republic 2.62E+11 69,502,363 4.05E+11 39,007,562
Denmark 2.58E+11 1.57E+08 4.06E+11 43,697,172
Egypt 2.62E+11 2.07E+08 4.06E+11 1.76E+08
Finland 2.59E+11 1.06E+08 4.03E+11 72,628,806
France 1.53E+11 2.32E+10 3.17E+11 1.01E+10
Germany 1.85E+11 1.47E+10 3.02E+11 1.45E+10
Greece 2.58E+11 1.99E+08 4.03E+11 89,477,099
Hong Kong 2.66E+11 20,513,298 4E+11 1.61E+08
Hungary 2.63E+11 62,699,028 4.09E+11 16,565,225
India 2.15E+11 2.36E+10 3.75E+11 2.91E+09
Indonesia 2.42E+11 2.63E+09 4.01E+11 1.92E+08
Ireland 2.61E+11 1.02E+08 4.04E+11 52,165,377
Israel 2.65E+11 54,526,685 4.08E+11 28411081
 Italy 1.99E+11 6.37E+09 3.22E+11 9.88E+09
Retail Marketing in
India: Trends and
Japan 1.27E+11 5.65E+10 1.39E+11 9.6E+10
Future Insights Malaysia 2.65E+11 30,208,237 4.07E+11 45,122,622
Mexico 2.31E+11 2.74E+09 3.62E+11 1.87E+09
Morocco 2.63E+11 1.14E+08 4.12E+11 2,782,432
Netherlands 2.45E+11 1.03E+09 3.82E+11 7.49E+08
New Zealand 2.61E+11 1.14E+08 4.08E+11 21,842,693
138
Norway 2.59E+11 2.79E+08 4.01E+11 1.65E+08
Philippines 2.58E+11 5.29E+08 4.05E+11 45,649,878
Poland 2.48E+11 6.44E+08 3.97E+11 2.36E+08
Portugal 2.57E+11 2E+08 4.02E+11 88,393,609
Romania 2.63E+11 66,763,885 4.11E+11 7,575,371
Russia 1.69E+11 1.49E+10 3.57E+11 7.47E+09
Saudi Arabia 2.57E+11 1.78E+08 3.95E+11 3.48E+08
Singapore 2.67E+11 5,295,641 4.08E+11 21,365,612
Slovakia 2.66E+11 10,163,841 4.12E+11 1,284,079
South Africa 2.49E+11 5.41E+08 3.98E+11 2.05E+08
South Korea 2.43E+11 9.27E+08 3.74E+11 1.46E+09
Spain 2.14E+11 5.12E+09 3.56E+11 2.98E+09
Sweden 2.5E+11 4.31E+08 3.96E+11 2.5E+08
Switzerland 2.45E+11 8.43E+08 3.93E+11 3.34E+08
Taiwan 2.55E+11 3.31E+08 3.92E+11 3.06E+08
Thailand 2.55E+11 5.38E+08 4.06E+11 61,339,236
Turkey 2.37E+11 1.62E+09 3.88E+11 9.45E+08
Ukraine 2.58E+11 1.5E+08 4.06E+11 91,589,719
United Kingdom 1.67E+11 1.7E+10 3.08E+11 1.06E+10
USA 2.43E+10 2.41E+11 4.34E+09 4.02E+11
Venezuela 2.46E+11 9.37E+08 3.96E+11 2.73E+08
Vietnam 2.64E+11 79,309,654 4.08E+11 37,598,987

Table 4: Ideal and Anti-ideal Solution for Grocery and Non-grocery Retail Sales
Combined
Ideal 2698 3327 848 2289 70 147 4020 265 186 320 1148 150 974
solution 76.3 37.7 37.2 22.3 710.2 976.3 91.1 571.7 343.6 585.8 69.6 146.6 08.7
Anti-
ideal
solution 0 732.5 0 895.8 211.1 56.9 132.9 1030.4 729.7 914.2 488.9 917 61.1
In Step 3, the six sub-divisions of grocery retail sales and seven sub-divisions non- Performance
Assessment of 52
grocery retail sales are combined. Under these 13 sub-divisions, we find the highest Countries Across
and lowest values for each sub-division and form the ideal and anti-ideal solution for the Globe in Retail
combined categories as given in Table 4. As previously explained, we find country wise Sector and Ranking
based on TOPSIS
distances D+ and D− using equations 4 and 5. In the next step, the index of relative
closeness for each of the category is calculated separately as well as combining the
categories, results are shown in Tables 5 and 6.

5. Result
139
Table 5 shows the results and ranking for grocery and non-grocery retail sales when
obtained independently. We can clearly see the difference in ranking of different
countries in both the categories. Table 6 shows the ranking for total retail sales when
both the categories are combined.

Table 5: Relative Closeness Index and Ranks Category Wise

Grocery Retail Sales Non-grocery Retail Sales

Closeness Closeness
Country Index Rank Country Index Rank
USA 0.908403 1 USA 0.98933 1
China 0.448301 2 Japan 0.408562 2
Japan 0.307872 3 China 0.309993 3
France 0.132026 4 Germany 0.045927 4
India 0.098901 5 United Kingdom 0.033204 5
United Kingdom 0.092718 6 France 0.030872 6
Russia 0.080979 7 Italy 0.029745 7
Germany 0.073347 8 Russia 0.020513 8
Italy 0.031096 9 Brazil 0.020133 9
Australia 0.023696 10 Canada 0.019792 10
Spain 0.023393 11 Spain 0.008298 11
Canada 0.013993 12 India 0.007706 12
Brazil 0.013351 13 Australia 0.005431 13
Mexico 0.011757 14 Mexico 0.005135 14
Indonesia 0.01075 15 South Korea 0.003884 15
Turkey 0.006789 16 Turkey 0.002429 16
Netherlands 0.004194 17 Netherlands 0.001955 17
Venezuela 0.003802 18 Austria 0.001138 18
South Korea 0.003798 19 Belgium 0.000902 19
Argentina 0.003457 20 Saudi Arabia 0.000879 20
Switzerland 0.00343 21 Switzerland 0.000847 21
Columbia 0.003055 22 Columbia 0.000806 22
Poland 0.002592 23 Taiwan 0.00078 23
Belgium 0.002363 24 Venezuela 0.000688 24
South Africa 0.002168 25 Argentina 0.000677 25
 Thailand 0.002105 26 Sweden 0.000631 26
Retail Marketing in
India: Trends and
Philippines 0.002042 27 Poland 0.000592 27
Future Insights Sweden 0.001721 28 South Africa 0.000516 28
Taiwan 0.001296 29 Indonesia 0.000477 29
Norway 0.001077 30 Egypt 0.000435 30
Egypt 0.000788 31 Norway 0.000413 31
Portugal 0.000777 32 Hong Kong 0.000403 32
140 Greece 0.000771 33 Ukraine 0.000225 33
Austria 0.000722 34 Greece 0.000222 34
Saudi Arabia 0.000692 35 Portugal 0.00022 35
Denmark 0.000607 36 Chile 0.000196 36
Ukraine 0.00058 37 Finland 0.00018 37
New Zealand 0.000438 38 Thailand 0.000151 38
Morocco 0.000434 39 Ireland 0.000129 39
Finland 0.000408 40 Philippines 0.000113 40
Ireland 0.000391 41 Malaysia 0.000111 41
Chile 0.000377 42 Denmark 0.000108 42
Vietnam 0.0003 43 Czech Republic 9.62E−05 43
Czech Republic 0.000265 44 Vietnam 9.22E−05 44
Romania 0.000254 45 Israel 6.97E−05 45
Hungary 0.000238 46 New Zealand 5.35E−05 46
Israel 0.000206 47 Singapore 5.23E−05 47
Malaysia 0.000114 48 Hungary 4.05E−05 48
Hong Kong 7.72E−05 49 Romania 1.84E−05 49
Slovakia 3.82E−05 50 Morocco 6.76E−06 50
Singapore 1.98E−05 51 Slovakia 3.12E−06 51
Bulgaria 1.07E−05 52 Bulgaria 2.92E−06 52

Table 6. Relative Closeness Index and Rank for Combined Retail Sales Data
Closeness Closeness
Country Index Rank Country Index Rank
USA 0.957398 1 Taiwan 0.000983 27
China 0.369751 2 Austria 0.000973 28
Japan 0.364412 3 Thailand 0.000906 29
France 0.066261 4 Philippines 0.000865 30
Germany 0.05655 5 Saudi Arabia 0.000806 31
United Kingdom 0.054974 6 Norway 0.000674 32
India 0.042979 7 Egypt 0.000573 33
Russia 0.040806 8 Portugal 0.000437 34
Italy 0.03026 9 Greece 0.000436 35
Brazil 0.01744 10 Ukraine 0.000363 36
 Performance
Canada 0.017431 11 Denmark 0.000302 37 Assessment of 52
Countries Across
Spain 0.014023 12 Hong Kong 0.000273 38 the Globe in Retail
Australia 0.012434 13 Finland 0.000269 39 Sector and Ranking
based on TOPSIS
Mexico 0.007722 14 Chile 0.000267 40
Indonesia 0.004368 15 Ireland 0.000232 41
Turkey 0.004087 16 New Zealand 0.000203 42
South Korea 0.00385 17 Vietnam 0.000174 43
Netherlands 0.002831 18 Morocco 0.000173 44 141
Venezuela 0.001882 19 Czech Republic 0.000163 45
Switzerland 0.00184 20 Israel 0.000123 46
Argentina 0.001741 21 Hungary 0.000118 47
Columbia 0.001678 22 Malaysia 0.000112 48
Belgium 0.001466 23 Romania 0.00011 49
Poland 0.001361 24 Singapore 3.95E−05 50
South Africa 0.001153 25 Slovakia 1.69E−05 51
Sweden 0.001053 26 Bulgaria 5.98E−06 52
From Tables 5 and 6, we can clearly see that USA leads in all the three data sets. China
and Japan are also among the leading states. India has different ranking in all the three
results. In grocery retail sales, it is at 5th ranking whereas in non-grocery retail sales
its ranking is 12. In the combined calculations, its ranking is 7th. Similarly, Germany
which is among top 5 in non-grocery retail sales is at 8th position in grocery retail sales.
In overall retail sales, it is at 5th ranking position. Bulgaria is at last rank in all three
categories. The figure 2 depicts the comparative results of the three way analysis. The
radar chart is useful tool for analysing the comparative position of all the 52 countries
in a single view. We can see from the figure that Indonesia which is at 15th position in
grocery retail and total retail but in non-grocery retail sales its ranking is 30th. Thus
one can see the relative position for a country of interest and also compare a number of
countries from the figure also.
Bulgaria
Slovakia

Thailand
Austria Sweden

Figure 2. Radar Chart of the Comparative Ranking of the Countries.

 6. Conclusion
Retail Marketing in The study uses TOPSIS approach for evaluating performance of the retail trade on
India: Trends and a global level. Fifty two countries with retail sales data under different standard
Future Insights
categories are being taken for ranking. Ranking is done for grocery and non-grocery
sales data separately and also by combing both categories. The ranking tables show
many important results in terms of difference of relative position of countries in the
three categories. USA, China and Japan top all three rankings whereas Romania,
Singapore, Slovakia and Bulgaria are in the bottom. The radar chart in Figure 2
depicts the ranking of each of 52 countries to give clear picture and can be used for
142 any international study and comparison. The study provide useful results to be used
in global scenario and also show the usefulness of TOPSIS in dealing with the data
involving large number of observations and multiple categories. Other categories can
also be made and TOPSIS can be used to analyse the trends. In the future, further
analysis can be done for finding the reasons for such ranking and policies can be given
for improvement of the ranking of country of interest. One can see the ranking of a
country of his/her interest and work upon further investing the reasons behind such
results. Also at global level, cross retail trade related trends can be analysed. 

References
Babin, B.J., Borges, A. and James, K. (2016). “The role of retail price image in a multi-
country context: France and the USA”, Journal of Business Research, 69(3):1074–81.
Behzadian, M., Otaghsara, S.K., Yazdani, M. and Ignatius, J. (2012). “A state-of the art
survey of TOPSIS applications”, Expert Systems with Applications, 39(17):13051–69.
Bottani, E. and Rizzi, A. (2006). “A fuzzy TOPSIS methodology to support outsourcing
of logistics services”, Supply Chain Management: An International Journal,
11(4):294–308.
Chen, S.J. and Hwang, C.L. (1992). Fuzzy Multiple Attribute Decision Making
Methods (pp. 289–486). Berlin Heidelberg: Springer.
Donthu, N. and Yoo, B. (1998). “Retail productivity assessment using data envelopment
analysis”, Journal of Retailing, 74(1):89–105.
Euromonitor International Handbook (2014). “World Retail Data and Statistics” (8th
edition).
Huang, J., Jiang, X. and Tang, Q. (2009). “An e-commerce performance assessment
model: Its development and an initial test on e-commerce applications in the retail
sector of China”, Information & Management, 46(2):100–8.
Hwang, C.L. and Yoon, K. (1981). Multiple Attribute Decision Making: Methods and
Applications A State-of-the-Art Survey (Vol. 186). Springer Science and Business
Media.
Lai, Y.J., Liu, T.Y. and Hwang, C.L. (1994). “Topsis for MODM”, European Journal of
Operational Research, 76(3):486–500.
Maruyama, M., Wu, L. and Huang, L. (2016). “The modernization of fresh food
retailing in China: the role of consumers”, Journal of Retailing and Consumer
Services, 30:33–39.
Tang, A.K., Lai, K.H. and Cheng, T.C.E. (2016). “A multi-research-method approach
to studying environmental sustainability in retail operations”, International Journal
of Production Economics, 171:394–404.
Touzani, M., Hirschman, E.C. and Salah, L.H. (2016). “Retail stressors in the Performance
Assessment of 52
MiddleEast/North Africa region”, Journal of Business Research, 69(2):726–35. Countries Across
Wang, J., Zhuang, H. and Lin, P.C. (2016). “The environmental impact of distribution the Globe in Retail
to retail channels: A case study on packaged beverages”, Transportation Research Sector and Ranking
based on TOPSIS
Part D: Transport and Environment, 43:17–27.
Yoon, K. (1980). Systems Selection by Multiple Attribute Decision Making. University
Microfilms International, Ph. D. Thesis, Kansas State University.

143
 Gupta
Dave
Editors

Visit us at www.emeraldinsight.com

ISBN : 9781786354105

Editors:
Anshu Gupta
9 781786 354105 Kartik Dave