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Topic : A comparative study between Private labels and National brands and effect on customer footfall & sales

in Pune.

Submitted by: NAMES Neha Agarwal Anuj Madhuri Eesha Keerty (absent) Manali Monika Nalini Nikhil Niranjan Varsha ROLL NOS 04 10 15 23 29 33 38 45 49 52 59

Chapter -1 Synopsis

As a Part of Our Academic Project ,the topic assigned to us was A comparative Study between Private Labels and Nationalised brands and their effect on customer footfall and sales in Pune. Generally ,the products are divided into two divisions : 1.Private labels 2.National Brands Private label products or services are typically those manufactured or provided by one company for offer under another company's brand. Private label goods and services are available in a wide range of industries from food to cosmetics to web hosting. They are often positioned as lower cost alternatives to regional, national or international brands, although recently some private label brands have been positioned as "premium" brands to compete with existing "name" brands.

The National brand are those product that is distributed nationally under a brand name owned by the producer or distributor, as opposed to local brands (products distributed only in some areas of the country), and private label brands (products that carry the brand of the retailer rather than the producer). National brands are produced by, widely distributed by, and carry the name of the manufacturer. In our Survey , A total of 130 samples were taken ,the analysis shown by the sample collected showed that Customers are generally aware of the national brand but most of them go for Private Labels.The most important reason behind this is that private labeled products do not use promotional tools like Advertisement. As in today era promotion which is one of the P of marketing mix plays a very important role, this is the reason behind the popularity of National Brands. In this Survey we also focused on Expectation level customers in different food retail stores.Also what are the reasons that Bring Customers to these stores to avail these services from the Customer Perspective & from the Companies i.e. retail stores. The sampling method which was used for this analysis was Random Sampling Method. Random Sample Questionnaire worked as the tool for this analysis.The questionnaire has given a clear

picture of what the customers think about Retail store as well as both private labels and nationalized brands.The survey also shows customer preference in terms of their visit to the retail stores.

On the other hand, when we analyse from Industry point of view ,we can draw conclusion that company prefer Private Label as compare to National brands.The reason behind this is the revenue generation. Companies generate most of the revenue from private labels as compare to the National brands.

As a Conclusion of this analysis we got to know that PLBs were giving more profit to the retail outlets whereas NB offer wide variety for the retail stores. Most of the Customers generally know what Private labels are but they are not aware about it as compare to the national brands.Thus, one can easily conclude that National Brand are important but Private Label too form an essential part and their presence do effect footfalls as well as sales in Pune.

CHAPTER 2 INTRODUCTION The topic of our survey was to do a comparative study of National brands as well as private labels. While preparing this project report, we came to know about the different food retails situated in pune and the most important thing is that we were able to make a comparison between private as well as nationalized brands. Broadly the whole products are broadly categorized into two broad categories:

Products

Private labels

National brands

Private Label products were once considered the step child to the mighty National Brands but that's no longer the case.

Retailers across all the different trade classes are focusing on the quality of their private label brands so they can compete head to head with National Brands. Private Label has come a long way from ugly packaging and poor ingredients. Quality takes center stage as private label grows market share at the expense of national brands. An article in The Times of India titled "Private labels take on branded biggies" points out the strategy of retailers in India pricing their private label food products in line with their branded counterparts. Retailers are strategically positioning their private label brands to be on par or even better than the brand. This is being accomplished through better formulation development, increased emphasis on internal and external testing of products, conducting audits at supplier manufacturing facilities, improved art graphics and the use of unique components.

The private label quality initiatives by retailers will continue to:


Build private label brand equity Establish a point of differentiation from the brand Grow retailer margin Weed out poor performing suppliers who cannot meet the higher standards Build customer loyalty Introduction to the companies visited FOOD BAAZAR (Ab Ghar Chalaana Kitna Aasaan )

At Food Bazaar one can find a hitherto unseen blend of a typical Indian Bazaar and International supermarket atmosphere. Flagged off in April02, Food Bazaar is a chain of large supermarkets with a difference, where the best of Western and Indian values have been put together to ensure satisfaction and comfort while shopping. The western values of convenience, cleanliness and hygiene are offered through pre packed commodities and the Indian values of "See-Touch-Feel" are offered through the bazaar-like atmosphere created by displaying staples out in the open, all at very economical and affordable prices without any compromise on quality.

The best of everything offered with a seal of freshness and purity will definitely make final buying decision a lot easier.

MORE:

Aditya Birla Retail Limited is the retail arm of Aditya Birla Group, a USD 28 billion Corporation. The Company ventured into food and grocery retail sector in 2007 with the acquisition of a south based supermarket chain. Subsequently Aditya Birla Retail Ltd. The company expanded its presence across the country under the brand "more." with 2 formats : 1: Supertmarkets. 2: Hypermarkets.

Supermarket More for you More supermarkets cater to the daily, weekly and monthly shopping needs of consumers. The product offerings include a wide range of fresh fruits & vegetables, groceries, personal care, home care, general merchandise & a basic range of apparels. Currently, there are over 600 More supermarkets in india.

Hypermarket More MEGASTORE It is a one-stop shopping destination for the entire family. Besides a large range of products across fruits & vegetables, groceries, FMCG products, more MEGASTORE also has a strong emphasis on general merchandise, apparels.

SPENCER:

Spencers Retail Limited is a multi-format food-first retailer providing a wide range of quality products to discerning young customers - well-travelled citizens of the world, looking out for authentic flavors and experiences in a fun-filled shopping environment. Their brand positioning Makes Fine Living Affordable embodies this approach, delighting shoppers with the best products and services that enable a fine living at reasonable prices while providing them with a warm, friendly and knowledgeable retail environment. Spencer runs about 200 stores (including about 30 large format stores) across 35 cities in India, employing more than 7,000 people. As one of the earliest entrants in the retail space in India,

they have been instrumental in introducing Indian consumers to the concept of organized retailing, becoming the countrys first grocery chain back in 1920, and offering the joys of hypermarket shopping in 2001. A food first retailer we offer both fresh and packaged foods as well as groceries. They also have a wide selection of electronics and electrical equipment, home and office essentials, garments and fashion accessories, toys, and personal care.

D-MART:

D-Mart seeks to provide a one-stop shopping experience for the entire family, meeting all their daily household needs. A wide selection of home utility products is offered, including foods, toiletries, beauty products, garments, kitchenware, bed and bath linen, home appliances and much more. Since D-Mart first opened its doors in the Mumbai region in 2000, it has grown into a trusted and well-established shopping destination in the Mumbai Metropolitan Region (Mumbai, Navi Mumbai and Thane). D-Mart is now looking forward to growing its stores across India. D-Mart's expansion began in 2007, when stores were opened in Ahmedabad, Baroda, Pune, Sangli and Sholapur. Today D-Mart is established in 38 locations across Maharashtra, Gujarat and Andhra Pradesh. D-Mart offers wide selections of products in the following categories:

Foods Toiletries and Beauty products Garments Kitchenware Bed and Bath linen Toys & Games Stationery Home Appliances Footwear

RELIANCE MART:

Reliance Mart is the convenience store format which forms part of the retail business of Reliance Industries of India which is headed by Mukesh Ambani. Reliance plans to invest in

excess of Rs 25000 crores in the next 4 years in their retail division. The company already has in excess of 560 reliance fresh outlets across the country.These stores sell fresh fruits and vegetables, staples, groceries, fresh juice, bars and dairy products. A typical Reliance mart store is approximately 3000-4000 square feet and caters to a catchment area of 23 km

STAR BAZAAR:

Star Bazaar is a retail operations company that owns and manages a number of retail chains in India. Established in 1998, it runs lifestyle chain Westside, one of Indias largest and fastest growing chain of lifestyle retail stores, Star Bazaar, a hypermarket chain, Landmark, a books and music chain, and Fashion Yatra, a complete family fashion store.

Star Bazaar is changing the way people shop for their groceries and household essentials. People who used to visit the local shops and vegetable markets frequently are now buying at hypermarkets such as Star Bazaar that offer customers a variety of products at affordable prices, in a comfortable environment. But while affordability is a big factor for customers, they also seek value and quality which they know they will get at Star Bazaar, a Tata enterprise. The uniqueness of each Star Bazaar store lies in the size and spread of its merchandise range. Shoppers can select from a large range of staples, fresh goods, apparel, luggage, consumer durables, household products and much more and also enjoy the benefit of generous reductions on the market rate.

CHAPTER -3 RESEARCH METHODOLOGY

The topic of the research was A comparative survey of Private label and national label brands & its effect on sales and customer in Pune. Research design: Research design is the specification of method and procedure used for acquiring information needed. As per our research design we went through the path as follows: Decided the Objective of Research. Determined the most liked way of Method. Specified the source of data collection. Defined the most appropriate sample design and sample size. Conducted the survey of data collection. Analyze data Inquiry Mode - The mode of inquiry to get the information is qualitative method. The reason behind this is that we are finding out the customers reaction regarding the effects of it on the customers. Sample Size- 120 customers 10 Industries

Data collection methodSecondary method- We have studied various food retail companies

Primary method- Questionnaire was adopted as the Primary methodology. Sample Techniques- structured questionnaire Geographical area- Pune city

Age 20-25 26-30 31-35 36-40 41-45 46-50

No. of People 12 58 34 21 04 01 Total 130

Data Bifurcation Table 1. A ge wise

2. Income wise

Income Less than 3 Lakh 3 -5 Lakh

No.of People 23 60

More than 5 Lakhs Total

47 130

CHAPTER 4 Data Analysis & Interpretation

1. Are you aware of Private labels (PL) and National brands (NB)?

PL NB

YES ( ) YES ( )

NO ( ) NO ( )

Objective : The objective behind the question is to know the awareness of brands among the people i.e. whether the people know the private and nationalized brands .

Yes Private Labels National Brand 97 113

No 23 07

120 100 80 60 40 20 0

113 97

Private Labels National Brand 23 7 Yes No

Conclusion: People are more aware of National brands as compared to the Private Labels.

2. How often do you visit food retail stores? Once in a week ( ) Once in a month ( ) Twice in a week ( )

Once in two months ( )

Objective : This question mainly tells about the frequency by which customers prefers to visit the retail stores. Once in a week Twice in a week Once in a month Once in two months 36 44 32 08

44 45 40 35 30 25 20 15 10 5 0 Once in a week Twice in a week Once in a month Once in two months 8 36 32

Conclusion : The study mainly shows that consumer prefer to visit the retail shops twice in a week.

3. How often do you buy Private labeled products? Once in a week ( ) Twice in a week ( ) Once in a month ( )

Once in three weeks ( )

Objective : The objective behind this question is to find out relationship between the awareness about the brands and their purchasing power .

Once in a week Twice in a week Once in three weeks

26 29 19

Once in a month

46

50 45 40 35 30 25 20 15 10 5 0

46

26

29 19

Once in a week Twice in a week

Once in three weeks

Once in a month

Conclusion : The study shows that customers prefer to buy private labeled products once in a month, the reason behind this can be that private labels are advertised less as compare to the National Brands.

4. How often do you buy products of National Brands? Once in a week ( ) Twice in a week ( ) Once in a month ( )

Once in three weeks ( )

Objective : This question mainly shows that whether the customers are aware of the national brands or not, if they are aware of the brand their purchasing power increases.

Once in a week Twice in a week Once in three week Once in a month

46 22 34 18

50 45 40 35 30 25 20 15 10 5 0

46 34 22 18

Once in a week Twice in a week

Once in three weeks

Once in a month

Conclusion : The study shows that customers mainly prefer to buy National brands once in a week , the reason is the promotional strategy i.e. advertisement.

5. Which stores private labeled products do you prefer? Spencer ( ) D-Mart More ( ) ( )

Star Bazaar ( ) Food Bazaar ( )

Reliance Mart ( )

Objective : The objective behind this question is to rank the retail stores according to the private labeled products provided by them. This will help us to know how customers rank their choices in terms of Retail stores.

Spencer D-mart Star Bazaar More Food Bazaar Reliance Mart

15 16 21 37 49 30

49 50 45 40 35 30 25 20 15 10 5 0 Spencer D-mart Star Bazaar More Food Bazaar Reliance Mart 15 16 21 37 30

Conclusion : The study shows that customers generally prefer to buy private label brands from Food Bazaar because it provides more variety of products in less price.

6. Does Brand name affect your purchasing decision in case of Private labels? Yes ( ) No ( )

Objectives : This question helps us to know how brand level impacts the purchasing decision i.e. Is Brand name playing a vital role in purchasing the private labels or not.

Private labels

Yes 97

No 23

Private labels
97 100 80 60 40 20 0 Yes No 23

Conclusion : The study shows that brand name affects the purchasing decision .

7. Which of the following aspects affect your purchasing criteria while buying Private labeled products? Price ( ) Quality ( ) Offers ( )

Discount ( )

Objective: The objective behind this question is to find out how different parameters like price, discount, offers & quality affects the purchasing criteria while buying the private labeled products. This shows whether these parameters are directly related or inversely related with the purchasing criteria while buying Private labeled products.

Price Discount Quality Offers

35 71 39 12

80 70 60 50 40 30 20 10 0 Price 35

71

39

12

Discount

Quality

Offers

Conclusion : The study shows that out of the above criteria mostly Discount affects purchasing decision of a customer because customers are more conscious about the prices of products.

8. What do you prefer PL or NB for following categories? Grocery ( ) Bakery ( ) Perishable Food ( ) Packed Food ( )

Objective : The objective behind this question is to find out which one i.e. either private labels or national brands plays a important role while purchasing grocery , bakery, perishable foods or packed foods. Grocery Private label 32 National brand 71

Perishable Food Bakery Packed Food

61 56 69

23 33 29

80 70 60 50 40 30 20 10 0 32

71 61 56

69

33 23

29

Private label National brand

Grocery

Perishable Food

Bakery

Packed Food

Conclusion: The study shows what people prefer usually while taking grocery, perishable food, bakery and packed foods. The graph shows that generally customer prefer national brand in case of grocery but in case of packed foods customers prefer private labels.

9. Does unavailability of Private Labels affect your buying decision? Yes ( ) No ( )

Objectives: The objective behind this is to see how customer get affected with the nonavailability of Private labels. This gives a clear picture that how Private labels affect the buying decision. Private Labels Yes 48 No 72

Private Labels
80 70 60 50 40 30 20 10 0 Yes 72 48

No

Conclusion : The study shows that unavailability of Private Labels do not affect the buying decisions.

10. Discount plays an important role while buying products of Private Labels . Agree ( ) Disagree ( ) cant say ( )

Strongly Agree ( )

Objectives: The main objective of this question is to see how one of the factor Discount plays a vital role while buying the Private Labels . Agree Disagree Strong Agree Cant say 70 11 23 16

70 70 60 50 40 30 20 10 0 Agree Disagree Strong Agree Cant say 11 23 16

Conclusion: The study shows that Discount plays a very vital role in buying Private Labels.

Industrial view

1.According to you which brand do you prefer to keep in the store? Private labels ( ) National brands ( )

OBJECTIVE: The objective behind this question is to know the preference of the store manager for private label and the national brand.

7 6 5 4 3 2 1 0 Private label National brand

CONCLUSION:The study shows that majority of companies prefer private labels over national brands.

2.What are the criteria for your selection? Price ( ) Customer demand ( ) Quality ( ) Customer satisfaction ( )

OBJECTIVE:The objective of this is to know the basis for selection of the private or national brand by the store manager. Price Quality Customer demand Customer satisfaction 5 2 5

6 5 4 3 2 1 0 Price Quality Customer demand Customer satisfaction

CONCLUSION:The study shows that company selects the private label and national brand on the basis of quality and customer satisfaction and 2% also sees on the basis of customer demand.

3.Whose unavailability effects the stores in terms of sales? Private label ( ) National brand ( )

Objective:The objective behind this question is to know that which( private or national brand) unavailability effects the most in terms of sales in the store. Private label National brand 5 6

6.2 6 5.8 5.6 5.4 5.2 5 4.8 4.6 4.4 Private label National brand

CONCLUSION:The study shows that national brands unavailability effects the company most in terms of sales.

4.How often the stocks are being replenished? Every day ( ) Twice in a week ( ) Once in a week ( ) Once in a two week ( )

OBJECTIVE:The objective behind this question is to know how much time does stock gets replenished from store in a week , twice a week or once in two weeks. Every day Once in a week Twice a week Once in a two week 9 1

10 9 8 7 6 5 4 3 2 1 0 Every day Once in a week Twice a week Once in a two week

CONCLUSION:The study shows that every day stocks from store get replenished and need to be filled as per the shelf requirement.

5.Does offer help you to increase your sales? National brands Private label Yes ( ) Yes ( ) No ( ) No ( )

OBJECTIVE:The objective for this is to know whether the offer given by the store on private labels and the national brands effects on the sales of the respective brands . National brands Private label Yes 9 9 No

10 9 8 7 6 5 4 3 2 1 0 Yes No National brands Private label

CONCLUSION:The study shows that the offer given by the company on private and national brands equally helps to increase the sales.

6. According to you which brand the customer purchase the most? National brand ( ) Private label ( )

OBJECTIVE:The objective for this question is to know the store keepers view as which brand does the customers purchases the most from there store. National brand Private label 8 2

9 8 7 6 5 4 3 2 1 0 National brand Private label

CONCLUSION:The study shows that customer purchases the national brand more than the private label from the stores.

7.On what criteria do you differentiate the private labels from the national brand? Price ( ) Packaging ( ) Quality ( ) Variety ( )

OBJECTIVE:The objective behind this question is to know at what criteria either on the basis of price, quality, packaging or variety the store keeper differentiates the private label and the national brand. Price Quality Packaging Variety 5 7 1

8 7 6 5 4 3 2 1 0 Price Quality Packaging Variety

CONCLUSION:The study shows that the company people differentiates the private label from the national brand on the basis of quality hen price and atlast they look at the price of the brand.

8.What factors influences consumer to go for Private Label? Quality ( ) Varieties ( ) Size ( ) Price ( )

OBJECTIVE:The objective behind this question is to know the factors by which the consumer gets influenced for purchasing the private label. Quality Size Variety Price 6

6.2 6 5.8 5.6 5.4 5.2 5 4.8 4.6 4.4 Quality Size Variety Price

CONCLUSION:The study shows that the quality of the brand influences the customer to purchase the private label over the national brand.

9.According to you,company earns more revenue from Private label or National brand? Private label ( ) National brand ( )

OBJECTIVE:The objective of this question is to know that between private label and national brand which one gives the more revenue to the company. Private label National brand 7 3

8 7 6 5 4 3 2 1 0 Private label National brand

CONCLUSION:The study shows that the private brands give more revenue to the stores than the national brands.

10.What will customer prefer Private label or National brand for the following categories: NB Staple food Fruits and Vegetable ( ) ( ) PL ( ) ( )

Packaged food Milk and milk products Beverages Meat ,fish and poultry

( ) ( ) ( ) ( )

( ) ( ) ( ) ( )

OBJECTIVE:The objective for framing this question is to know that from companies point of view what does the customer prefer in the above mention categories either private label or national brand. Staple food Fruits and Vegetable Packaged food Milk and milk products Beverages Meat, fish and poultry National brand 8 8 2 8 3 Private label

6 8 5

9 8 7 6 5 4 3 2 1 0

National brand Private label

CONCLUSION:The study shows that according to company the customers prefer private label in case of staple food ,fruits and vegeables,milk and milk products and national brands in case ofpackaged food ,beverages and meat ,fish and poultry.

11.According to you, which of the following has more growth in the future? Private label ( ) National brand ( )

OBJECTIVE:The objective behind this question is to know that according to company private label or the national brand has future growth n food retail sector .

Private label National brand

6 4

7 6 5 4 3 2 1 0 Private label National brand

CONCLUSION:The study shows that the private label has more future growth in food retail than the national brands.

Chapter -4 Observation & Findings

The observation and findings regarding the survey mainly highlights on following points :

Although some of the people are aware of the private labels still majority of them goes for national brands. It was also found that customers prefer to visit retail stores frequently i.e. once in a week. The study also showed that brand labels effect the purchasing decisions. The survey also showed that how customers rank their preference in terms of different products including grocery, bakery ,perishable foods etc. The other major finding was that out of all the food retails present in Pune, customers mainly prefer Food Bazaar. Discount , one of the parameter also plays a vital role while purchasing the products.

Chapter-5 Conclusion, Recommendation & Suggestions

People are not much aware of PLBS, thus a percentage loss of sales compared to NBs can be overcome by making people closer towards the offering and making them aware about the products. Out of their total buying , ratio contributed towards buying of PLBS is very less, because people are mostly conscious about NLBS to suite their needs. There is huge need of variety in case to promote and sale PLBS in the competitive market. Private labels need to be advertised ,as the nationalized brands.

Discounts and offers affect the purchasing criteria in big way. But still people go for National level brand.

Company tends to sell private level brand because they get more profit.