Marketing Project

A Study on Consumer Behaviour

A STUDY ON CONSUMER BEHAVIOUR IN PANTALOON

RETAIL LIMITED.

LALITHA SHREE.N

(Reg No: CC0032BK23AG25AAB)

GREAT EASTERN MANAGEMENT SCHOOL, BANGALORE

2009-20010

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A Study on Consumer Behaviour

CERTIFICATE

This is to certify that the Project work “EMPLOYEE RETENTION

SURVEY” is submitted to the college by the candidate MS.LALITHA

SHREE.N bearing Reg.No:CC0032BK23AG25AAB is the of bonafide

research carried out by the candidate under my supervision in subject

‘Marketing Mangement’

(GUIDE)

Mr.Tiwari,

Lecturer, Marketing Management

Great Eastern Management School

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ACKNOWLEDGEMENT

The Project work was carried out under the remarkable guidance of Mr.

Tiwari, Great Eastern Management School. I am grateful for his guidance,

valuable suggestions and for the constant encouragement and co-

operation.

I also express my sincere gratitude and thanks to all the subjects

participated in the study.

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A Study on Consumer Behaviour

CONTENTS

INTRODUCTION

INDUSTRIAL AND COMPANY PROFILE

ANALYSIS AND INTERPRETATION

SUGGESTIONS

CONCLUSION

BIBLIOGRAPHY

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CHAPTER-1

INTRODUCTION

DEFINITIONS OF MARKETING

“Marketing is defined as the activity, set of institutions, and processes for creating,

communicating, delivering, and exchanging offerings that have value for customers, clients,

partners, and society at large.”

-American Marketing Association

“Marketing is defined as the management process responsible for identifying anticipating

and satisfying customer requirements profitability”

-The Chartered Institute Of Marketing

“Marketing is defined as satisfying needs and wants through an exchange process”

-Philip Kotler

“Marketing is not about providing products or services it is essentially about providing

changing benefits to the changing needs and demands of the customer”

-P. Tai

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EVOLUTION OF MARKETING

1. STAGE OF BARTER :-

The pre Industrial Revolution world was characterized by an agricultural cum

handicraft economy. The agriculturalist, whether he produced corn or cotton, meat or

butter, disposed of the surplus in his immediate neighborhood. These products were

required in the neighborhood by those who were not engaged in such activities.

There was no elaborate distribution system, as the needs and habits of the people and

prevailing technology did not demand such a system. This represented the stage of

barter in the evolution of marketing.

2. STAGE OF MONEY ECONOMY :-

The change was limited to the replacement of the barter system by the money

system, pricing becoming the mechanism of the exchange process.

3. STAGE OF INDUSTRIAL REVOLUTION :-

They were many changes that took place during this stage. The industrial revolution

gave birth to a new business system. It introduced new products, new systems of

manufacturing, new modes of transportation and methods of communication. This

stage brought about sweeping changes in the physical and economic environment.

4. STAGE OF COMPETITION :-

This stage was characterized by the increasing number and size of the producing

firms which generated the phenomenon of competition.

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5. EMERGENCE OF MARKETING :-

After World War two, there was a substantial increase in population. The disposable

income of the average family registered an increase. New industrial concerns sprang

up rapidly. A great variety of changes came about during this period which lead to

the emergence of marketing.

MARKETING HISTORY

Much of traditional marketing practice prior to the twentieth century remained

hidebound by rules-of-thumb and lack of information. Information technology,

especially since the mid-twentieth century, has given the marketer new channels of

communication as well as enhanced means of aggregating and analyzing marketing

data. Specializations have emerged (especially sales versus marketing and

advertising versus retailing) and re-combined (business development) over the years.

Timeline of innovation

1450: Gutenberg's metal movable type, leading eventually to mass-production of

flyers and brochures

1730s: emergence of magazines (a future vector of niche marketing)

1836: first paid advertising in a newspaper (in France)

1839: posters on private property banned in Landon

1864: earliest recorded use of the telegraph for mass unsolicited spam

1867: earliest recorded billboard rentals

1880s: early examples of trademarks as branding

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1905: the University of Pennsylvania offered a course in "The Marketing of

Products"

1908: Harvard Business School opens

1922: radio advertising commences

1940s: electronic computers developed

1941: first recorded use of television advertising

1950s: systematization of telemarketing

1970s: E-commerce invented

1980s: emergence of relationship marketing

1980s: emergence of computer-oriented spam

1984: introduction of guerilla marketing

1985: desktop publishing democratizes the production of print-advertising

1995-2001: the Dot-com bubble temporarily re-defines the future of marketing

1996: identification of viral marketing

Consumer Behaviour

Consumer buying behaviour- refers to the buying behaviour of final consumers -

individuals and households that buy goods and services for personal consumption. All of

these final consumers combined make up the consumer market. The world consumer market

consists of about 5.5 billion people, but the billion people living in North America, western

Europe and Japan make up 70 per cent of the world's spending power.1 Even within these

wealthy consumer markets, consumers vary tremendously in age, income, education level

and tastes. They also buy an incredible variety of goods and services. How these diverse

consumers make their choices among various products embraces a fascinating array of

factors.

DEFINITION OF CONSUMER BEHAVIOUR

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According to the American Marketing Association, Consumer Behavior is defined as "the

dynamic interaction of affect and cognition, behavior, and environmental events by which

human beings conduct the exchange aspects of their lives."

Belch and Belch define consumer behavior as “the process and activities people engage in

when searching for, selecting, purchasing, using, evaluating, and disposing of products and

services so as to satisfy their needs and desires”

Consumer behavior is the study of when, why, how, where and what people do or do not

buy products. It blends elements from psychology, sociology, social psychology,

anthropology and economics. It attempts to understand the buyer decision making process,

both individually and in groups. It studies characteristics of individual consumers such as

demographics and behavioural variables in an attempt to understand people's wants. It also

tries to assess influences on the consumer from groups such as family, friends, reference

groups, and society in general.

Model of buyer behaviour

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In earlier times, marketers could understand consumers well through the daily experience of

selling to them. But as firms and markets have grown in size, many marketing decision

makers have lost direct contact with their customers and must now turn to consumer

research. They spend more money than ever to study consumers, trying to learn more about

consumer behaviour. Who buys? How do they buy? When do they buy? Where do they buy?

Why do they buy?

The central question for marketers is; how do consumers respond to various marketing

stimuli that the company might use? The company that really understands how consumers

will respond to different product features, prices and advertising appeals has a great

advantage over its competitors. Therefore, companies and academies have researched

heavily the relationship between marketing stimuli and consumer response. Their starting

point is the stimulus -response model of buyer behavior shown This shows that marketing

and other stimuli enter the consumer's 'black box1 and produce certain responses. Marketers

must figure out what is in the buyer's black box.2. Marketing stimuli consist of the four Ps:

product, price, place and promotion. Other stimuli include significant forces and events in

the buyer's environment; economic, technological, political and cultural. All these stimuli

enter the buyer's black box, where they are turned into a set of observable buyer responses :

product choice, brand choice, dealer choice, purchase timing and purchase amount.

The marketer wants to understand how the stimuli are changed into responses inside the

consumer's black box, which has two parts. First, the buyer's characteristics influence how

he or she perceives and reacts to the stimuli. Second, the buyer's decision process itself

affects the buyer's behaviour.

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Characteristics Affecting Consumer Behaviour

Consumer purchases are influenced strongly by cultural, social, personal and psychological

characteristics, as shown. For the most part, marketers cannot control such factors, but they

must take them into account. We illustrate these characteristics for the ease of a hypothetical

customer, Anna Flores. Anna is a married graduate who works as a brand manager in a

leading consumer packaged-goods company. She wants to buy a camera to take on holiday.

Many characteristics in her background will affect the way she evaluates cameras and

chooses a brand.

Cultural Factors

Cultural factors exert the broadest and deepest influence on consumer behavior. The

marketer needs to understand the role played by the buyer's culture, subculture and social

class.

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Culture:

Culture is the most basic cause of a person's wants and behaviour. Human behavior is

largely learned. Growing up in a society, a child learns basic values, perceptions, wants and

behaviours from the family and other important institutions. Like most wisent people, in

childhood observed and learned values about achievement and success, activity and

involvement, efficiency and practicality, progress, material comfort, individualism, freedom,

humanitananism, youthfulness, and fitness and health. Sometimes we take these values for

granted, but they are not cultural universals.

Marketers are always trying to spot cultural shifts in order to imagine new products that

might be wanted. For example, the cultural shift towards greater concern about health and

fitness has created a huge industry for exercise equipment and clothing, lower-calorie and

more natural foods, and health and fitness services. This allowed Snapple to change the face

of the US soft-drinks market

with its 'new age' iced teas and fruit-flavoured drinks. The shift towards informality has

resulted in more demand for casual clothing, simpler home furnishings and lighter

entertainment. And the increased desire for leisure time has resulted in more demand for

convenience products and services, such as microwave ovens, fast food and direct line

financial services such as First Direct and Direct Line. Concern for the environment is

influencing consumer behaviour both through legislation and through demand for less

wasteful goods

Subculture:

Each culture contains smaller subcultures or groups of people with shared value Systems

based on common life experiences and situations. Subcultures include Nationalities,

religions, racial groups and geographic regions. Many subcultures make up important

market segments and marketers often design products and marketing programmers tailored

to their needs," The huge US market of 260 million people has Hispanic (approaching 40

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million) and black (over 30 million) subcultures that are bigger than most national markets.

In all developed economies the graying population is growing rapidly. Marketers often have

a poor understanding of these over-55s who will be a huge market force in the next

millennium.7 Like all other people, Anna Florcs' buying behavior will be influenced by her

subculture identification.

It will affect her food preferences, clothing choices, recreation activities and career goals.

Subcultures attach different meanings to picture taking and this could affect both Anna's

interest in cameras and the brand she buys.

Social Factors:

A consumer's behaviour is also influenced by social factors, such as the consumer's small

groups, family, and social roles and status. Because these social factors can strongly affect

consumer responses, companies must take diem into account when designing their

marketing strategies.

• Groups

Groups influence a person's behaviour. Groups that have a direct influence and to which a

person belongs are called membership groups. Some are primary groups with whom there is

regular but informal interaction - such as family, friends, neighbours and fellow workers.

Some are secondary groups, which are more formal and have less regular interaction. These

include organizations like religious groups, professional associations and trade

unions.Reference groups are groups that serve as direct (face-to-face) or indirect points of

comparison or reference in forming a person's attitudes or behaviour.

Reference groups to which they do not belong often influence people. For example, an

aspirational group is one to which the individual wishes to belong, as when a teenage

football player hopes to play some day for Manchester United. He identifies with them,

although there is no face-to-face contact between him and the team. Marketers try to identify

the reference groups of their target markets. Reference groups influence a person in at least

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three ways. They expose the person to new behaviours and lifestyles. They influence the

person's attitudes and self-concept because he or she wants to 'fit in'. They also create

pressures to conform that may affect the person's product and brand choices

The importance of group influence varies across products and brands, but it tends to be

strongest for conspicuous purchases.

A product or brand can be conspicuous for one of two reasons. First, it may be noticeable

because the buyer is one of few people who owns it-luxuries, such as a vintage Wurlitzer

juke box or a Rolex, are more conspicuous than necessities because fewer people own the

luxuries. Second, a product such as Carlsberg ICE beer or Perrier can be conspicuous

because the buyer consumes it in public where others can see it. It shows how group

influence might affect product and brand choices for four types of product -public luxuries,

private luxuries, public necessities and private necessities. A person considering the

purchase of a public luxury, such as a yacht, will generally be influenced strongly by others.

Many people will notice the yacht because few people own one. If interested, they will

notice the brand because the boat is used in public. Thus both the product and the brand will

be conspicuous and the opinions of others can strongly influence decisions about whether to

own a boat and what brand to buy. At the other extreme, group influences do not much

affect decisions about private necessities because other people will notice neither the

product nor the brand.

• Family

Family members can strongly influence buyer behaviour. We can distinguish between two

families in the buyer's life. The buyer's parents make up the family of orientation. Parents

provide a person with an orientation towards religion, politics and economies, and a sense of

personal ambition, self-worth and love. Even if the buyer no longer interacts very much with

his or her parents, the latter can still significantly influence the buyer's behaviour. In

countries where parents continue to live with their children, their influence can be crucial.

The family of procreation - the buyer's spouse and children - have a more direct influence on

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everyday buying behaviour. This family is the most important consumer buying

organization in society and it has been researched extensively.

Marketers are interested in the roles and relative influence of the husband, wife and children

on the purchase of a large variety of products and services.

Husband-wife involvement varies widely by product category and by stage in the buying

process. Buying roles change with evolving consumer lifestyles. Almost everywhere in the

world, the wife is traditionally the main purchasing agent for the family, especially in the

areas of food, household products and clothing. But with over 60 per cent or more women

holding jobs outside the home in developed countries and the willingness of some husbands

to do more of the family's purchasing, all this is changing. For example, in the United States

women now buy about 45 per cent of all cars and men account for about-40 per cent of

expenditure on food shopping.1" Such roles vary widely among different countries and

social classes. As always, marketers must research specific patterns in their target markets.

CONSUMERS' BUYING ROLES: Group members can influence purchases in many

ways. For example, men normally choose their own newspaper and women choose their

own tights. For other products, however, the decision-making unit is more complicated with

people playing one or more roles:

Initiator. The person who first suggests or thinks of the idea of buying a particular

product or service. This could he a parent of friends who would Like to see a visual

record of Anna's holiday.

Influencer. A person whose view or advice influences the buying decision, perhaps

a friend who is a camera enthusiast or a salesperson.

Decider. The person who ultimately makes a buying decision or any part of it -

whether to buy, what to buy, how to buy or where to buy.

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Buyer. The person who makes an actual purchase. Once the buying decision is

made, someone else could make the purchase for the decider.

User. The person who consumes or uses a product or service. Once bought, other

members of her family could use a digital camera.

Personal Factors

A buyer's decisions are also influenced by personal characteristics such as the buyer's age

and life-cycle stage, occupation, economic situation, lifestyle, and personality and self-

concept.

• Age and Life-Cycle Stage

People change the goods and services they buy over their lifetimes. Tastes in food, clothes,

furniture and recreation are often age related. Buying is also shaped by the family life cycle -

the stages through which families might pass as they mature over time. Table 6.2 lists the

stages of the family life cycle. Marketers often define their target markets in terms of life-

cycle stage and develop appropriate products and marketing plans for each stage.

• Occupation

A person's occupation affects the goods and services bought. Blue-collar workers tend to

buy more work clothes, whereas white-collar workers buy more suits and ties. Marketers try

to identify the occupational groups that have an above-average interest in their products and

services. A company can even specialize in making products needed by a given occupational

group. Thus computer software companies will design different products for brand

managers, accountants, engineers, lawyers and doctors.

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• Economic Circumstances

A person's economic situation will affect product choice. Consumer considers buying an

expensive Olympus auto focus super zoom camera if she has enough disposable income,

savings or borrowing power. Marketers of income sensitive goods closely watch trends in

personal income, savings and interest.

The Consumer Decision-Making Process

What consumers think and the social environment they live in determine what they buy and

how that purchase decision is made. Typically, the decision process is described as a series

of five stages.

The first stage, need recognition, occurs when consumers perceive a difference between

their ideal and actual states. Need recognition is often prompted by persuasive advertising.

Consumers then begin with the second stage, the Information Search process by conducting

an internal search of their own knowledge structures, followed by an external search for

information from friends, family members, salespeople, and advertisements. This step can

clarify the problem, providing criteria to use for assessing product alternatives and resulting

in a subset, or "consideration set," of potential choices. These options are then assessed more

completely in the third stage, alternative evaluation.

In the third stage namely Alternative Evaluation, products in the consideration set are

compared with one another. Sometimes a simple heuristic rule of thumb, such as "I'm going

to buy the cheapest product" is used. At other times a more complex strategy, such as a

weighted-average model that compensates for product strengths and weaknesses, is used.

After examining each alternative, consumers are ready to purchase.

The fourth step is the Decision Process during which the consumer makes his final decision

about the purchase and goes ahead to make the purchase.

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Finally, after buying, the consumers enter the Post-purchase Phase of the process, during

which the performance of the chosen alternative is evaluated in light of prior expectations.

Consumers will be satisfied with the product if it meets or exceeds expectations;

dissatisfaction occurs if the product does not meet expectations.

This model of consumer behavior, while very useful, is highly simplified and does not

always accurately reflect the decision process consumers follow. Consumers may not always

proceed linearly through the five steps as described, and sometimes they may skip certain

steps entirely. However, the model is a close approximation of the process for most

consumers for most purchase occasions.

We are all consumers. Understanding why we behave as we do is integral to an efficient

transfer of goods and services in a market-driven economy.

APPAREL INDUSTRY

Retail is India's largest industry. It accounts for over 10 per cent of the India's GDP and

around eight per cent of the employment. Retail sector is one of India's fastest growing

sectors with a 5 per cent compounded annual growth rate. India's huge middle class base and

its untapped retail industry are key attractions for global retail giants planning to enter newer

markets. Driven by changing lifestyles, strong income growth and favorable demographic

patterns, Indian retail is expected to grow 25 per cent annually. It is expected that retail in

India could be worth US$ 175-200 billion by 2016.

The organized retail industry in India had not evolved till the early 1990s. Until then, the

industry was dominated by the un-organized sector. It was a sellers market, with a limited

number of brands, and little choice available to customers. Lack of trained manpower, tax

laws and government regulations all discouraged the growth of organized retailing in India

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during that period. Lack of consumer awareness and restrictions over entry of foreign

players into the sector also contributed to the delay in the growth of organized retailing.

Foundation for organized retail in India was laid by Kishore Biyani of Pantaloon Retails

India Limited (PRIL). Following Pantaloon's successful venture a host of Indian business

giants such as Reliance, Bharti, Birla and others are now entering into retail. .

A number of factors are driving India's retail market. These include: increase in the young

working population, hefty pay-packets, nuclear families in urban areas, increasing working-

women population, increase in disposable income and customer aspiration, increase in

expenditure for luxury items, and low share of organized retailing. India's retail boom is

manifested in sprawling shopping centers, multiplex- malls and huge complexes that offer

shopping, entertainment and food all under one roof.

But there is a flip side to the boom in the retail sector. It is feared that the entry of global

business giants into organized retail would make redundant the neighbourhood kiryana

stores resulting in dislocation in traditional economic structure. Also, the growth path for

organized retail in India is not hurdle free. The taxation system still favours small retail

business. With the intrinsic complexities of retailing such as rapid price changes, constant

threat of product obsolescence and low margins there is always a threat that the venture may

turn out to be a loss making one.

A perfect business model for retail is still in evolutionary stage. Procurement is very vital

cog in the retail wheel. The retailer has to fight issues like fragmented sourcing,

unpredictable availability, unsorted food provisions and daily fluctuating prices as against

consumer expectations of round-the-year steady prices.

Trained human resource for retail is another big challenge. The talent base is limited and

with the entry of big giants there is a cat fight among them to retain this talent. This has

resulted in big salary hikes at the level of upper and middle management and thereby

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eroding the profit margin of the business. All the companies have laid out ambitious

expansion plans for themselves and they may be hampered due lack of requisite skilled

manpower.

But retail offers tremendous for the growth of Indian economy. If all the above challenges

are tackled prudently there is a great potential that retail may offer employment

opportunities to millions living in small town and cities and in the process distributing the

benefits of economic boom and resulting in equitable growth.

Apparel is one of the basic necessities of human civilization along with food, water and

shelter. The Apparel Industry reflects people’s lifestyles and shows their social and

economic status. The Apparel and Textile industry, is India’s second largest industry after IT

Industry. At present, it is amongst the fastest growing industry segment and is also the

second largest foreign exchange earner for the country. The apparel industry accounts for

26% of all Indian exports. The Indian government has targeted the apparel and textiles

industry segments to reach $50 billion by the year 2015 . China on the other hand, has

already reached their target of $52 billion in 2004, and therefore, it is very possible for India

to reach its target soon.

One of the most interesting features of the apparel industry is that, it migrates from high cost

nations to the low cost nations. The growth of the domestic demand for clothing in India is

linked with the success of the retailing sector. India presently has entered the second phase

of growth and is witnessing a massive rise in the domestic demand. This is primarily due to

the rise in the standard of living caused by the rise in the middle-income groups. In our

present economic world of demand and supply, price and quality are the key factors, which

determine the success of any business. The key element here though, is the cost of labor.

India and China have a comparative advantage in this industry though, their vast labor forces

and the relatively low cost of labor.

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Since, India and China have the advantage of making textiles and so fabric costs are lower

than in other countries, they have become the Apparel sourcing choice for many

international companies. Sourcing choices arise from profitability. This includes considering

costs, such as, buying factors of production, like land, buildings and machines versus factors

affecting revenues, including pricing, marketing, and distribution. The issues of labor,

material, shipping costs and tariffs structure also affect the sourcing choices. Since, apparel

production is a labor-intensive activity, wage rates are also a major factor in sourcing

decisions. This gives immediate competitive advantage to producers in countries like India

and China to export to more developed and high cost countries like the United States and the

European Union.

OVERVIEW OF THE RETAIL APPAREL INDUSTRY

The global fashion apparel industry is one of the most important sectors of the economy in

terms of investment, revenue, trade and employment generation all over the world. Apparel

industry has short product life cycles, tremendous product variety, volatile and unpredictable

demand, long and inflexible supply processes. The industry has been in a transition over the

last 20 years. Some of the its major contributors are:

Significant consolidation in retail,

Increasing use of electronic commerce in retail, and

Wholesale trade

The clothing and apparel industry produces finished clothing products made from both

natural and manmade fibers like cotton, silk, wool, lenin, polyester, rayon, lycra and denim.

The important segments covered in apparel industry include kids clothing, mens clothing,

clothing for women, bridal wear, mens wedding wear and intimate apparel. The apparel is

sold through three major channels, which includes, brick & mortar, catalog and through

internet. The market share of the different channels is shown below:

Category Sales $ Billion Market Share (%)

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Brick and Mortar 169.256 92.9

Catalog 7.177 3.9

Online/ Internet 5,873 3.2

Total 182.306 100.00

Apparel sales by channel

STATE OF THE INDUSTRY: RETAIL APPAREL

HISTORY

There are many social and political influences that have influenced the

development of the retail fashion industry as we know it today, from social

reforms and interactions with other cultures through travel, to the women’s

rights movement, technology, industrialism, and war.

Of these factors, war, specifically the Civil War, has perhaps played the

largest role in the development of the retail aspect of today’s fashion

industry. In pre-industrial America, clothing was made for individuals at

home or by tailors/dressmakers. When the Civil War began to stretch out for

a longer period than the few months originally anticipated, a need for mass

produced uniforms became apparent. Very quickly, manufacturers of these

uniforms began to realize that standardized sizes would be necessary in order

to enhance the speed of uniform production. Many soldiers were measured,

and standards agreed upon, many of which we still use today in the sizing of

men’s apparel.

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There was not a strong demand for mass-produced women’s clothing until

the early 20th century and the development of many social, political, cultural,

and governmental factors that worked together to create a welcoming

environment for bulk-produced women’s fashions:

i. Rise of a middle class of urban professionals

ii. Improved textile manufacturing technologies and production methods

iii. Growth of the advertising industry

iv. Development of national markets and chain stores, in addition to mail

order catalogues)

Although the above factors combined to create the right atmosphere for the

development of the women’s retail fashion industry, demand for mass-

produced apparel was low at first. Because the first mass-produced apparel

items did not have the benefit of standardized sizes of men’s apparel, women

often had to have ready-made clothes altered by tailors and dressmakers at

additional cost. Manufacturing companies also experienced losses through

returned merchandise and imperfections in their distribution systems.

Many soon realized that size standardization was necessary; the first work to

create such as scale was done by the USDA’s National Bureau of Home

Economics’ 1939-1940 study to women’s body measurements. From1949-

1952, the mail order association of America and NIST conducted a survey of

women’s body measurements to develop standards for sizing of ready to wear

clothing. The results of both studies are still being used today to create sizing

standards for women’s clothing, although there is a movement to update the

sizing (due to women’s changing body types created by changes in our diets)

through technologies like body scanning.

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CURRENT SOCIAL, POLITICAL, TECHNOLOGICAL, ECONOMIC AND

GOVERNMENTAL FACTORS INFLUENCING THE SECTOR

Implementation of information technology; enhancing communication

networks and systems to facilitate interaction between customers and

companies

Movements to better track consumer trends, and create custom made clothes

quickly

Computer aided design and automated manufacturing plants

Seamless integration through technology of each step in the manufacturing

process

Internet sales

Consumers demanding quality rather than lowest price/brand loyalty weak

Most stable markets were for high-end luxury goods

Outsourcing for lower production.

Movement to stop manufacturing seasonally, rather by clothing type

Internationalizing production/alliances formed between countries involved in

production of fashion goods

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Movement to market products in non-traditional areas, like Russia, S. Korea,

Turkey, and S. America

Many large, traditional companies having trouble (e.g., UK’s Marks and

Spencer, U.S.’s J.C. Penny

Licensing brand names to stay afloat-Mossimo’s agreement with target-3

years, 1 billion dollars

Increasing monitoring of the industry and certification of manufacturers-e.g.

UK’s ethical trade initiative, Australia’s Fair Ware Campaign

Movement of higher wage textile jobs overseas (outsourcing) to lower wage

jobs in developing world (Asia and South America)

Smaller companies that can’t compete with larger companies’ outsourcing

methods have closed or merged- like other sectors of the economy, mergers

are very common and large conglomerate corporations are growing

De-regulation and lifting of quotas with china has had a huge impact on the

market- see quotes

Three sectors within the industry: designers/jobbers, manufactures, and

retailers

International agreements impact the industry: GATT-general agreement on

tariffs and trade- agreement began with negotiations 1986-1994) to reduce

tariffs that “hinder foreign competition” and established the WTO to develop

“fair, systematic trade policies”and NAFTA- 1994 which eliminated tariffs

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among north American countries. Also, the AGOA-African growth and

opportunity act-2000, between u.s. and 37 sub-Saharan African nations

allowed them duty free access to u.s. markets for several categories of

consumer goods

CHAPTER-2

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RESEARCH DESIGN

INTRODUCTION

Research design is like the foundation for a building. Research design helps the researcher to

carry out the research in a planned and systematic manner. It comprises of objectives of the

study, title, statement of the problem etc. Every research needs an efficient plan for it to be

successful.

Thus, it is vital to clearly define the research design before going further with the study. Let

us take a look at the skeleton or framework of the research design.

TITLE OF THE PROJECT

The title of the project is “Consumer Behaviour towards Pantaloons Retail India Ltd.”

STATEMENT OF THE PROBLEM

Consumers are dynamic in nature, and it is not easy to understand their needs, wants,

desires, satisfaction levels etc, and hence it’s difficult to exactly determine their behaviour,

because there are many factors which influence consumer behaviour.

The retail apparel industry today has many big and small players and with the emergence of

new competitors the amount of competition is building up rapidly in the market. To assess

the ability of Pantaloons to cater to customer needs as well as identify solutions to increase

the conversion rate. Taking all this into consideration, this study has been conducted on

Consumer Behaviour towards Pantaloons Retail India Ltd

OBJECTIVES OF THE STUDY

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To know consumer needs and wants, tastes and Preferences.

To find out the awareness level of the consumers

To find out the factors that have influenced the customers, like location of the store,

ambience and layout, staff behaviour and other facilities.

To find out the frequency of visit of consumers

To measure the effectiveness of advertising

To find out what adds on to a consumers shopping experience

To find out if the reference group behaviour was practiced by the consumers

To find out the satisfaction level of the consumers, towards Pantaloon Retail India

Ltd

To offer suggestions based on the findings

SAMPLE SIZE

A total of 100 respondents were drawn as sample size randomly.

METHODS OF DATA COLLECTION

There are two methods used for data collection namely primary method and secondary

method. In Primary data collection, data is collected by ones own self using methods such as

interviews and questionnaires. The key point here is that the data collected is unique and

also the research because until it is published, no one else can have access to it.

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There are many methods of collecting primary data and the main methods include:

Questionnaires

Interviews

Focus group interviews

Observation

Case-studies

Diaries

Critical incidents

Portfolios.

Questionnaires

Questionnaires are a popular means of collecting data, but are difficult to design and often require many

rewrites before an acceptable questionnaire is produced.

Secondary data is data that has already been collected by someone else for a different

purpose to yours. For example, this could mean using:

Data collected by a hotel on its customers through its guest history system

Data supplied by a marketing organisation

Annual company reports

Government statistics.

TOOLS OF DATA COLLECTION

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Primary and secondary data has been used for the collection of data for this project.

Primary data or first hand information was collected with the help of questionnaire method

which was designed based on the objective of the study. The questionnaire consisted of

about 20 questions in total along with personal information, which was optional. The

questions were primarily objective type with a few open ended questions. The survey was

conducted only in the city of Bangalore.

Secondary data has been taken from various sources including books, articles, magazines,

Internet etc.

PLAN OF ANALYSIS

Analysis and interpretation of the data is shown with the help of charts and tables. The data

furnished by the questionnaires was tabulated to deduce the information and was used for

the purpose of analysis based on which the inferences and conclusions were drawn.

LIMITATIONS OF THE STUDY

Utmost care was taken to complete the survey with accuracy, but there are a few limitations

of the study, they include:

The study suffers from time and cost constraints, as it is an academic study.

.

It lacks specialization or expertise since the survey was undertaken for academic purpose.

The study suffers from geographical constraints as it was conducted only in Bangalore

whereas the other branches include Hyderabad, Ahmedabad, Kolkata, Guwhati and many

more.

The study also suffers from time constraints since it was supposed to be

completed within a specific period of time.

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The researcher being an undergraduate student may not be well versed with the techniques

of collecting and conducting a research. Hence there could be lack of required information.

CHAPTER SCHEME

CHAPTER 1 – INTRODUCTION

In the first chapter, the definitions of Market, Marketing, Consumer Behaviour, various

factors influencing consumer behaviour etc. have been included. There is also the inclusion

of an introduction to the Apparel Industry of India. This chapter gives an introduction to the

project, as well as lists the various items related to the title of the project.

CHAPTER 2 – RESEARCH DESIGN

The chapter titled Research Design includes title of the project, statement of the problem,

sample size etc. From Objectives framing to fieldwork and analysis, the chapter gives a

detailed description of all aspects of Research Design. It is basically an overview of the

project.

CHAPTER 3 – COMPANY PROFILE

The chapter titled Company profile gives an introduction to the company. The profile of the

company with detailed description is presented here.

CHAPTER 4 – ANALYSIS AND INTERPRETATION

This chapter is concerned with deducing results from the analysis and thereby drawing

inferences. In this chapter each and every question of the questionnaire has been analyzed

and interpretations for each has been given which includes graphical representations.

CHAPTER 5 – SUMMARY OF FINDINGS

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This chapter includes the summary of findings got from the analysis and interpretations of

chapter 4. This is the summary of the analysis and inferences of the study.

CHAPTER 6 – SUGGESTIONS AND RECOMMENDATIONS

It is the conclusive chapter which deals with the drawing of conclusions from the findings

and consists of suggestions and recommendations offered by the researcher to the

organisation.

BIBLIOGRAPHY

This chapter contains the details of the various references used to source information for the

study.

ANNEXURE

This chapter contains an unfilled copy of the questionnaire, that was handed out to the

respondents, to facilitate the research.

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CHAPTER-3

COMPANY PROFILE

Pantaloons Retail (India) Ltd

BACKGROUND

Pantaloon Retail (India) Limited (PRIL) was incorporated on October 12, 1987 as Manz

Wear Private Limited under the stewardship of Mr. Kishore Biyani. It then forayed into

modern retail in August 1997 with the launch of its first department store, Pantaloons in

Kolkata. It later changed its name to Pantaloon Retail (India) Limited on 7th July 1999.

LISTING

The Company was converted into a public limited company on September 20, 1991 and on

September 25, 1992 the name was changed to Pantaloon Fashions (India) Limited and the

same time it went public and today it has approximately 14,000 shareholders. Pantaloon

Retail is a listed company on the Bombay Stock Exchange (BSE, Scrip Code: 523574) and

National Stock Exchange (NSE, Symbol: PANTALOON®).

OVERVIEW

Pantaloon Retail (India) Limited is India’s leading retailer with gross sales of Rs. 2,019

crores for the financial year ending June 2006. The company operates across multiple

segments including –Food, Books & Music, Fashion, Telecom & IT, Home & electronics,

General Merchandise, Leisure & Entertainment, Wellness, Health & Beauty and E-tailing

and that helps the company cater to every Indian customer.

Pantaloon Retail (India) Limited, is India’s leading retailer that operates multiple retail

formats in both the value and lifestyle segment of the Indian consumer market.

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Headquartered in Mumbai (Bombay), the company operates over 12 million square feet of

retail space, has over 1000 stores across 71 cities in India and employs over 30,000 people

The company’s leading formats include Pantaloons (department store), a chain of fashion

outlets,  Big Bazaar(a uniquely Indian hypermarket chain), Food Bazaar(a supermarket

chain), blends the look, touch and feel of Indian bazaars with aspects of modern retail like

choice, convenience and quality and Central, Central(a chain of seamless destination malls).

Some of its other formats include Brand Factory, Blue Sky(fashion accessories),

aLL(fashion apparel for plus size individuals), Top 10 and Star and Sitara. The company

also operates an online portal, futurebazaar.com

A subsidiary company, Home Solutions Retail (India) Limited, operates Home Town, a

large-format home solutions store, Depot (books and music), Shoe factory (footwear),

Collection I (home furnishings) and eZone focussed on catering to the consumer electronics.

Pantaloon Retail was recently awarded the International Retailer of the Year

2007 by the US-based National Retail Federation (NRF) and the Emerging Market Retailer

of the Year 2007 at the World Retail Congress held in Barcelona.

Pantaloon Retail is the flagship company of Future Group, a business group catering to the

entire Indian consumption space.

Employee Strength: 25,000

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FUTURE GROUP

Future Group, led by its founder and Group CEO, Mr. Kishore Biyani, is one of India’s

leading business houses with multiple businesses spanning across the consumption space.

While retail forms the core business activity of Future Group, group subsidiaries are present

in consumer finance, capital, insurance, leisure and entertainment, brand development, retail

real estate development, retail media and logistics.

Led by its flagship enterprise, Pantaloon Retail, the group operates over 12 million square

feet of retail space in 71 cities and towns and 65 rural locations across India. Headquartered

in Mumbai (Bombay), Pantaloon Retail employs around 30,000 people and is listed on the

Indian stock exchanges. The company follows a multi-format retail startegy that captures

almost the entire consumption basket of Indian customers. In the lifystyle segment, the

group operates Pantaloons, a fashion retail chain and Central, a chain of seamless malls. In

the value segment, its marquee brand, Big Bazaar is a hypermarket format that combines the

look, touch and feel of Indian bazaars.

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In 2008, Big Bazaar opened its 100th store, marking the fastest ever organic expansion of a

hypermarket. The first set of Big Bazaar stores opened in 2001 in Kolkata, Hyderabad,

Bangalore.

The group’s specialty retail formats include, books and music chain, Depot, sportswear

retailer, Planet Sports, electronics retailer, Ezone, home improvement chain, Home Town

and rural retail chain, Aadhar, among others. It also operates popular shopping portal,

futurebazaar.com.

Future Capital Holdings, the group’s financial arm provides investment advisory to assets

worth over $1 billion that are being invested in consumer brands and companies, real estate,

hotels and logistics. It also operates a consumer finance arm with branches in 150 locations.

Other group companies include, Future Generali, the group’s insurance venture in

partnership with Italy’s Generali Group, Future Brands, a brand development and IPR

company, Future Logistics, providing logistics and distribution solutions to group

companies and business partners and Future Media, a retail media initiative.

The group’s presence in Leisure & Entertainment segment is led through, Mumbai-based

listed company Galaxy Entertainment Limited. Galaxy leading leisure chains, Sports Bar

and Bowling Co. and family entertainment centres, F123. Through its partner company,

Blue Foods the group operates around 100 restaurants and food courts through brands like

Bombay Blues, Spaghetti Kitchen, Noodle Bar, The Spoon, Copper Chimney and Gelato.

Future Group’s joint venture partners include, US-based stationery products retailer, Staples

and Middle East-based Axiom Communications.

The group’s flagship company, Pantaloon Retail was awarded the International Retailer of

the Year 2007, by the US-based National Retail Federation, the largest retail trade

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association and the the Emerging Market Retailer of the Year 2007 at the World Retail

Congress in Barcelona.

Future Group believes in developing strong insights on Indian consumers and building

businesses based on Indian ideas, as espoused in the group’s core value of ‘Indianness.’ The

group’s corporate credo is, ‘Rewrite rules, Retain values.’

CORPORATE STATEMENTS

FUTURE GROUP MANIFESTO

“Future” – the word which signifies optimism, growth, achievement, strength, beauty,

rewards and perfection. Future encourages us to explore areas yet unexplored, write rules

yet unwritten; create new opportunities and new successes. To strive for a glorious future

brings to us our strength, our ability to learn, unlearn and re-learn, our ability to evolve.

We, in Future Group, will not wait for the Future to unfold itself but create future

scenarios in the consumer space and facilitate consumption because consumption is

development. Thereby, we will effect socio-economic development for our customers,

employees, shareholders, associates and partners.

Our customers will not just get what they need, but also get them where, how and when

they need.

We will not just post satisfactory results, we will write success stories.

We will not just operate efficiently in the Indian economy, we will evolve it.

We will not just spot trends, we will set trends by marrying our understanding of the

Indian consumer to their needs of tomorrow.

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It is this understanding that has helped us succeed. And it is this that will help us succeed

in the Future. We shall keep relearning. And in this process, do just one thing.

Rewrite Rules. Retain Values.

GROUP VISION

Future Group shall deliver Everything, Everywhere, Everytime for Every Indian Consumer

in the most profitable manner.

GROUP MISSION

We share the vision and belief that our customers and stakeholders shall be served

only by creating and executing future scenarios in the consumption space leading to

economic development.

We will be the trendsetters in evolving delivery formats, creating retail realty,

making consumption affordable for all customer segments – for classes and for

masses.

We shall infuse Indian brands with confidence and renewed ambition.

We shall be efficient, cost- conscious and committed to quality in whatever we do.

We shall ensure that our positive attitude, sincerity, humility and united

determination shall be the driving force to make us successful.

CORE VALUES

Indian-ness : confidence in ourselves.

Leadership: to be a leader, both in thought and business.

Respect & Humility : to respect every individual and be humble in our conduct.

Introspection: leading to purposeful thinking.

Openness : to be open and receptive to new ideas, knowledge and information.

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Valuing and Nurturing Relationships : to build long term relationships.

Simplicity & Positivity : Simplicity and positivity in our thought, business and action.

Adaptability: to be flexible and adaptable, to meet challenges.

Flow: to respect and understand the universal laws of nature.

During its evolution the company achieved various milestone and demonstrated

innovativeness and leadership by pioneering concepts that has now become industry

standards. Some of the major milestone achieved by the company during its life span is

enumerated below.

Major Milestones

1991 Launch of BARE, the Indian jeans brand.

1992 Initial public offer (IPO) was made in the month of May.

1994 The Pantaloon Shoppe – exclusive menswear store in franchisee format

launched across the nation. The company starts the distribution of branded

garments through multi-brand retail outlets across the nation.

1995 John Miller – Formal shirt brand launched.

1997 Pantaloons – India’s family store launched in Kolkata.

2001 Big Bazaar, ‘Is se sasta aur accha kahi nahin’ - India’s first hypermarket

chain launched.

2002 Food Bazaar, the supermarket chain is launched.

2004 Central – ‘Shop, Eat, Celebrate In The Heart Of Our City’ - India’s first

seamless mall is launched in Bangalore.

2005 Fashion Station - the popular fashion chain is launched

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all – ‘a little larger’ - exclusive stores for plus-size individuals is launched

2006 Future Capital Holdings, the company’s financial arm launches real estate

funds Kshitij and Horizon and private equity fund Indivision. Plans forays

into insurance and consumer credit.

Multiple retail formats including Collection i, Furniture Bazaar, Shoe

Factory, EZone, Depot and futurebazaar.com are launched across the nation.

Group enters into joint venture agreements with ETAM Group and Generali.

BOARD OF DIRECTORS

A professional and broad based board is managing the company that has

experience in the relevant fields of business making it a unique balance

of experience and knowledge.

Mr. Kishore Biyani, Managing Director

Kishore Biyani is the Managing Director of Pantaloon Retail (India) Limited and the

Group Chief Executive Officer of Future Group.

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 Mr. Gopikishan Biyani, Wholetime Director

Gopikishan Biyani, is a commerce graduate and has more than twenty years of

experience in the textile business.

 Mr. Rakesh Biyani, Wholetime Director

Rakesh Biyani, is a commerce graduate and has been actively involved in category

management; retail stores operations, IT and exports. He has been instrumental in the

implementation of the various new retail formats.

 Mr. Vijay Kumar Chopra, Independent Director

V.K.Chopra is a fellow member of The Institute of Chartered Accountants of India

(ICAI) by profession and is a Certified Associate of Indian Institute of Bankers

(CAIIB). His banking career spans over 31 years and he has served senior management

positions in Central Bank of India, Oriental Bank of Commerce, SIDBI, Corporation

Bank and SEBI.

 Mr. Shailesh Haribhakti, Independent Director

Shri Shailesh Haribhakti, is a Chartered Accountant, Cost Accountant, and a Certified

Internal Auditor. He is the Deputy Managing Partner of Haribhakti & Co., Chartered

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Accountants and past president of Indian merchant Chambers. He is on the Board of

several Public Limited Companies, including Indian Petrochemicals Corporation Ltd.,

Ambuja Cement Eastern Ltd. etc. He is on the Board of Company since June 1, 1999.

Mr. S Doreswamy, Independent Director

S. Doreswamy, is a former Chairman and Managing Director of Central Bank of India

and serves on the board of DSP Merrill Lynch Trustee Co and Ceat Limited among

others.

 Dr. D O Koshy, Independent Director

D. O. Koshy, holds a doctorate from IIT, Delhi and is the Director of National Institute

of Design (NID), Ahmedabad. He has over 24 years of rich experience in the textiles

and garment industry and was instrumental in the setting up of NIFT centres in Delhi,

Chennai and Bangalore. He is a renowned consultant specializing in international

marketing and apparel retail management.

 Ms. Bala Deshpande, Independent Director

Bala Deshpande, is Independent Director, Pantaloon Retail (India) Ltd. and also serves

on the boards of Deccan Aviation, Nagarjuna Construction, Welspun India and Indus

League Clothing Ltd, among others.

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 Mr. Anil Harish, Independent Director

Anil Harish, is the partner of DM Harish & Co. Associates & Solicitors and an LLM

from University of Miami. He also serves on the board of Mahindra Gesco, Unitech,

IndusInd Bank and Hinduja TMT, among others.

AFFILIATE COMPANIES

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Home Solutions Retail (India) Limited

Home Solutions Retail (India) Limited (HSRIL) offers complete retailing solutions for all

products and services related to home building and home improvement. The key product

categories are Consumer Durable & Electronics (CDE), Furniture, Home furnishing &

decor, Home improvement and Home services. HSRIL operates retail format Collection-i,

Furniture Bazaar, Electronics Bazaar, Home Town and e-zone.

Future Brands Limited

Future Brands Limited (FBL) has been incorporated on November, 2006 and is involved

in the business of creating, developing, managing, acquiring and dealing in consumer-

related brands and IPRs (Intellectual Property Rights).

Future Media (India) Limited

Future Media (India) Limited (FMIL) was incorporated as the Group’s media venture,

aimed at creation of media properties in the ambience of consumption and thus offers

active engagement to brands and consumers. FMIL offers relevant engagement through

its media properties like Visual Spaces, Print, Radio, Television and Activation.

Future Logistic Solutions Limited

Future Logistic Solutions Limited (FLSL) has been incorporated as a separate entity and

is involved in the business of providing logistics, transportation and warehousing

services for all group companies and third-parties.

Future Axiom Telecom Limited

Future Axiom Telecom Limited is a Joint Venture with Axiom Telecom LLC, UAE. The

Company has a 50% stake in Future Axiom Telecom Limited (FATL) which is a joint

venture Company with Axiom Telecom LLC, UAE. The Company would be engaged in

sourcing and wholesale distribution of mobile handsets, accessories and in setting up

service centres for mobile handsets in India.

Pantaloon Food Product (India) Limited

Pantaloon Food Product (India) Limited (PFPIL) was incorporated with the object of

sourcing and backward integration of food business of the Company. PFPIL has sourcing

and distribution bases at all key cities across the country.

Future Knowledge Services Limited

Future Knowledge Services Limited (FKSL) was incorporated on January, 2007 and is

engaged in the business of business process outsourcing and knowledge process

outsourcing.

Future Capital Holdings Limited

Future Capital Holdings Limited (FCH) was formed to manage the financial services