Asian Journal of

Management. 9(4): October-

December, 2018

0976-495X (Print)
ISSN 2321-5763 (Online) Available online at
DOI:
10.5958/2321-5763.2018.00204.4
www.anvpublication.org
Vol. 09 |ssue-04 AJM ar
October-December 20188 Asian Journal
of Management
Home page www.ajmjournal.com

RESEARCHARTICLE

Rural Retailing for Grocery Items: An

Empirical Study
Dr. Nihar
Mohapatra', Dr.
'Inspector of Supplies, FS and CW Department,Chinmaya Ku Dash?
Prof (Marketing), ADMAS Government of Odisha, Bhubaneswar
University,
*Corresponding Author E-mail:mohapatra82@gmail.com, Kolkata

ABSTRACT:
ckda_h@yahoo.com
Food and grocery is the largest retail sector worldwide and
and Carrefour operate in this segment. Retail is being
majority of large global retailers such Wal-Mart
a

projected as India's
industry of the future, driven by the
country's huge urban middle class population. Food and grocery is the
the potential for new entrants in this segment is
largest segment of the retail industry and
enormous, particularly in untapped markets like rural and semi-
rural areas. The Indian grocery market, specially the rural market,
fragmented and is characterised by the presence of Mom and popalthough (Kirana)extremely large,paper analyses the is immature and
stores. This
consumer attitude, preference of store choice for grocery items in rural markets.

KEYWORDS: Rural Retail, Grocery Retail, Retail Purchase Factor.

INTRODUCTION: Food retailing has come of age from a period when

Retailing is the set of business activities where products food items were sold in small road side grocer shot sops
are sold to consumers for their personal or family use. and mandis, haats and bazzars by vendors to a stage
Retailers attempt to satisfy consumer's needs by having when food products (processed and groceries) are
the right merchandise at the right price, at the retailed through supermarket stores where consumers
right can inspect, select and pick up the products they like in
place. Retail industry is changing rapidly and passing
through diversification, modernisation, innovation, a comfortable ambience and still pay a fair price for the
consolidation and customization owing to the huge product and the merchandise and sometimes even pay
socio-economic scenari0.
less than the price they would have paid at the nearest
changes in Indian food stores. Shopping for groceries is no longer a
Indians strenuous and uncomfortable affair.
The food industry is on a roller coaster ride as

continue to have a feast. Fuelled by- large disposable

remarkable Panda (2006) identified significant differences between
incomes the food sector is witnessing a

in terms of urban and rural consumers in terms of'source and

change in consumption patterns, especially distribution of income and allocation of expenditure.
food. Marketing infrastructure also varies quite signiticantly
in the two markets and is relatively underdeveloped in
rural India. Thus, marketing models and assumptions
based on urban market may not be that sucesstul in the
rural market. Mishra and Sakkthivel (2005) observed
that majority of rural consumers prefer products like
shampoo, spices, fairness cream and mosquito
repellents, which are purchased on weekly basis in
Modified on 05.06.2018
Received on 21.05.2018 reserved
sachets. But other products like taleum powder, toilet
OA&V Publications
All right
Accepted on I1.08.2018 1285-1290.
soaps, biseuits, shaving creams are expected in medium
2018; 9(4):
Management.
Asian Journal of
DOI: 10.5958/2321-5763.2018.00204.4
container, sachets in these eategories only provided an

1285
 2018
October- December,
Asian Jourmal of Management.
9(4):
The consumers have a dennite ceiling on now
sachets need to be as a
much
opportunity of trial. Thus, thcy can spend
and are looking at the best
promotional tool, rather than as packaging
a strategy. benefits at that price. T here is greater value in available
needs to be changed according to
this
rms of
Packaging strategy potential demand insegment than in
observed other
the consumption pattern. Vasudeva (1999) The challenge for the markcter ic to
segments.
that the proportion of households, which are brand loyal
this segment consumer into
the market
economy.
bring
to one or morebrands, are similar in urban market and the marketer, the rural market IS quite an opportunity t For
ruralmarket. Toothpaste is the only product for which top. A beginning should be made to understand
rural market shows greater brand loyalty than the urban the
arket. It is essential to understand the rural mindse
market. The rural brand loyal consumers were found to
social norms and culture specihcs. Rural peonle
be comparatively more price conscious than the urban are
sensory driven. So n this ground demos like how
brand loyal for detergent powder and toilet soaps. Jha a
soap or detergent lathers in far more effective than m
mere
(2003) observed that rural buyers were relatively
simpler, more forthright, with low to medium aspiration brand symbols or logos.
levels, they are influenced by social pressure, rituals
INDIAN RETAIL SCENARIO:
and norms, and have moderate to high risk taking
ability but are gullible to dream merchants. A combination of private and public investments in
Developmental marketing with a constructive mindset recent years, as well as steady liberalization of
and not the killing the golden goose mindset is
regulations, has created a situation that is unique in
required
to be effective in the rural market. Jain and Rathod India's history as an independent country, where
(2005) found that customers were not happy with business growth has lead to individual prosperity which
product quality and variety available in rural market. is, in turn, leading to explosive growth of further
Promotional offers also never reached rural consumers business opportunities. Although India's per capita
and retailers were found
selling promotional items income still places it in the list of "developing
separately. Proper marketing strategies are needed to countries", a significant population has emerged that
prevent product imitation. Sharma and Kasturi (2004) truly middle class. Rising incomes have created
observed that rural consumers do
experience tension
due to dissonance and exhibit defensive behaviour
visible shift in consumption patterns. The face of Indian
and has witness a rapid transformation over the last decade.
use attribution in
support of their behaviour. were They Organized retaining is poised for major growth in the
worse hit by non-availability of
quality alternatives. country. It was rated the fifth most attractive emerging
This forces them to accept low
quality products. As retail market and ranked second in a
advertisements were not reaching the rural sector
development index of 30 developing countries drawn
global
retail
effectively, there is need to strengthen the hands of
up by AT Keamey. This is evident from the
information agents to remove the ill effect of fact that
post
purchase dissonance. Khairoowala and Siddiqui (2001) shopping mall activity which was earlier only a
part of
the big cities has started percolating down
found that higher income to smaller
group customer did not like to cities and towns. There is brisk
make purchase space in tier-ll cities and towns ofdevelopment
from Haats. The reason which was of retail
observed may be that in Haats branded and India
premium
products are not available and mostly griffin goods are
east region. barring the fear
on sale in Haats. This makes
Haats less attractive for This was resulted in the
high income group customer. This study shows that Indian
Haats have lot of potential which néeds to be
to a
variety of retail format consumer being expoSed
and marketing strategies
exploited consumer
buying behaviour. The loading to change in
especially for Haat market curiosity value of the new formats entertainment and
should be designed. Haats can come out to be answer to
for the is fast
all marketing problems faced in rural India. consumer who is no diminishing
focused approach on this aspect of India's
Only a blanket
proposition longer satisfied with the
primitive and the offered by them. In order to
traditional rural marketing legacy, which has the increasing complexity
retailer will need to in the market
cater to
potential to bring a commercial revolution in rural know his place Indian
the
India. Kohok (2002) observed that the rural market is unique value customer
and design a
now almost as
proposition for his segment.
witnessing an unprecedented India is
big as the urban one. In some product
categories the rural market has outstripped the urban economy is growing consumption boom. The
one. The
heterogeneity 'is the biggest challenge to resulting improvement between
in
7 and 9
percent and
favorable income dynamic along With
understand the rural market. The characteristics of the factors ike
market that makes it different from other
segments is
patterns are driving the demographics and spending
that, it is all about a lot of people consuming a little
The Indian
consumption demana.
rather than a few people
consuming a lot. The rural retail market has been
riling on the gaining
vibes generated by astrength,
consumers are very conscious. They know the worth of sound
money. They do not believe in extravagant expenditure. cconomy
hand of the
that has
given more robust
consumer who
disposable
incomes the
ho will keep demand
in
1286
better
 Asian Journal of Management. 9(4): October-
December, 2018
ana a better
better shopping Overcrowded
n y o d u c i s a

and
n d

services,
s e r v i c e

agricultural sector,
manufacturing sector, the hard stagnating
environment. nature of
jobs and low
wages in both virtually force
FOOD
ANDGROCERYR
RETAlL SCENARIO: service sector. So, it is almost a many Indians to the
n
GROCERY natural decision to open
the
the 20th
. century, in both Europe and a small
shop or store depending on the available means
halfof been the emergence of the and
latter
as capitals due to the lack of opportunities. This
grocery retail form. The
The
N o r t h A m e r i c a ,

as
the
dominant
phenomenon explains the million of kirana shops and
supenmaket ave
hy supermarkets have come to dominate food small stores. ITC launched the
tind. The search for
country's first rural mall
are
not hard to Chaupal Sagar, offering a diverse product range from
shopping andconsumption, FMCG to electronics
etailing
in food appliance to automobiles,
nce
wnership, led to the birth of the
with car attempting to provide farmers a one-stop destination for
c o u p l e d

supermarket.
incomes rose
and shoppers sought both all of their needs. There has been yet another initiative
convenience and new tastes and simulation, by the DCM Sriram Group called the 'Hariyali Bazaar
products offered.
were able to expand the that has initially started off by providing farnm related
aunermarkets the same litle has remained inputs and services but plans to introduce the complete
retail stage,
On the global decade. One of the few similarities with shopping basket in due course. Other corporate bodies
Over tthe last include Escorts and Tata Chemicals (with Tata Kisan
Wal-Mart, which was
ranked the top
today is that to provide
world then; still holds the distinction. Sansar) setting up agri-stores
retailer in the products/services targeted at the farmer in order to tap
dominance, there is little about
Other thanWal-Martthat looks like the mid-1990. The the vast rural market.
environment
today's shifted
changed, consumer demand has in retail has been the
global economy infused with One of the most nglected markets
systems today are
and retailer's operating rural Indian market. But it has now
started to be seen as
far more technology. who understand the
a viable option and companies
will grow to incredible
needs of the rural
consumers
RURAL RETAIL SCENARIO: still lives in
economies in heights. The bulk of India's population
If the population of the
largest world's able to cater specifically
to them
and Euro zone are rural areas and to be business.
terms of GDP, namely USA, Japan will mean generating
tremendous amounts of

still be a lower than a third of

added, the total would
also means a lot
India's population. A large population RESEARCH METHODOLOGY:
the needs of other
of opportunities for companies serving Retail industry though
new in India but like any
Importantly, about 65 percent or 13.5 vested with countless
these individuals.
where the commercial and industrial sectors
the
crore households live in rural India, in the case of rural retailing
those in untapped problems. Especially and it faces many
e n o r m o u s including is not fhrm
opportunities are relatively virgin foot of the companies and
Rural markets are
the potentiality of the state
Dusiness segments.
theirown with very problems. Keeping will give emphasis on
evolved on study
markets, which have future growth, the present
them by the corporate world, Orissa with the following objectives:
httle direct contact Retail sector
with rural retailing in and issues related to
and attractive. the growth prospects
but their size is compelling investment in i. To study
and
offers opportunities for exploration the rural retailing. rural
and Entrepreneurs having
the factors driving growth in
rural areas, with Corporate
rural population ii. To study
India's largely retailing.
made a foray in the past.
retailers looking for new areas
of
nas caught the eye of India in 1999,
outlets in
lakh retail DATA SOURCES:
and
growth. Of the 33 in the rural area.
[Bamzal,
in this present study are both primary
were
The data used advent and
ne majority 2.1 million Bharat",
Business India,
data. Due to relatively
now target in india is secondary there is an extreme
of Retailing in Orissa,
9,marketers structure
Market
organization The primary
eptember 6-19, pp-64] and markets. and unpublished data.
dchotomous having
rural urban
paucity of published
collected through survey
and personal
thne data have been of the study a well-
up practically time
in all interview method.
For the purpose
where
outlets have sprung chore questionnaire was prepared
Retail retailing is a part structured simple and then
Villages. In interior villáges town. In a part
of their
were asked certain questions
retailer in The respondents elicit maximum
unlike the case of the counter.
retail were noted in aiming to
make responses
the villagers in interior vilages amount o f information.
Ouse, for retail outlets
travelling
naintenance costs on
cost spent
of the bchina collected both from
low with most reasons
for the study were
Sccondary data
aiso
C transportation. One of the principal fragmented nature extermal sources.Of the internal
and retail outlets
and its both internal and National
explosion of the primary
tormo
lmages Retail Report, Reports of
ne is probably The sources
that retailing
unemployment/underemployment.
1S 1287
disguised
 December. 2018
Asian Journal of Management. 9(4): October-
Some of the customers have given preferenco
Sample Organisation, Government of India
survey
Ministry of statistics and programme implementation,
one factor while choosing the retail store reference more than
store tor grocery
India items.
Reports of Census of India, Government of
Ministry of Home affairs, Reports of Department of
Govemment of Orissa was taken It is evident that 39 percent of the customers
rural development, S
into account.
retail outlet for three reasons: a) proximity, bì D. prefer a
assortment, and c) service. lt is also found l c r
SAMPLING PLAN: percent of the respondents choose retail 6
off
Sampling design and selection is important part grocery items due to proximity. Proximity
of researcher.
research, which strengthens authenticity very important factor for deciding on the st
ldeally the sample should be representative of the shopping as customers find it very convenient to for
whole population and should be random in nature. This
things from stores near to their homes or offces Duy
research study deals with retailing in rural Orissa hence also found that the 60 percent customers It is
the sample unit is taken from all the thirty districts of retail store for grocery items due to
preferre
the state that includes the rural Orissa
communica
people. For the followed by 60 percent due to price, 59
study purpose the 30 districts of Orissa is divided into preferred due to ambience, )9 percent due to ent
four zones, namely East, West, South, North. This produt
assortment, and 57 percent due to service.
division is on the basis of geography. For the study the
sample size was restricted to 120 respondents, who are With the consumer are looKing at convenience
randomly selected and the number of respondents and
choice of products under one root, consumer
chosen from each zone is 30. demand is
truly the driving force for organised retailing in the
rural area. To statistically analyse the
DATA ANALYSIS: homogeneity of
the above observation the following tests have
The respondents are chosen from all the 30 districts of been
Orissa. The division of the districts to zones is given done.
below on table no-l
Infuence of retail purchase factor on zones:
Table No-1: Geographic segmentation of Orissa Influence of geographical difference on e xpectation
ZONE DISCTRICT_ of proximity:
East Anugul, Cuttack, Dhenkanal, Jagatsinghpur The influence of proximity is very much
Jajpur, Kendrapada, Khurda,Nayagarh and Puri important in
West Balangiri, Bargarh, Boudh, Deogarh, Jharsuguda, grocery retailing. To study the variance the following
Kalahandi, Nuapada, Phulbani, Sambalpur, Sonepur hypothesis are developed.
and Sundargarh
North Balasore, Bhadrak, Keonjhar and Mayaurbhanja_ H: There is
South Gajapati, Ganjam, Koraput, Malkanagiri,
no
significant difference in importance of
proximity exists between zones.
Nabarangpur, and Rayagada H: There is
significant difference in importance of
Retail Purchase Factor (RPF): proximity exists between zones.
The factors that influence the choice of store for
shopping, six factors were identified, namely: One-way ANOVA: PROXIMITY versus ZONE:
A) Proximity Source DF SS MS F P
B) Product Assortment ZONE 3 0.22 0.07 0.04 0.9
C) Service Error 116 234.37 2.02
D) Ambience Total 119 234.59
E) Price S 1.421 R-Sq 0.10% =
R-Sq (adj) 0.00%
=

F) Communication
The results of the one-way ANOVA
The respondents opinion about these factors is
comparisons of
given Proximity scores of all the four zones for grocery sector
below in the table no-2 indicated that no significant difference in importance of
Table No-02: Respondents opinion regarding RPF proximity existed (F=0.04, p>0.05). So we may
conclude that proximity of grocery 1S equally
No. | Retail purchase Factor (RPE)_ NO. % irrespective of geographical areas.
important
Proximity_ 73
O
| 2 | Product ASSOrtment 70 59
Service 68 Influence of geographical dirterence on Product
4 Ambience
9 Assortment:
SPrice Product assortment is an
6 Communication | 71
60 1nportant factor in choosing
the retail store. The study the homogeneity of the
variable "product assortment tne rollowing hypothes

are developed.
1288
 Asian Journal of Managemen1. 9(4): October-
December. 2018
dilerence in mportance of
is
no
significant
signifi.

bctween zones.
One-way ANOVA: PRICE versus ZONE
H: The
c ta s s o r t m e n t e x i s t s
rre
e
Source DF SS MS FP
product. ZONE 3 1.23 0.41 0.19
sionificant diftercnee in importancc of 0.903
Error 116
H: There
no
cxists between zoncs. 248.70 2.14
Total 119 249.92
tment
p r o d u c ta S S o r t m

S =

1464 R-Sq=
MS F P
0.49% R-Sq(adj) =

0.00%
SS
0.03 0.994
DF
The results of the
160.052 . 0 8 onc-way ANOVA compariSons or
ource
2 O N E3 O0.1
Price scores of all the four
zones for
2 4 0 . 9 7

Eo
T r rto
ar
1 16
l1 1 92 4 1 . 1 2 indicated that no significant difference in grocery sector
R-Sq (adj) =
0.00% importance of
1,441
R-SqSa == 0.07%
0.07%
price existed (F 0.19, p>.10). So we may
=

conclude
that price of
S- grocery is equally important irrespective ot
the one-way ANOVA comparisons of geographical areas.
ults of f all th four for
The result

scores zones
ortment
that no significant difference in Influence of
sector indicated

assortment existed (F = 0.03, geographical difference on expectation

ortance o f product of Communication:
we may
concludede that Product Assortment Communication is. a factor which influence in store
0.05). So important irrespective of selection. To study the homogeneity of the variable
is equally
grocery
of the following hypothesis has been
geographic areas.
communication
developed.
of geographical difference on expectation
Infuence
of Ambience:
H: There is no significant difference in importance of
one of
the important factor in
most communication exists between zones.
mbience is H: There is significant difference in importance of
To study the homogencity of the factor
grocery retail.
the following hypothesis is developed. communication exists between zones.
"Ambience"
difterence in importance of One-way ANOVA: COMMUNUCATION versus
H: There is no significant
ambience exists between zones. ZONE:
difference in importan ce of Source DF SS MS FP
H: There is significant
ambience exists between zones. ZONE 3 2.47 0.82 0.38 0.769
Error 116 252.33 2.18
AMBIENCE versus ZONE: Total 119 254.80
One-way ANOVA: S= 1.475 R-Sq 0.97% R-Sq (adj) =0.00%
Source DF SS MS FP
ZONE 3 0.29 0.10 0.05 0.986
Error 116 235.70 2.03 The results of the one-way ANOVA comparisons of
Communication scores of all the three areas for grocery
Total 119 235.99 (F
a significant difference existed
S=1425.R-Sq 0.12% R-Sq (adj) =
0.00% sector indicated that
= 0.38, p .05). So we may conelude that
communication in grocery retail is equally important
The results of the one-way ANOVA comparisons of
Ambience scores of all the three areas for grocery irrespective of geographical areas.

sector indicated that a significant difference existed (F

difference on Service:
Ambience of Influence of geographical
0.05, p .05). So we may conclude that of the most important factor in grocery
grocery is equally important irrespective of geographic Service is one
in rural areas. To study the
areas. retailing, especially communication the
of the variable
homogeneity
expectation following hypothesis has been developed.
nfuence of geographical diff erence on
of Price:
H: There is no significant difference in importance of
Tice 1s
always an important factor in grocery retailing
service exists between zones.
in rural areas.To study the homogeneity of the variable ditkerence in inmportanee of
H: There is significant
acrOSs the four zones, the following hypothesis are zone8.
service exists betwveen
developed. of
There is no significant difference in importance One-way ANOVA:
SERVICE versus ZONE:
price exists between zones.
Souree DF SS MS FP
There is significant difference in importance of price 0.977
exists between zones. ZONE 3 042 0.14 0.07
242.37 2.09
Error 116
Total 1 19 242.79

1289
 Asian Journal of Management 914): October- December, 2018

S =1.445 R-Sq =0.18% R-Sq (adi) = 0.00% I1. Velayudhan, Sanal Kumar
(2007). "Rural
the non urban consiimers, SAGE
Publicatic Market
tng, 1
12. Dogra, Balaram and Ghuman, Karminder
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13. Ramkishen, Y and Srintvasan, R().
NewDe
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14. Singh. Sukhpal (2008), "Rural Marketing Focis
retail is equally important irrespective of gcographical inputs" Vikas Publishing House. on Agrl
areas 15. Orientation,"
Malhotra. Naresh K. (2006) "Marketing Rec
Fourth Edition, Pearson Education arch an

16. Pathak, S.V and

Caton, In Ne
RECOMMENDATIONS: Tipathi,
Behavior among Modern
Aditya P.
(2009), "Cu
Retail Formats: A Study e
'h
n
In of rural is Indian Journal ot Marketing. Volume XXXIX
case consumer proximity an importance NCR."
factor irespective of zones to they belong. They always pp-3-12
prefer grocery stores to be nearby. So there should be 17. Singh., Harpreet and Kaur, Narinder (2008), "Retailinn
Recent Trends and Challenges "Indian joumal marda
more aggressive and proactive approach by the Volume XXXVIII, Number 4.. p.p- 49-55
organisations and their distributors in the relatively
affiuent and easy to reach the rural market in Onissa.
18. Prasad,(2008),"MNCs
Begde,and Coca Cola
in Rural Marketina
The Ca
Pepsi Indian Journal of marketing. Vn
XXXVII, Number5,P-p-42-48 Voaume
It is observed that product assortment is important for 19. Agarwal Vaishali and Mishra, Sanjay, (2003).
in
Retailers Reducing Inventory "Role
and
grocery. They prefer the retail store which keeps Improving Cuer
Satisfaction: An Empirical Study of Consumer Durahles"nd
everything they want. Maximum number of journal of marketing, Volume XXXVIN, Number 9.pp- 44.
respondents is willing to travel to avail maximum 20. Ramanathan, V and Hari, K, (2008), "Structural Chang
choice if a store provides. Indian Retail Market: From Unorganised to Organised" in
Organisations can target rural of marketing, Volume XXXVIIL, Number 12,
journal indian
market of Orissa by developing value for p p- 344
money 21. Anandan, C and Raj, M. Prasanna Mohan, (2007), "A
products. Brand Preferences of Washing Soaps in Rural Areas."
Study
Indin
Journal of Marketing, Volume XXXVIL, Number 3.
p.p-30-37
Price is equally important for all in 22. Prasad, V.Vijay Durga *

grocery. Consumer , (2007), The Spread of Organize

prefers that store which provides discount. So Retailing in India-With a Special Reference to Vijayawada City
Indian Joumal of Marketing, Volume XXXVII, Number 5.
organisations can target the rural Orissa with every day 3-9
2

low price store. 23. Baseer, Amatul and Prabha, G.Laxmi, (2007), "Prospects and
Problems of Indian Retailing." Indian Journal of
Volume XXXVII, Number 10, p.p-26-28 Marketing
CONCLUDING COMMENTS: 24. Kumar, S.Arul and
Rural market has its Madhavi, C (2006), "Rural Marketing For
own set of challenges.
Therefore, FMCC". Indian Journal of
Marketing, Volume XXXVI, Number
organisations need to unlearn and then relearn the 4, P-p-19-23
25. Bhatnagar, Gitanjali, (2004),
marketing stragtegies and tactics that will enable "Retail Revolution", Indian Joumal
harnessing the immense rural potential. The approach, of Marketing, Volume XXXIV, Number 1I, P-p-21-27
stragtgies and marketing mix needs to be modified and
examined from rural consumer's perspective to be
successful in the rural market.

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