A STUDY ON CONSUMER BEHAVIOR AND SATISFACTION: A COMPARISON OF RETAIL STORES AND KIRYANA SHOPS
SUBMITTED IN THE PARTIAL FULFILLMENT OF MASTERS IN BUSINESS ADMINISTRATION. (PTU 2009-2011)
Under Supervision Of Mr Pranjal GJIMT
Submitted By: Ankur Gulbadhar MBA 4th Semester
It gives me immense pleasure, to express my unfeigned and sincere thanks and gratitude to my supervisor Mr.Pranjal for his valuable guidance sustained, encouragement and constructive critic at every stage of work, without which it would have never been accomplished.
I acknowledge with thanks the cooperation and help received from the management of retail outlets. I thank them for providing me with the opportunity to converse with the customers of their outlets and gather relevant data and other information. I acknowledge with thanks the unsolicited cooperation and help provided by the department, library and administrative staff of Gian Jyoti Institue of management and technology Mohali I owe special thanks for the help and support received from the faculty of department and colleagues.
CERTIFICATE OF COMPLETION
This is to certify that the Final Project report entitled “A STUDY ON CONSUMER BEHAVIOR AND SATISFACTION: A COMPARISON OF RETAIL STORES AND KIRYANA SHOPS ” Submitted to Punjab technical university in the partial fulfillment of the requirement for degree of MBA, is a work carried out by Ankur Gulbadhar Under my supervision and guidance.
Project Guide: Mr.Pranjal
I hereby declare that the Major Project Report, which is entitled “A STUDY ON CONSUMER BEHAVIOR AND SATISFACTION: A COMPARISON OF RETAIL STORES AND KIRYANA SHOPS” is Compiled and submitted by me is my original frame work. I have not copied the data from any previous report. However, my Project Guide Mr. Pranjal helped me at various points while preparing this report.
LIST OF TABLES
4.1 4.2 4.3 4.4 T-Test Group Statistics Independent sample tests Reason to go to retail store Reason to go kiryana store 56-60 61 62 63
LIST OF GRAPHS
Graph No. 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 Graph Name Gender Age Occupation Income Age and Store Type Gender and Store Type Occupation and Store Type Income and store type Awareness level Visited once Visit in last two times Page No. 48 48 49 49 50 50 51 51 52 53 54
This study titled “Study on consumer behavior and satisfaction: a comparison of retail stores and kiryana shops” was carried out to have an understanding of the consumer perception pertaining to the Retail Stores (Organized Retail) vis-à-vis Kiryana Stores (Unorganized Retail) and to analyze the important determinants of store choice. Further it was seen from the results and final findings that different variables that influence the choice of stores. Among the governing factors, General Store Attributes Dimension, Appearance Related Dimension, Salesperson Service Dimension, Physical Aspects, Reliability, Personal Interaction, Problem Solving, Policy, Location, Convenience of Shopping, Sales Personnel Service are statistically significant.
During project I covered mohali city and find out the major competitors of Spencer like Reliance fresh, 6-Ten, and other unorganized stores like kiryana stores like Amrit Confectioners, Sital departmental store, H.S. departmental store, gill store, P.D.store and then try to find out the reason why people go over there and I basically took 10 factors on which they rank the reason to retail store and kiryana store differently and then try to find the satifaction level of the customer towards product range, cleanliness, prices, discount provided by the retail and kiryana stores . I came with major finding that young generation people prefer more to retail stores rather than old people and in this fast growing competition we do not have enough time to go to store buy themselves and so people prefer home delivery more which is provided by kiryana stores
TABLE OF CONTENTS
ACKNOWLEDGEMENT List of Tables List of Graphs Executive Summary
3 4 4 5
CHAPTER 1: INTRODUCTION………………………………………………………….. 1.1 INTRODUCTION-INDIAN PERSPECTIVE ……………………………….9 1.1.1 Retail in India: Room for Everyone……………………………….. 16 1.1.2 Retail Formats………………………………………………………..19 1.1.3 Retail Market Trends ………………………………………………26 1.1.4 Potential Roadblocks to the Retail Growth Story………………. 28 1.1.5 Urban Vs Rural Retail Trends……………………………………..29 1.1.6 SWOT Analysis………………………………………………………32 1.1.7Conclusion………………………………………………………34 CHAPTER 2: 2.1 LITERATURE REVIEW………………………………………35 2.2 PURPOSE OF THE STUDY…………………………………39 CHAPTER 3: RESEARCH METHODOLOGY……………………………………41 3.1 RESEARCH OBJECTIVES……………………………………………..42 3.2 PROBLEM DEFINITION………………………………………………..43 3.3 RESEARCH DESIGN……………………………………………………43 3.4 METHOD OF DATA COLLECTION……………………………………45 3.5 SAMPLING…………………………………………………………………45 3.6 STATISTICAL TECHNIQUES USED………………………………………46 3.7 LIMITATIONS OF THE STUDY……………………………………………46
CHAPTER 4: DATA INTERPRETATION AND ANALYSIS……………………48
4.1 RESPONDENTS PROFILE……………………………………………49 4.2 Z- TEST…………………………………………………………………56 CHAPTER 5: FINDINGS AND SUGGESTIONS …………………………………64 5.1 FINDINGS ………………………………………………………………65 5.2 SUGGESTIONS……………………………………………………………67 5.3 DIRECTIONS FOR FUTURE RESEARCH……………………………..68 References………………………………………………………………………………69 Annexures Annexure A: Questionnaire……………………………………………………71
CHAPTER 1 INTRODUCTION
INTRODUCTION-INDIAN PERSPECTIVE “After leading the IT bandwagon, India is poised to grow as a retail hub. It is
imperative to sustain the modernization of the retail sector and dispel the myth that the game is big vs. small or traditional vs. modern or organized vs. unorganized or local vs. foreign. What is needed is to create an appropriate environment to propel retail.”, That aptly sums up the importance the retail sector has assumed in India’s economic scenario today. Retail is seen as the next booming industry after IT. The Indian retail market is the fifth largest retail destination globally. It was ranked second after Vietnam as the most attractive emerging market for investment in the retail sector by AT Kearney's seventh annual Global Retail Development Index (GRDI), in 2008. A report by global consultancy firm, AT Kearney said "The consumer spending in India has increased by an impressive 75 per cent in the last four years and will quadruple in the next 20 years." Moreover, India recently topped the Nielsen Global Consumer Confidence study, conducted by Nielsen, a market research company. Retailing in India can be classified under two broad headings: Organized and unorganized currently, the size of Indian retail sector is US$ 328 billion with unorganized retail accounting for a lion’s share of the market. Organized retailing contributes to roughly around 4% of the whole market. The top ten cities account for 96% of total organized retail, of which the top six cater to 82%. The rise in the disposable income of the Indian consumer is driving the revolution of the Indian retail industry. Indian retailing industry has seen phenomenal growth in the last five years. Organized retailing has finally emerged from the shadows of unorganized retailing and is contributing significantly in the growth of Indian retail sector.
The growth in Indian retailing is likely to rest on key determinants such as (i) Government policy, (ii) Infrastructure development, (iii) GDP growth, (iv) Employment scenario and (v) Changes in the retailing supply chain. The share of organized retail is expected to rise significantly because more than $30 billion of investment is being planned by both domestic and foreign players in retail space in the coming five to seven years. As per estimates, 92% of these investments are slated for urban areas whereas 8% for rural. Of the urban investments, majority share of investments is slated for the hypermarket (38%) and supermarket (21%) formats while 62% of urban investments are expected to go to A-type or above cities. A break-up of expected urban investments in different formats and cities is given below in Table 1:
Table 1: Format-wise urban investments in retail expected in next 5 years Format Hypermarket Supermarket Specialty Store Cash n Carry Department Stores %Share 38 28 22 16 2 Source: FICCI Retail Report 2007
Source: FICCI Retail Report 2007 With roughly 60 percent of the total population below 30 years of age, favorable demographics are expected to drive consumption across categories. The purchasing power of a young consuming middle class has been talked of considerably since the time of economic liberalization in 1991. Also, the growth in the income amongst the Indian households has been on an increase witnessing a significant growth of 3.7% for the middle income households during 2002-06. Also depicted in Figure1 is the increasing number of working women population across the major cities of the country. This trends points toward increasing number of dual income households which further leads to increased purchasing power of the consumers
Source: NSSO; AC Nielsen; IRS-2002; KPMG Analysis
With various factors impacting growth in retail, some segments are bound to grow faster than others. For instance, increasing affluence is driving growth in the watches and jewelry segment, while awareness of health is driving growth in lifestyle pharmaceuticals. However, food and grocery is expected to see the highest growth with clothing emerging as the second fastest growing segment. Despite Food and Grocery being the fastest growing retail segment in India today, only 8% of it is in the organized retail segment, which offers a huge opportunity for malls to exploit. Presently, this segment is being catered to by the unorganized players, notably the kiryana stores.
Source: FICCI – KPMG Retail Survey, 2005
According to the recent report by McKinsey & Company titled 'The Great Indian Bazaar, Organized Retail Comes of Age in India', India's overall retail sector is likely to grow to US$ 450 billion by 2015. Another McKinsey report 'The rise of Indian Consumer Market', estimates that the Indian consumer market is likely to grow four times by 2025.
Retailing consists of all activities involved in selling goods or services directly to final consumers for personal, non-business use. A retailer or retail store is any business enterprise whose sales volume comes primarily from retailing.” Retail is India's largest industry, accounting for over 10 per cent of the country's GDP and around eight per cent of the employment. Retail industry in India is at the crossroads. It has emerged as one of the most dynamic and fast paced industries with several players entering the market. The presence of 15million kiryana stores brings into light the very fact that the Indian retail industry is highly fragmented/ unorganized. Retailing in India is gradually inching its way toward becoming the next boom industry, organized retailing in particular. The whole concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. Modern retail has entered India as seen in sprawling shopping centers, multi-storied malls and huge complexes offer shopping, entertainment and food all under one roof. The future of Indian retailing may even witness the concept of 24 hour retailing. Although this concept has been in existence in few retail segments like pharmaceuticals and fuel, it still remains to be a challenge for other segments like food and groceries, apparel etc to adopt this trend. Although the organized retailing in India is coming up in a big way, it cannot simply ignore the competition from the conventional stores because of various factors like reach, extending credit facility and other intangible factors like the human touch which are provided only by the conventional stores. The urban retail market has been adopting various new formats and the malls turned out to be the trend setters by promising the concept of shoppertainment. The trends in the rural market
also have been changing from the old Haats and Melas to the rural malls like ‘Chaupal Sagar’ launched by ITC, DCM Shriram Groups one-stop shopping destination called ‘Hariyali Bazaar’, Godrej groups agri store ‘Adhar’ etc. 1.1.1 RETAIL IN INDIA: ROOM FOR EVERYONE
Evolution: Historical Indian retail market consisted of weekly markets, village fairs and melas and the 19th century gave birth to the retail outlets in the form of convenience stores, Mom and Pop stores/ kiryana stores. This helped the consumers on to stick to a particular store for their day to day requirements and also avail the credit purchasing facility. And in the 1980’s people have seen the new formats like supermarket, departmental stores and discount stores entering into the Indian retail space. In less than a decade hypermarkets have gained all the applause of the retail market and stood above all the other formats by bringing in the concept of “one stop shopping.” This stood as an opening door for the new generation of the retail industry. And very soon the malls became the trend setters in the new millennium. This has coined the term of ‘shopper-tainment’ (shopping and entertainment) which can be attributed to the changing life styles of the people.
Historic/Rura l Reach
Traditional/Perv asive Reach
Modern Formats/ International
PDS Outlets Khadi Stores Cooperatives Convenience Stores Mom and Pop/Kiryanas
Exclusive Brand Outlets Hyper/Super Markets Department Stores Shopping Malls
Weekly Markets Village Fairs Melas
Source of Entertainme nt
Neighborhood Stores/Convenienc e
Availability/ Low Costs / Distribution
Shopping Experience/Efficien cy
Figure 4: Evolution of the Indian Retail Market The above given diagram is the pictorial representation which depicts the evolution of the Indian retail market formats based on their category and value proposition. And a brief description above formats based on some of the parameters like their offerings, space occupied etc. is also given below for better understanding. In recent times, sweeping changes have affected both the supply and the demand fronts of the market. Customer spending as well as brand consciousness has been increasing substantially. Also, they have started demanding a better shopping experience. To tap increasing potential of the Indian consumers, a large number of corporate have entered the retail arena. These include large Indian business groups such as the Tatas, RPG, Rahejas, Piramal, Reliance,Bharti and Birlas as well as MNC brands in apparel, footwear and durables. The entry into retailing by MNC brands has driven the growth of specialty chains and upgraded the standards of existing multi-brand outlets.
The established players in the organized retail sector are: (i) RPG Group, (ii) K Raheja Group; (iii) R Raheja Group; (iv) Tata Group; (v) Pantaloon Retail Ltd; (vi) Landmark Group; and (vii) Piramal Enterprise. The more recent entrants are Reliance, Bharti and Birlas who have rolled out large investment plans for this sector. Apart from these there are retailers like Viswapriya Group, DS Group, Nilgiris, etc. that have been very successful in the different business formats in retailing. Franchising arrangements with local entities are a popular medium of entry by for foreign companies. Several global brands such as Marks and Spencers, Tommy Hilfiger and Nike have entered the market through this kind of arrangement. The Trends In Indian Retailing The Retail Industry in India has shown an upward trend in different formats. Retailers are venturing into a number of formats as Indian retail transits through experimental phase. Since most of the formats are new to the consumers, retailers have to choose models that are customized to Indian taste and habits. A trend that has been seen in the Indian retail scenario has been that of differentiation of product and service. However, this alone will not be sufficient for differentiating the store. While product differentiation would play a significant role, the gap will diminish due to ease in global sourcing for all competitors.
1.1.2 RETAIL FORMATS Food and Grocery Retail Format Food and grocery formats can be distinguished based on various parameters. These findings are tabulated in the Table 2. As can be seen, the combinations of the seven parameters have given rise to some generic retail formats. We can thus define a retail format in terms of these seven parameters. 1. Categories of Merchandise Category of merchandise refers to different types of goods held in the store. There are stores that hold only grains and pulses, stores that hold other grocery items along with grains and pulses and stores that hold consumer durables, clothes along with food and groceries. 2. Variety of Brands held in the store for each Type of Merchandise Food and grocery stores can also be differentiated based on variety of brands held in the store for each type of merchandise e.g. a Kiryana store would hold 5-6 brands of toilet soap, however, a hypermarket would hold more than 10 brands of toilet soap. 3. Number of SKUs held in the store under each Brand In small retail stores one may not find all SKUs under any given brand e.g. a Kiryana store may hold only a 100 gm tube of toothpaste, however, hypermarket may hold all the SKUs available for a particular brand of toothpaste. 4. Price of Merchandise Retail stores can be differentiated based on price at which merchandise is sold in the store. Thus we have stores that sell their merchandise at wholesale prices, maximum Retail Price (MRP), discounted prices or at lowest price in the market (may be EDLP). 5. Service Offered in the Store Some food and grocery stores are over-the-counter (OTC) stores. Others are selfservice stores (essentially supermarkets and hypermarkets). Some stores also offer 19
home-delivery service to their customers. In some cases, stores offered home delivery when the bill value exceeds a certain amount. 6. Accessibility Accessibility is the ease with which one can reach a particular food and grocery store. It can be defined either in terms of distance or time required to reach a particular store. Customers prefer to use the latter. 7. Ambience Ambience refers to the shopping conditions that exist within of merchandise (display). a store. It is a composite parameter composed factors like of cleanliness, lighting, walking space and arrangement
Table 2: Value Proposition of Existing Food and Grocery Formats in India
Store Kiryana Merchandize Grains, Pulses, other Groceries, personal products Number of brands Medium (4-5 brands per product category) Number of SKUs Low Price MRP Service Home Delivery Accessibility High (Walking Distance) Ambien ce Dull
Grains, Pulses, other Groceries, personal products Pulses, other Groceries, personal products , some other household items (plastics, utensils, etc) Pulses, other Groceries, personal products, wet groceries Household appliances, clothes, Footwear etc Grains Pulses and
Medium (4-5 brands per product category) Medium (4-5 brands per product category)
Home Delivery+ Self Service
High (Walking Distance)
Self Service + Home delivery based on bill amount
Medium (need to travel 10-15 mins)
Bright and Clean
High (more than 6 brands per product category
EDLP + Some Discount
Self Service + Home delivery based on bill amount
Low (need to travel more than 15 mins)
Bright and Clean
Low (1-3 brands per product category)
OTC – Home Delivery
Low (need to travel more than 15 mins)
Different Formats Existing In The Food And Grocery Sector Kiryana Store Kiryana store, a combination of convenience and mom-and-pop stores, is a well-located store. Ease of shopping, personalized services, credit availability and home delivery of ordered merchandise are the major reasons for its patronage, even when it charges average to above average prices, and carries a less number of items. These are generally over-thecounter (OTC) stores and have a dull atmosphere. They carry about 5000 items. They are small stores generally less than 500 sq ft. Yet, they service almost the complete purchase basket of customers. They are also useful for fill-in merchandise and emergency purchases. Many customers shop at least two to three times a week at these stores. These stores face most competition from supermarkets that have started providing longer hours and better stocks of non-food items. Upgraded Kiryana Stores Some stores have upgraded themselves to offer both OTC and self-service. This is a unique format that provides a cleaner and more hygienic environment for shopping as compared to a small Kiryana store. The merchandise and other elements of retail mix remain as in case of Kiryana. Supermarkets A conventional supermarket is a self-service food store offering groceries with limited sales of non-food items, such as health and beauty aids and general merchandise at discounted prices. They are larger in size and carry 9,000 to 11,000 items. They occupy between 1000 and 4000 sq. ft space. The self-service nature allows supermarkets to cut costs, as well as increase volume. They are chosen due to volume sales, self-service, low prices and cleaner and brighter ambience for shopping. Supermarkets offer medium variety of brands and SKUs. Conventional supermarkets have to deal with intense
competition from other types of food stores. Convenience stores offer greater customer convenience; Hypermarkets have more product lines and greater variety, low prices, as well as better gross margins; Wholesale dealers offer wholesale prices and have low operating costs. Hypermarkets Hypermarkets are large (above 8000 sq. ft.) combination food and general merchandise retailer. They stock a large assortment (40,000 to 60,000 items) and hence offer more variety of merchandise, brands and SKUs. Merchandise includes groceries, hardware, furniture, home appliances, clothes, sports equipment, and crockery. Hypermarkets offer a clean, hygienic and bright environment for shopping. They offer variety of promotional schemes to shoppers. Some hypermarkets are known to offer lowest price in the market on their merchandise. This attracts consumers to such hypermarkets. Economies of scale, efficient management of demand and supply chain are main reasons why hypermarkets can offer lower prices in the market. Wholesalers Wholesalers, although not retailers in strictly sense, attract retail customers for grocery and food items in India. They offer only one or two types of merchandise (grains and pulses), low variety and only one or two pack sizes (in which merchandise can be purchased). Purchase from wholesalers thus takes place in bulk. The main attraction of the wholesaler is its low price that may be lower than prices offered by hypermarkets. Other Existing Organized Retail Formats Convenience store: A subdued version of a supermarket. Merchandise: Groceries are predominantly sold. Space occupied: Around 500 Sq. ft. to 3000 Sq. ft. Example: stores located at the corners of the streets, Reliance Retail’s Fresh and Select.
Department store: A retail establishment which specializes in selling a wide range of products without a single prominent merchandise line and is usually a part of a retail chain. Merchandise: Apparel, household accessories, cosmetics, gifts etc. Space occupied: Around 10000 Sq. ft. – 30000 Sq. ft. Example: Landmark Group’s LifeStyle, Trent India Ltd.’s Westside. Discount store: Standard merchandise sold at lower prices with lower margins and higher volumes. Merchandise: A variety of perishable/ non perishable goods. Example: Viswapriya Group’s Subiksha, Piramal’s TruMart. Specialty store: It consists of a narrow product line with deep assortment. Merchandise: Depends on the stores Example: Bata store deals only with footwear, RPG’s Music World, Crossword. Figure 5
Malls: The largest form of organized retailing today. Located mainly in metro cities, in proximity to urban outskirts. Merchandise: They lend an ideal shopping experience with an amalgamation of product, service and entertainment, all under a common roof. 24
Space occupied: Ranges from 60,000 sq ft to 7, 00,000 sq ft. Example: Pantaloon Retail’s Central, Mumbai’s Orbit. MBO’s: Multi Brand outlets, also known as Category Killers. These usually do well in busy market places and Metros. Merchandise: Offers several brads across a single product category The percentage of organized retail per sector wise is very miniscule and this does not mean that there is stagnation of growth because if we look at the Figure 5 we can clearly observe the burgeoning pace of growth happening in all the sectors of Indian retailing. The fastest growing formats include specialty stores, supermarkets followed by hypermarkets. The relatively newer concept of E-tailing is also fast gaining popularity in the Indian market by growing at a significant 9%. PRESENT PLAYERS AND THEIR RETAIL FORMATS:
Figure 6: Formats adopted by key players
The above figure depicts the present scenario of the retail Industry in India i.e. the major players present and the various retail formats that have been adopted by them. The fast changing scenario demands the need of studying the various trends prevalent in the Indian retail markets. These are discussed ahead. 1.1.3 RETAIL MARKET TRENDS: New Product Categories: For a long time, the corner grocery store was the only choice available to the consumer, especially in the urban areas. This is slowly giving way to international formats of retailing. The traditional food and grocery segment has seen the emergence of supermarkets/grocery chains (Food World, Nilgiris, Apna Bazaar), convenience stores (ConveniO, HP Speedmart) and fast-food chains (McDonalds, Dominos). However that foray has been made into the non-food segment. These include lifestyle/fashion segments (Shoppers' Stop, Globus, LifeStyle, Westside), apparel/accessories (Pantaloon, Levis, Reebok), books/music/gifts (Archies, MusicWorld, Crosswords, Landmark), appliances and consumer durables (Viveks, Jainsons, Vasant & Co.), drugs and pharmacy (Health and Glow, Apollo). Increasing competition: Reliance is planning to launch a nationwide chain of hyper marts, supermarkets, discount stores, department stores, convenience stores and specialty stores. These 5,500 stores will be located in 800 cities and towns in India. Other new entrants such as Bharti Enterprises and the AV Birla group will compete against well-established retailers, such as Pantaloon Retail, Shoppers’ stop, Trent, Spencer’s and Lifestyle stores. Foreign retailers are keenly evaluating the Indian market and identifying partners to forge an alliance with in areas currently permitted by regulations. Increase in Private Labels: Private labels have been gaining significance. More retailers are introducing their own brands in all categories including Food & Groceries, apparel, accessories, footwear. It is mainly growing among FMCG products in most supermarkets with groceries accounting for 45.9%. They enhance the profitability levels of product categories, increase retailers’ negotiation powers and create consumer loyalty. These own
brands also do not have to manage intermediaries since retailers maintain oversight of the supply chain. Shifting Toward Tier II and III cities: Indian retailers are planning to extend operations into Tier II and Tier III cities as heightened IT off shoring activity in these locations have increased consumers’ disposable income. The population in these cities is typically well educated and willing to purchase goods and services. Some major retailers, like Globus, Reliance Retail and Pantaloon, have already begun building a retail presence in Tier III cities before many retailers have finalized their Tier II retail operations. Venturing into Agri-Business: India’s most prestigious business houses and global retailers are planning to enter retail agri-business. Market entrants plan to invest in the entire value chain, moving goods “from the farm to the fridge at home.” Viewed as India’s next “Sunrise Sector,” retailers are employing contract farming as a means of boosting their ventures. Contract farming enables farmers to access land, manpower and farming skill without having to purchase land. Of the total Cultivable land of 400 million acres in India, contract farming represents 7 million acres thus indicating a tremendous opportunity. For pure corporate contracts between farmers and companies, only 2,00,000 acres are used. Experimenting with formats: Selecting the right retail format is essential in modern retailing. The difference between urban and rural customers is one of the reasons why multiple formats are required in India. Local conditions and insights into buying-behavior shape the format choice. No single format will be suitable for an all India strategy and selecting the relevant format is the key success factor.
POTENTIAL ROADBLOCKS TO THE RETAIL GROWTH STORY
Despite the spectacular growth projections, one must not remain oblivious to the potential roadblocks that may hamper the growth of the organized retailing in the country. Some of these are shown and described below.
Real estate costs: Most retailers interviewed expressed concerns about the high cost of real estate today. On the other hand, the average purchase ticket size in India is still low. This could lead to a situation of high fixed cost, with low contribution per sale for retailers. High
footfalls would be a necessary condition for success. Unless real estate costs become conducive to retail growth, most retail business will take a longer time for break-even. Distribution costs: A key bottleneck mentioned by respondents is the absence of distribution networks connecting Tier-II towns with regional logistics hubs. There is scope for organized logistics players like regional transport companies/ third party logistics (3PL) players to develop these distribution networks including warehouses, cold chains and truck/ multimodal services connecting these locations. Investments are being made in warehouses and hubs by Indian corporate. Outsourced logistics service providers are also emerging. Regulatory aspects: A point that kept emerging in various discussions with the retailers was the dated regulations in the country. For example Weights and Measures Act expects all goods to be available in the factory packed form in the stores. Similarly Agricultural Produce Marketing Committee (APMC) Acts consider even small volume purchases to qualify as wholesale deals. There are also variations among states with respect to aspects like store timings. All these are hindrances that can restrict rapid growth of retailing in India. Skilled retail personnel: A key concern raised by most respondents has been the expected shortfall of trained manpower to meet expansion plans. With increasing competition from the ITeS industry, retail manpower shortage could become a critical bottleneck that limits player's expansion plans. Individual players are taking proactive measures like providing onthe-job training, setting up retail academies etc to ensure availability of people with the right skill sets. However, the industry as a whole would need to step forward and put in place measures to deal with the critical gap. 1.1.5 URBAN VS RURAL RETAIL TRENDS:
Urban Trends The urban retailing has been experimenting with many formats like the supermarkets, hypermarkets, specialty stores, multi branded outlets etc. and of latest it seems to be embracing the trend of mall culture. It is a rich man's world too, with multi-screen cinemas, 29
restaurants, games and branded shops - well out of the reach of many of the country's one billion people. But India's middle-classes, widely travelled and with deep pockets, are flocking to malls. India's organized retail industry accounts for just 3% of the country's total retail sales, though it is poised to grow by 97% per year in the next five years to a staggering $24bn. Fuelling this growth are India's sprawling shopping malls, which are increasingly challenging High Street stores, corner shops and village markets alike. Just five years ago, there were shopping arcades but no malls. Today there are nearly 100 big shopping malls in the country, more than half of them in Delhi and Mumbai alone. And in two years there will be 360 malls across the country. More than 20 are in various stages of development in Delhi and Mumbai. Among them is India's biggest shopping mall, Ambi, which is being built in Gurgaon, near Delhi. Spread over 3.2 million square feet, it is set to become a virtual town, where multiscreen cinemas, recreational facilities for adults and children, food courts and branded outlets will fill the space. It will have exclusive showrooms of international brands, where, according to the developers, customers will have to shop by prior appointment. Analysts comment that this is just the beginning and this is going to experience a ‘sea change’ once the platform is opened up for the FDI Figure 8
Rural Trends Wal-mart, the world's largest corporation, also had its roots in rural America. Unlike many other retailers who started from urban centers and then trickled down to rural areas, Wal-mart had started from rural areas and then came closer to cities over a period of time. Many more such concepts are likely to be tested in the future as marketers and retailers begin to acknowledge that the rural consumer is more than a ‘poor cousin' of the urban counterpart. The IMAGES KSA Report avers that these concepts are likely to go a long way in bringing a huge untapped population within the purview of organized retailing, thereby, increasing the size of the total market. India's largely rural population has also caught the eye of retailers looking for new areas of growth. ITC launched the country's first rural mall ‘ Chaupal Sagar' , offering a diverse product range from FMCG to electronics appliance to automobiles, attempting to provide farmers a one-stop destination for all of their needs. There has been yet another initiative by the DCM Sriram Group called the ‘ Hariyali Bazaar' , that has initially started off by providing farm related inputs and services but plans to introduce the complete shopping basket in due course. Other corporate bodies include Escorts, and Tata Chemicals (with Tata Kisan Sansar) setting up agri-stores to provide products/services targeted at the farmer in order to tap the vast rural market. In INDIA RETAIL REPORT 2005, Mr. Adi B. Godrej, Chairman, The Godrej Group said that his group had also launched the concept of agri-stores named 'Adhaar', which served as one-stop shops for farmers selling agricultural products such as fertilizers & animal feed and also providing farmers knowledge on how to effectively utilize these products. "There are 8 stores already operating in Maharashtra and Gujarat and further expansion is very much on the cards. FDI could indeed do a lot in this sector as entry of international retailers would bring in the required expertise to set the supply chain in place which would result in elimination of wastage, better prices and quality for consumers and higher income for farmers besides of course farm produce retailing getting a facelift”.
Godrej Group's Agro and Food division, Godrej Agrovet Ltd. (GAVL) operates the format, selling a variety of vegetables, fruits and herbs - both local and exotic thereby introducing the concept of 'farm-to-plate' to urbanites. Tapping the fresh farm produce sector, the group plans to take its recently launched retail concept – Nature's Basket - to newer cities steadily. Godrej plans to open four more Nature's Basket stores in Mumbai before taking them national.
1.1.6 SWOT ANALYSIS: A SWOT analysis of the Indian organized retail industry is presented below: Strength: 1. Technology-intensive: Retailing is technology driven which helps the organized retailers to score over the unorganized retailers. Successful organized retailers today work closely with their vendors to predict consumer demand, shorten lead times, reduce inventory holding and ultimately save cost. Example: Wal-Mart pioneered the concept of building competitive advantage through distribution & information systems in the retailing industry. They introduced two innovative logistics techniques – cross-docking and EDI (electronic data interchange) 2. On an average a super market stocks up to 5000 SKU's against a few hundreds stocked with an average unorganized retailer. This will provide variety in products (required breadth & depth for consumers) 3. As a consequence of high volumes, procurement will be direct from the Manufacturer. Hence, merchandise can be offered at lower costs. Weakness: 1. Less Conversion level : Despite high footfalls, the conversion ratio has been very low in the retail outlets in a mall as compared to the standalone counter parts. It is seen that actual conversions of footfall into sales for a mall outlet is approximately 20-25%. On the other hand, a high street store of retail chain has an average conversion of about 50-60%. As a 32
result, a stand-alone store has a ROI (return on investment) of 25-30%; in contrast the retail majors are experiencing a ROI of 8-10% 2. Customer Loyalty: Retail chains are yet to settle down with the proper merchandise mix for the mall outlets. Since the stand-alone outlets were established long time back, so they have stabilized in terms of footfalls & merchandise mix and thus have a higher customer loyalty base. Opportunity: 1. The Indian middle class is already 30 Crores & is projected to grow to over 60 Crores by 2010 making India one of the largest consumer markets of the world. The IMAGES-KSA projections indicate that by 2015, India will have over 55 Crores people under the age of 20 reflecting the enormous opportunities possible in the kids and teens retailing segment. 2. Organized retail is only 3% of the total retailing market in India. It is estimated to grow at the rate of 25-30% p.a. and reach INR 1,00,000 Crores by 2010. 3. Percolating down : In India it has been found out that the top 6 cities contribute for 66% of total organized retailing. While the metros have already been exploited, the focus has now been shifted towards the tier-II cities. The 'retail boom', 85% of which has so far been concentrated in the metros is beginning to percolate down to these smaller cities and towns. The contribution of these tier-II cities to total organized retailing sales is expected to grow to 20-25%. 4. Rural Retailing: India's huge rural population has caught the eye of the retailers looking for new areas of growth. ITC launched India's first rural mall "Chaupal Saga" offering a diverse range of products from FMCG to electronic goods to automobiles, attempting to provide farmers a one-stop destination for all their needs." Hariyali Bazar" is started by DCM Sriram group which provides farm related inputs & services. The Godrej group has launched the concept of 'agri-stores' named "Adhaar" which offers agricultural products such as fertilizers & animal feed along with the required knowledge for effective use of the same to the farmers.
Threat: 1. If the unorganized retailers are put together, they are parallel to a large supermarket with no or little overheads, high degree of flexibility in merchandise, display, prices and turnover. 2. Shopping Culture: Shopping culture has not developed in India as yet. Even now malls are just a place to hang around with family and friends and largely confined to windowshopping. 3. Cultural Variation leads to variation in merchandise in India at different geographical locations. 1.1.7 CONCLUSION: Organized retailing in India has been maturing by passing through many trends with the entry of many big players trying to build and strengthen their retail muscle by pumping in a lot of money in the retail space. And in the light of this situation some feel that the conventional stores may loose out their existence. Once the FDI is allowed into the Indian retail market there may be drastic changes in the Indian retailing and its focus may also shift to the vast untapped rural market which needs huge investments to build the infrastructure. All these changes in the Indian retail market are finally going to end up by benefiting the Indian consumer.
CHAPTER 2 LITERATURE REVIEW
2.1 LITERATURE REVIEW In India and rest of Asia organized retail is expected to grow rapidly in future. One factor in favor of this growth is the increased consumer valuation of time (Messinger and Narsimhan, 1997). As shoppers face more and more paucity of time, their preferences would shift towards one-stop shopping experiences. This supports the popular belief that hypermarkets would flourish in future. In a study of store choice behavior amongst audio equipment shoppers, Dash et al (1976) suggested that specialty store shoppers were more certain than the department store shoppers about their product choice being satisfactory. A housewife purchases fruits and vegetables from a roadside vendor, whom she has been patronizing since long, rather than from a supermarket. Taking a cue from this, it could be assumed that the perceived risk of purchase going wrong is less at the vegetable vendor as compared to a supermarket, where there is no guarantee of the fruits and vegetables being fresh. Here a store is being chosen based on self- confidence that the customer has regarding the store. Sharma and Krishnan (2002) have highlighted another important aspect with regard to format choice by shoppers. The study found that sales people do not seem to enhance preference for stores. Thus a simple not so literate grocer at a Kiryana store might prove to be more effective than qualified and well trained salespeople at big hypermarkets. This is one of the reasons why Kiryana stores are still so popular in India. Small stores seem to be able to create a special relationship between the salespeople and their customers. Zeithaml (1988) found that consumers consider both monetary and non-monetary costssuch as time and effort, to evaluate value of shopping at a particular store. Hence anything that can be built to reduce time, effort and search costs can increase perceptions of value. Search costs for a shopper can be reduced by properly laying out and displaying the merchandise. Use of appropriate signage can also reduce search effort. This is where store
ambience plays an important role. The shopping experience as created by a clean, hygienic, well lit and neatly laid out store has been found to increase store patronage. Amongst parameters that define a store format Engel, Blackwell and Miniard (2001) observed that price level, assortment and location of store appear as important drivers for consumer‘s choice between store formats. Quality and service on the other hand did not differentiate between formats in their study. A different approach of assessing shoppers‘format choice decision process is based on utility that shoppers derive from shopping at a particular store. Consumer‘s choice of preferred store format is based on the perceived utility that s/he derives from the store format (Solgaard and Hansen, 2003). In principle utility emerges based partly on what the consumers perceive they receive and partly on what consumers perceive they give. To receive the store service the consumer will incur some costs, i.e., spend a certain amount of resources , time, effort and money. Since these resources are scarce, the consumers would try to direct their resources towards the stores that will maximize their utility. This theory was developed based on the Prospect Theory as explained by Khanmen and Tversky (1979). Later the concept of Transaction Utility was modeled depending on the difference between the selling price and reference price. To explain this reference price was postulated and describes as the amount of money that a customer expects to pay for a good or service. It is suggested that any purchase occasion is associated with two utilities: acquisition utility and transaction utility. Acquisition utility represents the economic gain or loss from the transaction. Where as transaction utility is associated with purchase or (sale) and represents the pleasure (or displeasure) of the financial deal per se and is function of the difference between the selling price (p) and the reference price (q). The situation where p > q, the transaction utility is negative (rip-off situation); conversely when p < q, the transaction utility is positive (bargain situation). The total utility of a purchase is a sum of acquisition utility and transaction utility (Thaler, 1983). The implication is that an individual may not buy a product if acquisition utility is offset by loss in transaction utility when the price is sufficiently larger than reference price.
However, even though this theory exemplifies a purchase situation, it has not been applied in a retailing perspective. Given the basic tenet, it is felt that acquisition utility and transaction utility can be used to explain the shoppers‘ choice of a format. The theory may require modifications. Acquisition utility can be extended to include not only the price of the merchandise but also other costs associated with shopping such as, cost of product search, cost of information, size of purchase, and cost of access to the store. Shopping, being essentially a process that occurs in a context of a store may have a close association with the transaction utility. The perceived value delivered through the transaction could include all non-monetary aspects of the 'deal' that may include ambience and service at the retail point for explaining the transactional utility of the format. Shugar (1984) presents a theoretically logical development of factors influencing price quality relationships. It suggests that customers compare the quality they experience with a norm or standard, such as pre-purchase expectations about a particular product or service. Any perceived discrepancy between the two leads to increased or decreased satisfaction (Oliver, 1980). Kenhove et al. (1999) found that store choice is differentiated by the nature of the task. They studied the store choice decision across various tasks as described by the respondents, such as urgent purchase, large quantities, difficult job, regular purchase and get ideas. Store choice has also been found dependent on socio-economic background of consumers, their personality and past purchase experience (Dodge and Summer, 1969). Lumpkin et al. (1985) found that as compared to young shoppers, elderly shoppers were less price-conscious and proximity of residence to store was not an important factor for them. They considered shopping as recreational activity and thus chose a store that is perceived to be high on “entertainment” value.
Hutcheson and Mutinho (1998) found that shoppers used a combination of the quality of staff and “the occurrence of low prices and the frequency of promotions” in choosing a store. The role of ambience in store choice has also been found significant. Kotler (1973) has proposed atmospherics as an important part of retail marketing strategy. In recent times, Leszczyc and Sinha (2000) indicated that store choice was a dynamic decision and could be conceptualized as a problem of deciding when and where to shop. The first decision regarding choice of the traditional store location and the second regarding the timing of the shopping trip incidence. Another study showed that shoppers demanded good service as well as quality merchandise from the retailers (Business Today, 1999). Evidence for the effect of dissatisfaction can be shown in the tendency for people to discuss their negative experiences more than the positive ones, an effect widely known to bias surveys (deVaus, 1996). Baker, Grewal and Parasuraman (1994) posited that consumers make inferences about merchandise and service quality based on store environment factors and that these inferences, in turn, influence store image. Merchandise quality, styling, price, assortment, location convenience, staff service, general service, store environment and pleasantness of shopping have been identified as components of store image (e.g., Lindquist 1974; Mazursky and Jacoby 1986; Zimmer and Golden 1988). 2.2 PURPOSE OF THE STUDY In recent years many Indian business houses and global retailers such as Vishal Mega mart, Reliance, Tata, Aditya Birla Group, Trent, Giant, Big Bazaar, IKEA and Amway entered Indian retail market. Competing with local outlets, they experienced lower than average performance in certain cities. This provided me with the idea to start this research. I started by trying to generate the list of factors that determine consumers’ shopping behavior in retailing. In order to influence the choice of the consumers towards a particular store, it is
expected to obtain such benefits as frequent purchase, big amount of purchase, cost reduction, and favorable word of mouth (Zeithaml and Bitner 1996). This study was aimed at identifying the differences that exists in the consumer perception regarding a Kiryana store and a Retail store. The difference was studied amongst a list of factors inclusive of the store attributes, salesperson dimension, physical aspects, store policy, etc. Also the study was aimed at studying the various In-Store influences that affect the repurchase behavior of the consumers visiting the store. This includes the physical evidence that the store provides to the customers including the layout, store size, ease of searching for the goods, contact personnel etc. The study also aims at studying how the recommendation as well as repurchase behavior of the customers varies as a function of the demographics i.e. the age, monthly income, gender and occupation.
CHAPTER 3 RESEARCH METHODOLOGY
Marketing Research is a systematic and objective process of identifying and formulating the marketing problems, setting research objectives and methods for collecting editing, coding, tabulating, evaluating, analysis, interpreting and presenting data in order to find justified solutions to these problems. Planning provides a framework within which the goals of research are to be achieved. It facilitates the smooth sailing of the various research operations, thereby, making research as efficient as possible the plan and procedure of any research study is bound up with its purpose. The purpose of the present study was to study the determinants of store loyalty. The research methodology adopted for the study is described below: 3.1 PROBLEM DEFINITION With the increasing number of retail stores, the survival of the shop around the corner becomes an issue of concern. The study is aimed at understanding the perception of the customers towards both the type of stores, their approach towards the various store attributes, the marketing mix adopted by the stores etc so as to analyze if there is a shift in the store preference by the customers. 3.2 RESEARCH OBJECTIVES The objectives of the study are: Primary Objectives: To study the difference in consumer perception in a retail outlet vis-à-vis a kiryana store in regard to the following parameters:
1. Analyse the type of store preferred- retail or kiryana 2. To study factors influencing choice of store 3. To analyse effect of 4Ps of Marketing (product, price, promotion, place)
4. To study purchase behavior 5. To study in store influences 6. To study satisfaction level 7. To study post purchase behavior.
Secondary Objectives 1. To study the factors influencing store choice among the current consumers
2. To study the affect of the In-Store influences on repurchase behavior.
3. To study the recommending behavior and switching behavior across demographic variables
3.3 RESEARCH DESIGN Type of the study The study was both an exploratory and descriptive in nature. Firstly, exploratory study was conducted to find out basic information regarding store attributes. The exploratory study was helpful in formulating hypothesis & also in assessing how consumers make decision about the specific retail type for buying goods. After carrying out the exploratory research, descriptive study was carried out to identify the factors or variables so to understand the determinants of store loyalty. Hypothesis H01: There is no significant difference between the consumer perception regarding a kiryana store and a retail store. H02: There is no significant positive relation between recommendation and repurchase behavior and the Age of the customer.
H02a: There is no significant positive relation between recommendation and repurchase behavior and the Age of the kiryana store customer.
H02b: There is no significant positive relation between recommendation and repurchase behavior and the Age of the retail store customer.
H3: There is no significant positive relation between recommendation and repurchase behavior and the gender of the customer.
H03a: There is no significant positive relation between recommendation and repurchase behavior and the gender of the kiryana store customer. H03b: There is no significant positive relation between recommendation and repurchase behavior and the gender of the retail store customer.
H4: There is no significant positive relation between recommendation and repurchase behavior and the occupation of the customer.
H04a: There is no significant positive relation between recommendation and repurchase behavior and the occupation of the kiryana store customer. H04b: There is no significant positive relation between recommendation and repurchase behavior and the occupation of the retail store customer.
H5: There is no significant positive relation between recommendation and repurchase behavior and the monthly income of the customer.
H05a: There is no significant positive relation between recommendation and repurchase behavior and the monthly income of the kiryana store customer. H05b: There is no significant positive relation between recommendation and repurchase behavior and the monthly income of the retail store customer.
Scope of the study The study will be conducted in Mohali. A few selected organized and un-organized stores will be visited at different locations in the Mohali. The study however shall not be restricted to only the large and popular stores but will be done in stores at different locations so as to avoid data from similar consumer profiles Need of study Identification of customers and their buying behavior patterns have been the focus of a number of retail store studies. The results of these studies have been useful to the marketing managers in providing solutions to various marketing problems. 44
The aim of this study is to ascertain whether the consumer preference is actually shifting from the shop around the corner to the retail biggie. This will help to judge whether the retail format poses as a threat to the existence of the kiryana stores in mohali 3.4 METHOD OF DATA COLLECTION Secondary Data: The secondary data was referred to gain an insight into the work that has already been done in the context of the retailing scenario in India. Previous researches, articles published regarding the comparative studies, text on consumer behavior were studied. The sources were management journals (Journal of Retailing, Journal of Marketing Research),Books, Marketing Research Websites, Research papers, Print Articles etc. Primary Data: Primary data was collected through the structured questionnaires by survey method. The questionnaires were personally dispersed to the respondents to using convenience sampling to collect the relevant information after the secondary study had identified and refined measurement items used for the study. Respondents were asked to assess their perception of various items, including factors viewed as antecedents of quality and satisfaction. Assessment was based on a five point likert scale which was included in self administered structured questionnaires. Items and Scale The questionnaire included store image and store loyalty items in Likert 5 point scale and other demographic items such as occupation and income. It was used for both types of stores. It included items that are related to characteristics of store attributes and store choice in Likert scale and demographic characteristics in nominal, ratio, and ordinal scale
3.5 SAMPLING Sampling Unit
• • • • People who buy from grocery stores including modern retail format Age group: above 20 yrs City: Mohali Time period: 2-3 weeks
Sampling Technique: Convenience Sampling More emphasis on family member making the purchase decisions (Random size=150)
Type of Store Sample Size Retail Store 74 Kiryana Store 76
3.6 STATISTICAL TECHNIQUES USED For the analysis of the results of the study, various statistical tools were used using the aid of MS EXCEL, SPSS These statistical techniques used were: 1) Descriptive Statistics: Measures of central tendency such as mean, median, standard deviation etc were worked out to study the nature and distribution of scores on various variables. The means were calculated for the each of the thirty six attributes including demographics before the t-test, correlation, chi-square could be applied. 2) Z- test: - test was used to assess whether the means of two groups (Retail store & Kiryana store) are statistically different from each other or not. Z-test would help to prove the hypothesis of the existence of factors that govern the customer’s choice of the store.
3.7 LIMITATIONS OF THE STUDY
All research studies have their limitations and this study is no exception. In designing the study the researcher attempted to be as scientific as possible, the present study nevertheless has the following limitations. 1) The limitation concerns the nature of the measures used. The measures included in this research were all based on the perceptions of the participating customers. Therefore, the potential for data inaccuracies due to item misrepresentation or predisposition to certain responses on the part of participant does exist. 2) Responses (with respect to store type preference and store attributes) have been solicited from the customers in Mohali The perception of people in this area may vary from those of the rest of India. 3) Some customers (of both retail and kiryana store) did not participate in this study. As a result, the generalization of the findings of this research should be considered carefully. 4) This study attempted to explore extensively underlying key attributes of store. However, there may still be a possibility of missing key dimensions.
CHAPTER 4 DATA INTERPRETATION AND ANALYSIS
Q1. GENDER: Graph 4.1: Gender
Interpretation: Out of the total respondents surveyed for the research 60% were females and 40% were males. The data was collected through convenience sampling.
2. AGE: Graph 4.2: Age
The above chart shows that the maximum percentage of people i.e. 51.3%, visiting the store, belong to the age group of 25 to 34 hence the survey largely included the young earning individuals
3. OCCUPATION: Graph 4.3: Occupation
Interpretation: Maximum respondents targeted were the housewives, followed by the working men/women. A small percentage of the sample was students basically the residents of hostels/Paying Guests. 4. INCOME: Graph 4.4: Income
Maximum number of people visiting the store is belonging to the income group 20001 to 30000 followed by varied percentages of other groups.
Comparison Of The Store Type Visited On The Basis Of Demographics 5. AGE AND STORE TYPE: Graph 4.5
Across all age groups, higher number of respondents still visits the kiryana store. 6. GENDER AND TYPE OF STORE: Graph 4.6
Approximately same number of men and women visit each type of store. 51
7. OCCUPATION AND TYPE OF STORE Graph 4.7
Across all occupations, nearly equal preference is given to both the stores, however, larger number of students prefer the modern retail stores for their purchases. 8. INCOME AND STORE TYPE: Graph 4.8
There isn’t a significant difference observed between the store types visited on the basis of the income pattern of the sample.
10. VISITED ONCE IN DIFFERENT STORES
Stores 1.Big bazaar 2.6-ten 3.Vishal Mega Mart 4.Easy Day 5.More 6.Reliance 7.others
visited once 98 120 23 1 14 87 64
140 120 100 80 60 40 20 0 98
120 87 64 23 1 1bigbazar 2.6-ten 3.Vishal Mega Mart 4.Easy Day 5.More 6.Reliance 7.others
visited once Interpretation: 6-Ten is mostly visited followed by big bazar,Reliance fresh and then unorganized stores
11. HOW MANY TIMES VISIT IN RETAIL STORES IN LAST TWO MONTHS?
more than >3 times 5 36 1 0 4 17 28 3 45 1 0 5 36 9
Stores 1.Big bazaar 2.6-ten 3.Vishal Mega Mart 4.Easy Day 5.More 6.Reliance 7.others
once 31 21 18 1 2 21 12
2 times 14 18 3 0 3 13 15
Visit inLast Two Months
140 120 100 80 60 40 20 0
ba z ar i
45 36 18 21 1 3 18 36 17 13 21 9 28 15 12
3 5 14 31
more than >3 times 3 times 2 times once
5 4 3 2
3. Vi s
2. 6ha te lM n eg a M ar 4. t Ea sy D ay 5. M or e 6. R el ia nc e 7. ot he rs
12. T- TEST T- test was calculated to compare the means of all the variables i.e. price, advertisement, assortment, brand, store atmosphere, facilities, credit service, convenience of shopping, location, promotion, sales personnel service, and product quality etc across the two store types. We are primarily concerned with whether p (significance) is greater than or less than 0.05. The t value gives the estimated number of standard errors between the two means. So as a rule of thumb, I report one digit behind the decimal for a t-value, and report two digits behind the decimal for a p-value. T- test was used to assess whether the means of perceptions regarding the two groups (Retail store & Kiryana store) are statistically different from each other or not.. Group 1 was chosen as Kiryana Store Group 2 was chosen as Retail Store. The group statistics table provides the means, the standard deviation and the standard error mean of the various variables considered. The independent samples test provides information about the variables across which the consumers perception differs as far as the retail store and the kiryana stores are concerned. This helps to infer whether there actually exists a difference in the perception or not. This independent t-test will hence help to test the hypothesis H0 i.e. there exists a difference in the consumer perception across a retail store and a kiryana store.
Group Statistics Str_type Merch_good 1 2 Prd_qual 1 2 Qual_price 1 2 LowPrice 1 2 Prd_Avail 1 2 Variety 1 2 Att_schemes 1 2 Product 1 2 Groc_greengroc 1 2 Layout 1 2 Spacious 1 2 Easy_search 1 2 Adv_POP 1 2 Distance 1 2 Parking 1 2 Phy_cond 1 N 76 74 76 74 76 74 76 74 76 74 76 74 76 74 76 74 76 74 76 74 76 74 76 74 76 74 76 74 76 74 76 Mean 3.49 3.70 3.01 3.50 3.20 3.32 3.33 3.20 2.88 3.64 2.86 3.50 2.57 3.41 3.21 3.68 2.80 3.47 2.66 3.88 2.46 3.85 2.95 3.57 2.55 3.30 3.91 3.19 3.24 3.39 3.11 Std. Deviation .872 .887 .721 .969 .817 .796 .999 .921 1.188 .973 1.016 1.076 1.147 .964 .957 .967 1.255 .910 .974 .810 1.125 1.002 1.188 .966 1.063 .932 1.133 1.143 1.165 .841 1.066 Std. Error Mean .100 .103 .083 .113 .094 .092 .115 .107 .136 .113 .117 .125 .132 .112 .110 .112 .144 .106 .112 .094 .129 .117 .136 .112 .122 .108 .130 .133 .134 .098 .122
Independent Samples Test
Levene's Test for Equality of Variances t-test for Equality of Means 95% Confidence Interval of Sig. (2F Merch_good Equal variances assumed Equal variances not assumed Prd_qual EVA EVNA Qual_price EVA EVNA LowPrice EVA EVNA Prd_Avail EVA EVNA Variety EVA EVNA Att_schemes EVA EVNA Product EVA EVNA Groc_greengro EVA c Layout EVNA EVA EVNA Spacious EVA EVNA -8.000 146.866 .000 -1.391 .174 -1.734 -1.047 3.106 .080 8.188 .005 16.512 .000 .405 .526 3.309 .071 .077 .782 6.001 .015 .625 .430 .001 .970 12.217 .001 .362 Sig. .548 t -1.503 -1.503 -3.498 -3.485 -.964 -.964 .804 .805 -4.242 -4.254 -3.774 -3.772 -4.847 -4.858 -2.962 -2.962 -3.738 -3.753 -8.334 -8.354 -7.987 df 148 147.708 148 134.813 148 148.000 148 147.577 148 143.805 148 146.961 148 144.927 148 147.794 148 136.887 148 144.507 148 tailed) .135 .135 .001 .001 .337 .336 .423 .422 .000 .000 .000 .000 .000 .000 .004 .004 .000 .000 .000 .000 .000 Mean Difference -.216 -.216 -.487 -.487 -.127 -.127 .126 .126 -.754 -.754 -.645 -.645 -.840 -.840 -.465 -.465 -.670 -.670 -1.220 -1.220 -1.391 Std. Error Difference .144 .144 .139 .140 .132 .132 .157 .157 .178 .177 .171 .171 .173 .173 .157 .157 .179 .179 .146 .146 .174 the Difference Lower -.500 -.500 -.762 -.763 -.387 -.387 -.184 -.184 -1.105 -1.104 -.982 -.983 -1.182 -1.181 -.775 -.776 -1.025 -1.024 -1.510 -1.509 -1.735 Upper .068 .068 -.212 -.211 .133 .133 .436 .436 -.403 -.403 -.307 -.307 -.497 -.498 -.155 -.155 -.316 -.317 -.931 -.932 -1.047
148 143.500 148
.001 .001 .000
-.620 -.620 -.745
.177 .177 .163
-.970 -.969 -1.068
-.270 -.271 -.422
For significance values >0.05, we consider the row of Equal Variance Assumed (EVA). If the value of EVA <0.05, the variable is included amongst the factors where the costumer believes that the two store types differ. For significance values <0.05, we consider the row of Equal Variance Not Assumed (EVNA). If the value of EVNA <0.05, the variable is included amongst the factors where the costumer believes that the two store types differ. As can be seen from the table above, specifically from the values in bold, it is observed that the consumer perception about both types of the stores varies across a number of variables. These include
• • • • • • • • • • • • • • Store has a good selection of merchandize Availability of new fashionable products greater variety of brands of products available Store provides attractive schemes to make experience better Possibility of finding all products to be purchased Availability of grocery and green grocery under one roof Store layout is good Store is spacious and allows easy movement Easy to search for the product desired Advertisement/signage is attractive Store is located nearby Store is in good physical condition Physical facilities in store are better Store offer home delivery facility
• • • • • •
Luxurious atmosphere of the store attracts Easy exchange and return Store has high class image Store has high brand name Greater happiness of shopping atmosphere Availability of credit facility
Hence, our initial hypothesis H0, pertaining to the primary objective of the study stands proven i.e. there is a difference in the consumer perception regarding a retail store vis-à-vis a kiryana store.
13. Reasons to buy food and grocery from retail store
1.Range of Product Available 2.Cleanines s and freshness of products 3.Be havio ur of shop assis tants 4.Disco unt and promoti nal offers 5.Eas e of locatin g produ cts in the stores 6.proxi mity of the store from your home 7.cleanin ess and ambianc e of the store 8.Accur acy and speed of billing 9.Ho me delive ry facilit y 10.Acco unt facility with shop and making monthly payment 527 3.51
Total= 291 Avg= 1.94 Rank= 2
Interpretation: The most important factor for buying food and grocery from retail store are cleanliness of product followed by range of product ,ease of locating the product and least important factor are home delivery, account facility with shop and making monthly payment
14. Reason to visit kiryana store?
1.Range of Product Available
2.Cle anine ss and fresh ness of prod ucts 70 2.18
3.Be havio ur of shop assis tants
4.Disco unt and promoti nal offers
5.Eas e of locatin g produ cts in the stores
6.proxi mity of the store from your home
7.cleanin ess and ambianc e of the store
8.Accur acy and speed of billing
9.Ho me delive ry facilit y
10.Acco unt facility with shop and making monthly payment 275 8.59
Total= 51 Avg= 1.59 Rank=1
Interpretation: The most important factor for buying food and grocery from kiryana store are range of product followed by home delivery facility, cleanliness, behavior of employee and least important are proximity, account facility with shop and making monthly payment
CHAPTER 5 FINDINGS AND SUGGESTIONS
5.1 MAJOR FINDINGS
1) Across all age groups, higher number of respondents still visits the kiryana store. The
respondents of age group 25-34 years (51.33% of the total respondents) still prefer the kiryana store. Whereas the relatively younger age group i.e. 15-24 years comprising 26.67% of the total respondents, has a higher preference for the retail store.
2) The findings of the study show that equal number of respondents, from the 50.7% of the respondents whose monthly income lies between Rs 20,000 to Rs 30,000,visit the kiryana as well as the retail store. While more number of people in the higher income group i.e. >Rs 30,000, which constitute 15.3% of the total respondents shop at the kiryana store. 3) According to the survey, larger number of housewives (48% of total sample) still prefer kiryana store whereas the students (3.7% of the total sample) like visiting the retail stores. Amongst the working respondents (43.3% of the total sample), larger number still prefer to shop at kiryana store as opposed to the retail store.
4) T-test revealed some interesting facts. There exists a difference in the consumer
perception across a retail store and a kiryana store. This difference occurred across variables such as:
• • • • • •
Store has a good selection of merchandize Availability of new fashionable products greater variety of brands of products available Store provides attractive schemes to make experience better Possibility of finding all products to be purchased Availability of grocery and green grocery under one roof
• • • • • • • • • • • • • •
Store layout is good Store is spacious and allows easy movement Easy to search for the product desired Advertisement/signage is attractive Store is located nearby Store is in good physical condition Physical facilities in store are better Store offer home delivery facility Luxurious atmosphere of the store attracts Easy exchange and return Store has high class image Store has high brand name Greater happiness of shopping atmosphere Availability of credit facility
5) Intention of repurchase is a significantly influenced by the good physical condition of the store.
6) Salesperson related dimensions also play a significant role in the consumer’s decision
to repurchase from the store.
7) The factors amongst which all the variables for the retail store were categorized
include : Merchandise Characteristics, General Store Attributes, Policy, Reliability and Physical Aspects
8) The factors amongst which all the variables for the kiryana store were categorized
include: Physical Aspects, General Store Attributes, Reliability, Merchandise Characteristics and Monetary Benefits.
9) While studying the demographics affecting the recommending behavior of the customers, it was observed that the kiryana store customers’ behavior had a significant relation with their age.
10) It was observed that the monthly income parameter across the customer’s largely influenced their repurchase from a retail store.
Each study becomes complete when it lays down a set of suggestions. Following are some of the suggestions which store keepers (both retail as well as kiryana) should take into account to improve service so as to induce greater customer satisfaction and to attain higher levels of favorable perception in the minds of the consumers. 1) The study provides with a comprehensive list of the factors that influence the consumer perception towards the two types of retail outlets. This would help to assess the likely impact of any initiative in terms of its effect and importance on customer retention. 2) In recent years, retail outlets have been making great efforts to improve service quality to make customer return to the store. Rising expectations of service, quality etc is an economic and social phenomenon. Moreover, customers are becoming richer, more educated and better informed. Therefore, retail outlets must constantly monitor customer expectations and not merely the performance as commonly done.
This can be conducted through customer surveys, depth interviews and other informal means of research. 3) For kiryana store, store atmosphere, location, convenience of shopping, sales personnel service have come out to be statistically significant so these are the areas where one can make an improvement so as to retain the customers. 4) For retail store, the customers of think that Advertisement, availability of grocery and green grocery under one roof, and greater happiness of shopping environment are important. Thus these can be increased to increase store loyalty 5) Retail outlets should try to develop strategies that would enhance positive responses and prohibit negative ones. Such strategies can include meeting the desired service levels, preventing service problems, dealing effectively with the unsatisfied customers and confronting customer complaints positively. 6) The role of customer-contact-personnel in the attainment of quality goals is of paramount importance. Therefore, in their efforts to deliver high quality service to customers’ store should not ignore the needs of their customer-contact employees such as need for motivation, factors leading to satisfaction and commitment enhancing factors. 7) Stores should focus on those factors which contribute more towards improving perception of quality in mind of customers. In this way they can better understand the needs of the customers and can satisfy those needs efficiently.
5.3 DIRECTIONS FOR FUTURE RESEARCH
Although the study expands the knowledge of relationship between quality, satisfaction and other factors, viable prospects for future research remains.
1) Future research efforts should concentrate in building a broader conceptual model of factors that influence store loyalty. This can be achieved by including other variables, such as the interaction of the buyer with the technology employed during the service. 2) I have investigated the respondents at particular point of time but to get more accurate their views should be collected at regular intervals over a period of time.
3) Also, since the scope of the study was limited to mohali, a closer look at the important
factors influencing consumer perception can be obtained by conducting the research on a larger geographic area.
Ajith Paninchukannath, “Organized Supermarkets of South India” Indian Journal of Marketing May 2008 David L Laudon, Albert J Della Bitta – Consumer Behavior Dr. C P Gupta, Mitali Chaturvedi – Retailing: An Emerging Trend in India- Indian Journal of Marketing June 2007
Gitanjali Bhatnagar – Retail Revolution- Indian Journal of Marketing November 2004 Henry Arsael- Consumer Behavior and Marketing Action K Ambarish Kumar “ In-Store Influences on Shoppers” P.U.Management Review Zeithaml V (1988), —Consumer Perception of Price, Quality and Value: A Means-End Model and Synthesis of Evidence“, Journal of Marketing, Vol. 52 (July)
Annexure A QUESTIONNAIRE (After Pretest) 1. Gender 2. Age (in years): 3. Occupation: specify) 4. Monthly Income: 1. <10,000 (in Rs.) 5.Following are certain statements regarding the retail store and mom n pop store attributes. Kindly state your agreement or disagreement for the same as per the following scale 1-Strongly Disagree 2- Disagree 1 2 3 3-Neither agree nor disagree 4- Agree 1 1 1 2 2 2 5- Strongly Agree 3 3 3 4 4 4 5 5 5 2. 10,001- 20,000 3. 20,001-30,000 4. >30,000 1. Male 1. 15-24 1. Student 2.Female 2. 25 - 34 2. House wife 3. 35~54 4. 55 and above 4. Other( please 3. Working
The store has a good selection of merchandise The store offers excellent quality products relative to the other stores The store offers excellent quality products relative to price of the products
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The store offers low priced products There is an availability of new (fashionable) products in the store The store offers greater variety of brands of most products The store frequently provides attractive gifts/schemes which make the experience better There is a great possibility of finding all products which are to be purchased Availability of groceries and green grocery under one roof The store layout is good The store is spacious and allows easy movement I am easily able to search for goods wanted. The advertisements/signage in the store is very appealing The store is located nearby There is easy availability of parking The store is in good physical condition The physical facilities(shopping carts, elevator) at the
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store are better 18 The store offers Home Delivery option 19 There is a Luxurious atmosphere of lighting, color, and 20 21 22 23 24 25 26 27 other similar facilities attracts me to the store There is an easy return and exchange of goods There are long queues/ long billing time Availability of credit facility The store has a high class image The store has a high brand name There is a greater happiness of shopping atmosphere The salesperson at the store at courteous and kind There is greater assistance of salesperson on product and
related information 28 When the store promises to do something by a certain time, it would do so. 29 There is greater affirmative action and solution to complaints by salesperson 30 There is a high intention of repurchase from the store 31 I will recommend this store to someone who seeks my advice.