Project Report

(Submitted for the Degree of B.Com. Honours in

Marketing Under the University of Calcutta)

TITLE OF THE PROJECT

“Pricing Strategy of BATA SHOE”
Submitted by
Name of the Candidate : Subhendu Bhattacharjee
Registration No. : 043-1121-0579-10
Name of the College : Heramba Chandra College
College Roll No. : 1125

Supervised by
Name of the Supervisor : Prof. Rana Ghosh
(Department of Commerce & Management)
January 2013

1
 PREFACE
Education becomes successful when it can be applied to real life. A so called educated
person (with higher degrees and certificate with him) will be an educated person in
true sense if he can apply his or her knowledge in her practice and then only the
progress of the society, progress of the economy, progress of science and technology,
progress of human resources can take place. The supportive factor behind this
argument is the real fact that theories in science and technology, social sciences etc
comes from deep observation and analysis of real life activity, soc the relation between
education and practical happening in both way, i.e., education helps to judge
practicability and practical happenings leads to build up laws, theories.

So any branch of study, whether it is commerce, economics, sociology, or is it

mathematics, physics and chemistry all should contain some practical session.

The project is such a regular practical course. The aim of the project is to provide
necessary exposure to an undergraduate (mark of marketing specialization) student
about what is really happening in an industry. How individuals are working in different
sectors.

During this course, I had been familiar with practical application of the oratorical
knowledge of the marketing activities of business organization.

2
 ACKNOWLEDGEMENT
I use this opportunity to acknowledge all the help and support we got from various
quarters without which this project would never have reached fructification.

Before I get into thick of the things, I would like to add a few heartfelt words for our
Heramba Chandra College and all the people who were a part of the project in
numerous ways. First of all, I would take this opportunity to acknowledge and show my
gratitude towards our principal, Dr. Prasanta Sharma, Prof. Bhaskar
Purakayastha and Prof. Rana Ghosh and all the members of Heramba Chandra
College. I would like to show my gratitude to all the teachers of our department for
their valuable suggestions. I am thankful to Prof. Rana Ghosh (lecturer) for the
project. For his guidance throughout the course of the project and his invaluable
support, my Endeavour towards this project became focused. I would like to give my
thanks to the teacher of computer lab for his kind cooperation. And a final note to all
the unseen staff that worked for index. We could not have done it without them. A
jumbo sized “thank you” to all of them.

REGISTRATION NO: 043-1221-0579-10

ROLL NO : 1125

B.COM HONS (MARKETING)

CALCUTTA UNIVERSITY

3
 SUPERVISOR’S CERTIFICATE
This is to certify that Mr./Ms. Subhendu Bhattacharjee, a student of B.Com
Honours in Marketing of Heramba Chandra College (name of the college) under the
University of Calcutta has worked under my supervision and guidance for his/her
project work and prepared a project report with the title of the Pricing Strategy of
BATA SHOE

The project report, which he/she is submitting is his/her genuine and original work to
the best of my knowledge.

Signature :

Name : Subhendu Bhattacharjee

Place : Address : Rajdanga Chakraborty

Para, Kol-107

Date : Name of college : Heramba Chandra College

TABLE OF CONTENTS
4
 CHAPTERS PAGE NO.
1.INTRODUCTION 6-8

 Normative Aspects of Pricing 9 – 17

 Factors that influence buyers’ price 10 – 11

sensitivity
 Factors Influence Price Perception 12 – 17

 Literature review

 Objective of the study

 Research methodology

 Sample size

 Limitation of the study

2.Detail analysis of BATA shoe company

22

3. Presentation of Data Analysis and 23 - 24

Findings

25 - 26
4.Conclusion and Recommendation &
suggestion

5. Bibliography
6.Annexure : questionnaire

5
 1. INTRODUCTION
Psychological pricing or price ending is a marketing practice based on the theory
those certain prices have a psychological impact. The retail prices are often
Expressed as "odd prices": a little less than a round number, e.g. Rs.1999 or
Rs.2995 .The theory is this drives demand greater than would be expected if consumers
were perfectly rational. Psychological pricing is one cause of price points.
Consumers perceive a nine-ending price to be significantly lower than a price one cent
higher (e.g., Rs.399 vs.Rs.400). This statement has attracted researchers’ attention as
early as 1932. Past research (Monroe 2003) and conventional wisdom suggest that
consumers do not respond to very small price changes. Since nine endings change the
price of a product by just one cent (e.g., from Rs.400 to Rs.399), several early
researchers were skeptical about the effects of nine endings on magnitude perceptions .

Are consumers really 'fooled' into thinking that a $9.99 price is cheaper than a
$10 Price?
   "Apparently so: In her new Pricing Psychology Report, pricing expert
Marlene Jensen says that a $9.99 price will probably pull 10% to 20% more
buyers than a $10 price.
   "Why? Certainly not because of the one cent difference. The report states:
'There is a learned pattern response in our brains that makes us see $9.99 as
much lower than $10. And it persists, even though most of us know this trick.'
   "To order Marlene's report (which I highly recommend) visit
pricingpsychology.com”
………..-- Bob Bly
Bob Bly's Direct
Response Newsletter

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 Price, from its narrowest definition to its broadest, has always
been a major factor in buyer choice, historically set by
negotiation between buyer and seller (dynamic pricing) with
fixed pricing only a factor in the last century or so. Price is one
of the most important product information cues used by
consumers. Price perception is the process by which consumers
translate prices into meaningful mental cognitions and has interested researchers for
several decades (Lichtenstein et al., 1988, 1993; Lichtenstein et al., 1990). Pricing
research has shown that the level of a price can communicate meaning to consumers,
such as a high price communicating that the offered item is of high quality (e.g., Dodds
et al. 1991; Rao and Monroe 1989). This appears to be at least partially due to
consumers learning that higher quality items generally tend to be sold at higher prices
(e.g., Lichtenstein and Burton 1989; Riesz 1978; Sproles 1977). In other words,
consumers may have learned this price-level meaning from their observations of the
association between price and quality that exists in the marketplace.

7
Psychological pricing or price ending is a marketing practice based on the theory that
certain prices have a psychological impact. This strategy is used when the marketer
wants the consumer to respond on an emotional, rather than rational basis. For
example, when a container of cleaning spray is priced at $2.99 rather than $3.00. The
penny “lost” is made up quickly with volume as people see the two dollars and miss that
it really is three dollars. The retail prices are often expressed as "odd prices": a little
less than a round number, e.g. $19.99 or $2.98. Study revealed that the buyers
generally believe that prices ending in uneven, rather than even numbers, (such as,
$9.99, $199,999, etc.) are a better deal or a better price than even numbers (e.g. $10 or
$200,000). If the products to be priced are to be in a price 'band' (such as on-line
auctions, or cars or other sales listings), if the listing price is in the odd range, say
$199,000, it will appear in a lower price band than the $200,000 listing and will be
viewed as better value. The challenge with this strategy is that products ending in an
odd number are also often perceived as being lower in value and price tangibles.
Exactly how psychological pricing came into common use is not clear, though it is
known that the practice arose during the late 19th century. A new study published in
the June 2005 issue of the Journal of Consumer Research analyzes how consumers
perceive the difference between prices ending in 0.00 or 0.99.

2. Normative Aspects of Pricing

A well chosen price should do three things:

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  Achieve the financial goals of the company (e.g., profitability).

 Fit the realities of the marketplace (Will customers buy at that price?).

 Support a product's positioning and be consistent with the other variables in the
marketing mix.

 Price is influenced by the type of distribution channel used, the type of

promotions used, and the quality of the product.
 A low price can be a viable substitute for product quality, effective promotions, or
an energetic selling effort by distributors.

From the marketer's point of view, an efficient price is a price that is very close to the
maximum that customers are prepared to pay. In economic terms, it is a price that
shifts most of the consumer surplus to the producer. A good pricing strategy would be
the one which could balance between the price floor (the price below which the
organization ends up in losses) and the price ceiling (the price beyond which the
organization experiences a no demand situation).

Factors that influence buyers’ price sensitivity

In their book, "The Strategy and Tactics of Pricing", Thomas Nagle and Reed Holden
outline 9 laws or factors that influence a buyer's price sensitivity with respect to a given
purchase:

9
1) Reference Price Effect:
Buyer’s price sensitivity for a given product increases the higher the product’s
price relative to perceived alternatives. Perceived alternatives can vary by buyer
segment, by occasion, and other factors.

2) Difficult Comparison Effect

Buyers are less sensitive to the price of a known / more reputable product when
they have difficulty comparing it to potential alternatives.
3) Switching Costs Effect
The higher the product-specific investment a buyer must make to switch
suppliers, the less price sensitive that buyer is when choosing between
alternatives.

4) Price-Quality Effect
Buyers are less sensitive to price the more that higher prices signal higher quality.
Products for which this effect is particularly relevant include: image products,
exclusive products, and products with minimal cues for quality.

5) Expenditure Effect

Buyers are more price sensitive when the expense accounts for a large percentage
of buyers’ available income or budget.

6) End-Benefit Effect
The effect refers to the relationship a given purchase has to a larger overall
benefit, and is divided into two parts:

10
 Derived demand: The more sensitive buyers are to the price of the end benefit,
the more sensitive they will be to the prices of those products that contribute to
that benefit.

Price proportion cost: The price proportion cost refers to the percent of the
total cost of the end benefit accounted for by a given component that helps to
produce the end benefit (e.g., think CPU and PCs). The smaller the given
components share of the total cost of the end benefit, the less sensitive buyers
will be to the component's price.

7) Shared-cost Effect
The smaller the portion of the purchase price buyers must pay for themselves, the
fewer prices sensitive they will be.
8) Fairness Effect
Buyers are more sensitive to the price of a product when the price is outside the
range they perceive as “fair” or “reasonable” given the purchase context.
9) The Framing Effect
Buyers are more prices sensitive when they perceive the price as a loss rather
than a forgone gain, and they have greater price sensitivity when the price is paid
separately rather than as part of a bundle.

Factors Influence Price Perception

Price is one of the most important product information cues used by consumers. Price
perception is the process by which consumers translate prices into meaningful mental
cognitions and has interested researchers for several decades (Lichtenstein et al., 1988,
1993; Lichtenstein et al., 1990). In conceptualizing this translation process, Jacoby and
Olson (1974) employed a stimulus-organism-response (S-O-R) model to consumer
price perception. Based on the S-O-R model, if the same stimulus (e.g., the objective or
actual price of a product) leads to a significantly different response (e.g., a consumer's
11
purchasing behavior), then "organism" (e.g., the consumer) is the only possible
explanation of the behavioral differences. More specifically, if consumers are exposed
to the same price information (e.g., a McDonald's meal priced at $4.35), they may,
nevertheless, assign unique meaning to the objective price while translating it into a
perceived or psychological price. This cognitive process explains why the same price
may be perceived as "high" by one consumer and "low" by another
In this study, as a dependent factor, price perception indicates the overall assessment
of product benefit and monetary sacrifice associated with the purchase. It is the mixed
consequence directed by both the negative and positive roles of price cue. In simpler
words, this is the general and overall perception or evaluation in the consumer's mind
of whether the objective price is cheap or expensive, of whether the money spent on the
purchase was well spent, and of whether the value for the money associated with this
purchase is high or low.

In the early stages of marketing science, a significant subset of research investigated

the effect of price on a consumer's overall product evaluation. However, much of this
research regarded price as a one-dimensional cue (Chang and Wildt, 1996) and
suggested that price was simply an economic index of the sacrifice a consumer has to
make to obtain goods or services (e.g., price was simply considered the "cost" of a
product). Lichtenstein et al. (1993), however, argued that price was a multidimensional
phenomenon, composed of consumer-level personality variables that had positive and
negative influences on perceived price. This was the first study on consumer price
perception to propose multiple price cues that could both negatively and positively
associate with consumers' general price perceptions. Lichtenstein et al. (1993)
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identified seven constructs that affect a consumer's overall price perception: value
consciousness, coupon proneness, price consciousness, sales proneness, price
mavenism, price-quality schema, and prestige sensitivity.

1) Value Consciousness.
Perception of the price cue for some consumers can be characterized by a concern with
the "appropriateness" or "fairness" of the ratio of perceived quality received and price
paid in a purchase transaction. Numerous studies have defined the concept of "value"
in terms consistent with this perspective (e.g., Lichtenstein et al., 1990; Tellis and
Gaeth, 1990; Thaler, 1985; Zeithaml, 1988). Consequently, value consciousness is
conceptualized as reflecting a concern for price paid relative to quality received.
2) Price Consciousness
Related to "value consciousness," perceptions of price can be characterized more
narrowly as reflecting "price consciousness." Though the term "price consciousness"
has been used by different researchers to refer to a variety of price-related cognitions
(Zeithaml, 1984), in this study, it was used in a very narrow sense to refer to the degree
to which the consumer focuses on paying low prices to the exclusion of all other
considerations. This definition is consistent with those employed by several researchers
(e.g., Erickson and Johansson, 1985; Lichtenstein et al., 1988; Monroe and Petroshius,
1981; Tellis and Gaeth, 1990).

3) Price-Quality Schema.
Product quality is one of the most important concepts in marketing strategy, as it is
believed to be positively related to a product's competitive advantage over its
competitors (Schnaars, 1991; Molz and Gielnik, 2006). Buyers judge product quality in
terms of overall product superiority, compared to substitute products in their evoked
13
sets (Zeithaml, 1988). To perform this judgment task, they focus on and evaluate
product attributes. Not all product attributes lead to a quality assessment before
purchase (Nelson, 1970; Karni and Darby, 1973), thus, buyers sometimes rely on
extrinsic attributes, such as store name, brand name, and advertising intensity, as a
summary measure of the level of product quality prior to purchase. Therefore, these
extrinsic attributes affect buyers' assessments of product quality through their role as
quality signals (Martins and Monroe, 1994). Price is often interpreted by the consumer
as being positively correlated to quality (i.e., higher prices indicate higher quality). This
positive relationship of price and quality is referred to as the price-quality schema. To
the degree consumers perceive price in this way, they will view higher prices more
favorably because they believe that increases in product quality are necessarily
associated with additional monetary outlays (Lichtenstein et al., 1988; Rao and Bergen,
1992).

4) Prestige Sensitivity.
Price perceptions are also influenced by what the price signals to other people about
the purchaser. Prestige sensitivity is associated with favorable perceptions of price,
based on the feelings of prominence and status that higher prices signal to other people
about the purchaser. Branding strategy frequently takes advantage of this positive
aspect of price to add premium value into products because the higher the price, the
higher the prestigious level perceived by the consumers (Lichtenstein et al., 1990).
5) Internal Reference Price
As previous research on consumer information processing has shown, price cues are
important, but the relative importance of the cues varies depending on the purchase
context (Alexis, 1968; Bettman, 1970). Among these cues, reference price is very
14
critical. It has long been recognized that consumers use some standard or reference
point to evaluate the purchase price of a product (Emery, 1970; Monroe, 1973). The
reference price function in consumer choice can be theoretically explained by a
psychological concept--adaptation-level (AL). In a pricing context, adaptation-level
theory suggests price perception depends on the actual price and the individual's
reference price or AL. According to adaptation-level theory (Helson, 1964), an
individual's behavioral response to stimuli represents modes of adaptation to
environmental and organism forces. These forces are not random, and the pooled effect
of three classes of cues--focal, contextual, and organic--determines the adjustment or
AL underlying behavior. Focal cues are the stimuli the individual is directly responding
to such as the price. Contextual or background cues are all other stimuli in the
behavioral situation providing the context within which the focal cues are operative.
Within the marketing literature, there are two streams of research on reference price.
The first centers around consumers' reactions to advertised (external) reference prices
(Chandrashekaran and Jagpal, 1995; Smith and Sinha, 2000), while the second
research stream focuses on internal reference price. Internal reference price is
commonly defined as "a price (or price scale) in buyers' memories that serves as a basis
for judging or comparing actual prices" (Grewal et al., 1998, p. 47).

According to Urbany et al., (1988), internal reference price is influenced by the range of
normal prices and the range of lowest prices a consumer perceives to exist in the
marketplace, in addition to the internal reference price range and the latitude of price
acceptance. Other examples of internal reference price definitions include lowest,
highest, and normal market prices (Lichtenstein et al., 1988; Urbany and Dickson,
1991; Biswas and Sherrell, 1993); past price (Kalwani et al., 1990; Mayhew and Winer,
1992), expected price (Winer, 1986), and expected future price (Jacobson and
Obermiller, 1990). Helgeson and Beatty (1987) and Grewal et al. (1998) argued that
15
internal reference price is the key to understanding how consumers judge actual prices
and how price cues affect consumer product evaluation and buying behavior.
Furthermore, recent empirical evidence suggests that consumers can use multiple
reference prices in making price comparisons (Rajendran and Tellis, 1994;
Chandrashekaran and Jag pal, 1995).
There is a significant body of literature to support the notion that "individuals make
judgments and choices based on the comparison of observed phenomena to an internal
reference price" (Kalahari and Winner, 1995, p. 161). It is generally accepted that
consumers compare a market price to an internal reference price when judging the
attractiveness of the market price (Janiszewski and Lichtenstein, 1999). Moreover,
Grewal et al. (1998) developed a comprehensive model of internal reference price,
applied it to a bicycle purchase setting, and empirically tested its significant effect on
consumer's "willingness to buy" and "search intentions". These authors found that IRP
was negatively related to consumers' price perceptions.
Although the research on internal reference price has been fruitful, the research scope
is flawed to some degree. More specifically, as presented in Grewal et al's (1998)
research, the majority of internal reference price literature investigated the effect of
internal reference price on a consumer's purchase intention in contexts where an
external reference price also was presented to respondents, such as stated reference
price in a newspaper (Haynes, 1991). This concomitant presentation of dual reference
prices is obviously biased because internal reference price generally exists across all
kinds of purchase settings, while advertised selling/reference price is only utilized in
some periods and for some products. A consumer's internal reference price can exist
independently from external reference price in many situations; past research,
however, has not addressed the effects of internal reference price on consumers'

16
purchase intentions in a context where influences from advertised selling/reference
price are excluded.
In addition, internal reference price research does not usually include measures of
individuals' personality factors, such as price consciousness, value consciousness, and
inclination to take risk. Grewal et al. (1988) presented a call to researchers to look at
such personality effects more closely, which provided a rationale for integrating
Lichtenstein et al.'s (1993) price perception model with an internal reference price
factor in the present project, to discover these factors' simultaneous effects on
consumers' overall price perceptions.
Therefore, the study presented here is arguably the first to incorporate IRP without the
presence of external reference price into price perception constructs, to apply proposed
comprehensive model into a real product (Bata’s shoes) purchase setting, and to
empirically test the model fit and path significance.

3. Literature Review

17
Price, arguably one of the most important marketplace cues, is a pivotal consumption
variable because of its presence in virtually every purchasing situation (Monroe, 1979).

In the UK, before the withdrawal of the half penny coin in 1984, prices often ended in
99½. This is still seen today in petrol (gasoline) pricing ending in 9⁄10s of the local
currency's smallest denomination; for example in the US the price of a gallon of
gasoline almost always ends in US$0.009 (e.g. US$3.289) evaluated.

It is well accepted in behavioral pricing research that price is one of the most
important informational cues consumers use in the decision making process (Helgeson
and Beatty, 1987). Moreover, what is revealed in these literatures is a general
agreement that what actually influences consumer behavior, especially final consumers'
behaviors, is not objective price but subjective price, also referred to as perceived price
or price perceptions (Lichtenstein et al., 1988; Lichtenstein et al., 1993; Zeithaml,
1988).
Furthermore, the literature also reveals a complex picture of price as a cue; price has
been deemed a multidimensional stimulus affecting consumers' purchase intentions
(Dodds et al., 1991).
Lichtenstein et al. (1993) proposed and empirically tested a price perception model in
a retailing setting that included five constructs (value consciousnesses, price
consciousness, coupon proneness, sale proneness, and price mavenism) that had a
negative impact on overall price perception, and two constructs (price-quality schema
and prestige sensitivity) with positive relationships with price perception. They argued
that whether a consumer perceived a price as high/low, acceptable/not acceptable, or a
good value/not a good value depended on these seven constructs.
Schindler & Kibarian (1996) tested odd pricing using three versions of a direct mail
catalog for women's clothing. The catalogs were identical except for the prices, which

18
ended with 00, 99, or 88. The version with prices ending in 99 generated 8% more
sales volume and had more purchasers than the 00-ending version. The 88-ending
catalog produced a similar sales

According to a 1997 study published in the Marketing Bulletin, approximately 60% of

prices in advertising material ended in the digit 9, 30% ended in the digit 5, 7% ended
in the digit 0 and the remaining seven digits combined accounted for only slightly over
3% of prices evaluted.

Kaushik Basu used game theory in 1997 to argue that rational consumers value their
own time and effort at calculation. Such consumers process the price from left to right
and will to tend to mentally replace the last two digits of the price with an estimate of
the mean "cent component" of all goods in the marketplace. In a sufficiently large
marketplace, this implies that any individual seller can charge the largest possible "cent
component" (99¢) without significantly affecting the average of cent components and
without changing customer behavior This model became the basis of much price
perception research and has been applied and confirmed in retail management in
varied consumer segments and different cultural settings (Zhou and Nakamaoto,
2001). Kenneth Wisniewski and Robert Blattberg at the University of Chicago's Center
for Research in Marketing showed that when the price of margarine was lowered from
89 cents to 71 cents, sales volume increased a mere 65%, but when it was lowered from
89 to 69 cents, sales volume increased by 222%.[
In another study, the perceived value of all the numbers between 1 and 100 were
studied, and 77 was shown to have the lowest perceived value relative to its actual
value.
The euro introduction in 2002, with its various exchange rates, distorted existing
nominal price patterns while at the same time retaining real prices.

19
However, all seven constructs reflect the underlying personality and psychology of the
consumer, and are mostly studied with respect to how the constructs influence
consumers' general price perceptions. It still is unclear how these price perception
constructs affect consumers' overall price perceptions towards a specific product or in a
specific purchase setting. Another insufficiency of this 7-construct price perception
model is that it did not include other important factors that influence the formation of
a consumer's overall price perception, such as brand name, reference price, and
country-of-origin effect.
The goal of this research is to further investigate the direct relationship between price
perception constructs and consumers' overall price perceptions. In addition, we
examine the effect of a consumer's internal reference price (with no external advertised
selling/reference price mentioned) on his/her price perception. Finally, we propose a
more comprehensive underlying structure of price perception by incorporating internal
reference price with other previously proposed constructs into the price perception
model and testing the fit of our model with structural equation modeling techniques.
(June 7, ScienceDaily 2005) — Have WE ever wondered why prices do not often end in
simple round numbers? This study which focuses on the left digit, rather than cents,
finds that the difference can be important to consumers.
"We show that nine ending prices may sometimes but not always be perceived to be
lower than a price one cent higher. This perception is more likely to occur when
introducing a nine ending in the price causes a change in the left-most digit. Further,
this perception is more likely when the nine ending price is perceived to be close to the
comparison standard price," ------ Manoj Thomas and Vicki Morwitz (New York
University).
A European wide study (el Sehity, Hoelzl and Kirchler, 2005) investigated consumer
price digits before and after the euro introduction for price adjustments. The research
20
reports clear trend towards psychological pricing after the nominal shock of the euro
introduction. Further, Benford’s Law as a benchmark for the investigation of price
digits was successfully introduced into the context of pricing. The importance of this
benchmark for detecting irregularities in prices was demonstrated and with it a clear
trend towards psychological pricing after the nominal shock of the euro introduction
Kenneth Wisniewski and Robert Blattberg at the University of Chicago's Center for
Research in Marketing showed that when the price of margarine was lowered from 89
cents to 71 cents, sales volume increased a mere 65%, but when it was lowered from 89
to 69 cents, sales volume increased by 222 .In another study, the perceived value of all
the numbers between 1 and 100 were studied, and 77 was shown to have the lowest
perceived value relative to its actual value.]

4. Objective of the Study

It is well accepted in behavioral pricing research that price is one of the most important
informational cues consumers use in the decision making process Moreover, studies
have also revealed the fact that it is not the objective price but the subjective price that
actually influences consumer behavior, especially final consumers' behaviors. It is also
referred to as perceived price or price perceptions
Psychological pricing is pricing that attempts to influence a customer’s perception of
price to make a product’s price more attractive.    Odd-even pricing is ending the price
with certain numbers to influence buyers’ perceptions of the price or product.

On the basis of the past literature in this field the following attempts have been made in
the present study:-

 The process of consumers’ price perception.

21
  To investigate the area of price endings -- to determine which groups of
consumers are more likely to use odd- endings as opposed to round endings
 To find out the percentage of people using Bata shoes.
 To determine the preference of Bata brand among various other shoe
brands.

Limitation of the study :-

Firstly , this project is an institutional project which has a narrow scope.So all aspects of the
topic have not been covered on this project.

Secondly,size of sample is sample is small.An increase in the number of sample can give
clearer picture.

Thirdly, the time permitted by the institution was not adequate which stopped me from making
extensive study.

Fourthly, the project is self funded projects and in some

22
 DETAIL ANALYSIS OF BATA COMPANY :-
Bata India Ltd is the largest footwear retailer and the leader in the footwear industry in
India. The company is engaged in the business of manufacturing and trading of
footwear and accessories through their retail and wholesale network. They are having
their production facilities at Batanagar in West Bengal, Patna and Hathidah in Bihar,
Faridabad in Haryana, Bangalore in Karnataka and Hosur in Tamilnadu. Their wholly
owned subsidiaries include Bata Properties Ltd and Coastal Commercial & Exim Ltd.
The company operates in two segments, namely footwear & accessories, and
investments in joint venture for surplus property development. Their Footwear &
Accessories segment is engaged in the business of manufacturing and trading of
footwear and accessories items through their retail and wholesale network. Their
Investment in joint venture for surplus property development segment is involved in
development of real estate at Batanagar. Their products include leather footwear,
rubber/canvas footwear and plastic footwear. Bata India Ltd was incorporated in the
year 1931 as Bata Shoe Company Pvt Ltd in Konngar, West Bengal, which was then
shifted to Batanagar. Batanagar was the first manufacturing facility in the Indian shoe
industry to receive the ISO 9001 certification. The company went public in 1973. They
changed their name to Bata India Ltd. Over the years, the company has established a
leadership position in the footwear industry and is easily the most trusted name in
branded footwear. The company has entered into an agreement with Bata Ltd of
Toronto, Canada for supply of technical know-how and services such as Footwear
23
technology and design, brand development, product development, retailing and
information systems for a period of ten years from January 1, 2001. The company
bagged the Retailer of the year award for the year 2006 in the footwear category as a
part of the Reid and Taylor Award for Retail Excellence which was presented during
the Indian Retail Summit 2006. They received the country's most coveted Retail Award
at the 4th Images Retail Awards (IRA) 2007. The company was honoured with Most
Admired Brand of the year 2006-07 in Footwear category. They were rated as one of
the Top 10 super brands in India and awarded Super Brands Award on April 12, 2007.
In February 21, 2008, they were given AMITY Corporate Excellence Award 2008. This
award was given for Bata's excellent performance and retail growth during 2007. The
company entered into a joint development agreement with Calcutta Metropolitan Group
Ltd for developing around 262 acres of land in Batanagar. The company formed a
special purpose vehicle called Riverbank Holdings Pvt Ltd. The development of 262
acres was split into two parts, IT SEZ for 25 acres developed by Riverbank Holdings
Pvt Ltd and the remaining 237 acres will be done by the new company Riverbank
Developers Pvt Ltd. In the year 2009, the company opened 69 new Bata stores, which
are all in large format with an average of over 3000 square feet. They also renovated
40 existing stores and closed down 73 stores which were in small format and unviable.
In the year 2010, the company won the 'Consumer Awards 2010' as 'India's Most
Preferred Retailer' given by CNBC Awaaz. The company opened 108 new large format
stores across all major towns in India.

24
25
 P/E P/BV
Market Cap EV/EBIDTA ROE ROCE D/E
Company (TTM) (TTM)
(Rs. in Cr.) (x) (%) (%) (x)
(x) (x)

Senthur Shoes 2.07 0.00 0.66 91.57 0.0 0.0 1.08

Anusha Internatl 2.06 0.00 -0.12 0.00 0.0 0.0 0.00

Carona 2.05 0.00 -0.09 0.00 0.0 0.0 0.00

Tejoomals Inds. 1.88 2.07 0.14 6.10 7.0 8.1 0.05

Cosmos Leather 1.79 0.00 0.33 0.00 0.0 0.0 1.65

Avanti Leathers 1.54 11.86 -0.17 0.00 1.7 0.8 0.00

Gyan Leather 1.54 0.00 -0.02 0.00 0.0 0.0 0.00

Mideast (India) 1.51 0.00 -0.01 0.00 0.0 0.0 0.00

Gurdarshan Leath 1.50 0.00 0.50 0.00 0.0 0.0 0.51

Micam Leather 1.35 0.00 1.42 0.00 0.0 0.0 5.64

Montari Leather 1.28 0.00 -0.02 0.00 0.0 0.0 0.00

Hamilton Shoes 1.26 0.00 0.74 0.00 0.0 0.0 2.36

Vishal Footwear 1.16 0.00 0.29 0.00 0.0 0.0 1.03

Savitri Overseas 1.16 0.00 13.04 0.00 0.0 0.0 1.84

AP Tanneries 1.10 0.00 0.48 0.00 0.0 0.0 0.0

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********

5. Research Methodology
A questionnaire was developed that tested respondents' use of odd-endings as
opposed to round-endings dependent on classification by gender, age occupation, &
income. Respondents were required to estimate the price they would be expected to
pay in factory outlet for BATA. It is determined by several factors which are influence
the price. Value consciousness, price q Value consciousness, price quality schema,
price sensitivity, internal reference price are found to be the key influencing factors of
price perception. In order to make a judgmental view of these the following process
has been adopted.

Research Period: Research work is only carried for 3 weeks.

This Chapter describes the methodology of the study. The project is based on information collected from
primary sources. After the detailed study, an attempt has been made to present comprehensive analysis
of usage of pricing strategy of bata shoe. The data has been used to cover various aspects like usage,
user’s preference and customer’s satisfaction regarding different healthcare soaps. In collecting requisite
data and information regarding the topic selected, I conducted a survey and collected the data.

34
Research Technique:

Data Collection:
Data can be defined as the quantitative or qualitative values of a variable. Data is plural of
“Dataum” which literally means to give or something given. Data is thought to be the lowest unit of
information from which other measurements and analysis can be done. Data can be numbers,
images, words, figures, facts or ideas. Data in itself cannot be understood and to get information
from the data one must interpret it into meaningful information.

There are various methods of interpreting data. Data sources are broadly classified into primary
and secondary data.

Types of Data:

 Primary Data
 Secondary data

 Primary Data
Data that has been collected from first-hand experience is known as primary data. Primary data
has not been published yet and is more reliable, authentic and objective. Primary data has not been
changed or altered by human beings, therefore its validity is greater than secondary data.

 Importance of primary data

Importance of primary data cannot be neglected. A research can be conducted without secondary
data but a research based on only secondary data is least reliable and may be biased as it has
already been manipulated by human beings. In statistical surveys it is necessary to get
information from primary sources and work on primary data, for example the statistical records
of female population in a country cannot be based on newspapers, magazines and other printed
sources. One such source is old and secondly they contain limited information as well as they can
be misleading and biased.

Primary data has the following importance:-

o Validity - Validity is one of the major concerns in a research. Validity is the quality of a
research that makes it trustworthy and scientific. Firsthand data obtained from a sample

35
 that is a representative of the target population will yield data that will be valid for the
entire target population.
o Authenticity- It is the genuineness of the research. Authenticity can be at stake if the
researcher invest personal biases or use misleading information in the research. Primary
source are more authentic because the facts are not overdone.
o Reliability- Reliability is the certainty that the research is enough true to be trusted on.
Information collected from internet and books may not be reliable every time. Reliability
improves with use of primary data.

 Secondary Data
Data collected from a source that has already been published in any form is called as secondary
data. The review of literature in any research is based on secondary data., mostly from books,
journals, and periodicals.

 Importance of secondary data

Secondary data can be less valid but its importance is still there. Sometimes it is difficult to obtain
primary data; in these cases getting information from secondary sources is easier and possible.
Sometimes primary data is present but the respondents are not willing to reveal it. In such cases
secondary data is useful.

Survey Design:
The study is a cross sectional study because the data were collected at a single point of source. For
the purpose of present study a related sample of population was selected on the basis of
convenience.

Sample Size and Design:

A sample of 50 people was taken on the basis of convenience.

Research Instrument:
This work is carried out through self-administered questionnaires. The questions included open
ended, dichotomous and offered multiple choice questions.

Data Analysis:

36
The data is analyzed on the basis of suitable tables by using statistical techniques. The technique
that I have use includes graphs technique which contains Bar Charts, Pie Charts and Line Graphs.

MENS WEAR

Mod: 107 RS. 699 Mod: 68 RS. 1099 Mod: 80 Rs. 899

WOMENS WEAR

37
Mod: 205 Rs. 499 Mod: 202 RS. 749 Mod: 223 RS. 599

KIDS WEAR

Mod: 330 Rs. Mod: 317 RS. 449 Mod: 349 Rs. 649
399

38
 ANNEXURE

Questionnaire

Name: ________________________________________________________

Address:_______________________________________________________

Age:_____________________ yrs Gender: M F

Education qualification____________________________________

Occupation: Service man Business man Students

Others

Income (Monthly):Rs. 10000 - 20000 20000 – 30000

30000 – 40000 above 40000

Marital status: Married Unmarried

1. Do you use Branded or Unbranded footwear?

Yes No
39
2. When you are willing to buy shoes?

Seasonal
Occasional
Can’t Say

3. What range of BATA shoes are you looking for?

Casual
Formal
Power
Sports Wear
4. Which brand of footwear’s currently you are using?

Bata Khadims Woodland

Reebok Sreeleathers Nike
Liberty Addidas Others
5. From where do you buy shoes?
Mall Retail Shop

Whole Sale Markets Others

6. How frequently do you visit the Bata Shop?

Once a Year Twice a Year

Once a Month Twice a Month

7.If ‘no’ please mention the number of your visits :______________________

8. Which media of advertisement influence your purchase?

Television Word of mouth

Newspaper Hoarding

8. What factors would you consider before selecting your footwear?

40
 Price Quality

Style Durability

Comfort Availability

9. Who influence you to buy footwear?

Friends Relatives

Advertisement Others

10. Which brand advertisement has the greatest appeal?

Bata Reebok

Liberty Woodland

Khadims Sreeleathers
Addidas Nike
Others

12.Statement to know the price Consciousness of the respondents:

I Am not willing to pay extra effort to find lower SDA/ SODA/ NDANA/
 a. prices. SOA/ SA

I use to visit more than one store to take advantage SDA/ SODA/ NDANA/
 b. of low price. SOA/ SA

The money saved by finding low prices is worth the SDA/ SODA/ NDANA/
 c. time & effort SOA/ SA

The time it takes to low price is usually not worth SDA/ SODA/ NDANA/
d.  the effort. SOA/ SA

41
 

  Note SDA= strongly disagree, SODA= somewhat

disagree, NDANA= either Disagree Nor Disagree  
SOA= Somewhat Agree, SA= Strongly Agree)

1. Do you use Branded or Unbranded footwear?

Presentation of Data Analysis of Finding

NUMBER OF PERCENTAGE OF
TOPICS PERSONS PERSON
BRAND 30 60%
UNBRAN
D 20 40%

42
 PERCENTAGE OF PERSON

40%
2

PERCENTAGE OF PERSON

60%
1

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Interpetasion
When consumer asked are you used branded or unbranded footwear then,

60% says branded

40%says unbranded

2. When you are willing to buy shoes?

Presentation of Data Analysis of Finding

NUMBER OF PERCENTAGE OF
TOPICS PERSONS PERSON
Seasonal 10 20% 43
Occasiona
l 20 40%
Can't Say 20 40%
 PERCENTAGE OF PERSON

20%

40% 1
2
3

40%

Interpetasion
when consumer asked when are you willing to buy shoes the
40% says Occasional
40% can’t Says
20% says Seasonal

3. What range of BATA shoes are you looking for?

Presentation of Data Analysis of Finding

44
 NUMBER OF PERCENTAGE OF
TOPICS PERSONS PERSON
Casual 30 60%
Formal 16 32%
Power 0 0%
Soprtswear 4 8%

PERCENTAGE OF PERSON
70%

60%

50%

40% PERCENTAGE OF PERSON

30%

20%

10%

0%
1 2 3 4

Interpetasion
when consumer asked what range of shoes are you looking then;
60% says Casual
32% says Formal
8% says Sportswear
0% says Power

45
4. Which brand of footwear’s currently you are using?

Presentation of Data Analysis of Finding

NUMBER OF PERCENTAGE OF
TOPICS PERSONS PERSON
Bata 13 26%
Reebok 8 16%
Liberty 3 6%
Woodland 2 4%
Khadmis 5 10%
Shreeleather
s 7 14%
Addidas 6 12%
Nike 3 6%
Others 3 6%

PERCENTAGE OF PERSON
30%
26%
25%

20%
16%
15% 14%
PERCENTAGE OF PERSON
12%
10%
10%
6% 6% 6%
5% 4%

0%
1 2 3 4 5 6 7 8 9

Interpetasion
when consumer asked which brand of footwear are you currently using then,
26% says Bata
16% says Reebok
14% says Shreelathars
12% says Addidas
10% say Khadim

46
 6% says Liberty

6% says Nike
6% says others
4% says Woodland

1. How much importance do you give the following factors when you purchase Health Care
Soap?

Strongly Least
Factors Important Normal None
agree Important
I Am not
willing to pay
extra effort to 20 12 8 6 4
find lower
prices.
Colour 8 9 10 11 12
Shape 8 6 10 12 14
Durability 20 16 8 4 2
Packaging 8 7 10 12 13
Availability 16 14 10 6 4
Total 80 64 56 51 49

Average X1 = 13.33 X 2 = 10.67 X 3 = 9.33 X 4 = 8.50 X 5 = 8.17

47
 X1+ X2+ X3+ X4+ X5
Thus, the grand average ( X ) = =¿8.33
6

Now, using multiplicative model, we have,

X1
For Very Important = = 160.02
X

X2
For Important = = 128.09
X

X3
For Normal = = 112
X

X4
For Least Important = = 102.04
X

X5
Seasonal Index for None = = 98.07
X

WRITE INTERPRETATION :
In YOUR OWN WORDS .

48
5. From where do you buy shoes?

Presentation of Data Analysis of Finding

NUMBER OF PERCENTAGE OF
PLACE PERSONS PERSON
Mall 3 6%
Retails Shop 30 60%
WholeSale
Market 12 24%
Others 5 10%

PERCENTAGE OF PERSON
60%

50%

40%
PERCENTAGE OF PERSON
60%
30%

20%
24%
10%
6% 10%
0%
1 2 3 4

49
Interpretation
when consumer asked from where do you buy shoes then 6
60% says Retail shop
24% says Wholesale market
10% says Others
6% says Mall

6. How frequently do you visit the Bata Shop?

Presentation of Data Analysis of Finding

NUMBER OF NUMBER OF PERCENTAGE OF

TIMES PERSONS PERSON
Once a Year 40 80%
Twice a Year 5 10%
Once a Months 4 8%
Twice a Months 1 2%

PERCENTAGE OF PERSON

4 2%

3 8%
PERCENTAGE OF PERSON

2 10%

1 80%

0% 10% 20% 30% 40% 50% 60% 70% 80%

50
Interpetasion
when consumer asked how frequently are you visit the Bata shop then,
80% says once a year
10% says twice a year
8% says once a month
2% says twice a month

7. Which media of advertisement influence your purchase?

Presentation of Data Analysis of Finding

NUMBER OF PERCENTAGE OF
TOPICS PERSONS PERSON
Television 8 16%
Word Of
Mouth 23 46%
Newspaper 15 30%
Hoarding 4 8%

PERCENTAGE OF PERSON

8%
16%
1
2
30% 3
4

46%

51
Interpretation
When consumers asked about the media of advertisement that influence their purchase then,

46% says Word of mouth

30% says Newspaper
16% says Television
8% says Hoarding

8. What factors would you consider before selecting your footwear?

Presentation of Data Analysis of Finding

NUMBER OF PERCENTAGE OF
FACTORS PERSONS PERSON
Price 3 6%
Quality 25 50%
Style 5 10%
Duarbality 10 20%
Comfort 5 10%
Availabilit
y 2 4%

52
 PERCENTAGE OF PERSON
60%

50%

40%
PERCENTAGE OF PERSON
30%
50%
20%

10% 20%
6% 10% 10%
0% 4%
1 2 3 4 5 6

Interpretation
when consumer asked which factor are you consider before selecting your footwear then,
50% says Quality
20% says Durability
10% says Style
10% says Comfort
6% says price
4% says Availability

9. Who influence you to buy footwear?

Presentation of Data Analysis of Finding

PERSON INFLUENCE NUMBER OF PERCENTAGE OF

YOU PERSONS PERSON
Friends 30 60%
Relatives 5 10%
Advertisement 15 30%
Others 0 0%

53
 PERCENTAGE OF PERSON
30%

1
2
3
4
60%

10%

Interpretation
when consumer asked who influence you to buy footwear then
60% says Friends
30% says Advertisement
10% says Relatives
0% says nothing

10. Which brand advertisement has the greatest appeal?

Presentation of Data Analysis of Finding

BRAND ATTRACTS NUMBER OF PERCENTAGE OF

YOU PERSONS PERSON
Bata 2 4%
Reebok 10 20%
Liberty 3 6%
Woodland 0 0%
Khadmis 20 40%
Shreeleathers 10 20%
Addidas 2 4% 54
Nike 3 6%
 PERCENTAGE OF PERSON
4%
4% 20% 1
6%
2
20% 3
4
5
6
6% 7
8
9

40%

Interpretation
when consumer asked which brand advertisement are greatest appeal then ,
40% says khadmis
20% says Reebok
20% saysShreeleathers
6% says Liberty
6% says Nike
4% says Addidas

4% says Bata
0% says Woodland

Findings, Conclusion and Recommendation

Findings
 Consumer Research:
Consumer research deals with consumer and their problems and solution to the problems. In this I came
to know about the consumers need and expectation levels regarding products and ascertainable levels of
consumer satisfaction.
55
  Product Research:
Under product research I came to know about the modification which consumers wants as to the quality,
packing, shape, color and quantity of their favorite healthcare soaps. In the study it has been found that
among all the products Lifebuoy is the most preferred product.

 Pricing Research:
This includes ability to consume, to pay for the product, how much a person can spend on his/her
favorite healthcare soap. In this I have found that number of people prefers price range of Rs. 25.

 Advertising Research:
Under this I have concluded that whether the advertisement appeals the consumers or not. This also
included evaluating and selecting the proper media-mix and measuring advertising effectiveness. I have
found that most people decide about their healthcare soaps based on doctor’s advice rather than
advertising.

Conclusion and Recommendation :

Lastly , we conclude that , The retail prices are often expressed as "odd prices": a little less
than a round number, e.g. 999 or 1000. Study revealed that the buyers generally believe that
prices ending in uneven, rather than even numbers, (such as, 99, 999, etc.) are a better deal or a
better price than even numbers (e.g. 10 or 1000 ). Many consumers thinks that 999 is lower than
the 1000. This price is effect on the psychology of the customer .
After a carefully study of my project , I am in a position to suggest that :-

Although the difference between Rs.99 and a Rs.100 is small, for high volume items this can
have a significant impact on gross profit and margins, particularly for low value items. If
retailers understand which groups of consumers were more likely to be attracted to the round-
endings they could use this knowledge to determine the most effective prices.

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BIBLOGRAPHY
http://www. Bata.com

www.product range.com

http://www.bata manufacturing process.

www.consumercomplaints.in/

.www.indiainfoline.com/

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MORE FREE TERM PAPERS ON SITE: www.BesplatniSeminarskiRadovi.com

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