CHAPTER 1 INTRODUCTION: Consumer Buying Behavior is the behavior that a consumer display while buying the product or a service. Each and every consumer has his/her own buying behavior that he displays it during purchase of different products. This behavior displayed by the consumer is the result of a number of influences which he/she receives from the environment. These influences can be categorized into four factors viz. Cultural factors, Social factors, Personal factors and Psychological factors. Cultural Factors: - culture, subculture and social classes are particularly important in buying behavior. Culture is the fundamental determinant of a person’s wants and behavior. Each culture consists of smaller subcultures that provide more specific identification and socialization of its members. Subculture includes nationalities, religions, racial groups and geographic regions. Social Factors: - In addition to cultural factors a consumer’s behavior is influenced by such social factors as reference groups, family and social roles and statuses. A person’s reference group consists of all the groups that have a direct (face to face) or indirect influence on the person’s attitudes or behavior. Groups that have direct influence on a person is called as membership groups. Some 1
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CHAPTER 1
INTRODUCTION: Consumer Buying Behavior is the behavior that a consumer
display while buying the product or a service. Each and every consumer has
his/her own buying behavior that he displays it during purchase of different
products. This behavior displayed by the consumer is the result of a number of
influences which he/she receives from the environment. These influences can be
categorized into four factors viz. Cultural factors, Social factors, Personal factors
and Psychological factors.
Cultural Factors: - culture, subculture and social classes are particularly
important in buying behavior. Culture is the fundamental determinant of a
person’s wants and behavior. Each culture consists of smaller subcultures that
provide more specific identification and socialization of its members. Subculture
includes nationalities, religions, racial groups and geographic regions.
Social Factors: - In addition to cultural factors a consumer’s behavior is
influenced by such social factors as reference groups, family and social roles and
statuses. A person’s reference group consists of all the groups that have a
direct (face to face) or indirect influence on the person’s attitudes or behavior.
Groups that have direct influence on a person is called as membership groups.
Some membership groups are also called as primary groups, such as family,
friends, neighbors and coworkers with whom the person interacts fairly
continuously and informally. People also belong to secondary groups such as
religious, professional and trade union groups which tend to be more formal and
require less continuous interaction. Aspirational groups are those a person
hopes to join; dissociative groups are those whose values and behavior an
individual rejects. The family is the most important consumer buying
organization in society, and family members constitute the most influential
primary reference group. A person participates in many groups-families, clubs,
organizations. The persons position in each group can be defined in terms of
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role and status. A role consists of the activities a person is expected to perform.
Each role carries a status.
Personal Factors: - A buyer’s decisions are also influenced by personal
characteristics. These include the buyer’s age in the life cycle, occupation,
economic circumstances, lifestyle and personality and self concept.
People buy different goods and services over a lifetime. They eat baby food in
the early years, most foods in the growing matured years and special diet in the
later years.
Occupation also influences consumption patterns. A blue collar worker may buy
work clothes, work shoes and lunch boxes. A company president may buy
expensive suits, air travel and country club membership.
People from same subculture, social classes and occupation may lead quite
different lifestyles. A lifestyle is a person’s pattern of living in the world expressed
in activities, interest and opinions.
Psychological Factors: - A person’s buying choices are influenced by four
major factors viz. motivation, perception, learning, believes and attitudes.
In the light of growing competition in the Indian retail industry each and every
company is trying its best to attract new customers as well as at the same time
retain the existing customers. Hence this can be done by keeping a track on the
buying behavior of the customers. Therefore my topic on buying behavior of
consumer shows the different factors which influence the consumer buying
behavior while shopping.
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The Retail Industry: - India's vast middle class and its almost untapped retail
industry are key attractions for global retail giants wanting to enter newer
markets. Driven by changing lifestyles, strong income growth and favourable
demographic patterns, Indian retail is expected to grow 25 per cent annually.
Modern retail in India could be worth US$ 175-200 billion by 2016. With the
economy booming, competition in the marketplace is fierce. According to 'Retail
in India Getting Organised to Drive Growth', a report by AT Kearney and the
Confederation of Indian Industry, retail is one of India's fastest growing industries
with a 5 per cent compounded annual growth rate and expected revenues of US$
320 billion in 2007. Rising incomes, increasing consumerism in urban areas and
an upswing in rural consumption will fuel this growth to around 7-8 per cent.
KSA-Technopak, a retail consulting and research agency, predicts that by
2010, organised retailing in India will cross the US$ 21.5-billion mark from
the current size of US$ 7.5 billion.
Retail space
Retailers in India are the most aggressive in Asia in expanding their businesses,
thus creating a huge demand for real estate. Their preferred means of expansion
is to increase the number of their outlets in a city, and also expand to other
regions, revealed the Jones Lang LaSalle third annual Retailer Sentiment
Survey-Asia.
Deutsche Bank's research report on 'Building up India' says India's burgeoning
middle class will drive up nominal retail sales through 2010 by 10 per cent per
annum. The country may have 600 new shopping centres by 2010.
Food retail
Food dominates the shopping basket in India. The US$ 6.1 billion Indian foods
industry, which forms 44 per cent of the entire FMCG sales, is growing at 9 per
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cent and has set the growth agenda for modern trade formats. Since nearly 60
per cent of the average Indian grocery basket comprises non-branded items, the
branded food industry is homing in on converting Indian consumers to branded
food.
The mobile revolution
The retail market for mobile phones -- handset, airtime and accessories -- is
already a US$ 16.7 billion business, growing at over 20 per cent per year. In
comparison, the consumer electronics and appliance market is worth US$ 5.6
billion, with a growth rate that is half of the mobile market.
Kids retail
When it comes to Indian children, retailers are busy bonding--and branding:
Monalisa, the Versace of kids is coming to India.
Global lifestyle brand Nautica is bringing Nautica Kids.
International brand Zapp tied up with Raymond to foray into kids' apparel.
Disney launched exclusive chains which stock character-based stationery.
Pantaloon's joint venture with Gini & Jony will set up a retail chain to market kids'
apparel.
Swiss kidswear brand Milou is collaborating with Tirupur-based Sreeja Hosieries.
Turner International India Pvt Ltd. will launch Cartoon Network Townsville and
Planet POGO--two theme parks designed around its channels--in the National
Capital Region.
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Sahara One Television has also signed a Memorandum of Understanding to
source content from Spacetoon Media Group, Middle East's largest kids'
entertainment brand for animation and live action content.
Leading the kids' retail revolution is the apparel business, which accounts for
almost 80 per cent of the revenue, with kids' clothing in India following
international fashion trends. According to research firm KSA Technopak, the
branded segment comprises US$ 701.7 million of the total kids' apparel market-
size of over US$ 3 billion.
Industry experts say kids' retailing will touch annual growth of 30-35 per cent.
farmers to high-yielding basmati rice, mangoes, potatoes, chilies, peanuts, and
barley for its Frito-Lay snacks.
Export potential and a rapidly growing domestic demand for reliable produce
from new supermarket chains is driving change. With 77 per cent of India's
population relying on agriculture for a living, improved efficiency and new
markets can benefit a large number of people.
International retailers
The Australian government's National Food Industry Strategy and Austrade
initiated a test marketing food retail in India wherein 12 major Australian food
producers have tied up with India-based distributor AB Mauri to sell their
products directly at retail outlets.
The largest-ever 150-member British business delegation in India committed
investments in the areas of food processing, agri retail and manufacturing. It is
also likely to press for the liberalisation of sectors like financial & legal services
and retail.
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US-based home delivery and logistics company, Specialised Transportation Inc,
will enter the Indian market through a strategic alliance with Patel Retail, a
subsidiary of Patel Integrated Logistics.
Among other big international players, Wal-Mart has announced its plans for
India in partnership with Bharti, Tesco is sure to try again, and Carrefour too
might finally find the right partner.
Retail reform
The Government regulations allow 100 per cent FDI in cash and carry through
automatic route and 51 per cent in single brand. Besides, the franchise route is
available for big operators. Now, the Government also proposes further
liberalisation in the retail sector allowing 51 per cent FDI in consumer electronics
and sports goods.
The retail road ahead
The Indian retail market is estimated at US$ 350 billion. But organised retail is
estimated at only US$ 8 billion. However, the opportunity is huge--by 2010,
organised retail is expected to grow to US$ 22 billion. With the growth of
organised retailing estimated at 40 per cent (CAGR) over the next few years,
Indian retailing is clearly at a tipping point. India is currently the ninth largest retail
market in the world. And it is names of small towns like Dehradun, Vijayawada,
Lucknow and Nasik that will power India up the rankings soon.
Indian retail industry is going through a transition phase. Most of the retailing in our country is still in the unorganized sector. The spread out of the retails in US and India shows a wide gap between the two countries. Though retailing in India is undergoing an exponential growth, the road ahead is full of challenges.
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What is retailing?
The word "Retail" originates from a French-Italian word. Retailer-someone who
cuts off or sheds a small piece from something. Retailing is the set of activities
that markets products or services to final consumers for their own personal or
household use. It does this by organizing their availability on a relatively large
scale and supplying them to customers on a relatively small scale. Retailer is a
Person or Agent or Agency or Company or Organization who is instrumental in
reaching the Goods or Merchandise or Services to the End User or Ultimate
Consumer.
SCENARIO OF RETAILING IN INDIA
Retailing is the most active and attractive sector of last decade. While the
retailing industry itself has been present since ages in our country, it is only the
recent past that it has witnessed so much dynamism. The emergence of retailing
in India has more to do with the increased purchasing power of buyers,
especially post-liberalization, increase in product variety, and increase in
economies of scale, with the aid of modern supply and distributions solution.
Indian retailing today is at an interesting crossroads. The retail sales are at the
highest point in history and new technologies are improving retail productivity.
though there are many opportunities to start a new retail business, retailers are
facing numerous challenges.
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KEY CHALLENGES:
1) LOCATION:
"Right Place, Right choice"
Location is the most important ingredient for any business that relies on
customers, and is typically the prime consideration in a customers store choice.
Locations decisions are harder to change because retailers have to either make
sustainable investments to buy and develop real estate or commit to long term
lease with developers. When formulating decision about where to locate, the
retailer must refer to the strategic plan:
* Investigate alternative trading areas.
* Determine the type of desirable store location
* Evaluate alternative specific store sites
2) MERCHANDISE:
The primary goal of the most retailers is to sell the right kind of merchandise
and nothing is more central to the strategic thrust of the retailing firm.
Merchandising consists of activities involved in acquiring particular goods and
services and making them available at a place, time and quantity that enable
the retailer to reach its goals. Merchandising is perhaps, the most important
function for any retail organization, as it decides what finally goes on shelf of
the store.
3) PRICING:
Pricing is a crucial strategic variable due to its direct relationship with a firm's
goal and its interaction with other retailing elements. The importance of pricing
decisions is growing because today's customers are looking for good value
when they buy merchandise and services. Price is the easiest and quickest
variable to change.
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4) TARGET AUDIENCE:
"Consumer the prime mover"
"Consumer Pull", however, seems to be the most important driving factor behind
the sustenance of the industry. The purchasing power of the customers has
increased to a great extent, with the influencing the retail industry to a great
extent, a variety of other factors also seem to fuel the retailing boom.
5) SCALE OF OPERATIONS:
Scale of operations includes all the supply chain activities, which are carried out
in the business. It is one of the challenges that the Indian retailers are facing. The
cost of business operations is very high in India.
PRESENT INDIAN SCENARIO
* Unorganized market: Rs. 583,000 crores
* Organized market: Rs.5, 000 crores
* 5X growth in organized retailing between 2000-2005
* Over 4,000 new modern Outlets in the last 3 years
* Over 5,000,000 sq. ft. of mall space under development
* The top 3 modern retailers control over 750,000 sq. ft. of retail space
* Over 400,000 shoppers walk through their doors every week
* Growth in organized retailing on par with expectations and projections of the
last 5 Years: on course to touch Rs. 35,000 crores (US$ 7 Billion) or more by
2005-06
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Major players
- Food and grocery
- Fashion
- Others
- Food world
- Shoppers' Stop
- Vivek's
- Subhiksha
- Westside
- Planet M
- Nilgris
- Lifestyle
- Music World
- Adani- Rajiv's
- Pyramid
- Crossword
- Nirma-Radhey
- Globus
- Life spring
TRADITIONAL RETAIL SCENE IN INDIA
India is the country having the most unorganized retail market. Traditionally the
retail business is run by Mom & Pop having Shop in the front & house at the
back. More than 99% retailers function in less than 500Sq.Ft of area. All the
merchandise was purchased as per the test & vim and fancies of the proprietor
also the pricing was done on ad hock basis or by seeing at the face of customer.
Generally the accounts of trading & home are not maintained separately. Profits
were accumulated in slow moving & non-moving stocks which were to become
redundant or consumed in-house. Thus profits were vanished without their
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knowledge. The Manufactures were to distribute goods through C & F agents to
Distributors & Wholesalers. Retailers happen to source the merchandise from
Wholesalers & reach to end-users. The merchandise price used to get inflated to
a great extent till it reaches from Manufacturer to End-user. Selling prices were
largely not controlled by Manufacturers. Branding was not an issue for majority of
customers. More than 99% customers are price sensitive & not quality or Brand
Sensitive at the same time they are Brand conscious also. Weekly Bazaar in
many small tows was held & almost all the commodities were on the scene
including livestock. Bargaining was the unwritten law of market. Educational
qualification level of these retailers was always low. Hence market was controlled
by handful of distributors &/or Wholesalers. Virtually there was only one format of
retailing & that was mass retail. Retailer to consumer ratio was very low, for all
the categories without exception. Varity in terms of quality, Styles were on
regional basis, community based & truly very low range was available at any
given single place. Almost all the purchases / (buying) by mass population was
need oriented & next turn may be on festivals, Marriages, Birthdays & some
specific occasions.
Impulsive buying or consumption is restricted to food or vegetables etc. Having
extra pair of trousers or Shirts or Casuals & Formals & leisure wear & sports
wear & different pair of shoes for occasions is till date is a luxury for majority
population except for those living in Metros. Purchasing power of Indian urban
consumer is very low and that of Branded merchandise in categories like
Apparels, Cosmetics, Shoes, Watches, Beverages, Food, Jewellery, are slowly
seeping into the lifeline of Indian City folks. However electronic & electrical home
appliances do hold appropriate image into the minds of consumers. Brand name
does matter in these white goods categories. In the coming times also majority of
organized retailers will find it difficult to keep balance with rest of the unbranded
retail market which is very huge.
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INDIAN RETAIL IS MOVING INTO SECOND GEAR
1) FIRST GEAR:
(Create awareness)
* New retailers driving awareness
* High degree of fragmentation
* Real estate groups starting retail chains
* Consumer expecting 'value for money' as core value
2) SECOND GEAR:
(Meet customer expectations)
* Consumer-driven
* Emergence of pure retailers
* Retailers getting multi-locational and multi-format
* Global retailers evincing interest in India
3) THIRD GEAR:
(Back end management)
* Category management
* Vendor partnership
* Stock turns
* Channel synchronization
* Consumer acquisition
* Customer relation's management
4) FOURTH GEAR:
(Consolidation)
* Aggressive rollout
* Organized retail acquitting significant share
* Beginning of cross-border movement
* Mergers and acquisitions
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CHAPTER 2
RESEARCH DESIGN: Research design is a frame work or blueprint for
conducting the market research project. It details the procedure necessary for
obtaining the information needed to structure or solve marketing research
problem.
Statement of the problem: -
To determine the buying behavior of the consumer with respect to ladies ethnic
section.
Significance of the study: -
The study done on the above topic will give an idea of how the shopping
behavior of the customers’ changes and what behavior they display while
shopping. The project will be help full in finding out what strategies to make in
order to fulfill the needs and wants of customers and create a competitive
advantage in the retail market.
Objectives:-
To determine the customer profile.
To determine the shopping behavior/buying behavior of the customers.
To determine the brand preferences and reasons thereof.
Operational concept:-
Descriptive study- A type of conclusive research which has it’s major objective
the description of something – usually market characteristics or functions.
Population -The aggregate of all the elements, sharing some common set of
characteristics, comprising the universe for the purpose of the marketing
research problem.
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Sample – A subgroup of the elements of the population selected for participation
in the study.
Primary data – Information that is collected on field in the form of surveys,
interviews and observation.
Secondary data – Information that is collected through journals, magazines,
company brochures, previous reports and government publishing.
Questionnaire – Questionnaire is a part of survey where in questions are framed
in a structured manner in order to draw information from the respondents
regarding the topic.
Scaling and Measurement – The assignment of numbers or other symbols to
characteristics of objects according to certain prespecified rules is called
measurement. The generation of a continuum on which measured objects are
located.
Hypothesis:-
Ho: the proportion of sample who ranked Shoppers Stop 1st is 50%.
H1: the proportion of sample who ranked Shoppers Stop 1st is more then 50%.
Scope of the study:-
The population was limited to only those customers who came to ladies ethnic
section only.
Methodology:-
The type of study used is Descriptive Study
Population – all those customers who came to shoppers stop in a month (April
2007).
Sample size – 180
Sampling technique – Convenience Sampling
Primary data – primary data was collected using a structured questionnaire.
Secondary data – secondary data was collected from the company website and
brochure, marketing text books.
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Tools and Techniques of data collection:-
The technique used to collect the primary data was a Survey. A well structured
questionnaire was prepared and given to the respondents to be filled.
The information obtained from the questionnaire was edited, cross tabulated and
an appropriate test was applied to get the result.
The test used was Z test.
Limitations:-
Limited time was given for data collection.
Some of the customers were not cooperative.
Responses from the customers were different during weekdays and
weekends.
The findings were based on the information given by the customers and
can be biased.
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CHAPTER 3
COMPANY PROFILE:-
History - The foundation of Shoppers' Stop was laid on October 27, 1991 by the
K. Raheja Corp. group of companies. Being amongst India's biggest hospitality
and real estate players, the Group crossed yet another milestone with its lifestyle
venture - Shoppers' Stop.
From its inception, Shoppers' Stop has progressed from being a single brand
shop to becoming a Fashion & Lifestyle store for the family. Today, Shoppers'
Stop is a household name, known for its superior quality products, services and
above all, for providing a complete shopping experience.
With an immense amount of expertise and credibility, Shoppers’ Stop has
become the highest benchmark for the Indian retail industry. In fact, the
company’s continuing expansion plans aim to help Shoppers’ Stop meet the
challenges of the retail industry in an even better manner than it does today.
Nature – Shoppers Stop is a retail store which sells multiple branded products.
Products and Services – Shoppers Stop deals with
Apparels (Men, Women and Children)
-Ladies western wear, Ladies ethnic wear, Men’s formal, Men’s
semiformal, Casual wear, Sports wear and Kids wear.