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Rana project report on retail Rana project report on retail Document Transcript

  • Study on changing consumer preferencetowards organized retailing from un-organized retailingSUBMITTED BY SUBMITTEDTORANA YOGESH SINGH Prof. NitinSinghRoll No. 15033Maharishi Nagar, Noida-Dadri Road- 201304Tel: (0120) 2567603 Fax : 0120-2562652Website:maharishiinstituteofmanagement.com1
  • Study on changing consumer preferencetowards organized retailing from un-organized retailing2
  • The Indian retail industry is the fifth largest in the world. Retailbusiness contributes around 11 percent of country‘s GDP and isthe second largest sector in India, only after agriculture. Retailingas a sector is witnessing revolution in India. Though at present,around 94-95% of India‘s retail market is unorganized Comprisingof organized and unorganized sectors, India retail industry is oneof the fastest growing industries in India, especially over the lastfew years. Though initially, the retail industry in India was mostlyunorganized, however with the change of tastes and preferences ofthe consumers, the industry is getting more popular these days andgetting organized as well. With growing market demand, theindustry is expected to grow at a pace of 25-30% annually. TheIndia retail industry is expected to grow from ` 35,000 crore in2004-05 to ` 109,000 crore by the year 2011.According to a report by Northbride Capita, the India retailindustry is expected to grow to US$ 700 billion by 2011. By thesame time, the organized sector will be 20% of the total marketshare.The following report ‘Study on changing consumer preferencetowards organized retailing from un-organized retailing’ is basedon the study conducted in Retail sector of India3
  • We express our sincere thanks to Prof. Nitin Singh, our GrandProject guide to have given us the opportunity to work on such achallenging project. We also thank our institute MaharishiInstitute of Management for providing us all the necessaryresources required in our study.Again we would like to earnestly thank those all people who giveus their valuable time for us in questionnaire survey. All theinteraction with them was really a good experience and addedsome valuable knowledge and experience.Last but not the least I would also like to thank our friends whotook time off to share insights about their experiences this helpedus immensely to understand the psyche of the consumer. We justhope that the recommendations and suggestions presented by usare considered seriously.On the onset, we would like to take this opportunity to express ourgratitude to all those great minds and hearts that have touched thisproject in the path of its success.RANAYOGESH SINGH4
  • After going thick on the thing now time is to make completepicture Organized Retail Stores are the market leader in the fieldof Retailing. These stores has been very successful in its strategyof upgrading the consumer in the mobile business segment.Organized stores has made sure that it makes its consumers moveup the product chain by introducing same products to the newcustomers. Mostly respondents prefer Branded Product. Manyrespondents are buying products by brand name. Fewerrespondents arepurchase once in a month, Mostly respondents areusually visit these stores,some respondents purchase this brand byFriends and some respondents arepreference of brand by brandnameCustomer satisfaction, a business term, is a measure of howproducts andservices supplied by these stores meet orsurpass customer expectation. It isseen as a key performanceindicator within business and is part of the four ofa BalancedScorecard.5
  • In a competitive marketplace where businesses compete forcustomers,customer satisfaction is seen as a key differentiator andincreasingly hasbecome a key element of business strategy.Table of ContentSERIAL TITLE PAGE No.6
  • No.1. Preface 22. Acknowledgement 33. Executive Summary 4 - 54. CHAPTER -1 Introduction to IndianRetail Industry7 - 255. CHAPTER - 2 Classification 26 - 306. CHAPTER - 3 Consumer BuyingBehaviour31 - 387. CHAPTER - 4 Organized vsUnorganized Retail39 - 428. CHAPTER - 5 Selection of the topic 43 - 459. CHAPTER - 6 Purpose andSignificance of the study46 - 5010. CHAPTER - 7 Literature Review 51 - 5511. CHAPTER - 8 Sampling design 56 - 5812. CHAPTER - 9 Data analysis &Interpretation59 - 6913. CHAPTER - 10 Finding 70 - 7214. CHAPTER - 11 Suggestion 73 - 7515. CHAPTER - 12 Limitation 76 - 7716. CHAPTER - 13 Conclusion 78 - 8117. CHAPTER - 14 Appendices 82 - 8918. CHAPTER - 15 Bibliography 90 - 927
  • Retail consists of the sale of goods or merchandise from a fixedlocation,such as a department store, boutique or kiosk, or by mail, in smallor8
  • individual lots for direct consumption by the purchaser.[1]Retailing may include subordinated services, such as delivery.Purchasers may beindividuals or businesses. In commerce, a "retailer" buys goods orproducts in large quantities from manufacturers or importers,either directly or through a wholesaler, and then sells smallerquantities to the end-user. Retail establishments are often calledshops or stores. Retailers are at the end of the supply chain.Manufacturing marketers see the process of retailing as anecessary part of their overall distribution strategy.The term "retailer" is also applied where a service providerservices the needs of a large number of individuals, such as apublic utility, like electric power.Shops may be on residential streets, shopping streets with few orno houses or in a shopping mall. Shopping streets may be forpedestrians only.Sometimes a shopping street has a partial or full roof to protectcustomers from precipitation. Online retailing, a type of electroniccommerce used for business-to-consumer (B2C) transactions andmail order, are forms of non-shop retailing.Shopping generally refers to the act of buying products.Sometimes this is done to obtain necessities such as food andclothing;sometimes it is done as a recreational activity. Recreationalshopping often involves window shopping (just looking, notbuying) and browsing and does not always result in a purchase.Global retail giants such as Wal-Mart, Tesco, Germanys MetroAG andmany others are ready to enter the retail markets. The risingdemand ofbranded products and increase in purchasing power has lured thesecompanies to enter the market.9
  • The Apple Store retail location on the Magnificent Mile inChicago.The worlds only Garmin retail location is located on theMagnificent Milein Chicago.Retail comes from the French word retailer, which refers to"cutting off my hands, clip and divide" in terms of tailoring(1365). It first was recorded as a noun with the meaning of a "salein small quantities" in 1433 (French).Its[ literal meaning for retail was to "cut off, shred, off my toesparing".2] Like the French, the word retail in both Dutch andGerman (detail handel and Einzelhandel respectively), also refersto the sale of small quantities ofitems10
  • 11
  • 12
  • 1. Introduction toIndian retailindustry:13
  • The sea of change can pull customers in many directions. It is ourresponsibility to light the way and take care of them… before thecompetition does.The Indian retail story couldnt have been more different. India hasapprox 12 million retail stores, more than rest of the world puttogether. But the per capita square feet area under retail is just 2sq.ft or 0.2 sq. meters with fragmented kirana stores being thepredominant players.Retailing in India has remained in the unorganized sector andlargely untouched by corporate. The first decade of modern retailin India has been characterized by a shift from traditional channelsto new formats including department stores, hypermarkets,supermarkets and specialty stores across a range of categories.Modern retail formats have mushroomed in metros and mini-metros, in the last few years modern retail has also established itspresence in the second rung cities. Thus, exposing the residents of14
  • these cities to shopping options, they have never experiencedbefore. It has been forecasted that the share of modern retail willincrease from 2 per cent currently, to about 15-20 per cent overthe next decade. To begin with, retailers today will have to supportthe large retail infrastructure in terms of Malls and Superstoresthat are being created. The challenge for leading retailers shalltherefore shift from diverting demand to creating demand.With all the modern stores offering convenience in terms of anassortment of products, ambience, service and innovativeproducts, the paradigm shall shift from competing with the kiranastores to an in-house demand creation. Relevant experiences fromconsumer goods companies, which have successfully crafted anexplosion in demand in their sectors, through innovation,consumer driven strategies, will be head runner. Times arechanging. With the GDP at an all time high and income levelsshooting through the roof, the average Indian consumer has neverhad it so good. The propensity to consume has reached peaks thathad never been scaled before. Credit cards are flashed with disdain15
  • and shopping baskets are getting bigger all the time. Here aresome factors that indicate the potential of retail in India:At 271 million, one of the largest consuming base in the world,forming 27% of the total population.A high spending community below 45 years comprises 81 percentof the population.A young population with 54% population below 25 yearsIncreased literacy from 44% in 1965 to 70% in 2003Increase in working women from 1.3 million in 1961 to 4.8million in 1998.The first decade of modern retail in India has been characterizedby a shift from traditional kirana shops to new formats includingdepartment stores, hypermarkets, supermarkets and specialtystores across a range of categories. Modern retail formats havemushroomed in metros and minimetros.In the last few years, modern retail has also established itspresence in the second-rung cities, exposing residents to shoppingoptions like never before. However, even as modern retailers16
  • garner share from traditional channels, there is a larger role theywould be required to play in boosting consumption levels.Figuressuggest that the total turnover of the sector is around Rs 10 lakhcrores, of which 4 percent is contributed by the organised sector.The retail sector in India is highly fragmented with organizedretail contributing to only 2% of total retail sales. The retail sectorin developed countries was also highly fragmented at thebeginning of the last century but emergence of large chains likeWall Mart, Sears, and McDonald’s led to rapid growth oforganized retail and growing consolidation of the retail industry inthe developed countries.Organized retail is growing rapidly and we see the emergence oflarge organized retail chains like Shopper’s Stop, Lifestyle, andWestside. We also find retail malls mushrooming all over thecountry. The opportunities in retail industry in India will increasesince Indian retailing is on the threshold of a major change.17
  • India retail industry is the largest industry in India, with anemployment of around 8% and contributing to over 10% of thecountrys GDP. Retail industry in India is expected to rise 25%yearly being driven by strong income growth, changing lifestyles,and favorable demographic patterns. It is expected that by 2016modern retail industry in India will be worth US$ 175- 200 billion.India retail industry is one of the fastest growing industrieswith revenue expected in 2007 to amount US$ 320 billion and isincreasing at a rate of 5% yearly. A further increase of 7-8% isexpected in the industry of retail in India by growth inconsumerism in urban areas, rising incomes, and a steep rise inrural consumption. It has further been predicted that the retailingindustry in India will amount to US$ 21.5 billion by 2011 from thecurrent size of US$ 7.5 billion.Shopping in India have witnessed a revolution with the change inthe consumer buying behavior and the whole format of shoppingalso altering. Industry of retail in India which have becomemodern can be seen from the fact that there are multi- stored18
  • malls, huge shopping centers, and sprawling complexes whichoffer food, shopping, and entertainment all under the same roof.India retail industry is expanding itself most aggressively, as aresult a great demand for real estate is being created.1.1 Traditional Convenience Stores:Traditional convenience stores are too well established in Indiathan to be wiped out and besides there is uniqueness in thetraditional items that represent the sub-continent. The retail storesin India are essentially dominated by the unorganized sector ortraditional stores. Infact the traditional stores have taken up 98percent of the Indian retail market. Now stores run by families areprimarily food based and the set up is as Kirana or the cornergrocer stores. Basically they provide high service with low prices.If the stores are not food based then the type of retail itemsavailable are local in nature.19
  • The traditional family run convenience stores can take pride in thefact that the Kirana is the most common outlet forms for theconsumers. The tough competition for convenience stores arecoming from organized retail stores dealing in food items, like:Apna BazaarCanteen storesFood WorldSubhikshaFood BazaarConvenience Stores are open for long hours and is one of theformats of the Indian retail stores that cater to basic needs of theconsumer. A good example of such would be Convenio. Thesestores are found in both residential as well as commercial markets.The food products of traditional family run convenience stores arecomprised of branded aswell as non-branded items. The benefits of family run conveniencestores is that they give importance to:20
  • Personal touchFacilities of creditQuick home deliveryNon-food based stock comprises of multiple and varieties of localbrands.The future of such stores as they face competition from organizedsector, would depend on the following particulars:Place and capacityDiligent area coverageDisciplined work scheduleManaging turnoverRevenue from assetsCustomer service and satisfactionThe traditional family run convenience stores serves the purposeof the housewives who definitely wants to avoid traveling longdistances to purchase daily needs. The convenience factor in termsof items, among people in general can be highlighted as below:21
  • GroceriesFruitsDrug StoreNecessary stationeryAs such traditional family run convenience stores are here to stayand cannot be oversized by the organized retail sector besides, itrepresents the variety of India.1.2 Indian organized retail market:Indian organized retail market is growing at a fast pace due to theboom in the India retail industry. In 2005, the retail industry inIndia amounted to Rs 10,000 billion accounting for about 10% tothe countrys GDP. The organized retail market in India out of thistotal market accounted for Rs 350 billion which is about 3.5% ofthe total revenues.22
  • Retail market in the Indian organized sector is expected to crossRs 1000 billion by 2011. Traditionally the retail industry in Indiawas largely unorganized, comprising of drug stores, medium, andsmall grocery stores. Most of the organized retailing in India havestarted recently and is concentrating mainly in metropolitan cities.The growth in the Indian organized retail market is mainly due tothe change in the consumers behavior. This change has come inthe consumer due to increased income, changing lifestyles, andpatterns of demography which are favorable. Now the consumerwants to shop at a place where he can get food, entertainment, andshopping all under one roof. This has given Indian organized retailmarket a major boost.Retail market in the organized sector in India is growing can beseen from the fact that 1500 supermarkets, 325 departmentalstores, and 300 new malls are being built. Many Indian companiesare entering the Indian retail market which is giving Indian23
  • organized retail market a boost. One such company is the RelianceIndustries Limited. It plans to invest US$ 6 billion in the Indianretail market by opening 1000 hypermarkets and 1500supermarkets. Pantaloons is another Indian company which plansto increase its retail space to 30 million square feet with aninvestment of US$ 1 billion. Bharti Telecoms an Indian companyis in talks with Tesco a global giant for a £ 750 million jointventure. A number of global retail giants such as Walmart,Carrefour, and Metro AG are also planning to set up shop in India.Indian organized retail market will definitely grow as a result ofall this investmentsClassifying Indian retail:A. Modern Format retailersB. Traditional Format RetailersC. Large Indian retailersD. Department store(A)Modern Format retailers24
  • 1) Supermarkets (Foodworld)2) Hypermarkets (Big Bazaar)3) Department Stores (Shoppers Stop)4) Specialty Chains (Ikea)5) Company Owned Company Operated (BP)B)Traditional Format Retailers:25
  • 1) Kiranas: Traditional Mom and Pop Stores2) Kiosks3) Street Markets4) Exclusive /Multiple Brand Outlets26
  • (C) Large Indian retailers1. Hypermarket1) Big Bazaar2) Giants4) StarII Department store1) Lifestyle2) Pantaloons3) PiramydsIII Entertainment1) Fame Adlabs2) Fun Republic4) PVR27
  • Classificationof Indianretail sector2.Classification ofIndian retail sector:28
  • a) FOOD RETAILERSThere are large number and variety of retailers in the food-retailing sector Traditional types of retailers, who operate smallsingle-outlet businesses mainly using family labour, dominate thissector In comparison, super markets account for a smallproportion of food sales in India, However the growth rate ofsuper market sales has being significant in recent years becausegreater numbers of higher income Indians prefer to shop at supermarkets due to higher standards of hygiene and attractiveambience.b) HEALTH & BEAUTY PRODUCTSWith growth in income levels, Indians have started spending moreon health and beauty products .Here also small, single-outletretailers dominate the market .However in recent years, a fewretail chains specializing in these products have come into themarket. Although these retail chains account for only a small shareof the total market their business is expected to grow significantly29
  • in the future due to the growing quality consciousness of buyersfor these products.C) CLOTHING & FOOTWEARNumerous clothing and footwear shops in shopping centers andmarkets operate all over India. Traditional outlets stock a limitedrange of cheap and popular items; in contrast, modern clothingand footwear stores have modern products and attractive displaysto lure customers. However, with rapid urbanization, and changingpatterns of consumer tastes and preferences, it is unlikely that thetraditional outlets will survive the test of time.D) HOME FURNITURE & HOUSEHOLD GOODSSmall retailers again dominate this sector. Despite the large size ofthis market, very few large and modern retailers have establishedspecialized stores for these products. However there isconsiderable potential for the entry or expansion of specializedretail chains in the country.E) DURABLE GOODS30
  • The Indian durable goods sector has seen the entry of a largenumber of foreign companies during the post liberalization period.A greater variety of consumer electronic items and householdappliances became available to the Indian customer. Intensecompetition among companies to sell their brands provided astrong impetus to the growth for retailers doing business in thissector.F) LEISURE & PERSONAL GOODSIncreasing household incomes due to better economicopportunities have encouraged consumer expenditure on leisureand personal goods in the country. There are specialized retailersfor each category of products (books, music products, etc.) in thissector. Another prominent feature of this sector is popularity offranchising agreements between established manufacturers andretailers.Today trend is the development of integrated retail cumEntertainment centers or shopping malls. An increasing number ofretailers are focusing on malls now as opposed to stand-alone31
  • developments. While the number of shopping malls has seen amassive surge in the recent past in the metros and their suburbs,the latest trend in this sector is the increasing focus on providingleisure activities such as multiplexes, facilities for kidsentertainment, eateries etc. within the mall premises. Customerless the time consumes and more entertainment with his family inmalls because they within shopping mall number of retail shopand variety of products and selected the product they want. Goodenvironment in mall. Less crowed and These are enclosed, air-conditioned, multi-level malls of at least 100,00 sq ft. Critical tothese malls is the concept of the anchor, the key outlet or storearound which other outlets cluster. The most popular Indiananchors include Shoppers Stop, Globus, Pantaloon, Lifestyle andhypermarkets like Big Bazaar and Giant. Cinemas also oftenanchor malls. Driven by the lucrative tax breaks, the old singlescreen theatres are being divided into three-five smaller screens, aswas done in the US, years ago. Example for wave and PVR.32
  • Consumerbehavior andretailingdecisions33
  • 3. Consumer behaviorand retailingdecisions:Consumer behavior refers to the mental and emotional process andthe observable behavior of consumers during searching,purchasing and post consumption of a product or service.Consumer behavior involves study of how people buy, what theybuy, when they buy and why they buy. It blends the elements frompsychology, sociology, sociopsychology, anthropology andeconomics. It also tries to assess the influence on the consumerfrom groups such as family, friends, reference groups and societyin general. Buyer behavior has two aspects: the final purchaseactivity visible to any observer and the detailed or short decisionprocess that may involve the interplay of a number of complexvariables not visible to anyone.34
  • Factors Affecting Consumer Buying BehaviorConsumer buying behavior is influenced by the major threefactors:• Social Factors• Psychological Factors• Personal Factors.A. Social FactorsSocial factors refer to forces that other people exert and whichaffect consumers’ purchase behavior. These social factors caninclude culture and subculture, roles and family, social class andreference groups.35
  • B. Psychological FactorsThese are internal to an individual and generate forces within thatinfluence her/his purchase behavior. The major forces includemotives, perception, learning, attitude and personality.C. Personal FactorsThese include those aspects that are unique to a person andinfluence purchase behavior. These factors include demographicfactors, lifestyle, and situational factors.36
  • Consumer decision-making process generally involves five stages:Information SearchProblem RecognitionPurchase ActionAlternative EvaluationPost purchase ActionsConsumer Attribute affecting choice of format between organizedand unorganized Retail37
  • 38
  • 3.1 Retail outlet selection and brand selection:There are three fundamental patterns, which a consumer canfollow and theycould be:(I) Brand first, retail outlet second(ii) Retail outlet first, brand second(iii) Brand and retail outlet simultaneously.A consumer wanting to buy a car may collect information onbrands and purchase it from a retail outlet based on his perceptionof price offered or after sales service provided by the outlet(typically, search for information on brands is followed by retailoutlet selection in durables). In certain product categories,especially where `category killers exist, consumers may think ofthe retail outlet initially and then the brands (television,refrigerator and audio products retailed through outlets like Vivekand Co. in the South, could be an example).39
  • One more dimension may be to compare brands in the evoked setat retail outlets which also exist in an evoked set of their own. Thisis highly possible, especially in the Indian context where dealersdevelop a social relationship with consumers, especially in semi-urban and rural areas. Primary research could be used to discoverthe specific sequence involved in a situation of this kind. A `brandfirst dimension may need feature-based advertising and a `retailoutlet first dimension may require a set of point-of-purchase(POP) materials and special training to sales personnel torecognize the needs of consumers.Brand first and outlet second: The brand was probably thoughtof by the consumers because-(i) the consumers may not have developed a relationship with anyretailer which is strong enough to get into the `evoked retail set or(ii) the brand has got into the evoked set because of advertising orpositive word of mouth. Local advertising with the mention ofbrand names which have already got into the evoked set would40
  • enable consumers to be `pulled to the outlet. Primary researchmay be required to identify the brands in the evoked set.Organized vsUnorganizedRetail41
  • 4. Organized vsUnorganized Retail:In the developed economies, organized retail is in the range of 75-80 per cent of total retail, whereas in developing economies, theunorganized sector dominates the retail business. The share oforganized retail varies widely from just one per cent in Pakistanand 4 per cent in India to 36 per cent in Brazil and 55 per cent inMalaysia (Table 2.2). Modern retail formats, such ashypermarkets, superstores, supermarkets, discount andconvenience stores are widely present in the developed world,whereas such forms of retail outlets have only just begun to spreadto developing countries in recent years. In developing countries,the retailing business continues to be dominated by family-runneighbourhood shops and open markets. As a consequence,wholesalers and distributors who carry products from industrial42
  • suppliers and agricultural producers to the independent family-owned shops and open markets remain a critical part of the supplychain in these countries.Organized retail SectOr UnOrganized retailSectOr43
  • 44
  • Factor Organized RetailSectorUnorganized RetailSectorDefinition Modern form ofretailingTraditional form ofretailingExamples Hypermarket, Retailchain etcMom n Pop stores, handcart, pavement vendorsetcMarket Share 3% 97%Market Growth 35% 6%Challenges Poor supply chainmanagement, aggressiveexpansion etc.Use of labour intensivetechnology, lack ofgovernment support etTable 2.2: Share of Organized Retail in Selected Countries,2006CountryTotal Retail Sales (US$ bn) Share ofOrganized Retail (%)USA 2,983 85Japan 1,182 66China 785 20United Kingdom 475 80France 436 80Germany 421 8045
  • India 322 4Source: Planet Retail and Technopak Advisers Pvt. LtdSelection ofTopic46
  • 5. Selection of TopicThis research project “Study on changing consumerpreferences towards Organised retailing from un-organised retailing (Delhi /Noida)” is an attempt to find outthe change in consumer’s purchasing behavior, which is shiftingtowards organized retailing like malls, shopping complexes etcfrom traditional kirana stores.Why Delhi and Noida: The malls and shopping complexes arebuilding here at a high rate and a large number of populationshifted towards this format of retailing so for my project Delhi andNoida are the appropriate places to go for the research analysis.47
  • 48
  • Purpose andSignificanceof the study49
  • 6.PurposeandSignificance of thestudy:Organized retail has started to spread its roots in the Indian marketsince past one decade and is gradually making mark among allsections of the society. This project report tries to explore the wayorganized retail has dramatically changed not only the Indiantraditional retailing structure by also the consumption behavior.The consumption behavior was examined with the help of astructured questionnaire. The results show that, for consumers, theshopping mall or variant of organized retail format is the preferredtype of retail store, due to convenience and variety.50
  • 6.PurposeandSignificance of thestudy:Organized retail has started to spread its roots in the Indian marketsince past one decade and is gradually making mark among allsections of the society. This project report tries to explore the wayorganized retail has dramatically changed not only the Indiantraditional retailing structure by also the consumption behavior.The consumption behavior was examined with the help of astructured questionnaire. The results show that, for consumers, theshopping mall or variant of organized retail format is the preferredtype of retail store, due to convenience and variety.The Indian market has seen vast changes in political, economicaland social environment, which has a great impact on consumption.With the Indian as well as international corporate entering into theIndian retail scenario the market has been divided between thetraditional and the organized sector. The Indian retail scenario ispresently facing the similar situations as the mom and pop stores51
  • in the developing nations faced at the emergence big box retailers.There are various issues that need to be addressed, like whatwould be future patterns of consumption, which formats of retailwould be preferred by consumers and will the rise of organizedretail affect the traditional retailers.This study will contributes to the understanding that consumersand retailers in most cases have different perceptions in relation tostore image and shopping habits, justifying the need for consumermarketing research, which is important in helping retailers,implement in a real marketing orientation. The study willexamines the choice of format the consumer has when he or shedecides to buy a particular product and also describes thedevelopment of organized retail in the future, focusing on aspectswith potential effect on purchasing behavior among theconsumers. The focus is on consumer expectations. The questionswere formulated to capture the overall behavior of the consumersand with the help of the survey questionnaire the analyses was52
  • done. An attempt has been made to explore the way organizedretail has dramatically changed not only the Indian traditionalretailing structure but also the consumption behavior.To understand the impact and choice of retail format by theconsumers a questionnaire will be used. Three questions wereformulated in order to capture the overall purpose or objective ofthis section of the research:1. What are the most favored retail attributes by consumers andhow will they change in future?2. How are the conventional and organized retailers perceived?3. What external forces influence the choice of consumers andhow can these forces be accounted for in future?53
  • Objective of the Study:·To know the consumer satisfaction.· Financial performance in Retail industry.· Market performance.· Market position.· Economic and the industry environment.· Cost saving initiatives.· To find out the satisfaction level of people..To find out the awareness level of customer.· To find the satisfaction amongst the customers54
  • LiteratureReview55
  • 7. LissteratureReview:Mathew Joseph and Manisha Gupta_September 2008: TheIndian retail sector is booming and modernizing rapidly in linewith India’s economic growth. In this review the author talkedabout the impact of organized retailing on traditional retailing.With the increase in number of various formats for shopping likemalls, departmental stores, hypermarkets etc the Indianconsumer’s preferences are changing towards and that’s the reasonforeign investors like the king of retail Wal-Mart also came intothe Indian retail ground in collaboration with Bharti. There is ahuge untapped market is present in India right now which containsa number of opportunities for retailers.56
  • Sen-2000: Store Image and Consumer Shopping Habits: IndianContext: In India, some empirical studies provide importantinformation about consumer behavior and its responses to thedevelopment of organized retail. Economical and social changesare major contributors for a growing fragmentation of consumersinto multiple segments with different values and buying priorities.Consumers have become more pragmatic, educated anddemanding, learning how to manage money and time moreefficiently. The focus on low prices was gradually replaced by avalue for money perspective. The study developed by ETIG(Economic Times Intelligence Group, 2002) confirms thesetendencies. Concerning food, the most important attributementioned was quality, followed by price. Indian consumer hasdifferent reasons for preferring different store formats, eithermodern or traditional; Sen (2000) confirms this in the studyundertaken in Indian context. He confirms that in the case ofhypermarkets, the main motives for preferences, in decreasingorder are low prices, the possibility of buying everything in the57
  • same place and the general appearance of the store. Severalinvestigations emphasize the possible coexistence of differentstore formats (Chandrasekhar, 2001) and others point out therelationship between the type of store and the type of products.These studies show that, while specialized and traditional storesare preferred for fresh products, hypermarkets are preferred forshopping in general, and also for frozen food, groceries andbeverages. The purchase of perishables in hypermarkets isreduced.Radhakrishnan, 2003: Traditional Retailers Perceptions aboutOrganized RetailAs already mentioned, organized retail has deeply changed theIndian commercial structure. However, it is not exclusivelyresponsible, as other changes (economical, social and culturalones) have occurred simultaneously. Concerning the more directeffects of organized retail on different types of commerce, it ispossible to verify that the major impact is felt on traditional retail58
  • and, in particular, on the food sector. The impact of organizedretail is also significant on other types of retail, namely toys,stationery goods and household appliances; moreover, it isprobable that competition gets more intense in other sectors, suchas clothing and furniture.RNCOS (March 15, 2009/24-7 press releases): Increasing trendof organized retailing will drive the growth of convenience-storeindustry in the world. By 2011, Asia remains the fastest growingconvenience store market in the world as the major Asian retailmarkets registered explosive growth in opening up of newconvenience store. Changing consumer preferences, lifestyle andrising income level, which is heavily influenced by economicgrowth, remains the major driving force for c-store industry in theAsian region. as per "Global Convenience Store Market Analysis".59
  • SamplingDesign60
  • 8. Sampling Design:1. Sampling unit Respondents of (few malls)2. Size of sample 100 respondents3. Sample Method Random Sampling4. Types of questionnaire Close ended8.1 Type of Data:Data type collected for analysis is PRIMARY i.e. data has beenobserved and recorded by the researchers for the first time to theirknowledge. Data collected through journals, newspapers &internet is SECONDARY type.8.2 Method of data collection:61
  • This study is a research which utilizes interrogation andobservation method for data collection. Secondary data wasobtained from intensive analysis & observation. The primary dataare those, which are collected afresh and for the first time, andthus happen to be original in character. The secondary data, on theother hand, are those which have already been collected by someone else and which have already been passed through thestatistical process. Method employed to collect data isQuestionnaire. This is a simple survey conducted by filling inquestionnaire from the people who visit malls.8.3 Collection of the Primary data:As this study is of descriptive type, the primary data has beencollected through Questionnaire.8.4 Collection of the Secondary:-The secondary data has been collected from the following modes:·BooksData through internet sources62
  • Analysis ofData63
  • 9. Analysis of Data:Data collected through questionnaire is being processed .Thisprocessed data is:a. Age wise distribution:A) <20 [ 12 RESPONDENTS ]B) 20-29 [ 45 RESPONDENTS ]C) 30-39 [25 RESPONDENTS ]D) >40 [18 RESPONDENTS]• On the basis of above respondents the figures shows thatmaximum respondents i.e. 45 out of 100 are young agepeople. It means maximum no of customers belongs toyoung age group.b. Gender wise distribution:64
  • A) MALE [ 58 RESPONDENTS ]B) FEMALE [ 42 RESPONDENTS ]• On the basis of above respondents the figures shows thatmaximum respondents i.e. 58 out of 100 are males. It meansmaximum no of customers are male in malls due to familyresponsibility.c. Education wise distribution:A) HIGH SCHOOL [ 08 RESPONDENTS]B) LESS THAN GRADUATION [ 12 RESPONDENTS ]C) GRADUATION [ 32 RESPONDENTS ]D) POST GRADUATION [ 32 RESPONDENTS ]E) PROFESIONAL QUALIFICATION [ 16 RESPONDENTS ]• On the basis of above respondents the figures shows thatmaximum respondents i.e. 32 out of 100 are graduates and65
  • 32 out of 100 are post graduate. It means maximum no ofcustomers are educated and aware about retail store.d. Income wise distribution:A) LESS THAN Rs 20,000 [ 28 RESPONDENTS ]B) BETWEEN Rs 30,000 TO 40,000 [ 48 RESPONDENTS ]C) BETWEEN Rs 40,001 TO 50,000 [ 20 RESPONDENTS ]D) MORE THAN Rs 50,000 [ 12 RESPONDENTS ]• On the basis of above respondents the figures shows thatmaximum respondents i.e. 48 out of 100 are having monthlyincome between Rs 30,000 to 40,000. It means maximum noof customers are belonging to upper middle class.1) Which type of place do you visit frequently for your shoppingneeds?66
  • a) Supermarket [ 80 Respondents]b) Wholesaler [ 8 Respondents]c) Local Stores [ 12 Respondents]• On the basis of above respondents the figures shows thatmaximum respondents i.e. 80 out of 100 are agree that theyfrequently visit shopping mall for their shopping needs. Itmeans maximum no of customer are preferred ShoppingMalls for purchasing.2) From where would you prefer to buy products?a) Single brand store [ 24 Respondents]b) Multi brand store [ 60 Respondents]c) Factory outlets [ 4 Respondents]d) Local Big Retail Store [ 12 Respondents]67
  • • i.e. 60 out of 100 are preferred multi branded store forshopping. It means maximum no of customers are timeconscious and desire for many brand under one roof.3) Which one from malls/ Local Stores (kirana store) is moreconvenient for all your shopping needs?a) Malls [ 72 Respondents]b) Local stores [ 28 Respondents]• i.e. 72 out of 100 are preferred shopping in malls for all theirshopping needs. It means maximum no of customers arefeels good in shopping for their needs in malls because theycan get everything from there under one roof.4) What are the prime factors for shopping in malls?a) Variety in product.b) Serviceability68
  • c) Discountsd) Mode of paymente) All [ 100 Respondents]• i.e. 100 out of 100 are preferred shopping in malls becauseof the various factors which make the whole shoppingexperience good.5) What are the prime factors for shopping in kirana stores?a) Emergency buying [ 65 Respondants]b) For grocery items only [35 Respondants]c) Discountsd) Serviceability• i.e. People preferred shopping from kirana stores just whenthey need something urgent and grocery items only. It showsthe limited shopping experience one customer have withthese stores.69
  • 6) What influences your buying selections?a) Availability of range b) Reasonable pricec) Availability of size e) Customer servicef) Brand name1st OPTION 30 20 30 8 102nd OPTION 22 32 25 10 133rd OPTION 20 18 15 14 334th OPTION 16 17 19 32 165th OPTION 12 13 11 36 28• On the basis of above respondents the figures shows thatmaximum respondents are attracted towards the Store due tothis ranking-CUSTOMER SERVICE, BRAND, PRICE, RANGE, SIZEIt means maximum no of customers are prefer to the Malls forcustomer service.7) What do you look for in a product during your purchase?70
  • a) Price [60 Respondents]b) Brand Name [ 12 Respondents]c) Customer Service [ 16 Respondents]d) Variety available [12 Respondents]• i.e. 60 out of 100 preferred price during their purchasing. Itmeans maximum no of customers are price conscious somaximum customers belongs to middle class.8) When do you prefer to shop Most in Store?a) During Sale [ 18 Respondents]b) During Fresh season stock [54 Respondents]c) During Discount [ 24 Respondents]d) When required [4 Respondents]• On the basis of above respondents the figures shows thatmaximum respondents i.e. 60 out of 100 are prefer shoppingduring fresh season stock. It means maximum no of71
  • customers did not compromise quality with discount andoffers.9) How frequently you visit the Store (wherever you go for theshopping)?a) <1 month [ 60 Respondents]b) 1-3 month [ 28 Respondents]c) 1-6 month [ 4 Respondents]d) 1 year [ 8 Respondents]• On the basis of above respondents the figures shows thatmaximum respondents i.e. 60 out of 100 are visited the storewith in one month. It means maximum no of customers arevisiting the store monthly.10) What more fascinates you at shopping in malls?a) Membership Card [ 28 Respondents]b) Discount Mailers [ 20 Respondents]72
  • c) Parking Facility [ 30 Respondents]d) Lucky draw offer [ 22 Respondents]• On the basis of above respondents the figures shows thatthere are almost same numbers of respondents agrees for allthe facilities provided by malls. It means every respondent isinclined towards the facilities provided by malls.73
  • Findings74
  • 10. Findings:• Customer’s preferences for grocery shopping are graduallyshifting from local kirana stores to organized conveniencestores.• Age is one of the most important factors responsible for thechanging preference of customers.• Payment through credit cards is increasing purchases fromconvenience store.• Brand Choice of customers is changing and this is alsoinfluencing shift from kirana to convenience store. .• Maximum no of customers belongs to young age group.• Maximum no of customers are male in malls due to familyresponsibility.75
  • • It means maximum no of customers having nucleur family.• Maximum no of customers are educated and aware aboutretail store.• Maximum no of customers are belonging to upper middleclass.• Maximum no of customer are preferred Shopping Malls forpurchasing.• Maximum no of customers are time conscious and desire formany brand under one roof.• Maximum no of customers are price conscious so maximumcustomers belongs to middle class.• Maximum no of customers did not compromise quality withdiscount and offers.76
  • Suggestions77
  • Suggestions:- With a population fast approaching 1.2 billion and aneconomy that is likely to double in size by 2015, India seemsdestined to become one of the largest consumer markets inthe world over the next decade. Retailing as a sector is witnessing revolution in India. Retailbusiness contributes around 11 percent of country‘s GDP.From employment perspective, retail is already the secondlargest sector in India, only behind agriculture. Indias retailmarket is expected to grow tremendously in next few years. Though at present, around 94-95% of India‘s retail market isunorganized, as compared to unorganized retail, organizedretail is experiencing much higher growth and throwing openopportunities for new entrants to come and grow. People should not attract towards the facilities provided byorganizedstores. Today, Indians are willing to try new things and lookdifferent, which has increased spending on health and beautyproducts apart from apparels, food and grocery items. Also, in the last 4-5 years, Indian markets have witnessed astrong shift towards branded products.78
  •  Sometimes the organized stores charge high prices, soconsumer should beaware. Consumers should also have there attention towards thequality of the products Target customer base India should beclearl identified for each of the selected brandsin each of the product categories beforeopening of single brand outlets.79
  • Limitation11. Limitation:80
  • Every report has its pros and cons so mine also have somelimitations.They can be pointed as:• Sample size restricted to 100 only which was very lessaccording total population.• The responses given by respondents were not alwaysaccurate because the respondents gave the responseaccording to their understanding.• Survey is a time consuming process but the time to collectthe data for research was very less.• Sometimes the respondents are not willing to fill thequestionnaire and hence the resultant may not be correct.81
  • Conclusion12. Conclusion:82
  • The past 4-5 years have seen increasing activity in retailing. And,various business houses have already planned for few investmentsin the coming 2-3years. And though the retailers will have to face increasinglydemanding customers, and intensely competitive rivals, moreinvestments will keep flow in. And the share of organized sectorwill grow rapidly. retailing in India is surely poised for a takeoffand will provide many opportunities both to existing players aswell as new entrants.. The country is witnessing a period of boomin retail trade, mainly on account of a gradual increase in thedisposable incomes of the middle and upper-middle classhouseholds. More and more corporate houses including large realestate companies are coming into the retail business, directly orindirectly, in the form of mall and shopping center builders andmanagers.83
  • New formats like super markets and large discount anddepartment stores have started influencing the traditional looks ofbookstores, furnishing stores and chemist shops. The retailrevolution, apart from bringing in sweeping, positive changes inthe quality of life in the metros and bigger towns, is also bringingin slow changes in lifestyle in the smaller towns of India. Increasein literacy, exposure to media, greater availability and penetrationof a variety of consumer goods into the interiors of the country,have all resulted in narrowing down the spending differencesbetween the consumers of larger metros and those of smallertowns. Lastly I want to conclude my project in some points- The customers are attracting towards shopping malls &retail outlets. The shopping malls & retail outlets are targeting to middleclass customers because the purchasing power of this class israpidly growing as well as the class is also growing.84
  •  The young generation is fashion & show-off conscious soretail outlets are mainly focused on them. Most of the family wants to purchase from big showroomsand malls because there are no bargaining system so thehave a trust that there is no cheating. The main strength of most of the retail outlets are providingattractive offers to attract customers. Big retail stores are running customer loyalty programmeswhich has increased profits and no. of customers.85
  • Appendix86
  • 13. Appendix:QuestionnaireQuestionnaire on Consumer’s changing Buying Behavior.I am a student of Maharishi Institute of Management and amworking on a project “Study on changing consumerpreferences towards Organised retailing from un-organisedretailing”. I request you to spare a while to help fill, thisquestionnaire, needed for the project assigned to me as a partof my curriculum.a. Age wise distribution:A) <20B) 20-29C) 30-39D) >4087
  • b. Gender wise distribution:A) MALEB) FEMALEc. Education wise distribution:A) HIGH SCHOOLB) LESS THAN GRADUATIONC) GRADUATIOND) POST GRADUATIONE) PROFESIONAL QUALIFICATIONd. Income wise distribution:A) LESS THAN Rs 20,000B) BETWEEN Rs 30,000 TO 40,000C) BETWEEN Rs 40,001 TO 50,000D) MORE THAN Rs 50,00088
  • 1.What type of retail stores you prefer?A) OrganizedB) UnorganizedC) Both2.If organized then what type of organized stores?C) Branded ShowroomsD) Malls3.If Unorganized then what type of unorganized stores?C) Kirana ShopsD) Small society shops4.Do you think is there any price difference between products oforganizedand unorganized stores?C) YesD) No5.Do you think that the price difference is due to the extrafacilitiesprovided by the organized stores?C) YesD) No6.Is the method of payment in organized stores is better thenunorganizedstores?89
  • C) YesD) No7.Do the facilities provided by organized stores attract youC) YesD) No8.Which type of place do you visit frequently for your shoppingneeds?a) Supermarketb) Wholesalerc) Local Stores9. From where would you prefer to buy products?a) Single brand storeb) Multi brand storec) Factory outletsd) Local Big Retail Store90
  • 10. Which one from malls/ Local Stores (kirana store) is moreconvenient for all your shopping needs ?a) Mallsb) Local stores11. What are the prime factors for shopping in malls?d) Variety in product.e) Serviceabilityf) Discountsg) Mode of paymenth) All12. What are the prime factors for shopping in kirana stores?a) Emergency buyingb) For grocery items onlyc) Discountsd) Serviceability91
  • 13. What influences your buying selections?a) Availability of range b) Reasonable pricec) Availability of size e) Customer servicef) Brand name14.What do you look for in a product during your purchase?a) Priceb) Brand Namec) Customer Serviced) Variety available15. When do you prefer to shop Most in Store?a) During Saleb) During Fresh season stockc) During Discountd) When required92
  • 16.How frequently you visit the Store (wherever you go for theshopping)?a) <1 monthb) 1-3 monthc) 1-6 monthd) 1 year17. What more fascinates you at shopping in malls?a) Membership Cardb) Discount Mailersc) Parking Facilityd) Lucky draw offer18.Which store do you find more comfortable for shopping?a) Organizedb) Unorganized93
  • Bibliography94
  • 14. Bibliography:Goswami. P and Mishra. M, 2009, Would Indian consumers movefrom kirana store to organized Retailers when shopping forgroceries, Asia Pacific Journal of Marketing and Logistics, Vol.20, No. 1ICRIER journal paper, September 2008http://ssrn.com/abstract=994238BOOKS:-Marketing Management. ----Kotler & KellerMarketing Management in Indian Perspective----V. S. Ramaswamy & S. NamakumariRetail management ---Levy & Weitzs95
  • WEBSITES:-www.wikipideia.comwww.google.comwww.relianceindustry.comwww.bigbazar.comwww.emraldinsight/1355-5855.htmwww.Fibre2fashion.com/industry-articlewww.tataretail.comwww.retailindia.netwww.retailyatra.comwww.retailbiz.comwww.aboutus.comwww.businessworld.in96
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